>> from the Cosmopolitan Hotel in Las Vegas, Nevada. It's the Cube covering Cooper inspired 2019. Brought to you by Cooper. >> Hey, welcome to the Cube. Lisa Martin on the ground in Las Vegas at Cooper Inspired 19. Excited to welcome to the program. And gentlemen from Staples, a place I go to all the time we have Christy Oreo, VP of strategic sourcing. Hey, Chris, welcome to the Cube. >> Thank you. Glad to be here, >> So I was just a staples the other day getting office supplies. It's a go to Penn's files Folders, Inc et cetera. You name it. That is a place I think everybody on the planet knows. But I >> want to >> talk to you about the Staples business and how you guys now have control over 8000 suppliers. You've got this visibility in control, which I think every human wants and every element of life you know of 100% of your indirect spend under management. So given those big business outcomes, let's dissect that. Obviously, you're a cool customer. That's why you're here. Talk to us about a little bit about Staples. All the different suppliers you guys have, and some of the challenges that you came to Cooper to help erase >> Well, we had a lot of issues with Roque spend. Everybody was doing what they wanted in every location. We had no verification. We weren't consolidating our spend to get the best deals and get the best outcomes, lack of consistency, all the stuff you hear about. And since we've ruled out Cooper, we've got a lot of structure in place now, and we've got much better uniformity, much better consistency. We've dramatically lowered our costs through the use of the tool and some of the some of the rules that we've put in place as a result of of launching Cooper a couple years ago now. So we're really pleased with how it's helped us organize our business and really bring visibility to where we're spending money and showing us the opportunities and where we could go after her and save even more money. >> You know, you talk about rogue spending. >> One of >> the interesting disrupters of procurement and finance is consumer ization we all have. Whether we're going on staples dot com or something else, we're on Amazon. I need to buy this. We have this expectation as consumers in our private lives that we can get anything we want. We have to check with anybody. I one click. So then when we go in as business buyers, we sort of have the same mentality. But obviously the challenge there is, a lot of organizations don't have visibility into. Where has every single dollar going? How many different suppliers are we working with? Do we have duplicates triple kits everywhere to talk to me >> a little >> bit about the with a kind of cultural strategic shift that you guys are making now that you have this visibility? Well, >> everybody's happy with the results. That's >> always good right >> when he had his. When you have some success and you start to tell the story, then all of a sudden people's eyes get opened, and what's interesting is I don't think anyone does anything with malice. But if you have a general manager of a warehouse who believes that ex widget is what he needs to really Pel perform and do better, he's doing that with the right intentions. What he doesn't understand is everything else that's going on behind the scenes, and we have deals in place with suppliers and there's a level of consistency that we expect that our suppliers expecting that our customers expect and we can't have that experience be different. So once we can't explain that story and the tool helps us see where that spend is coming from, we go back. We have a conversation, and all of a sudden it's enlightening like, Oh, I didn't know. Now that I know Okay, I get it. Let me do what you want me to do or what you need me to do. So that's been the biggest shift I think is just sharing information and putting a spotlight on things when they come up and it happens even still. You know, we've rolled out now a little over two and 1/2 years ago, and we still have these things come up because you get new people and people change roles and, you know, as a business person there's folks I've done business with in the past that have earned my trust, and I want to do business with them again because I know what. When people get new roles, they do the same thing, and sometimes that's not what we need them to do. So once you explain the story and you tell them about it and you show him the results, they come onboard. It's phenomenal. >> Everything goes back to the user experience with customer, whether your customer is an individual buyer or a business of 20 people to a Fortune 500. Everybody in an organization is ultimately, in some form or fashion touching the customer. The customer experience is critical to delight the customer to drive higher customer lifetime value from that customer. Um, so having the employees onboard understanding we still want you to be able to manage your Ware house even more efficiently. But we need you to understand how we're gonna give you the tools to do it better. Ultimately, the end of the day, it's goes back to that customer and making sure you can keep extracting value from them. >> One of our core values is put the customer first, always, and that's at the heart of everything we do. It's not about buying things cheap. It's about buying things at the right value and giving the customer the best possible experience they can, so there may be less expensive ways to do it, but it may not deliver the outcomes we want, so it's not always about buying cheap. It's about buying and getting the best value for us so that we can deliver the right experience to our customers. >> Was that a >> mentality that staples had prior to bringing on Cooper? Or now? Because suddenly you're starting to You have visibility into everything you're going? Oh, cheaper isn't necessarily better in some of these areas. I think it's >> a It's a corporate philosophy that we've had. I think we we realize that people can shop anywhere for anything they wanted. Anytime. Cooper has helped highlight some some discrepancies that we've been able to kind of take out. I would say that Cooper's help with that, but it's also been just a core philosophy of the company for a long time. Cooper's helping us execute against >> that now, but you're right. Consumers can buy >> whatever it >> is. If it's a product like something you want to buy on Amazon or service. Maybe it's your Internet service provider. We have so much choice. Think vendors of any product testers that recognize that and sounds like Staples does. From a core cultural perspective. You're already in a better position to understand. I really need to find Tune everything under the hood here because they could go somewhere else like that. They can't. It's good to >> understand that. But Cooper gives us the data and the facts and the analytics to help prove out where we can make a change and where we can help the company and help our customers. So it's a combination of both. >> Let's Dig into that data was in one of the things that Robert seemed shared this morning was about. Since Cooper's been public, which was 2016 they have a five x increase in the amount of spend that is being managed in the Cooper platform. I think the number was is now 1.2 trillion dollars, a tremendous amount of data in this group of community that everybody can leverage and share. We often hear data is gold. It's the new oil it is and you're smiling if you can actually see it, right extracted value, Yes, talk to us about the amount of value that Staples is getting by this group of community with a ton of valuable data. >> I would say we're at the infancy of going into the Cooper community in terms of sharing information and gaining information. I'm excited about the little bit that I've seen, and I'm one of things I want to learn. Here is more about how it will work and how it can help us. What Rob shared this morning was very interesting to me, and I'm very excited to learn more about >> it. Sounds and you're right And even Cooper says, they're at the infancy of it. I think they have. A couple of 100 customers are starting to use the community to share intelligence. Eso It is early days, but it's also something that I think of when I go to events and we talk about, you know, devil's Community. It's a very collaborative that not only is it customer centric, also, supplier centric Staples is a supplier of a lot of other businesses. So imagine there's kind of double and did benefit. It's that could be gleaned by you guys from them. We hope so. >> I think we're you know, we're probably a more unique customer than many that Cooper has and that we are. We are a customer. We use the tools, we love the tool, but we're also a cellar to you guys and two other Cooper uses in the community. So we see both sides of the equation with Cooper, and it is interesting. T gain those insights and see how we can help both sides of the company. Help group is customers and our customers more >> if you look at >> the platform for procurement invoices, expenses. Heymans, where did you start a few years ago with Cooper and where are you now? In terms of all the different elements that are running through it? >> We started with a simple PIO management secure to pay. Then we instituted a no P o no pay policy, and everyone started using the tools. It really helped us change things We don't use it for. Expenses wear starting like, as I said, to start to use some of the analytics. I'm very interested in learning more about Cooper pay or out here virtual card usage. That's very interesting to me, so I'm curious to learn about that on. We'll see where we go from there. >> Cooper Pay was, I think I know it's just a few months ago in London, and we are excited to hear some more news about that tomorrow, how they're expanding that. But there's this visibility and control idea is so critical because of any type of organization. Whether it's a retailer manufacturer, it's a hospital. There's so much shatter, weighty going. But I t is really big challenge of reining in the cats, if you will in all these cats. Because we all know now that Robert likes cats. But it's one of the things that they're announced with Amazon is wow. I t can have access to buy all of this software, control it, deploy it, manage it through the Amazon marketplace. And you suddenly think, Wow, how procurement and t are gonna be aligning, joining forces and really affecting top line of of any industry. >> Yeah, I think in Staples are our relationship between procurement and our i t S t s department has been strong from day one. They were the biggest advocates of us getting the tool to help them gain control and kind of eliminates a lot of the shadow I t organizations issue. Does you mentioned so in our environment, we are excited about that. We embrace that we're trying. Thio forced that out. So we've always had that sort of very strong partnership with our I T team, and that's really what's helped progress the tool through the company with great success with them in the beginning. And then you start to tell the story, and more and more people are interested in. Wait a minute. You can help them save how much into the budget and where we can reallocate that money and what can I do with it? So it's been really exciting and sort of fun to be part of the transformation. >> And you guys have, what north of 17,000 users on the platform, >> today's wave? A lot, A lot. >> That's pretty quick >> adoption in a few years, a lot of people to train, to educate and and to have it become part of their normal everyday activities. >> Well, we're going through a relaunch now, and the Cooper team has been phenomenal in terms of training and helping my team with all the work that goes on behind the scenes that nobody sees and helping us develop training for all of our associates as we relaunch it, because we're really gonna change the tool. We were a couple of revisions behind Ah, now we're getting caught up. So there's a lot of change coming in September to my company and to Cooper and thrilled with the help that the Cooper team has given us the launch. This >> last question for you. Chris Staples, a 34 year young business. I was just talking with a gentleman from procurement and Lulu Lemon and much younger business. And you >> kind of think, Well, a younger business Have more nimble mind sets. Give your advice your best lessons learned to your peers >> at older, more established organizations, going through a change of really looking at getting complete visibility and all your spent advice to them. >> It's a bit of a cliche, but don't do what you did yesterday. You know, you've got to be open to change. You've got to let the you know, I always say, the month the numbers tell the story, and where is where you're spending too much and how do you fix that? And just because you love a supplier today doesn't mean you can't love somebody else just as much tomorrow. If they can deliver a better value, and a lot of times you can find out that your current supplier can give you a better value than you. Then you had before if you just start poking around a little bit. So my advice would be not to stick with the status quo. Just cause it's easy. Challenge yourself. Challenger team. Challenge the people you work with. Change is good. >> Change is good. Chorus. What a pleasure to have you on the Cube. Big. Thanks. So much for joining me. >> Thank you. Very nice. I appreciate it. >> All right. For Christie. Oreo. I'm Lisa Martin. You're watching the Cube from Kucha. Inspire 19. Thanks for watching.

>> From the KIPP studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is a CUBE conversation. >> IBM's new CEO has an opportunity to reset the direction of the company. Outgoing CEO Ginni Rometty, inherited a strategy that was put in place over two decades. It became fossilized in a lower-margin services-led model that she helped architect. Ginni spent a large portion of her tenure, shrinking the company so it could grow. But unfortunately, she ran out of time. For decades, IBM has missed opportunities to aggressively invest in the key waves that are now powering the tech economy. Instead, IBM really tried to balance investing innovation with placating Wall Street. We believe IBM has an opportunity to return to the Big Blue status that set the standard for the tech industry. But several things have to change, some quite dramatically. So we're going to talk about what it's going to take for IBM to succeed in this endeavor. Welcome to this special Wikibon CUBE Insights powered by ETR. In this breaking analysis, we're going to address our view of the future of IBM and try to accomplish three things. First, I want to review IBM's most recent earnings, the very first one under new CEO Arvind Krishna, and we'll discuss IBM's near-term prospects. Next, we'll look at how IBM got to where we are today. We want to review some of the epic decisions that it has made over the past several years and even decades. Finally, we'll look at some of the opportunities that we see for IBM to essentially remake itself and return to that tech titan that was revered by customers and feared by competitors. First, I want to look at the comments from new CEO Arvind Krishna. And let's try to decode them a bit. Arvind in the first earnings call that he held, and in interviews as well, and also internal memos, he's given some clues as to how he's thinking. This slide addresses a few of the key points. Arvind has clearly stated that he's committed to growing the IBM company, and of course, increasing its value. This is no surprise, as you know, every IBM CEO has been under pressure to do the same. And we'll look at that further a little later on in the segment. Arvind, also stated that he wants the company, he said it this way, "To lead with a technical approach." Now as we reported in January when Krishna was appointed to CEO. We're actually very encouraged that the IBM board chose a technical visionary to lead the company. Arvind's predecessors did not have the technical vision needed to make the bold decisions that we believe are now needed to power the company's future. As a technologist, we believe his decisions will be more focused on bigger tactical bets that can pay bigger returns, potentially with more risk. Now, as a point of just tactical commentary, I want to point out that IBM noted that it was doing well coming into the March month, but software deals especially came to a halt as customers focused on managing the pandemic and other parts of the business were okay. Now, this chart pulls some of the data from IBM's quarter. And let me make a few comments here. Now, what was weird here, IBM cited modest revenue growth on this chart, this was pulled from their slides. But revenue was down 2% for the quarter relative to last year. So I guess that's modest growth. Cloud revenue for the past 12 months, the trailing 12 months, was 22 billion and grew 23%. We're going to unpack that in a minute. Red Hat showed good growth, Stu Miniman and I talked about this last week. And IBM continues to generate a solid free cash flow. Now IBM, like many companies, they prudently suspended forward guidance. Some investors bristled at that, but I really have no problem with it. I mean, just way too much uncertainty right now. So I think that was a smart move by IBM. And basically, everybody's doing it. Now, let's take a look at IBM's business segments and break those down and make a few comments there. As you can see, in this graph, IBM's 17 plus billion dollar quarter comprises their four reporting segments. Cloud and cognitive software, which is, of course, its highest margin and highest growth business at 7%. You can see its gross margin is really, really nice. But it only comprises 30% of the pie. Services, the Global Business Services and GTS global technology services are low-growth or no growth businesses that are relatively low margin operations. But together they comprise more than 60% of IBM's revenue in the quarter and consistently throughout the last several years. Systems, by the way, grew nicely on the strength of the Z15 product cycles, it was up by 60% and dragged storage with it. But unfortunately power had a terrible quarter and hence the 4% growth. But decent margins compared to services of 50%. IBM's balance sheet looks pretty good. It took an advantage of some low rates recently and took out another $4 billion in corporate debt. So it's okay, I'm not too concerned about its debt related to the Red Hat acquisition. Now, welcome back to cloud at 22 billion for the past 12 months and growing at 23%. What, you say? That sounds very large, I don't understand. It's understandable that you don't understand. But let me explain with this next graphic. What this shows is the breakdown of IBM's cloud revenue by segment from fiscal year 19. As you can see, the cloud and cognitive segments, or segment which includes Red Hat comprises only 20% of IBM's cloud business. I know, kind of strange. Professional services accounts for 2/3 of IBM's Cloud revenue with systems at 14%. So look, IBM is defining cloud differently than most people. I mean, actually, that's 1% of the cloud business of AWS, Azure and Google Cloud come from professional services and on-prem hardware. This just doesn't have real meaning. And I think frankly, it hurts IBM's credibility as it hides the ball on cloud. Nobody really believes this number. So, I mean, it's really not much else I can say there. But look, why don't we bring in the customer angle, and let's look at some ETR data. So what this chart shows is the results of an ETR survey. That survey ran, we've been reporting on this, ran from mid March to early April. And more than 1200 respondents and almost 800 IBM customers are in there. If this chart shows the percentage of customers spending more on IBM products by various product segments that we chose with three survey samples April last year, January 2020, and the most recent April 2020 survey. So the good news here is the container platforms, OpenShift, Ansible, the Staples of Red Hat are showing strength, even though they're notably down from previous surveys. But that's the part of IBM's business that really is promising. AI and machine learning and cloud, they're right there in the mix, and even outsourcing and consulting and really across the board, you can see a pretty meaningful and respectable number or percent of customers are actually planning on spending more. So that's good, especially considering that the survey was taken right during the middle of the COVID-19 pandemic. But, if you look at the next chart, the net scores across IBM's portfolio, they're not so rosy. Remember, net score is a measure of spending momentum. It's derived by essentially subtracting the percent of customers that are spending less from those that are spending more. It's a nice simple metric. Kind of like NPS and ETR surveys, every quarter with the exact same methodology for consistency so we can do some comparisons over time series, it's quite nice. And you can see here that Red Hat remains the strongest part of IBM's portfolio. But generally in my experience as net scores starts to dip below 25% and kind of get into the red zone, that so called danger zone. And you can see many parts of IBM's portfolio are showing softness as we measure in net score. And even though you see here, the outsourcing and consulting businesses are up relative to last year, if you slice the data by large companies, as we showed you with Sagar Kadakia last week, that services business is showing deceleration, same thing we saw for Accenture, EY, Deloitte, etc. So here's the takeaway. Red Hat, of course, is where all the action is, and that's where IBM is going to invest in our opinion, and we'll talk a little bit more about that and drill into that kind of investment scenario a bit later. But what I want to do now is I want to come back to Arvind Krishna. Because he has a chance to pull off a Satya Nadella like move. Maybe it's different, but there are definite similarities. I mean, you have an iconic brand, a great company, that's in many technology sectors, and yes, there are differences, IBM doesn't have the recurring software revenue that Microsoft had, it didn't have the monopoly and PCs. But let's move on. Arvind has cited four enduring platforms for IBM, mainframes, services, middleware, and the newest hybrid cloud. He says that IBM must win the architectural battle for hybrid cloud. Now, I'm going to really share later what we think that means. There's a lot in that statement, including the role of AI in the edge. Both of which we'll address later on in this breaking analysis. But before we get there, I want to understand from a historical perspective where we think Arvind is going to take IBM. And to do that, we want to look back over the modern history of IBM, modern meaning of the post mainframe dominance era, which really started in 1993 when Louis Gerstner took over. Look, it's been well documented how Louis Gerstner pivoted into services. He wrote his own narrative with the book, "Who Says Elephants Can't Dance". And you know, look, you can't argue with his results. The graphic here shows IBM's rank in the fortune 500, that's the green line over time. IBM was sixth under Gerstner, today it's number 38. The blue area chart on the Insert, it shows IBM's market cap. Now, look, Gerstner was a hero to Wall Street. And IBM's performance under his tenure was pretty stellar. But his decision to pivot to services set IBM on a path that to this day marks company's greatest strength, and in my view, its greatest vulnerability. Name a product under the mainframes in which IBM leads. Again, middleware, I guess WebSphere, okay. But you know, IBM used to be the leader in the all important database market, semiconductors, storage servers, even PCs back in the day. So, I don't want to beat on this too much, I can say it's been well documented. And I said earlier, Ginni essentially inherited a portfolio that she had to unwind, and hence the steep revenue declines as you see here, and it's 'cause she had to jettison the so called non-strategic businesses. But the real issue is R&D, and how IBM has used it's free cash. And this chart shows IBM's breakdown of cash use between 2007 and 2019. Blue is cash return to shareholders, orange is research and development, and gray is CapEx. Now I chose these years because I think we can all agree that this was the period of tech defined by cloud. And you can see, during those critical early formative years, IBM consistently returned well over 50%, and often 60% plus of its free cash flow to shareholders in the form of dividends and stock buybacks. Now, while the orange appears to grow, it's because of what you see in this chart. The point is the absolute R&D spend really didn't change too much. It pretty much hovered, if you look back around 5 1/2 to $6 billion annually, the percentage grew because IBM's revenue declined. Meanwhile, IBM's competitors were spending on R&D and CapEx, what were they doing? Well, they were building up the cloud. Now, let me give you some perspective on this. In 2007 IBM spent $6.2 billion on R&D, Microsoft spent 7 billion that same year, Intel 5.8 billion, Amazon spent 800 million, that's it. Google spent 2.1 billion that year. And that same year, IBM returned nearly $21 billion to shareholders. In 2012 IBM spent $6.3 billion on R&D, Microsoft that year 9.8 billion, Intel 10 billion, Amazon 4.6 billion, less than IBM, Google 6.1 billion, about the same as IBM. That year IBM returned almost $16 billion to shareholders. Today, IBM spends about the same 6 billion on R&D, about the same as Cisco and Oracle. Meanwhile, Microsoft and Amazon are spending nearly $17 billion each. Sorry, Amazon 23 billion, and IBM could only return $7 billion to shareholders last year. So while IBM was returning cash to its shareholders, its competitors were investing in the future and are now reaping the rewards. Now IBM suspended its stock buybacks after the Red Hat deal, which is good, in my opinion. Buybacks have been a poor use of cash for IBM, in my view. Recently, IBM raised its dividend by a penny. It did this so it could say that it has increased its dividend 25 years in a row. Okay, great, not expensive. So I'm glad that that investors were disappointed with that move. But since 2007, IBM has returned more than $175 billion to shareholders. And somehow Arvind has to figure out how to tell Wall Street to expect less while he invests in the future. So let's talk about that a little bit. Now, as I've reported before, here is the opportunity. This chart shows data from ETR. It plots cloud landscape and is a proxy for multi-cloud and hybrid cloud. It plots net score or spending momentum on the y-axis, and market share, which really isn't market share, as we've talked about, it's a measure of pervasiveness in the data set, that's plotted on the x-axis. So, the point is, IBM has presence, it's pervasive in the marketplace, Red Hat and OpenShift, they have relevance, they have momentum with higher net scores. Arvind's opportunity is to really plug OpenShift into IBM's, large install base, and increase Red Hat's pervasiveness, while at the same time lifting IBM momentum. This, in my view, as Stu Miniman and I reported last week at the Red Hat Summit, puts IBM in a leading position to go after multi and hybrid cloud and the edge. So let's break that down a little bit further. When Arvind talks about winning the architectural battle for hybrid cloud, what does he mean by that? Here's our interpretation. We think IBM can create the de facto standard for cloud and hybrid cloud. And this includes on-prem, public cloud, cross clouds, or multi cloud, and importantly, the edge. Here's the opportunity, is to have OpenShift run natively, natively everywhere, on-premises in the AWS cloud, in the Azure Cloud, GCP, Alibaba, and the IBM Cloud and the Oracle Cloud, everywhere natively, so we can take advantage of the respective services within all those clouds. Same thing for on-prem, same thing for edge opportunities. Now I'll talk a little bit more about that in a moment. But what we're talking about here is the entire IT stack running natively, if I haven't made that point on OpenShift. The control plane, the security plane, the transport, the data management plane, the network plane, the recovery plane, every plane, a Red Hat lead stack with a management of resources is 100% identical, everywhere the same cloud experience. That's how IBM is defining cloud. Okay, I'll give them a mulligan on that one. IBM can be the independent broker of this open source standard covering as many use cases and workloads as possible. Here's the rub, this is going to require an enormous amount of R&D. Just think about all the startups that are building cloud native services and imagine IBM building or buying to fill out that IT stack. Now I don't have enough time to go in too deep to all other areas, but I do want to address the edge, the opportunity there and weave in AI. Beyond what I said above, which I want to stress, the points I made above about hybrid, multi-cloud include edge, the edge is a huge opportunity. But IBM and in many other, if not most other traditional players, we think are kind of missing the boat on that. I'll talk about that in a minute. Here's the opportunity, AI inference is going to run at the edge in real-time. This is going to be incredibly challenging. We think about this, a car running inference AI generates a billion pixels per second today, in five years, it'll be 15 times that. The pressure for real-time analysis at the edge is going to be enormous, and will require a new architecture with new processing models that are likely going to be ARM-based in our opinion. IBM has the opportunity to build end-to-end solutions powered by Red Hat to automate the data pipeline from factory to data center to cloud and everywhere. Anywhere there's instruments, IBM has an opportunity to automate them. Now rather than toss traditional Intel-based IT hardware over the fence to the edge, which is what IBM and most people are doing right now, IBM can develop specialized systems and make new silicon investments that can power the edge with very low cost and efficient systems that process data in real-time. Hey look, I'm out of time, but some other things I want you to consider, IBM transitioning to a recurring revenue model. Interestingly, Back to the Future, right? IBM used to have a massive rental revenue stream before it converted that base to sales. But if Arvind can recreate a culture of innovation and win the day with developers via its Red Hat relationships, as I said recently, he will be CEO of the decade. But he has to transform the portfolio by investing more in R&D. He's got to convince the board to stop pouring money back to investors for a number of years, not just a couple of quarters and do Whatever they have to do to protect the company from corporate raiders. This is not easy, but with the right leader, IBM, a company that has shown resilience through the decades, I think it can be done. All right, well, thanks for watching this episode of the Wikibon CUBE Insights powered by ETR. This is Dave Vellante. And don't forget, these episodes are available as podcasts, wherever you listen, I publish weekly on siliconangle.com, where you'll find all the news, I publish on wikibon.com which is our research site. Please comment on my LinkedIn posts, check out etr.plus, that's where all the data lives. And thanks for watching everybody. This is Dave Vellante for Breaking Analysis, we'll see you next time. (soft music)

>> Hey, welcome back, everybody. Jefe Rick here with the Cube. Where? It Oracle Park in San Francisco, on the stork with cubby code. We're excited to be here. They're moving a lot of dirt, I think downstairs. But we're at a very cool event. It's called Sports Tech Tokyo World Demo Day. And we're excited. Have our next guest. He's Todd Simms s VP of corporate development from access taught. Great to see you. Great >> to be here. Thank you. Absolutely. So, for people are familiar with access. Give us kind of the company over here. >> We're a global ticketing company. We were launched out of ah global sports and entertainment company called E E G in 2011. And we serve live the live entertainment market and ticketing. Excellent. >> All over the world, >> different types of events. >> E e g. Is a global company with a run venues worldwide. And we serve them as well as third party clients. >> Okay, great. So we're here. It's sports tech, Tokyo. It's a little bit different. Type of an organization. Kind of an incubator. Not really an incubator kind of association, early association, but certainly a community. Why are you guys here. What is this organization mean to you? Why is that important? >> Yeah, it's really important. We We launched our ticketing service in Tokyo last year, and you know, that's a market that we love. It's a vibrant large market with super passionate fans, both on the sports side and on the music side. What it really needs is more of an ecosystem. It can't just be a new, innovative ticketing platform needs all the bells and whistles around it to really innovate the fan experience. And that's what these startups are doing. I >> just I just love this job because, you know, you think of many industries if you're not familiar with them, and they seem really simple on the outside and like everything, once you get under the covers, >> a lot more going on. So >> from the outside, looking in a ticket is a ticket. Yeah, what's the innovation and tickets? What's different about somebody in Japan buying a ticket to watch a baseball game than >> somebody find a ticket to come here to talk >> a little bit about what we're bringing to Tokyo and what we brought to our platform of clients here in the States as well as in Europe, and that's really a digital I. D based ticketing system. So when you walk into the Staples Center at L. A live in Los Angeles, that thing that's getting scanned is not a ticket. It's an identity, it's you. And what's being reviewed is whether you have access to that building on that night or not. So what that allows for is full data around the customer base. Every president of every team wants to know two things. They want to know who's in there building, and they wanna have some control, whether it's economic control or otherwise on the secondary market. Our digital I D ticketing system enables both of that, and that's kind of the innovation that we're bringing to the Tokyo market. >> But I would imagine when you say, you know it's me, you know the opportunities way beyond that because now you know what in my preference is, how often do I come? What kind of beer do I like to drink? It just opens up a whole kind of CR m ah, world of opportunity for this relationship between the team now in that person with that barker, >> absolutely, and that happens today, but what you're missing is every time someone comes in with a paper ticket, you're really not sure who's entering the building. So that eliminates that piece of that. And it gets all these teams with analytic departments to really have a full picture of their fan base. So, you know, they may have been investing in some of this and capturing 60 70% of their who's in the building. Now they have 100% right, >> and I would imagine they've been doing this for a long time, with kind of their season ticket base and knowing they're in the building. But it got a lot of data on their season ticket holders. How is that? You know, changed. What can they apply there to? The casual fan that maybe bought a ticket on the secondary market and his, you know, common is sitting in the bleachers? >> Well, it's huge >> for up sales and establishing that relationship. A lot of teams, if you've you know, just buying a single ticket off a secondary market, you're nowhere in that database now because of our I D based system. Those people are now prospects for either mini pack or a season ticket back. It's right. Just >> curious how the rise of the secondary market really impacted the teams and how they think about their own ticket based. I think the 1st 1 is probably StubHub back in the day for some, and it all happened kind of outside the purveyor of leagues and outside the purveyor of the teams. Likely, they're pretty smart and figured out we need to be a piece of this. So how did that kind of evolution change the way the teams think about their fans? Well, look, I mean, teams >> like music promoters, they Sometimes they like the brokers getting involved because it takes risk off the table. I think teams air realizing, though, that a riel yield management perspective on their ticket inventory to really revenue manage this appropriately. They have to take a holistic approach on their >> tickets, and any time you >> have a segment of your >> ticket base where you really don't have control of pricing distribution, >> all of that, it really hurts and it has an impact on your unsold primaries. So what teams are looking to do is gain more control and manages inventory more holistically to do that you really need to know all the data. And again, the I. D based ticketing system enables secondary sales. But at least you are tracking those sales and, you know, from one person to the next who who sold it, who bought it >> right? I'm curious to get your perspective on on the difference between if you arm or >> entertainment focused. So you know, the Rolling Stones were in town a couple nights ago, and it's really a one shot deal for the Rolling Stones in the Bay Area that night versus the Giants game, right where you're hoping that your people come back over and over. Did they think of it differently? Or is it Maur? You know, Jeff, you like music? You went to the Rolling Stones last night. Maybe you'll come and see somebody else tonight. Is that is that well, can't were they? No doubt, sports teams are >> a lot smarter about their fan base. They have loyalty built in. They have got history, you know there's variability. There's night of game. And then there's weather in who's on the mound and all of those factors. But promoters are, ah, lot more in the dark about, you know, Is this an artist that you know? How much credence can they put in the last two? Or they did. It's too been two years. Is that artist still going to sell appropriately or similarly than they did last time again? The secondary market on the music side is made a bigger issue because of that variability, and those promoters are willing to take risk off the table. But the same thing applies in order for them to really manage and revenue manage that tour. They really need to know who's buying and grab some of that secondary economics out of the system. Right? And that's again, what our platform enables, and that's what we're really bringing to the Tokyo market. It's really exciting. That's a great market for >> us. I was gonna say just to close. >> You know what's special about the Tokyo market either? From an opportunity side, we're kind of a unique way which they do things or unique way in which the kind of the fan experiences as you look at that market. >> Well, it's interesting. I mean, in a culture that is so reliant on such interesting technology, these ticketing technology is actually quite old, and so we're excited to bring that. We've got great partners past Revo is our partner there, and they're really selling that through the Yahoo ticketing channel. Uh, they we have we just signed the B league, which is the professional basketball league will be rolling them out in their fall season coming up soon here. But basically, they are looking for the same things. We're looking for more data and Maura capturing of the secondary market, and we can bring that to them. >> All right. Well, Todd, thanks for taking a few minutes. Pull the covers back off ticketing A lot more going on than people think. Thank you very much. All right, He's >> taught. I'm Jeff. You're watching The Cube. Were Rhetorical Park on the shores of >> McCovey Cove in San Francisco. Thanks for watching. We'll see you next time.

(soft rock music) >> Announcer: Live from Los Angeles, it's theCUBE. Covering Open Source Summit North America 2017. Brought to you by the Linux Foundation and Red Hat. >> Hello everyone, welcome to a special Cube coverage here in Los Angeles, California for The Linux Foundation's Open Source Summit in North America. I'm John Furrier, co-host of The Cube. This week I'll be co-hosting with Jeff Frick and Stu Miniman who will be here shortly. He's out getting data from the keynotes and scouring the community for information. Two days of coverage of line up here. Open source is changing the world. More than ever, open source is continuing to accelerate. Over 23 million developers now actively programming with open source. Where the world economy is now based on open source, relies on open source, and where open source and code is changing culture. Jeff, had a great keynote from the Linux Foundation open source community, and really this is an accumulation of many, many years of coverage for us in the developer community. Kind of sitting above all the different communities like Stack Overflow, all the different source foundational communities: Open Stack Summit, Cooper Netty's, KubeCon, now CNCF, a variety of other shows, and obviously industry shows. And this is now, we're seeing where open source is becoming so mainstream on a global scale, we're seeing something unprecedented in the history of the computer industry and that is the role of open source in society. And I think the number one message we're seeing is that the Linux software has been around for 25 plus years. Linus Torvalds was on stage today kind of like reminiscing. He's been Time Man of the Year, he's won the Nobel Prize in Computer Science, the Millennial Award I think it's called. Essentially the top award. 17th most important person in this decade. Linux is now a main force. People are relying on open source, and then look no further than the Equifax pact that has changed 150 plus million people in terms of their, potentially identity fraud out there. It's from open source software, so you're starting to see the reliance of open source, where a sustainable ecosystem is continuing to grow, but security is a concern, and which projects to join. There's so much action, I called it open bar and open source. There's so much goodness flowing in from Google, IBM, you name the companies out there. People are being paid to learn and write code at this point in history. This is a historic moment for the open source community. As society starts to be molded by the shape of code in the keynote they call it a Do-Acracy. For doers and builders who are changing democracy on a global scale. This is the big theme and obviously a slew of announcements on a project basis: Certification for Cooper Netty's, new people joining, the CNCF and a variety of different projects. But certainly from our standpoint and theCUBE, we covered a lot of the game of this past eight years. Certainly the Cloud and big data, and the software ecosystem. Software-defined Data Center to software eating the world, Data Science eating the world. This is only going to continue with things like Blockchain, virtual reality. And as fake news and bought networks in the cloud continuing to change the notion of what the source is, not just source code, source of information. More than ever, the role of communities will play a front and center role in all of this. >> Yeah I think that's as big of a deal as the software piece, John, is the role of communities that open source creates. And it's a different way of thinking about things. It's a different way of trying to get more innovation. It's acknowledging that the smartest people aren't necessarily in your four walls. So it's really an attitude, but I want to get your take 'cause there's a couple models of stewardship in the open source world. We're here at Open Source Summit in L.A. Linux Foundation event. Linux Foundation is taking on more and more of the stewardship of many of these projects, kind of bringing it under one roof. We see another model where the stewardship is kind of driven by one particular company, right, that's trying to build a commercial business around an open source stack, but there's a couple companies that have become almost the defacto steward for a new and evolving open source space. How do you see the pros and the cons against those two models. Ya know it's great is you got a great steward, it's maybe not so great is the steward is not so terrific and you get a conflict between the steward of the technology and the actual open source project. >> Well, Jeff, and this is the fundamental question on everyone's mind here, as we continue to see the communities grow. And also the scale out of communities as well as the number of overall lines of code. So a couple of key things, one is: We call it the ruling class, that's the elephant in the room here at the show is, we see it in politics, identity politics shaping our national level and certainly on a global scale. China blocking all block chain, ICOs, and all virtual currencies as of today. You're starting to see the intersection of geopolitics with code. Where the notion of a democracy, or democratization, or do-acracy, as one of the speakers has called it. You can think of code, lines of code, as a vote. You write a line of code, that's a vote into an ecosystem. And we're starting to see these notion of distributed labor, distributed control changing the face of capitalism. Ya know, it's really happening, and the value that corporations are creating in this new model is a real dynamic. And really what's happening is the change from a ruling class, even in the software world. The success of open source has always been based upon self-governance. Self-governance implies a group collective that manages and approves things. That group collective, some would argue, has not been inclusive over the years. Certainly the role of women in tech has been an issue. And so what you have developing is the potential for a ruling class of what shapes the future culture. Certainly there's a no-brainer with women in tech that there should be more women in tech because half the people in the world are women. They're users of software. Software is going to be relied on by all aspects of our world. Not just in Earth but also in Space. So, the notion of ruling class is changing and the inclusion is a huge deal. Onboarding new people. Building on individual successes, and building it together as a group relies on inclusion. It relies on inlcusion of people, and requires inclusion of how the self-governance goes forward. And again, this is a major concept in this world as it evolves because like I said, open source is relied on, people are leaning on it at a tier one level. Software that's powering the telescope in the North Pole, in the Antarctic to Space stations all use Linux. And this is, again, what we're seeing. Getting technology in the hands so people can use code to shape culture. That is ultimately a big thing, we're at a tipping point right now, were at an inflection point, whatever you want to call it. Open source is continuing to grow, and that culture-shaping notion of code equals culture, is really what it's all about, and the role of community is more important than ever. And inclusion is the number one factor in my opinion. >> The other interesting thing to get your take, John, is Android. So Linux has been around for a long time, everybody knows about Linux, and there was lots of flavors and it all kind of aggregated. Android is really growing as a significant factor, and I think it was announced here that Samsung has now joined the project. And there's a really interesting little gizmo now that you can take your Samsung phone, stick it in a docking station, and have it power a big giant screen and a keyboard. And so, ya know, as Android has developed as the power in the handheld devices, it's closer and closer, it's not surpassing what we have in these things. It's another big kind of shot in the arm towards the open source ecosystem that really wasn't as significant as it is today. >> Well I mean the Android Operating System is again, just an operating system in the minds of the tech world. Obviously consumers use it, device, huge market share iOS Android and even other operating systems. Who knows, maybe it'll be the year of Linux on the phone, at some point. But you're starting to see software powering devices. This is the internet of things phenomenon. This is where you start to see trends that build out of that notion, like Blockchain, like A.I. are going to start impacting lives. And that's one thing that Linus Torvalds was saying on stage was, the most rewarding thing in his career with all the accolades aside; the fact that he's had an impact on people's lives has been the number one thing that motivates him. That's what motivates most people. So I would say that the Android significance is one of pure numbers. More market share, more penetration for the user experience. And the user experience is a cultural issue. Back to culture equals code. And, inclusively powering everyone to get involved and be part of it, either as a user or a participant in the community or a coder, really is about deciding the future, and if people do not get involved and are not included, then the ruling class will decide what's best for the culture, and that is not the theme here today. The theme here in open source for the next level is letting the code and the technologists in an open collaborative self-governing way be in communities, be inclusive and shape the culture, letting the code shape the culture. And Android, again, is another straw in the camel's back that allows for more penetration and more influence. More relevance, and continued relevance of technology. Providers, coders, communities and certainly individuals. And again, collective intelligence is a group phenomenon. That is a community powered theme. That is what's going on here and again, this is to me, is very radical disruption to the global society. >> Get your take John, 'cause then you get kind of forking and things kind of move and groove, it's kind of like a river, finds another path, right. And you had the container and docker really drove a lot of activation on the container side. Google comes out strong with Cooper Netty's, another open source project that we just heard at the VMworld a week ago. Pivotal get on stage with Michael Dell and Pat Gelsinger talking about kind of a new derivation that they're kicking out that's not Cooper Netty's. I forget what it's called, a different, cube-something >> John: PKS. >> PKS. >> John: A little container service. >> Continues to evolve and kind of fork. So what's your take on kind of how these things continue to morph. >> Well that's a good point, I mean you're talking about vendors in industry. Industry is a term that they use here it's kind of a polite term for saying companies with a vol for capitalism. And capitalism, one of the factors involved in what's going on here: corporate value is not a bad thing. But capitalism driving the culture is not what it wants. Distributed labor, distributed control, changing the face and capitalism is about the role of open source. So there's a role for industry and corporations. The issue is that as vendors, in the old model, which is put stuff out there, control the standards bodies and influence the industry through their proprietary mechanisms. That's changed and they don't have the proprietary nature but they can try to use their muscle and money. That's not happening anymore, and I think forking, as you mentioned, the ability to take a piece of code and build on it, whether it's a framework or libraries out there. And writing custom code is what Jim Zemlin was talking about with us is the code sandwich. That 90 percent of the software out there is open source and only ten percent is highly differentiated. That is the programming model. So, to me I think forking is a wonderful democracy dynamic in open source. If you don't like it, you can fork it. And if it doesn't make it, then the Do-Acracy voted with their code. So, this a term you call voting with your code. We can use the term in marketing called people vote with their wallet, vote with their feet. In communities, in open source they vote with their code. So to me, forking if a good thing that provides great opportunity for innovation. The issue of vendors pushing stuff out there is what I call the calling the bullshit factor. Communities that are vibrant and sustainable they can call bullshit on this right away. So, companies can't operate on the old model, they have to ingratiate in, they have to make real contribution, and they have to be community citizens. Otherwise you're going to get called out for pushing their vendorware. And that is interesting, and I'm not saying that they are doing that but Pivotal is a great example. Ya know, Pivotal put out a pretty good service, makes Cooper Netty's manageable, Google Cloud engines tied directly to it. So any updates coming from the Google Cloud engine gets updated into Pivotal, that's the value to users. If it sucks, if it doesn't work well, people won't use it. So, voting with your code, voting with your feet, is what people will do. So there's now a new level of triangulation or a heat shield if you will from vendor dominance, throwing their muscle around and even Microsoft is here with Linux. It's a huge testament to the success of Linux, and that's really what it's all about. >> Yeah, Microsoft is here, Intel is here. A lot of big companies are here and a lot of, in the early days, people had issues with the big companies coming in. But, clearly they're a huge part of the ecosystem, they write big checks, they help fund nice events like this. So the last question for you John, before we get into it: Two days of wall to wall coverage, what are you looking for? What are some of the questions that you've got on top of your mind that we'd hope to get some answers over the next couple weeks, or couple days, excuse me. >> Well I saw a great quote up on stage, was called May The Source Be With You. And, it was kind of a Star Wars reference: May the force be with, may the source code be with you, if you will. I'm looking for things that changed people's lives, 'cause the theme in open source now is the reliance of code in all aspects of global life here on earth and in space now as we see it. That the quality of life for society depends on open source. And again, 90 percent of most great software is written in open source, ten percent is differentiated and unique. That's the model they call the code sandwich. It's easy to code, it's easier to get involved. There's more communities that are robust and vibrant. If it impacts the quality of life, so that's one thing. The second thing I'm looking for is, we're looking at some of these new future trends and I've been really thinking a lot about lately as you know in theCUBE, is the role of Blockchains and these really disrupted technologies. We've started to see the power of the user in communities where there's technologies empowering the individual at the same time creating a group dynamic where the groups can build. So, individual success can be part of something that contributes to a group that can build on top of it. That's an open source flywheel that works great. I'm looking for Blockchain, I'm looking for those new technologies that are going to be in that vein. And of course, the outcome is: Does it impact lives, does it make the quality of life better? >> Alright. Well you heard it there, we'll be here for two days of wall to wall coverage. We're at the Open Source Summit North America in L.A. It's pretty funny, right next to Staples Center. John, I don't think we've ever been right downtown L.A. You're watching theCUBE, we'll be back with our next guest after this short break, thanks for watching. (light electronic music)

hi from Las Vegas Nevada it's the cube covering IBM world of Watson 2016 brought to you by IBM now here are your hosts John Fourier as Dave Volante hey welcome back everyone we are here live at the Mandalay Bay at the IBM world of Watson this is Silicon angles cube our flagship program we go out to the events and extract the signal from the noise I'm John Fourier with my co-host Dave allanté for the two days of wall-to-wall coverage our next guest is michelle fools so who's the chief marketing officer for IBM knew the company fairly new within the past year yes welcome to the queue last month I think you check all these new hires a lot of new blood coming inside me but this is a theme we heard from Staples to be agile to be fast you're new what's what's your impressions and what's your mandate for the branding the IBM strong brand but yes what's the future look well look I'm I'm thrilled to be here and I'm thrilled to be here because this is an extraordinary company that makes real difference in the world right and that I think you feel it here at the world of Watson in the sort of everyday ways that Watson and IBM touches consumers such as end-users makes their health better you know allows them to have greater experiences so so that's incredible to be part of my kind of company having said that and exactly to your point it's a time of acceleration and change for everyone in IBM is not immune to that and so my mandate here in my remit here and coming in and being a huge fan of what IBM has to say well how do we sharpen our messaging how do we always feel like a challenger brand you know how do we think about what Watson can do for people what the cloud can do what our services business can do and how is that distinctive and differentiated from everybody else out there and I think we have an incredible amount of assets to play with that's got to be through the line you know it's no longer the case that we can have a message on TV and that you know attracts the world the digital experiences are having every single day when they're clicking through on an ad when they're chatting with somebody when their car call center when they have a sales interaction is that differentiated message that brand resident all the way through second thing is marketing's become much more of a science you know and that to me is super exciting I've been a CEO most of my career and you know that the notion that marketing has to drive revenue that marketing has to drive retention and loyalty and expansion that we can come to the table with much more science in terms of what things are most effective in making sure that more clients love us more deeply for longer I'm gonna ask you the question because we had we've had many conversations with Kevin he was just here he was on last year Bob Lord the new chief digital officer we talked to your customers kind of the proof points in today's market is about transparency and if you're not a digital company how could you expect customers to to work with them so this has been a big theme for IBM you guys are hyper focused on being a digital company yes yes and how does it affect the brand a brand contract with the users what's your thoughts on that well first of all Bob Lord is awesome we've known each other for 10 years so it's so wonderful to be working with him again and Dave Kenny as well I think that the at the end of the day consumers have experiences and and you know think of every business you know out there as a consumer and they're having experiences all the time their expectations are being shaped by the fact that they go on Amazon and get prime delivery right their expectations are being shaped by they can go on Netflix and get you know personalized recommendations for them or Spotify and so our job of course and we have some of the greatest technical minds in the world it's to make sure that every experience lines up with the highest of their expectations and so much of that is digital and so my passion my background is entirely in the digital space I have a CEO of Travelocity and then CEO of gilt chief marketing a digital officer at Citigroup so the notion that you know the world's greatest digital experiences is something I'm very passionate about you mentioned Zelda so big TV ads and you think of the smarter planet which was so effective but it was a big TV campaign so you do what's the what's the sort of strategy that you're envisioning is in sort of digital breadcrumbs maybe you could talk about deadly yeah well think about Watson it's a perfect place to think about the Watson branding what does Watson really mean right Watson is and Ginni has said this so well of course it's cognitive and but at the end of the day it's about helping people make better decisions and so you can do some advertising with Watson and Bob Dylan and Watson and you know the young young girl with Serena and and you can get that messaging high but then you've got to bring it all the way through so that's why it's something like this is so powerful to see Woodside up their alley or all these companies talking about staples how they are using Watson embedded in their processes their tools to make their end-users experiences better and how nobody else could do this for them the way Watson's doing it that's taking a brand on high and advertising message on high and delivering value for businesses for patients for consumers all the way through that's what we have to do I got to ask you about that ad advertising trends I so we all see ad blocker in the news digital is a completely different new infrastructure expanded dynamic with social what not you can talk about Bob and I were talking last night about it too you Trevor you know banner ads are all out there impression base and then coded URLs to a landing page email marketing not gonna go away anytime soon but it's changing rapidly we have now new channels yeah what's your thoughts because this is now a new kind of ROI equation is there any thoughts on how you look at that and is it going to integrate into the top level campaigns how are you looking at the new digital that the cutting-edge digital stuff huge amounts of thoughts on this topic so I think you know if you think back 15 20 years ago there were always something called market mix modelling which helps advertisers and marketers to understand the effectiveness of their TV campaigns and frankly not too dissimilar from Nielsen you know there were so there was art and science at best in it and then all of a sudden the digital world evolved and you could get at a tactical level very very clear about attribution and whether you drove something and the challenge for us now is much more sophisticated models that are multi-touch attribution because the reality is an average consumer doesn't do one thing or have one interaction with a brand they're gonna see a TV show and watch a commercial while they're watching that commercial that business user or that end consumer is on their iPad or on their phone they're seeing a digital ad the next day at work they're being retargeted because they were aughts company they search for something they see a search campaign our job is to connect those dots and understand what really moves that consumer that business user to take an action and there are many sophisticated multi-touch attribution models where you model you know a standard set of behaviors and you test correlations against a bunch of different behaviors so you understand of what I did all the money I spent what really drove impact and by cohort I think that's the other credit there's no more the sense of sort of aggregated everything you really have to break it out yeah I didn't space my cohort to see what moves me and improve that experience right which has been you you get the example in the day of the Hilton retirees you already know that the retard the hotel was full so so obviously Watson plays a role in them Satyam plays a role in that so it's all about data it's all about you know that's where I think Watson can be extraordinarily helpful so if you think about the tool as a marketer has they're becoming more and more sophisticated and retargeting with something out of 10 years ago whenever was introduced that helped all of us a little bit and getting that message but it is only as good as the API is behind it and the the experience behind it when now when I was at gilt I was CEO of gilt we would put over a thousand products on sale every day that would be sold out by the next day sales down this 24-hour flash sale we had to get really really good at knowing how to how to retarget because last thing you want is to retarget something that sold out right or gone the next day and understand the user that was in and out and they're coming back and of course in that cohort that's where Watson to me is very exciting and you probably saw this in some of the demos of where Watson can help marketers you know where Watson can can really understand what are the drivers of behavior and what is likely to drive the highest purpose why were you so successful at guild and and how are the challenges different years because there's a sort of relatively more narrow community or city group to I was called the chief marketing and digital officer at Citigroup and and you know a tremendous budget and a lot of transactions you have to drive every day a lot of people you want to open credit cards and bank accounts so around the world I think that the the relentless focus on on marketing being art and science you know art and science and I think that's you know that passion for analytics passion for measurement having been CEO that passion for being able to say this is what we're doing and this is what we're driving so you've been kind of a data geek in your career you mentioned the financial services you can't to measure everything but back to the ad question you know the old saying used to be wasting half my advertise I just don't know which half yeah and my archives is wasted but now for the first time in the history of business in the modern era you measure everything online that's right so does that change your view and the prism of how you look at the business cuz you mentioned multi-touch yeah so now does that change the accountability for the suppliers I mean at agencies doing the big campaign I think it changes the game for all of us and there's no destination this is every day you can get better at optimizing your budget and and I would be the first to tell you as much of a sort of engineering and data geek because I've always been and deep-fried in the reality is there is art even in those attribution models what look back windows you choose etc that you know you're making decisions as a company but once you make those decisions you can start arraying all of your campaigns and saying what really moved the needle what was the most effective it's not an indictment that say what are we can do differently tomorrow you know the best marketers are always optimizing they're always figuring out at what point in the final can we get better tomorrow well in answer about talent because that's one of the things that we always talk about and also get your thoughts on Women in Technology scheme we were just at Grace Hopper last week and we started to fellowship called the tech truth and we're doing it's real passion area for us we have a site up QP 65 net / women in tech all women interviews we're really trying it the word out but this is now a big issue because now it's not stem anymore it's team arts is in there and we were also talking to the virtual reality augmented reality user experience is now potentially going to come into the immersion students and there's not enough artists yeah so you starting to see a combination of new discipline talents that are needed in the professions as well as the role of women in technology yeah your thoughts on that because this isn't you've been very successful what's your view on that at what's your thoughts about thank you for what you're doing right it takes a lot of people up there saying that this is important to make a difference so most of all thank you you know I think that this this is obviously a place I've been passion about forever I remember being a and being pregnant and that becoming this huge you know issue a news story and you're trying to juggle it right and how could a woman CEO be pregnant so it's so funny how people ridiculous took attention but but I think that the point is that the the advantage as a company has when there are great women in engineering and great women in data science and great women and user experience and design are just palpable they're probable in a variety of ways right when the team thinks differently the team is more creative the team is more open to new ideas the output for the customers are better right I mean they just saw a snapchat today just announced that in 2013 70% of their users were women so all the early adopters were women you know now it's balance but the early the early crowd were women and so we have got to figure out how to break some of the minds now I'm incredibly encouraged though while we still have a long way to go the numbers would suggest that we're having the conversation more and more and women are starting to see other women like them that they want to be it's a global narrative which is good why we're putting some journalists on there and funding it as and just as a fellowship because this it's a global story yeah okay and the power women I mean it's like there are real coders and this real talent coming in and the big theme that came out of that was is that 50% of the consumers of product are women's but therefore they should have some women features and related some vibe in there not just a male software driven concept well and should too when a powerful individual male individual like Satya steps in it and and you know understands what the mistaken and someone like refer to his speech two years ago where he said that you should just bad karma don't speak up and opening up transparency he got some heat yeah but that talk as you probably know but my opinion it's it's it's a positive step when an individual like that it was powerful and opening transparency within their company yeah that's it is that great networking I host a core I've been doing this for a year years with a good friend of mine Susan line from AOL we host a quarterly breakfast for women in tech every every quarter in New York City and we've been doing it for a long time it's amazing when those women come together the conversations we have the discussions we have how to help each other and support each other and so that's that's a real passion we were lost in a few weeks ago for the data science summit which Babu Chiana was hosting in and one of the folks was hosting the data divas breakfast we a couple there were a couple day two dudes who walked in and it was interesting yeah the perspectives 25 percent of the women or the chief data officer were women mm-hmm which was an interesting discussion as well so great 1,000 men at 15 you know as you see that techno but it's certainly changing when I get back to the mentoring thing because one of the things that we're all so passionate about is you've been a pioneer okay so now there's now an onboarding of new talent new personas new professions are being developed because we're seeing a new type of developer we're seeing new types of I would say artists becoming either CG so there's new tech careers that weren't around and a lot of the new jobs that are going to be coming online haven't even been invented yet right so you see cognition and what cognitive is enabling is a new application of skills yep can your thoughts on that because this is an onboarding opportunity so this could change the the number of percentage of women is diverse when you think about what I mean it's clear your notion of steam right your notion of stem that is a male and female phenomena and that is what this country needs it's what this world needs more of and so there's a policy and education obligation and all of us have to the next generation to say let's make sure we're doing right by them in terms of education and job opportunities when you think about onboarding I mean to me that the biggest thing about onboarding is the world is so much more interconnected than it used to be if you're a marketer it's not just art or science you have to do both it's a right brain left brain connectivity and I think 1020 years ago you could grow up in a discipline that was functional and maybe siloed and maybe you were great at left brain or great at right brain and the world demands so much more it's a faster pace it's an accelerated pace and the interconnection is critical and I've one of the things we're doing is we're putting together these diamond teams and I think it's going to really help lead the industry diamond teams are when you have on every small agile marketing team and analytics head a product marketing had a portfolio marketing had a design or a social expert these small pods that work on campaigns gone are the days that you could say designer designs it product comes up with the concept then it goes so it's design team then it goes to a production team then it goes to an analytics team we're forcing this issue by putting these teams together and saying you work together every day you'll get a good sense of where the specialty is and how you learn how to make your own discipline better because you've got the analytics person asked a question about media buying and media planning advertising as we're seeing this new real-time wet web yeah world mobile world go out the old days of planned media buyers placed the advertisement was a pacing item for execution yep now things you mentioned in the guild flash sales so now you're seeing new everyday flash opportunities to glob on to an opportunity to be engagement yeah and create a campaign on the fly yes and a vision of you guys I mean do you see that and does it change the cadence of how you guys do your execution of course of course that's one of the reasons we're moving to this diamond team and agile I think agile will ultimately be as impactful to marketing as it was to engineering and development and so I think the of course and that has to start with great modeling and great attribution because you have to know where things are performing so that you can iterate all the time I mean I believe in a world where you don't have marketing budgets and I know that sounds insane but I believe in a world where you set target and ranges on what you think you're gonna spend at the beginning of the year and every week like an accordion you're optimizing spend shipping code you've been marketing you should be doing like code so much of marketing is its episodic you boom and then it dies in a moment it's gone to the next one and you're talking about something that's I love that you know the personas to your point are much more fluid as well you got Millennials just creating their own vocations yes well this is where I think consumer companies have led the path and you know if you think about a lot of b2b companies we've had this aggregated CIO type buyer and now we've got to get much more sophisticated about what does the developer want you know what's important to the developer the messaging the tools the capabilities the user experience what about the marketer you know what the person in financial services and so both industry and professional discipline and you know schooling now with Watson you don't have to guess what they want you can actually just ask them yeah well you can actually the huge advantage you got you observe the observation space is now addressable right so you pull that in and say and that's super important even the stereotype of the persona is changing you've been saying all week that the developer is increasingly becoming business oriented maybe they don't they want they don't want to go back and get their MBA but they want to learn about capex versus op X and that's relevant to them and they to be a revolutionary you have to understand the impact right and and and they want to ship code they want to change the world I mean that is every engineering team I've ever worked at the time only worked with I mean I've been as close to engineering as from day one of the internet or early on in the internet great engineers are revolutionaries they want to change the world and they change the world they want to have a broader and broader understanding of what levers are at their disposal and I will say that I you know and I am one of the reasons I came to yam is I am passionate about this point technology cannot be in the hands of a few companies on the west coast who are trying to control and dominate the experience technology has to exist for all those amazing developers everywhere in the world who will make a difference to end user this is IBM strategy you actually have a big presence on the west coast also in Germany so you guys are going to where the action centers ours but not trying to just be so Malory point is what exactly because my point is IBM has always been there for making businesses stronger and better we don't monetize their data that's not our thing our thing is to use our cloud our cognitive capabilities and Watson to make actual businesses better so that ultimately consumers have better health care and better results I know you're new on the job silence this is not a trick question just kind of a more conversational as you talk to Bob lower Bob Chiana Jeanne yeah what's the promise of the brand and you used to be back in the days when you know Bob piano we talk about when we I worked at IBM in the 80s co-op student and it was you'll never get fired for buying IBM mainframe the kind of concept but it's evolved and I'll see we see a smarter plan what's the brand promise now you guys talk about what's the brainstorm on its head I think that I think the greatest innovators the world the most passionate business leaders of tomorrow come to IBM to make the world better and I I believe this is a brand for the forward the forward lookers the risk takers the you know the makers I think that you come to IBM because there's extraordinary assets and industry knowledge real humans real relationships that we exist to make your business better not our business will be a vibrato be exist to make your business better that has always been where IBM has been strong you know it's interesting that brings up a good point and just riffing on that Dave and I were just observing you know at the Grace Hopper with our tech truth mentorship which is promoting the intersection of Technology and social justice you're seeing that mission of Technology business value and social justice as an integral part of strategies because now the consumer access the consumerization of business yeah software based is now part of that feedback you're not doing good Millennials demand it I mean Millennials now when you look at the research in the next generation high Millennials are very very you know they want to know what are you doing for the world I mean who could do a 60 minute show besides IBM who could have who could be on 60 minutes changing cancer changing cancer outcomes for people beside IBM that that is an extraordinary testament to what the brand is and how it comes to life every day and that's important for Millennials we had Mary click-clack Clinton yesterday she is so impressive we're talking about how though these ozone layer is getting smaller these are us problems it can be solved they have to be so climate change can be solved so the whole getting the data and she's weather compass oh she's got a visit view on that is interesting her point is if we know what the problems are we as a community global society could actually solve them completely and it's an you know the more we make this a political and we say here is a problem and we have the data and we have the tools we have the people and capabilities to solve it that is where IBM Stan's tallest well I think with Watson use its focused on some big hairy problems to start with and now you're knocking off some some of the you know maybe more mundane but obviously significant to a marketer incredible that a company can start with the hardest most complicated problems the world has and actually make a difference my final question when I asked Mary this yesterday and she kind of talked about if she could have the magic Watson algorithm to just do something magical her and what would it be and she said I'll send Watson to the archives of all the weather data going back to World War two just compile it all and bring it back or addressability so the question is if you could have a Magic Watson algorithm for your chief marketing officer job what would you assign it to do like what would it be it's like first task well first of all reaction of course I'm a mom of six year olds an eight year old and so I want Watson to optimize my time no but a chief marketing officer I mean I think it really does go back to getting Watson's help in understanding how we use a dollar better how we use a dollar smarter how we affect more customers and and and connect connects with more customers in the way we you know we communicate the way we engage the way we've put our programs out that would be extraordinary and that's possible that's becoming more and more possible you know bringing science into the art of marketing I think will have great impact on what we're doing in also just the world I mean nobody wants to have you know maybe targeted ten times for something that's sold out well we asked one more time here so I got some more couple of questions because it's not getting the hook yet I gotta ask you see you mentioned Travelocity you know the web you've been through the web 1.2.0 yeah yeah so on so URLs and managing URLs was a great tracking mechanism from the old impressions weren't working and go to call to action get that look right there but now we different where that world is kind of like become critical infrastructure for managing technology since you're kind of geeking out with us here what's your view of the API economy because now apps don't use URLs they use tokens they use api's they use new push notification based stuff what sure how does api's change the marketing opportunities both right it's clearly changes the engineering environment and sort of opens up the world of possibilities in terms of who you partner with and how etc and I think it changes the marketing world too and entirely right you think about the API economy and the access you have to new ways of doing business new potential partnerships new ways of understanding data you know that that is absolutely you know at the fore of a lot of our thinking it might change the agency relationships to if they got to be more technical in changing as much as fast as companies are and they have to you know they are an extension they're your best you should be able to look in a room of agency and your team and not know who is who when you can tell who is who you have a problem and so agencies themselves have to become you know way more scientific harder-hitting faster pace and outcomes orient and somebody sees now are saying you know what pay me on outcomes I love that I love that mode to say we're in the boat with you pay me on outcome and the big s eyes are right there - absolutely yes Michele Palooza new chief marketing officer at IBM changing the game bring in some great mojo to IBM they're lucky to have you great conversations and thanks for coming on the cube live at Mandalay Bay this is silicon angles the cube I'm John four with Dave Volante be right back with more after this short break