(upbeat music) >> From New York City, it's theCUBE. Covering "Welcome To The New Edge." Brought to you by Pensando Systems. >> Hey, welcome back here ready. Jeff Frick here with theCUBE. We are high atop Goldman Sachs in downtown Manhattan, I think it's 43 floors, for a really special event. It's the Pensando launch. It's really called welcome to the new edge and we talked about technology. We had some of the founders on but, these type of opportunities are really special to talk to some really senior leaders and we're excited to have John Chambers back on, who as you know, historic CEO of Cisco for many, many years. Has left that, is doing his own ventures he's writing books, he's investing and he's, happens to be chairman of the board of Pensando. So John, thanks for taking a few minutes with us. >> Well, more than a few minutes, I think what we talked about today is a major industry change and so to focus on that and focus about the implications will be a lot of fun. >> So let's jump into it. So, one of the things you led with earlier today was kind of these 10 year cycles and they're not exactly 10 years, but you outlined a series of them from mainframe, mini client server everybody knows kind of the sequence. What do you think it is about the 10 year kind of cycle besides the fact that it's easy and convenient for us to remember, that, kind of paces these big disruptions? >> Well, I think it has to do with once a company takes off they tend to, dominate that segment of the industry for so long that even if a creative idea came up they were just overpowering. And then toward the end of a 10 year cycle they quit reinventing themselves. And we talked earlier about the innovator's dilemma and the implications for it. Or an architecture that was designed that suddenly can't go to the next level. So I think it's probably a combination of three or four different factors, including the original incumbent who broke the glass, disrupted others, not disrupting themselves. >> Right, but you also talked about a story where you had to shift focus based on some customer feedback and you ran Cisco for a lot longer than 10 years. So how do you as a leader kind of keep your ears open to something that's a disruptive change that's not your regular best customer and your regular best salesman asking for a little bit faster, a little bit cheaper, a little bit of more the same versus the significant disruptive transformational shift? >> Well this goes back to one of my most basic views in life is I think we learn more from our setbacks or setbacks we were part of, or even the missteps or mistakes than you ever do your successes. Everybody loves to talk about successes and I'm no different there. But when you watched a great state like West Virginia that was the chemical center of the world and the coal mining center of the world, the 125,000 coal mines, six miners very well paid, 6,000 of the top engineers in the world, it was the Silicon Valley of the chemical industry and those just disappear. And because our state did not reinvent itself, because the education system didn't change, because we didn't distract attract a new set of businesses in we just kept doing the right thing too long, we got left behind. Then I went to Boston, it was the Silicon Valley of the world. And Route 128 around Boston was symbolic with the Silicon Valley and I-101 and 280 around it. And we had the top university at that time. Much like Stanford today, but MIT generating new companies. We had great companies, DEC, Wang, Data General. Probably a million jobs in the area and because we got stuck in a segment of the market, quit listening to our customers and missed the transitions, not only did we lose probably 1.2 million jobs on it, 100,000 out of DEC, 32,000 out of Wang, etc, we did not catch the next generation of technology changes. So I understand the implications if you don't disrupt yourself. But I also learned, that if you're not regularly reinventing yourself, you get left behind as a leader. And one of my toughest competitors came up to me and said, "John, I love the way you're reinventing Cisco "and how you've done that multiple times." And then I turned and I said "That's why a CEO has got to be in the job "for more than four or five years" and he said, "Now we disagree again." Which we usually did and he said, "Most people can't reinvent themselves." And he said "I'm an example." "I'm a pretty good CEO" he's actually a very good CEO, but he said, "After I've been there three or four years "I've made the changes, that I know "I've got to go somewhere else." And he could see I didn't buy-in and then he said, "How many of your top 100 people "you've been happy with once they've been "in the job for more than five years?" I hesitated and I said "Only one." And he's right, you've got to move people around, you've got to get people comfortable with disruption on it and, the hardest one to disrupt are the companies or the leaders who've been most successful and yet, that's when you got to think about disruption. >> Right, so to pivot on that a little bit in terms of kind of the government's role in jobs, specifically. >> Yes. >> We're in this really strange period of time. We have record low unemployment, right, tiny, tiny unemployment, and yet, we see automation coming in aggressively with autonomous vehicles and this and that and just to pick truck drivers as a category, everyone can clearly see that autonomous vehicles are going to knock them out in the not too distant future. That said, there's more demand for truck drivers today than there's every been and they can't fill the positions So, with this weird thing where we're going to have a bunch of new jobs that are created by technology, we're going to have a bunch of old jobs that get displaced by technology, but those people aren't necessarily the same people that can leave the one and go to the other. So as you look at that challenge, and I know you work with a lot of government leaders, how should they be thinking about taking on this challenge? >> Well, I think you've got to take it on very squarely and let's use the U.S. as an example and then I'll parallel what France is doing and what India is doing that is actually much more creative that what we are, from countries you wouldn't have anticipated. In the U.S. we know that 50% of the Fortune 500 will probably not exist in 10 years, 12 at the most. We know that the large companies will not incrementally hire people over this next decade and they've often been one of the best sources of hiring because of AI and automation will change that. So, it's not just a question of being schooled in one area and move to another, those jobs will disappear within the companies. If we don't have new jobs in startups and if we don't have the startups running at about three to four times the current volumes, we've got a real problem looking out five to 10 years. And the startups where everyone thinks we're doing a good job, the app user, third to a half of what they were two decades ago. And so if you need 25 million jobs over this next decade and your startups are at a level more like they were in the 90s, that's going to be a challenge. And so I think we've got to think from the government perspective of how we become a startup nation again, how we think about long-term job creation, how we think about job creation not taking money out of one pocket and give it to another. People want a real job, they want to have a meaningful job. We got to change our K through 12 education system which is broken, we've got to change our university system to generate the jobs for where people are going and then we've got to retrain people. That is very doable, if you got at it with a total plan and approach it from a scale perspective. That was lacking. And one of the disappointing things in the debate last night, and while I'm a republican I really want who's going to really lead us well both at the presidential level, but also within the senate, the house. Is, there was a complete lack of any vision on what the country should look like 10 years from now, and how we're going to create 25 million jobs and how we're going to create 10 million more that are going to be displaced and how we're going to re-educate people for it. It was a lot of finger pointing and transactional, but no overall plan. Modi did the reverse in India, and actually Macron, in all places, in France. Where they looked at GDP growth, job creation, startups, education changes, etc, and they executed to an overall approach. So, I'm looking for our government really to change the approach and to really say how are we going to generate jobs and how are we going to deal with the issues that are coming at us. It's a combination of all the the above. >> Yep. Let's shift gears a little bit about the education system and you're very involved and you talked about MIT. Obviously, I think Stanford and Cal are such big drivers of innovation in the Bay area because smart people go there and they don't leave. And then there's a lot of good buzz now happening in Atlanta as an investment really piggy-backing on Georgia Tech, which also creates a lot of great engineers. As you look at education, I don't want to go through K through 12, but more higher education, how do you see that evolving in today's world? It's super expensive, there's tremendous debt for the kids coming out, it doesn't necessarily train them for the new jobs. >> Where the jobs are. >> How do you see, kind of the role of higher education and that evolving into kind of this new world in which we're headed? >> Well, the good news and bad news about when I look at successful startups around the world, they're always centered around a innovative university and it isn't just about the raw horse power of the kids, It starts with the CEO of the university, the president of the university, their curriculum, their entrepreneurial approach, do they knock down the barriers across the various groups from engineering to business to law, etc? And are they thinking out of box? And if you watch, there is a huge missing piece between, Georgia Tech more of an exception, but still not running at the level they need to. And the Northeast around Boston and New York and Silicon Valley, The rest of the country's being left behind. So I'm looking for universities to completely redo their curriculum. I'm looking for it really breaking down the silos within the groups and focus on the outcomes. And much like Steve Case has done a very good job on focusing, about the Rust Belt and how do you do startups? I'm going to learn from what I saw in France at Polytechnique and the ITs in India, and what occurred in Stanford and MIT used to occur is, you've got to get the universities to be the core and that's where they kids want to stay close to, and we've got to generate a whole different curriculum, if you will, in the universities, including, continuous learning for their graduates, to be able to come back virtually and say how do I learn about re-skilling myself? >> Yeah. >> The current model is just not >> the right model >> It's broken. >> For the, for going forward. >> K through 12 is >> hopelessly broken >> Yeah. >> and the universities, while were still better than anywhere else in the world, we're still teaching, and some of the teachers and some of the books are what I could have used in college. >> Right, right >> So, we got to rethink the whole curriculum >> darn papers on the inside >> disrupt, disrupt >> So, shifting gears a little bit, you, played with lots of companies in your CEO role you guys did a ton of M&A, you're very famous for the successful M&A that you did over a number of years, but in an investor role, J2 now, you're looking at a more early stage. And you said you made a number of investments which is exciting. So, as you evaluate opportunities A. In teams that come to pitch to you >> Yeah. >> B. What are the key things you look for? >> In the sequence you've raised them, first in my prior world, I was really happy to do 180 acquisitions, in my current world, I'm reversed, I want them to go IPO. Because you add 76% of your headcount after an IPO, or after you've become a unicorn. When companies are bought, including what I bought in my prior role, their headcount growth is pretty well done. We'd add engineers after that, but would blow them through our sales channel, services, finance, etc. So, I want to see many more of these companies go public, and this goes back to national agenda about getting IPO's, not back to where they were during the 90's when it was almost two to three times, what you've seen over the last decade. But probably double, even that number the 90's, to generate the jobs we want. So, I'm very interested now about companies going public in direction. To the second part of your question, on what do I look for in startups and why, if I can bridge it, to am I so faired up about Pensando? If I look for my startups and, it's like I do acquisitions, I develop a playbook, I run that playbook faster and faster, it's how I do digitization of countries, etc. And so for a area I'm going to invest in and bet on, first thing I look at, is their market, technology transition, and business model transition occurring at the same time. That was Amazon of 15 years ago as an example. The second thing I look at, is the CEO and ideally, the whole founding team but it's usually just the CEO. The third thing I look for, is what are the customers really say about them? There's only one Steve Jobs, and it took him seven years. So, I go to the customers and say "What do you really think of this company?" Fourth thing I look for, is how close to an inflection point are they. The fifth thing I look for, is what they have in their ecosystem. Are they partnering? Things of that type. So, if I were to look at Pensando, Which is really the topic about can they bring to the market the new edge in a way that will be a market leading force for a whole decade? Through a ecosystem of partners that will change business dramatically and perhaps become the next major tech icon. It's how well you do that. Their vision in terms of market transitions, and business transitions 100% right. We've talked about it, 5G, IOT, internet of things, going from 15 billion devices to 500 billion devices in probably seven years. And, with the movement to the edge the business models will also change. And this is where, democratization, the cloud, and people able to share that power, where every technology company becomes a business becomes a, every business company becomes a technology company. >> Right. >> The other thing I look at is, the team. This is a team of six people, myself being a part of it, that thinks like one. That is so unusual, If you're lucky, you get a CEO and maybe a founder, a co-founder. This team, you've got six people who've worked together for over 20 years who think alike. The customers, you heard the discussions today. >> Right. >> And we've not talked to a single cloud player, a single enterprise company, a single insurance provider, or major technology company who doesn't say "This is very unique, let's talk about "how we work together on it." The inflection point, it's now you saw that today. >> Nobody told them it's young mans game obviously, they got the twenty-something mixed up >> No, actually were redefining (laughs) twenty-something, (laughs) but it does say, age is more perspective on how you think. >> Right, right. >> And Shimone Peres, who, passed away unfortunately, two years ago, was a very good friend. He basically said "You've got all your life "to think like a teenager, "and to really think and dream out of box." And he did it remarkably well. So, I think leaders, whether their twenty-something, or twenty-some years of experience working you've got to think that way. >> Right. So I'm curious, your take on how this has evolved, because, there was data and there was compute. And networking brought those two thing together, and you were at the heart of that. >> Mm-hmm. Now, it's getting so much more complex with edge, to get your take on edge. But, also more importantly exponential growth. You've talked about going from, how ever many millions the devices that were connected, to the billions of devices that are connected now. How do you stay? How do you help yourself think along exponential curves? Because that is not easy, and it's not human. But you have to, if you're going to try to get ahead of that next wave. >> Completely agree. And this is not just for me, how do I do it? I'm sharing it more that other people can learn and think about it perhaps the same way. The first thing is, it's always good to think of the positive, You can change the world here, the positive things, But I've also seen the negatives we talked about earlier. If you don't think that way, if you don't think that way as a leader of your company, leader of your country, or the leader of a venture group you're going to get left behind. The implications for it are really bad. The second is, you've got to say how do you catch and get a replicable playbook? The neat thing about what were talking about, whether it's by country in France, or India or the U.S., we've got replicable playbooks we know what to run. The third element is, you've got to have the courage to get outside your comfort zone. And I love change when it happens to you, I don't like it when it happens to me And I know that, So, I've got to get people around me who push me outside my comfort zone on that. And then, you've got to be able to dream and think like that teenager we talked about before. But that's what we were just with a group of customers, who were at this event. And they were asking "How do we get "this innovation into our company?" "How do we get the ability to innovate, through not just strategic partnerships with other large companies or partnerships with startups?" But "How do we build that internally?" It's comes down to the leader has to create that image and that approach. Modi's done it for 1.3 billion people in India. A vision, of the future on GDP growth. A digital country, startups, etc. If they can do it for 1.3 billion, tell me why the U.S. can not do it? (laughs) And why even small states here, can't do it. >> Yeah. Shifting gears a little bit, >> All right. >> A lot of black eyes in Silicon Valley right now, a lot of negativity going on, a lot of problems with privacy and trading data for currency and, it's been a rough road. You're way into tech for good and as you said, you can use technology for good you can use technology for bad. What are some things you're doing on the tech for good side? Because I don't think it gets the spotlight that it probably should, because it doesn't sell papers. >> Well, actually the press has been pretty good we just need to do it more on scale. Going back to Cisco days, we never had any major issues with governments. Even though there was a Snowden issue, there were a lot of implications about the power of the internet. Because we work with governments and citizens to say "What are the legitimate needs so that everybody benefits from this?" And where the things that we might have considered doing that, governments felt strongly about or the citizens wouldn't prosper from we just didn't do it. And we work with democrats and republicans alike and 90% of our nation believed tech was for good. But we worked hard on that. And today, I think you got to have more companies doing this and then, what, were doing uniquely in JC2, is were literally partnering with France on tech is for good and I'm Macron's, global tech ambassador and we focus about job creation and inclusion. Not just in Paris, or around Station F but throughout all the various regions in the country. Same thing within India, across 26 different states with Modi on how do you drive it through? And then if we can do it in France or India why can't we do it in each state in the U.S.? Partnering with West Virginia, with a very creative, president of the university there West Virginia University. With the democrats and republicans in their national senate, but also within the governor and speaker of the house and the president and senate within West Virginia, and really saying were going to change it together. And getting a model that you can then cookie cut across the U.S. if you change the curriculum, to your earlier comments. If you begin to focus on outcomes, not being an expert in one area, which is liable not to have a job >> Right. >> Ten years later. So, I'm a dreamer within that, but I think you owe an obligation to giving back, and I think they're all within our grasps >> Right >> And I think you can do, the both together. I think at JC2 we can create a billion dollar company with less than 10 people. I think you can change the world and also make a very good profit. And I think technology companies have to get back to that, you got to create more jobs than you destroy. And you can't be destroying jobs, then telling other people how to live their lives and what their politics should be. >> Yeah. >> That just doesn't work in terms of the environment. >> Well John, again, thanks for your time. Give you the last word on >> Sure >> Account of what happened here today, I mean you're here, and Tony O'Neary was here or at the headquarters of Goldman. A flagship launch customer, for the people that weren't here today why should they be paying attention? >> Well, if we've got this market transition right, the technology and business model, the next transition will be everything goes to the edge. And as every company or every government, or every person has to be both good in their "Area of expertise." or their vertical their in, they've got to also be good in technology. What happened today was a leveling of the playing field as it relates to cloud. In terms of everyone should have choice, democratization there, but also in architecture that allows people to really change their business models, as everything moves to the edge where 75% of all transactions, all data will be had and it might even be higher than that. Secondly, you saw a historic first never has anybody ever emerged from stealth after only two and a half years of existing as a company, with this type of powerhouse behind them. And you saw the players where you have a customer, Goldman Sachs, in one of the most leading edge areas, of industry change which is obviously finance leading as the customer who's driven our direction from the very beginning. And a company like NetApp, that understood the implication on storage, from two and a half years ago and drove our direction from the very beginning. A company like HP Enterprise's, who understood this could go across their whole company in terms of the implications, and the unique opportunity to really change and focus on, how do they evolve their company to provide their customer experience in a very unique way? How do you really begin to think about Equinix in terms of how they changed entirely from a source matter prospective, what they have to do in terms of the direction and capabilities? And then Lightspeed, one of the most creative intra capital that really understands this transition saying "I want to be a part of this." Including being on the board and changing the world one more time. So, what happened today? If we're right, I think this was the beginning of a major inflection point as everything moves to the edge. And how ecosystem players, with Pensando at the heart of that ecosystem, can take on the giants but also really use this technology to give everybody choice, and how they really make a difference in the future. As well as, perhaps give back to society. >> Love it. Thank you John >> My pleasure, that was fun. >> Appreciate it. You're John, I'm Jeff you're watching theCUBE. Thanks for watching, we'll see you next time. (upbeat music)