>>Hey guys. Welcome back to the Cubes coverage of Ansible Fast 2022. This is day two of our wall to wall coverage. Lisa Martin here with John Ferer. John, we're seeing this world where companies are saying if we can't automate it, we need to, The automation market is transforming. There's been a lot of buzz about that. A lot of technical chops here at Ansible Fest. >>Yeah, I mean, we've got a great guest here coming on Cuba alumni, Dean Newman, future room. He travels every event he's got. He's got his nose to the grindstone ear to the ground. Great analysis. I mean, we're gonna get into why it's important. How does Ansible fit into the big picture? It's really gonna be a great segment. The >>Board do it well, John just did my job for me about, I'll introduce him again. Daniel Newman, one of our alumni is Back Principal Analyst at Future and Research. Great to have you back on the cube. >>Yeah, it's good to join you. Excited to be back in Chicago. I don't know if you guys knew this, but for 40 years, this was my hometown. Now I don't necessarily brag about that anymore. I'm, I live in Austin now. I'm a proud Texan, but I did grow up here actually out in the west suburbs. I got off the plane, I felt the cold air, and I almost turned around and said, Does this thing go back? Yeah. Cause I'm, I've, I've grown thin skin. It did not take me long. I, I like the warm, Come on, >>I'm the saying, I'm from California and I got off the plane Monday. I went, Whoa, I need a coat. And I was in Miami a week ago and it was 85. >>Oh goodness. >>Crazy. So you just flew in. Talk about what's going on, your take on, on Ansible. We've talked a lot with the community, with partners, with customers, a lot of momentum. The flywheel of the community is going around and round and round. What are some of your perspectives that you see? >>Yeah, absolutely. Well, let's you know, I'm gonna take a quick step back. We're entering an era where companies are gonna have to figure out how to do more with less. Okay? We've got exponential data growth, we've got more architectural complexity than ever before. Companies are trying to discern how to deal with many different environments. And just at a macro level, Red Hat is one of the companies that is almost certainly gonna be part of this multi-cloud hybrid cloud era. So that should initially give a lot of confidence to the buying group that are looking at how to automate their environments. You're automating workflows, but really with, with Ansible, we're focused on automating it, automating the network. So as companies are kind of dig out, we're entering this recessionary period, Okay, we're gonna call it what it is. The first thing that they're gonna look at is how do we tech our way out of it? >>I had a wonderful one-on-one conversation with ServiceNow ceo, Bill McDermott, and we saw ServiceNow was in focus this morning in the initial opening session. This is the integration, right? Ansible integrating with ServiceNow. What we need to see is infrastructure automation, layers and applications working in concert to basically enable enterprises to be up and running all the time. Let's first fix the problems that are most common. Let's, let's automate 'em, let's script them. And then at some point, let's have them self resolving, which we saw at the end with Project Wisdom. So as I see it, automation is that layer that enterprises, boards, technologists, all can agree upon are basically here's something that can make our business more efficient, more profitable, and it's gonna deal with this short term downturn in a way that tech is actually gonna be the answer. Just like Bill and I said, let's tech our way out of it. >>If you look at the Red Hat being bought by ibm, you see Project Wisdom Project, not a product, it's a project. Project Wisdom is the confluence of research and practitioners kind of coming together with ai. So bringing AI power to the Ansible is interesting. Red Hat, Linux, Rel OpenShift, I mean, Red Hat's kind of position, isn't it? Kind of be in that right spot where a puck might be coming maybe. I mean, what do you think? >>Yeah, as analysts, we're really good at predicting the, the recent past. It's a joke I always like to make, but Red Hat's been building toward the future. I think for some time. Project Wisdom, first of all, I was very encouraged with it. One of the things that many people in the market probably have commented on is how close is IBM in Red Hat? Now, again, it's a $34 billion acquisition that was made, but boy, the cultures of these two companies couldn't be more different. And of course, Red Hat kind of carries this, this sort of middle ground layer where they provide a lot of value in services to companies that maybe don't use IBM at, at, for the public cloud especially. This was a great indication of how you can take the power of IBM's research, which of course has some of the world's most prolific data scientists, engineers, building things for the future. >>You know, you see things like yesterday they launched a, you know, an AI solution. You know, they're building chips, semiconductors, and technologies that are gonna power the future. They're building quantum. Long story short, they have these really brilliant technologists here that could be adding value to Red Hat. And I don't know that the, the world has fully been able to appreciate that. So when, when they got on stage and they kind of say, Here's how IBM is gonna help power the next generation, I was immediately very encouraged by the fact that the two companies are starting to show signs of how they can collaborate to offer value to their customers. Because of course, as John kind of started off with, his question is, they've kind of been where the puck is going. Open source, Linux hybrid cloud, This is the future. In the future. Every company's multi-cloud. And I said in a one-on-one meeting this morning, every company is going to probably have workloads on every cloud, especially large enterprises. >>Yeah. And I think that the secret's gonna be how do you make that evolve? And one of the things that's coming out of the industry over the years, and looking back as historians, we would say, gotta have standards. Well, with cloud, now people standards might slow things down. So you're gonna start to figure out how does the community and the developers are thinking it'll be the canary in the coal mine. And I'd love to get your reaction on that, because we got Cuban next week. You're seeing people kind of align and try to win the developers, which, you know, I always laugh cuz like, you don't wanna win, you want, you want them on your team, but you don't wanna win them. It's like a, it's like, so developers will decide, >>Well, I, I think what's happening is there are multiple forces that are driving product adoption. And John, getting the developers to support the utilization and adoption of any sort of stack goes a long way. We've seen how sticky it can be, how sticky it is with many of the public cloud pro providers, how sticky it is with certain applications. And it's gonna be sticky here in these interim layers like open source automation. And Red Hat does have a very compelling developer ecosystem. I mean, if you sat in the keynote this morning, I said, you know, if you're not a developer, some of this stuff would've been fairly difficult to understand. But as a developer you saw them laughing at jokes because, you know, what was it the whole part about, you know, it didn't actually, the ping wasn't a success, right? And everybody started laughing and you know, I, I was sitting next to someone who wasn't technical and, and you know, she kinda goes, What, what was so funny? >>I'm like, well, he said it worked. Do you see that? It said zero data trans or whatever that was. So, but if I may just really quickly, one, one other thing I did wanna say about Project Wisdom, John, that the low code and no code to the full stack developer is a continuum that every technology company is gonna have to think deeply about as we go to the future. Because the people that tend to know the process that needs to be automated tend to not be able to code it. And so we've seen every automation company on the planet sort of figuring out and how to address this low code, no code environment. I think the power of this partnership between IBM Research and Red Hat is that they have an incredibly deep bench of capabilities to do things like, like self-training. Okay, you've got so much data, such significant size models and accuracy is a problem, but we need systems that can self teach. They need to be able self-teach, self learn, self-heal so that we can actually get to the crux of what automation is supposed to do for us. And that's supposed to take the mundane out and enable those humans that know how to code to work on the really difficult and hard stuff because the automation's not gonna replace any of that stuff anytime soon. >>So where do you think looking at, at the partnership and the evolution of it between IBM research and Red Hat, and you're saying, you know, they're, they're, they're finally getting this synergy together. How is it gonna affect the future of automation and how is it poised to give them a competitive advantage in the market? >>Yeah, I think the future or the, the competitive space is that, that is, is ecosystems and integration. So yesterday you heard, you know, Red Hat Ansible focusing on a partnership with aws. You know, this week I was at Oracle Cloud world and they're talking about running their database in aws. And, and so I'm kind of going around to get to the answer to your question, but I think collaboration is sort of the future of growth and innovation. You need multiple companies working towards the same goal to put gobs of resources, that's the technical term, gobs of resources towards doing really hard things. And so Ansible has been very successful in automating and securing and focusing on very certain specific workloads that need to be automated, but we need more and there's gonna be more data created. The proliferation, especially the edge. So you saw all this stuff about Rockwell, How do you really automate the edge at scale? You need large models that are able to look and consume a ton of data that are gonna be continuously learning, and then eventually they're gonna be able to deliver value to these companies at scale. IBM plus Red Hat have really great resources to drive this kind of automation. Having said that, I see those partnerships with aws, with Microsoft, with ibm, with ServiceNow. It's not one player coming to the table. It's a lot of players. They >>Gotta be Switzerland. I mean they have the Switzerland. I mean, but the thing about the Amazon deal is like that marketplace integration essentially puts Ansible once a client's in on, on marketplace and you get the central on the same bill. I mean, that's gonna be a money maker for Ansible. I >>Couldn't agree more, John. I think being part of these public cloud marketplaces is gonna be so critical and having Ansible land and of course AWS largest public cloud by volume, largest marketplace today. And my opinion is that partnership will be extensible to the other public clouds over time. That just makes sense. And so you start, you know, I think we've learned this, John, you've done enough of these interviews that, you know, you start with the biggest, with the highest distribution and probability rates, which in this case right now is aws, but it'll land on in Azure, it'll land in Google and it'll continue to, to grow. And that kind of adoption, streamlining make it consumption more consumable. That's >>Always, I think, Red Hat and Ansible, you nailed it on that whole point about multicloud, because what happens then is why would I want to alienate a marketplace audience to use my product when it could span multiple environments, right? So you saw, you heard that Stephanie yesterday talk about they, they didn't say multiple clouds, multiple environments. And I think that is where I think I see this layer coming in because some companies just have to work on all clouds. That's the way it has to be. Why wouldn't you? >>Yeah. Well every, every company will probably end up with some workloads in every cloud. I just think that is the fate. Whether it's how we consume our SaaS, which a lot of people don't think about, but it always tends to be running on another hyperscale public cloud. Most companies tend to be consuming some workloads from every cloud. It's not always direct. So they might have a single control plane that they tend to lead the way with, but that is only gonna continue to change. And every public cloud company seems to be working on figuring out what their niche is. What is the one thing that sort of drives whether, you know, it is, you know, traditional, we know the commoditization of traditional storage network compute. So now you're seeing things like ai, things like automation, things like the edge collaboration tools, software being put into the, to the forefront because it's a different consumption model, it's a different margin and economic model. And then of course it gives competitive advantages. And we've seen that, you know, I came back from Google Cloud next and at Google Cloud next, you know, you can see they're leaning into the data AI cloud. I mean, that is their focus, like data ai. This is how we get people to come in and start using Google, who in most cases, they're probably using AWS or Microsoft today. >>It's a great specialty cloud right there. That's a big use case. I can run data on Google and run something on aws. >>And then of course you've got all kinds of, and this is a little off topic, but you got sovereignty, compliance, regulatory that tends to drive different clouds over, you know, global clouds like Tencent and Alibaba. You know, if your workloads are in China, >>Well, this comes back down at least to the whole complexity issue. I mean, it has to get complex before it gets easier. And I think that's what we're seeing companies opportunities like Ansible to be like, Okay, tame, tame the complexity. >>Yeah. Yeah, I totally agree with you. I mean, look, when I was watching the demonstrations today, my take is there's so many kind of simple, repeatable and mundane tasks in everyday life that enterprises need to, to automate. Do that first, you know? Then the second thing is working on how do you create self-healing, self-teaching, self-learning, You know, and, and I realize I'm a little broken of a broken record at this, but these are those first things to fix. You know, I know we want to jump to the future where we automate every task and we have multi-term conversational AI that is booking our calendars and driving our cars for us. But in the first place, we just need to say, Hey, the network's down. Like, let's make sure that we can quickly get access back to that network again. Let's make sure that we're able to reach our different zones and locations. Let's make sure that robotic arm is continually doing the thing it's supposed to be doing on the schedule that it's been committed to. That's first. And then we can get to some of these really intensive deep metaverse state of automation that we talk about. Self-learning, data replication, synthetic data. I'm just gonna throw terms around. So I sound super smart. >>In your customer conversations though, from an looking at the automation journey, are you finding most of them, or some percentage is, is wanting to go directly into those really complex projects rather than starting with the basics? >>I don't know that you're, you're finding that the customers want to do that? I think it's the architecture that often ends up being a problem is we as, as the vendor side, will tend to talk about the most complex problems that they're able to solve before companies have really started solving the, the immediate problems that are before them. You know, it's, we talk about, you know, the metaphor of the cloud is a great one, but we talk about the cloud, like it's ubiquitous. Yeah. But less than 30% of our workloads are in the public cloud. Automation is still in very early days and in many industries it's fairly nascent. And doing things like self-healing networks is still something that hasn't even been able to be deployed on an enterprise-wide basis, let alone at the industrial layer. Maybe at the company's on manufacturing PLAs or in oil fields. Like these are places that have difficult to reach infrastructure that needs to be running all the time. We need to build systems and leverage the power of automation to keep that stuff up and running. That's, that's just business value, which by the way is what makes the world go running. Yeah. Awesome. >>A lot of customers and users are struggling to find what's the value in automating certain process, What's the ROI in it? How do you help them get there so that they understand how to start, but truly to make it a journey that is a success. >>ROI tends to be a little bit nebulous. It's one of those things I think a lot of analysts do. Things like TCO analysis Yeah. Is an ROI analysis. I think the businesses actually tend to know what the ROI is gonna be because they can basically look at something like, you know, when you have an msa, here's the downtime, right? Business can typically tell you, you know, I guarantee you Amazon could say, Look for every second of downtime, this is how much commerce it costs us. Yeah. A company can generally say, if it was, you know, we had the energy, the windmills company, like they could say every minute that windmill isn't running, we're creating, you know, X amount less energy. So there's a, there's a time value proposition that companies can determine. Now the question is, is about the deployment. You know, we, I've seen it more nascent, like cybersecurity can tend to be nascent. >>Like what does a breach cost us? Well there's, you know, specific costs of actually getting the breach cured or paying for the cybersecurity services. And then there's the actual, you know, ephemeral costs of brand damage and of risks and customer, you know, negative customer sentiment that potentially comes out of it. With automation, I think it's actually pretty well understood. They can look at, hey, if we can do this many more cycles, if we can keep our uptime at this rate, if we can reduce specific workforce, and I'm always very careful about this because I don't believe automation is about replacement or displacement, but I do think it is about up-leveling and it is about helping people work on things that are complex problems that machines can't solve. I mean, said that if you don't need to put as many bodies on something that can be immediately returned to the organization's bottom line, or those resources can be used for something more innovative. So all those things are pretty well understood. Getting the automation to full deployment at scale, though, I think what often, it's not that roi, it's the timeline that gets misunderstood. Like all it projects, they tend to take longer. And even when things are made really easy, like with what Project Wisdom is trying to do, semantically enable through low code, no code and the ability to get more accuracy, it just never tends to happen quite as fast. So, but that's not an automation problem, That's just the crux of it. >>Okay. What are some of the, the next things on your plate? You're quite a, a busy guy. We, you, you were at Google, you were at Oracle, you're here today. What are some of the next things that we can expect from Daniel Newman? >>Oh boy, I moved Really, I do move really quickly and thank you for that. Well, I'm very excited. I'm taking a couple of work personal days. I don't know if you're a fan, but F1 is this weekend. I'm the US Grand Prix. Oh, you're gonna Austin. So I will be, I live in Austin. Oh. So I will be in Austin. I will be at the Grand Prix. It is work because it, you know, I'm going with a number of our clients that have, have sponsorships there. So I'll be spending time figuring out how the data that comes off of these really fun cars is meaningfully gonna change the world. I'll actually be talking to Splunk CEO at the, at the race on Saturday morning. But yeah, I got a lot of great things. I got a, a conversation coming up with the CEO of Twilio next week. We got a huge week of earnings ahead and so I do a lot of work on that. So I'll be on Bloomberg next week with Emily Chang talking about Microsoft and Google. Love talking to Emily, but just as much love being here on, on the queue with you >>Guys. Well we like to hear that. Who you're rooting for F one's your favorite driver. I, >>I, I like Lando. Do you? I'm Norris. I know it's not necessarily a fan favorite, but I'm a bit of a McLaren guy. I mean obviously I have clients with Oracle and Red Bull with Ball Common Ferrari. I've got Cly Splunk and so I have clients in all. So I'm cheering for all of 'em. And on Sunday I'm actually gonna be in the Williams Paddock. So I don't, I don't know if that's gonna gimme me a chance to really root for anything, but I'm always, always a big fan of the underdog. So maybe Latifi. >>There you go. And the data that comes off the how many central unbeliev, the car, it's crazy's. Such a scientific sport. Believable. >>We could have Christian, I was with Christian Horner yesterday, the team principal from Reside. Oh yeah, yeah. He was at the Oracle event and we did a q and a with him and with the CMO of, it's so much fun. F1 has been unbelievable to watch the momentum and what a great, you know, transitional conversation to to, to CX and automation of experiences for fans as the fan has grown by hundreds of percent. But just to circle back full way, I was very encouraged with what I saw today. Red Hat, Ansible, IBM Strong partnership. I like what they're doing in their expanded ecosystem. And automation, by the way, is gonna be one of the most robust investment areas over the next few years, even as other parts of tech continue to struggle that in cyber security. >>You heard it here. First guys, investment in automation and cyber security straight from two analysts. I got to sit between. For our guests and John Furrier, I'm Lisa Martin, you're watching The Cube Live from Chicago, Ansible Fest 22. John and I will be back after a short break. SO'S stick around.

>> Live from San Francisco, California, it's theCUBE covering the IBM Chief Data Officer Summit. Brought to you by IBM. >> Hi everybody, welcome back to theCUBE's coverage of the IBM Chief Data Officer Event. We're here at Fisherman's Wharf in San Francisco at the Centric Hyatt Hotel. This is the 10th anniversary of IBM's Chief Data Officer Summits. In the recent years, anyway, they do one in San Francisco and one in Boston each year, and theCUBE has covered a number of them. I think this is our eighth CDO conference. I'm Dave Vellante, and theCUBE, we like to go out, especially to events like this that are intimate, there's about 140 chief data officers here. We've had the chief data officer from AstraZeneca on, even though he doesn't take that title. We've got a panel coming up later on in the day. And I want to talk about the evolution of that role. The chief data officer emerged out of kind of a wonky, back-office role. It was all about 10, 12 years ago, data quality, master data management, governance, compliance. And as the whole big data meme came into focus and people were realizing that data is the new source of competitive advantage, that data was going to be a source of innovation, what happened was that role emerged, that CDO, chief data officer role, emerged out of the back office and came right to the front and center. And the chief data officer really started to better understand and help companies understand how to monetize the data. Now monetization of data could mean more revenue. It could mean cutting costs. It could mean lowering risk. It could mean, in a hospital situation, saving lives, sort of broad definition of monetization. But it was really understanding how data contributed to value, and then finding ways to operationalize that to speed up time to value, to lower cost, to lower risk. And that required a lot of things. It required new skill sets, new training. It required a partnership with the lines of business. It required new technologies like artificial intelligence, which have just only recently come into a point where it's gone mainstream. Of course, when I started in the business several years ago, AI was the hot topic, but you didn't have the compute power. You didn't have the data, you didn't have the cloud. So we see the new innovation engine, not as Moore's Law, the doubling of transistors every 18 months, doubling of performance. Really no, we see the new innovation cocktail as data as the substrate, applying machine intelligence to that data, and then scaling it with the cloud. And through that cloud model, being able to attract startups and innovation. I come back to the chief data officer here, and IBM Chief Data Officer Summit, that's really where the chief data officer comes in. Now, the role in the organization is fuzzy. If you ask people what's a chief data officer, you'll get 20 different answers. Many answers are focused on compliance, particularly in what emerged, again, in those regulated industries: financial service, healthcare, and government. Those are the first to have chief data officers. But now CDOs have gone mainstream. So what we're seeing here from IBM is the broadening of that role and that definition and those responsibilities. Confusing things is the chief digital officer or the chief analytics officer. Those are roles that have also emerged, so there's a lot of overlap and a lot of fuzziness. To whom should the chief data officer report? Many say it should not be the CIO. Many say they should be peers. Many say the CIO's responsibility is similar to the chief data officer, getting value out of data, although I would argue that's never really been the case. The role of the CIO has largely been to make sure that the technology infrastructure works and that applications are delivered with high availability, with great performance, and are able to be developed in an agile manner. That's sort of a more recent sort of phenomenon that's come forth. And the chief digital officer is really around the company's face. What does that company's brand look like? What does that company's go-to-market look like? What does the customer see? Whereas the chief data officer's really been around the data strategy, what the sort of framework should be around compliance and governance, and, again, monetization. Not that they're responsible for the monetization, but they responsible for setting that framework and then communicating it across the company, accelerating the skill sets and the training of existing staff and complementing with new staff and really driving that framework throughout the organization in partnership with the chief digital officer, the chief analytics officer, and the chief information officer. That's how I see it anyway. Martin Schroeder, the senior vice president of IBM, came on today with Inderpal Bhandari, who is the chief data officer of IBM, the global chief data officer. Martin Schroeder used to be the CFO at IBM. He talked a lot, kind of borrowing from Ginni Rometty's themes in previous conferences, chapter one of digital which he called random acts of digital, and chapter two is how to take this mainstream. IBM makes a big deal out of the fact that it doesn't appropriate your data, particularly your personal data, to sell ads. IBM's obviously in the B2B business, so that's IBM's little back-ended shot at Google and Facebook and Amazon who obviously appropriate our data to sell ads or sell goods. IBM doesn't do that. I'm interested in IBM's opinion on big tech. There's a lot of conversations now. Elizabeth Warren wants to break up big tech. IBM was under the watchful eye of the DOJ 25 years ago, 30 years ago. IBM essentially had a monopoly in the business, and the DOJ wanted to make sure that IBM wasn't using that monopoly to hurt consumers and competitors. Now what IBM did, the DOJ ruled that IBM had to separate its applications business, actually couldn't be in the applications business. Another ruling was that they had to publish the interfaces to IBM mainframes so that competitors could actually build plug-compatible products. That was the world back then. It was all about peripherals plugging into mainframes and sort of applications being developed. So the DOJ took away IBM's power. Fast forward 30 years, now we're hearing Google, Amazon, and Facebook coming under fire from politicians. Should they break up those companies? Now those companies are probably the three leaders in AI. IBM might debate that. I think generally, at theCUBE and SiliconANGLE, we believe that those three companies are leading the charge in AI, along with China Inc: Alibaba, Tencent, Baidu, et cetera, and the Chinese government. So here's the question. What would happen if you broke up big tech? I would surmise that if you break up big tech, those little techs that you break up, Amazon Web Services, WhatsApp, Instagram, those little techs would get bigger. Now, however, the government is implying that it wants to break those up because those entities have access to our data. Google's got access to all the search data. If you start splitting them up, that'll make it harder for them to leverage that data. I would argue those small techs would get bigger, number one. Number two, I would argue if you're worried about China, which clearly you're seeing President Trump is worried about China, placing tariffs on China, playing hardball with China, which is not necessarily a bad thing. In fact, I think it's a good thing because China has been accused, and we all know, of taking IP, stealing IP essentially, and really not putting in those IP protections. So, okay, playing hardball to try to get a quid pro quo on IP protections is a good thing. Not good for trade long term. I'd like to see those trade barriers go away, but if it's a negotiation tactic, okay. I can live with it. However, going after the three AI leaders, Amazon, Facebook, and Google, and trying to take them down or break them up, actually, if you're a nationalist, could be a bad thing. Why would you want to handcuff the AI leaders? Third point is unless they're breaking the law. So I think that should be the decision point. Are those three companies, and others, using monopoly power to thwart competition? I would argue that Microsoft actually did use its monopoly power back in the '80s and '90s, in particular in the '90s, when it put Netscape out of business, it put Lotus out of business, it put WordPerfect out of business, it put Novell out of the business. Now, maybe those are strong words, but in fact, Microsoft's bundling, its pricing practices, caught those companies off guard. Remember, Jim Barksdale, the CEO of Netscape, said we don't need the browser. He was wrong. Microsoft killed Netscape by bundling Internet Explorer into its operating system. So the DOJ stepped in, some would argue too late, and put handcuffs on Microsoft so they couldn't use that monopoly power. And I would argue that you saw from that two things. One, granted, Microsoft was overly focused on Windows. That was kind of their raison d'etre, and they missed a lot of other opportunities. But the DOJ definitely slowed them down, and I think appropriately. And if out of that myopic focus on Windows, and to a certain extent, the Department of Justice and the government, the FTC as well, you saw the emergence of internet companies. Now, Microsoft did a major pivot to the internet. They didn't do a major pivot to the cloud until Satya Nadella came in, and now Microsoft is one of those other big tech companies that is under the watchful eye. But I think Microsoft went through that and perhaps learned its lesson. We'll see what happens with Facebook, Google, and Amazon. Facebook, in particular, seems to be conflicted right now. Should we take down a video that has somewhat fake news implications or is a deep hack? Or should we just dial down? We saw this recently with Facebook. They dialed down the promotion. So you almost see Facebook trying to have its cake and eat it too, which personally, I don't think that's the right approach. I think Facebook either has to say damn the torpedoes. It's open content, we're going to promote it. Or do the right thing and take those videos down, those fake news videos. It can't have it both ways. So Facebook seems to be somewhat conflicted. They are probably under the most scrutiny now, as well as Google, who's being accused, anyway, certainly we've seen this in the EU, of promoting its own ads over its competitors' ads. So people are going to be watching that. And, of course, Amazon just having too much power. Having too much power is not necessarily an indication of abusing monopoly power, but you know the government is watching. So that bears watching. theCUBE is going to be covering that. We'll be here all day, covering the IBM CDO event. I'm Dave Vallente, you're watching theCUBE. #IBMCDO, DM us or Tweet us @theCUBE. I'm @Dvallente, keep it right there. We'll be right back right after this short break. (upbeat music)

>> From our studios, in the heart of Silicon Valley, Palo Alto, California, this is a CUBE Conversation. >> Welcome to this CUBE Conversation here in Palo Alto, California. I'm John Furrier, host of theCUBE. We are here with Arpit Joshipura, GM of Networking, Edge, IoT for the Linux Foundation. Arpit, great to see you again, welcome back to theCUBE, thanks for joining us. >> Thank you, thank you. Happy to be here. >> So obviously, we love the Linux Foundation. We've been following all the events; we've chatted in the past about networking. Computer storage and networking just doesn't seem to go away with cloud and on-premise hybrid cloud, multicloud, but open-source software continues to surpass expectations, growth, geographies outside the United States and North America, just overall, just greatness in software. Everything's an abstraction layer now; you've got Kubernetes, Cloud Native- so many good things going on with software, so congratulations. >> Well thank you. No, I think we're excited too. >> So you guys got a big event coming up in China: OSS, Open Source Summit, plus KubeCon. >> Yep. >> A lot of exciting things, I want to talk about that in a second. But I want to get your take on a couple key things. Edge and IoT, deep learning and AI, and networking. I want to kind of drill down with you. Tell us what's the updates on the projects around Linux Foundation. >> Okay. >> The exciting ones. I mean, we know Cloud Native CNCF is going to take up more logos, more members, keeps growing. >> Yep. >> Cloud Native clearly has a lot of opportunity. But the classic in the set, certainly, networking and computer storage is still kicking butt. >> Yeah. So, let me start off by Edge. And the fundamental assumption here is that what happened in the cloud and core is going to move to the Edge. And it's going to be 50, 100, 200 times larger in terms of opportunity, applications, spending, et cetera. And so what LF did was we announced a very exciting project called Linux Foundation Edge, as an umbrella, earlier in January. And it was announced with over 60 founding members, right. It's the largest founding member announcement we've had in quite some time. And the reason for that is very simple- the project aims at unifying the fragmented edge in IoT markets. So today, edge is completely fragmented. If you talk to clouds, they have a view of edge. Azure, Amazon, Baidu, Tencent, you name it. If you talk to the enterprise, they have a view of what edge needs to be. If you talk to the telcos, they are bringing the telecom stack close to the edge. And then if you talk to the IoT vendors, they have a perception of edge. So each of them are solving the edge problems differently. What LF Edge is doing, is it is unifying a framework and set of frameworks, that allow you to create a common life cycle management framework for edge computing. >> Yeah. >> Now the best part of it is, it's built on five exciting technologies. So people ask, "You know, why now?" So, there are five technologies that are converging at the same time. 5G, low latency. NFV, network function virtualization, so on demand. AI, so predictive analytics for machine learning. Container and microservices app development, so you can really write apps really fast. And then, hardware development: TPU, GPU, NPU. Lots of exciting different size and shapes. All five converging; put it close to the apps, and you have a whole new market. >> This is, first of all, complicated in the sense of... cluttered, fragmented, shifting grounds, so it's an opportunity. >> It's an opportunity. >> So, I get that- fragmented, you've got the clouds, you've got the enterprises, and you've got the telcos all doing their own thing. >> Yep. >> So, multiple technologies exploding. 5G, Wi-Fi 6, a bunch of other things you laid out, >> Mhmm. >> all happening. But also, you have all those suppliers, right? >> Yes. >> And, so you have different manufacturers-- >> And different layers. >> So it's multiple dimensions to the complexity. >> Correct, correct. >> What are you guys seeing, in terms of, as a solution, what's motivating the founding members; when you say unifying, what specifically does that mean? >> What that means is, the entire ecosystem from those markets are coming together to solve common problems. And I always sort of joke around, but it's true- the common problems are really the plumbing, right? It's the common life cycle management, how do you start, stop, boot, load, log, you know, things like that. How do you abstract? Now in the Edge, you've 400, 500 interfaces that comes into an IoT or an edge device. You know, Zigbee, Bluetooth, you've got protocols like M2T; things that are legacy and new. Then you have connectivity to the clouds. Devices of various forms and shapes. So there's a lot of end by end problems, as we call it. So, the cloud players. So for LF Edge for example, Tencent and Baidu and the cloud leaders are coming together and saying, "Let's solve it once." The industrial IoT player, like Dynamic, OSIsoft, they're coming in saying, "Let's solve it once." The telcos- AT&T, NTT, they're saying "Let's solve it once. And let's solve this problem in open-source. Because we all don't need to do it, and we'll differentiate on top." And then of course, the classic system vendors that support these markets are all joining hands. >> Talk about the business pressure real quick. I know, you look at, say, Alibaba for instance, and the folks you mentioned, Tencent, in China. They're perfecting the edge. You've got videos at the edge; all kinds of edge devices; people. >> Correct. >> So there's business pressures, as well. >> The business pressure is very simple. The innovation has to speed up. The cost has to go down. And new apps are coming up, so extra revenue, right? So because of these five technologies I mentioned, you've got the top killer apps in edge are anything that is, kind of, video but not YouTube. So, anything that the video comes from 360 venues, or drones, things like that. Plus, anything that moves, but that's not a phone. So things like connected cars, vehicles. All of those are edge applications. So in LF Edge, we are defining edge as an application that requires 20 milliseconds or less latency. >> I can't wait for someone to define- software define- "edge". Or, it probably is defined. A great example- I interviewed an R&D engineer at VMware yesterday in San Francisco, it was at the RADIO event- and we were just riffing on 5G, and talking about software at the edge. And one of the advances >> Yes. >> that's coming is splicing the frequency so that you can put software in the radios at the antennas, >> Correct. Yeah. >> so you can essentially provision, in real time. >> Correct, and that's a telco use case, >> Yeah. >> so our projects at the LF Edge are EdgeX Foundry, Akraino, Edge Virtualization Engine, Open Glossary, Home Edge. There's five and growing. And all of these software projects can allow you to put edge blueprints. And blueprints are really reference solutions for smart cities, manufacturing, telcos, industrial gateways, et cetera et cetera. So, lots of-- >> It's kind of your fertile ground for entrepreneurship, too, if you think about it, >> Correct; startups are huge. >> because, just the radio software that splices the radio spectrum is going to potentially maybe enable a service provider market, and towers, right? >> Correct, correct. >> Own my own land, I can own the tower and rent it out, one radio. >> Yep. >> So, business model innovations also an opportunity, >> It's a huge-- >> not just the business pressure to have an edge, but-- >> Correct. So technology, business, and market pressures. All three are colliding. >> Yeah, perfect storm. >> So edge is very exciting for us, and we had some new announcements come out in May, and more exciting news to come out in June, as well. >> And so, going back to Linux Foundation. If I want to learn more. >> LFEdge.org. >> That's kind of the CNCF of edge, if you will, right? Kind of thing. >> Yeah. It's an umbrella with all the projects, and that's equivalent to the CNCF, right. >> Yeah. >> And of course it's a huge group. >> So it's kind of momentum. 64 founding members-- >> Huge momentum. Yeah, now we are at 70 founding members, and growing. >> And how long has it been around? >> The umbrella has been around for about five months; some of the projects have been around for a couple of years, as they incubate. >> Well let us know when the events start kicking in. We'll get theCUBE down there to cover it. >> Absolutely. >> Super exciting. Again, multiple dimensions of innovation. Alright, next topic, one of my favorites, is AI and deep learning. AI's great. If you don't have data you can't really make AI work; deep learning requires data. So this is a data conversation. What's going on in the Linux Foundation around AI and deep learning? >> Yeah. So we have a foundation called LF Deep Learning, as you know. It was launched last year, and since then we have significantly moved it forward by adding more members, and obviously the key here is adding more projects, right. So our goal in the LF Deep Learning Foundation is to bring the community of data scientists, researchers, entrepreneurs, academia, and users to collaborate. And create frameworks and platforms that don't require a PhD to use. >> So a lot of data ingestion, managing data, so not a lot of coding, >> Platforms. >> more data analyst, and/or applications? >> It's more, I would say, platforms for use, right? >> Yeah. >> So frameworks that you can actually use to get business outcomes. So projects include Acumos, which is a machine learning framework and a marketplace which allows you to, sort of, use a lot of use cases that can be commonly put. And this is across all verticals. But I'll give you a telecom example. For example, there is a use case, which is drones inspecting base stations-- >> Yeah. >> And doing analytics for maintenance. That can be fed into a marketplace, used by other operators worldwide. You don't have to repeat that. And you don't need to understand the details of machine learning algorithms. >> Yeah. >> So we are trying to do that. There are projects that have been contributed from Tencent, Baidu, Uber, et cetera. Angel, Elastic Deep Learning, Pyro. >> Yeah. >> It's a huge investment for us. >> And everybody wins when there's contribution, because data's one of those things where if there's available, it just gets smarter. >> Correct. And if you look at deep learning, and machine learning, right. I mean obviously there's the classic definition; I won't go into that. But from our perspective, we look at data and how you can share the data, and so from an LF perspective, we have something called a CDLA license. So, think of an Apache for data. How do you share data? Because it's a big issue. >> Big deal. >> And we have solved that problem. Then you can say, "Hey, there's all these machine learning algorithms," you know, TensorFlow, and others, right. How can you use it? And have plugins to this framework? Then there's the infrastructure. Where do you run these machine learning? Like if you run it on edge, you can run predictive maintenance before a machine breaks down. If you run it in the core, you can do a lot more, right? So we've done that level of integration. >> So you're treating data like code. You can bring data to the table-- >> And then-- >> Apply some licensing best practices like Apache. >> Yes, and then integrate it with the machine learning, deep learning models, and create platforms and frameworks. Whether it's for cloud services, for sharing across clouds, elastic searching-- >> And Amazon does that in terms of they vertically integrate SageMaker, for instance. >> That's exactly right. >> So it's a similar-- >> And this is the open-source version of it. >> Got it- oh, that's awesome. So, how does someone get involved here, obviously developers are going to love this, but-- >> LF Deep Learning is the place to go, under Linux Foundation, similar to LF Edge, and CNCF. >> So it's not just developers. It's also people who have data, who might want to expose it in. >> Data scientists, databases, algorithmists, machine learning, and obviously, a whole bunch of startups. >> A new kind of developer, data developer. >> Right. Exactly. And a lot of verticals, like the security vertical, telecom vertical, enterprise verticals, finance, et cetera. >> You know, I've always said- you and I talked about this before, and I always rant on theCUBE about this- I believe that there's going to be a data development environment where data is code, kind of like what DevOps did with-- >> It's the new currency, yeah. >> It's the new currency. >> Yeah. Alright, so final area I want to chat with you before we get into the OSS China thing: networking. >> Yeah. >> Near and dear to your heart. >> Near and dear to my-- >> Networking's hot now, because if you bring IoT, edge, AI, networking, you've got to move things around-- >> Move things around, (laughs) right, so-- >> And you still need networking. >> So we're in the second year of the LF Networking journey, and we are really excited at the progress that has happened. So, projects like ONAP, OpenDaylight, Tungsten Fabric, OPNFV, FDio, I mean these are now, I wouldn't say household names, but business enterprise names. And if you've seen, pretty much all the telecom providers- almost 70% of the subscribers covered, enabled by the service providers, are now participating. Vendors are completely behind it. So we are moving into a phase which is really the deployment phase. And we are starting to see, not just PoCs [Proofs of Concept], but real deployments happening, some of the major carriers now. Very excited, you know, Dublin, ONAP's Dublin release is coming up, OPNFV just released the Hunter release. Lots of exciting work in Fido, to sort of connect-- >> Yeah. >> multiple projects together. So, we're looking at it, the big news there is the launch of what's called OVP. It's a compliance and verification program that cuts down the deployment time of a VNF by half. >> You know, it's interesting, Stu and I always talk about this- Stu Miniman, CUBE cohost with me- about networking, you know, virtualization came out and it was like, "Oh networking is going to change." It's actually helped networking. >> It helped networking. >> Now you're seeing programmable networks come out, you see Cisco >> And it's helped. >> doing a lot of things, Juniper as well, and you've got containers in Kubernetes right around the corner, so again, this is not going to change the need, it's going to- It's not going to change >> It's just a-- >> the desire and need of networking, it's going to change what networking is. How do you describe that to people? Someone saying, "Yeah, but tell me what's going on in networking? Virtualization, we got through that wave, now I've got the container, Kubernetes, service mesh wave, how does networking change? >> Yeah, so it's a four step process, right? The first step, as you rightly said, virtualization, moved into VMs. Then came disaggregation, which was enabled by the technology SDN, as we all know. Then came orchestration, which was last year. And that was enabled by projects like ONAP and automation. So now, all of the networks are automated, fully running, self healing, feedback closed control, all that stuff. And networks have to be automated before 5G and IoT and all of these things hit, because you're no longer talking about phones. You're talking about things that get connected, right. So that's where we are today. And that journey continues for another two years, and beyond. But very heavy focused on deployment. And while that's happening, we're looking at the hybrid version of VMs and containers running in the network. How do you make that happen? How do you translate one from the other? So, you know, VNFs, CNFs, everything going at the same time in your network. >> You know what's exciting is with the software abstractions emerging, the hard problems are starting to emerge because as it gets more complicated, end by end problems, as you said, there's a lot of new costs and complexities, for instance, the big conversation at the Edge is, you don't want to move data around. >> No, no. >> So you want to move compute to the edge, >> You can, yeah-- >> But it's still a networking problem, you've still got edge, so edge, AI, deep learning, networking all tied together-- >> They're all tied together, right, and this is where Linux Foundation, by developing these projects, in umbrellas, but then allowing working groups to collaborate between these projects, is a very simple governance mechanism we use. So for example, we have edge working groups in Kubernetes that work with LF Edge. We have Hyperledger syncs that work for telecoms. So LFN and Hyperledger, right? Then we have automotive-grade Linux, that have connected cars working on the edge. Massive collaboration. But, that's how it is. >> Yeah, you connect the dots but you don't, kind of, force any kind of semantic, or syntax >> No. >> into what people can build. >> Each project is autonomous, >> Yeah. >> and independent, but related. >> Yeah, it's smart. You guys have a good view, I'm a big fan of what you guys are doing. Okay, let's talk about the Open Source Summit and KubeCon, happening in China, the week of the 24th of June. >> Correct. >> What's going on, there's a lot of stuff going on beyond Cloud Native and Linux, what are some of the hot areas in China that you guys are going to be talking about? I know you're going over. >> Yeah, so, we're really excited to be there, and this is, again, life beyond Linux and Cloud Native; there's a whole dimension of projects there. Everything from the edge, and the excitement of Iot, cloud edge. We have keynotes from Tencent, and VMware, and all the Chinese- China Mobile and others, that are all focusing on the explosive growth of open-source in China, right. >> Yeah, and they have a lot of use cases; they've been very aggressive on mobility, Netdata, >> Very aggressive on mobility, data, right, and they have been a big contributor to open-source. >> Yeah. >> So all of that is going to happen there. A lot of tracks on AI and deep learning, as a lot more algorithms come out of the Tencents and the Baidus and the Alibabas of the world. So we have tracks there. We have huge tracks on networking, because 5G and implementation of ONAP and network automation is all part of the umbrella. So we're looking at a cross-section of projects in Open Source Summit and KubeCon, all integrated in Shanghai. >> And a lot of use cases are developing, certainly on the edge, in China. >> Correct. >> A lot of cross pollination-- >> Cross pollination. >> A lot of fragmentation has been addressed in China, so they've kind of solved some of those problems. >> Yeah, and I think the good news is, as a global community, which is open-source, whether it's Europe, Asia, China, India, Japan, the developers are coming together very nicely, through a common governance which crosses boundaries. >> Yeah. >> And building on use cases that are relevant to their community. >> And what's great about what you guys have done with Linux Foundation is that you're not taking positions on geographies, because let the clouds do that, because clouds have-- >> Clouds have geographies, >> Clouds, yeah they have agents-- >> Edge may have geography, they have regions. >> But software's software. (laughs) >> Software's software, yeah. (laughs) >> Arpit, thanks for coming in. Great insight, loved talking about networking, the deep learning- congratulations- and obviously the IoT Edge is hot, and-- >> Thank you very much, excited to be here. >> Have a good trip to China. Thanks for coming in. >> Thank you, thank you. >> I'm John Furrier here for CUBE Conversation with the Linux Foundation; big event in China, Open Source Summit, and KubeCon in Shanghai, week of June 24th. It's a CUBE Conversation, thanks for watching.

(upbeat music) >> Announcer: Live from Boston, Massachusetts, it's theCUBE, covering your Red Hat Summit 2019. Brought to you by Red Hat. >> And welcome back to Boston, we continue our coverage here in theCUBE of the Red Hat Summit and welcoming now to theCUBE stage for the first time, I believe, David Gledhill. Who is the group chief information officer and head of group technology and operations at DBS Bank. David, good morning to you. >> Morning, hi, it's great to be here. >> All the way from Singapore, and he was early for the segment this morning. So you get extra points for that, congratulations. >> Put that up to jet lag. (men laughing) >> Thanks for being with us. David, anymore we talk about companies in general, everybody says everybody's a tech company now, right? Not the way it used to be. How is that playing out in your world in financial services as far as how deeply ingrained you have to be with the technology? >> Yeah, so very much, we are. Tech transformation started about 10 years ago. Been CIO of the company about 10 years. And frankly, the first five years were just fixing the basics. So getting in place what we'd call world-class systems. Doing a bunch of stuff on resilience and security and all of that kind of stuff. And the other thing, and this is the dramatic change, you know 10 years ago when I joined the company, we were 85% outsourced to managed service vendors. So I had technology people that basically were signing contractors and managing service agreements. We didn't have technology DNA. Over those five years and a full 10 years actually. We've been doing a lot about just insourcing and rebuilding our technical muscle if you like. So now we're, we've gone from 85% outsourced to 90% insourced. So we run, build and manage our own. We're now a technology company. >> And five years ago, we had a real big shift and we were closest to what was going on in China and so probably saw this before many, many of the other banks saw this around the world. Of what Alibaba was doing with Ant Financial and Tencent and this whole, just complete disruption of how customers interact with the banking industry. So we got an early lead on this digital transformation and really for the last five, six years have been doubling down on building a pure digital offering and we see ourselves as a technology company providing banking services, not as a bank with some technology department in the backend. >> Yeah, I'd love if you can, a little bit, to help us dig into that because, I think back it was okay, what does digitization mean 10 years ago, it was like oh, okay, I need to make sure I have a good website and maybe a good mobile app. Which is a fine starting piece, and also the piece you talked about is when it was outsourced, I'm managing pieces but I sign up for what I need today and when the business needs something, those outsources aren't necessarily tied to them, so you're playing telephone with them. Most the companies I've talked to that have brought skills back inside, it's because the needs of the business are constantly asking for more and it can't be well, it's not part of our contract with what we have. We'll get to that in a year or two. >> Yeah, yeah, so that's a very interesting shift. It plays out in a number of different dimensions. First of all, let me go into that question of business and tech and that separation. When we were managed service, it was literally writing contracts and the specs and handing to vendors. It was just a horrible process. And how can you be a modern technology firm like that? So insourcing, for us, was one big thing to owe those people, but when you insource, then you end up with a business unit and a technology unit. And you still have got silos, so how do you break that? Because that really is a problem. If you look at the way technology companies work, they don't work like that. Five years ago when we said, okay, how do you make that flip to being the digital company? We went very deep into how some of the great technology companies operate. We wanted to understand, what is it? How does that DNA work? How does that culture work? How do they organize themselves? How do they build technology? How do they become agile, speed to market? And so we looked at, we studied Google, Amazon, Netflix Apple, LinkedIn, Facebook and we call them the Gandalf companies. And we said, how can we be more like them? Well, a Gandalf is missing a D. And fortunately at DBS, we happen to have a D. (laughing) So our goal became how do we become the D in Gandalf? And that was just like a lightening rod through the organization because all of the sudden it said to our people, forget about biz and tech and things. You need to think about how these technology comp operates and be more like them. Which means there's no separation, there are no silos we are together building great technical products for our customers so we need to re-think the organization to make sure that happens. >> There's magic. (laughing) You've got a saying, making banking joyful. >> Yep. >> All right, which is not exactly the emotion that I associate with having to deal with my bank. It's fine, but joyful? A very unusual adjective there. What's that all about? And again, at the end of the day, how does technology enhance that? How does that compliment that and really boosted that? >> Yeah, so it was quite a radical moment for us. That came up, we were at a leadership meeting and talking about what is our purpose and how do we. Lots of people talk about customer journey, thinking and stuff like that but how do you bring that to life and one of the execs there said, well what about making banking joyful? And the rest of us just looked at him like he was from a different planet. Saying, are you kidding, what do you mean by that? But as we thought about it more, it has a great meaning and a great purpose to it, that we're not there just to do transactions but we're there to enrich lives, create new businesses, to make customers feel great in their financial stability, in the way they deal with us. And it applies on so many levels. So if you're a bank teller, you understand how to make banking joyful by just that, going the extra mile, in terms of service. If you're in infrastructure, and you're dealing with data centers and servers, you understand that making banking joyful, you must be there all the time. You must have sub-second responses, you must feel great in the customers hands, so it's something that you can apply to all aspects of banking and everybody plays a part in making banking joyful for our customers. >> All right, so David, bring us inside a little bit your organization, you said transforming to a technology company. What's that mean, what technology are you using? We're here at the Red Hat Show. Open-source, not the first thing that people think about when they they think about banking. So how does that fit into the culture that you're building? >> Yeah, yeah, okay, so, this Gandalf thing that I talked about, that's great as a logo and a mindset shift, but it doesn't get you very far. And so what we came up with is five key elements that have to change. And we had to work on to become more like a technology company. And one was a shift from projects to running technology like a series of platforms. That enables you to do agile at scale, but for that you need to organize very differently, which is the third thing. And then the fourth thing is that you need to build for modern systems. The legacy way of building technology just wasn't going to get us to where we needed to be as a technology company. And then the last bit is alternate everything. So, if you want speed to market and agility, you have to alternate. That modern technology stat, it was very obvious to us that the legacy, corporate technologies that we used to build systems, were just not going to win it for us. And so that's our move to open-source. Red Hat was a fabulous partner in that and we used Red Hat extensively throughout our entire infrastructure. And so we went through this rapid modernization of moving to open-source, moving to open-source database we used Merare DD quite extensively, but also, picking up pieces of the open-source from the Gandalf companies. We've seen the way they use open-source to scale. Plus also, to provide just amazing services. So for example, Netflix. We run a bunch of banking platforms on Netflix, believe it or not. It's kind of cool, banking on Netflix is a kinda crazy concept, but we brought that do life. What is is that Netflix we loved? We loved their engineering discipline around chaos engineering and the use of chaos to really build resilient platforms. So in our whole test and deployment framework, we have a lot of Netflix chaos elements built into that to make sure that when we actually are testing, we're testing for chaos and random failures which we inject into those platforms. We don't do it in production like Netflix do quite yet. This whole concept of site reliability and chaos and excellence of service is again something we learned from the Gandalf companies. So Gandalf was not just a, oh yeah, let's pester in the heart of the business article. It was really, let's use their engineering disciplines and design principles to build our own systems. Our network, Facebook, which is, you think of it as a network company. We think of network and the infrastructure layer. And our infrastructure and our networking is designed on a bunch of concepts that Facebook have about how they build their network within their data centers. >> Can you help connect the dots, you talk about a phenomenal technologies, chaos engineering, networking like these global companies. How does that lead to the outcome that you talked about? You know, joy to your end users? >> So if you want to make banking joyful, you have to be super-reliable. You have to be on the edge of the innovation curve all the time. Which means you need to be test and learn, which means you'll be very agile. You need to be able to scale very well and the open-source technologies enable us to scale superbly. You need to be able to to perform as well, superbly well. When I joined the company, our measure of how well our applications were performing is are they up or down? And then we advanced that to, well, are they up and maybe 80% of the time they responded within four seconds. Those are terrible measures because they're not joyful. That means 20% of the time we're awful. That doesn't bring joy to a customer. So what brings joy is we've now scrapped all those things and we're starting to look at performance, for example at the 99th percentile, so anything below that is just noise and the signal is what is our worst performing 99%, because if you wanna be joyful every single time that a customer opens your application you wanna be there and respond well, et cetera, et cetera. Same thing goes for customer science. Where do you get customer drop offs and how do you fix problems? So customer science and the engineering disciplines around observing and instrumenting a platform all the time become very , very important. So it goes very, very deep. You know it's a simple concept. But totally changes the way we engineer. >> Your line of work, or your industry obviously is very security oriented, right? >> Yeah. >> I think of healthcare being another with health information what have you. But certainly financial services, so in the open-source community, how do you address this, I would say it's not a clash by any means, but it's a concern, I would think, still that you have to be micro-observant of security practices and yet this is an open-community and exchange of ideas and could be an exchange of vulnerabilities or problems, too. >> So, sure, and we absolutely do. There are certain things that we, certain places that we won't go, or we will go but only for experimentation reasons because of that question. But you know arguably, we think that open-source company can more secure over time than non-open source, because you're also getting a bunch of people fixing it the whole time. And we've seen some of the issues with some of the open-source and the heart bleed and those other bits and pieces. But they were shut down pretty quickly and found pretty quickly. So we move with caution, we're very cognoscente. We move with our eyes open and it's really the zero day vulnerabilities that we are exposed to. But equally, if you're in a proprietary state. The whole thing that came up with the X86 platform in terms of the vulnerabilities there that apply open-source or not. So yeah, security issues exist everywhere. >> Right, all right, so, David, bring us in. You talked about some of the open-sourced technologies. Where does Red Hat fit into this? What's it like, how have they advanced that journey that DBS has been on? >> So for the heavy lifting, for the big applications that we want to run, and the majority of our workload going with open-source is fine, but you want to have open-source that also you think isn't going to break or have big security vulnerabilities to your question. And that's really where a partner like Red Hat comes in because it gives us access to all the wonderful benefits of open-source with a trusted partner that's putting industrial strength quality releases out that we can really rely on and bank on. So, in awhile we used open-source, at the periphery and true open-source that we just plug it off the internet. The really very, very high demanding workloads and very secure workloads we will always work with a partner that can wrap that into an enterprise-quality offering for us. So Red Hat has gone from zero to running way over 50%, 60% of our workload. And we'll continue to put it even more on that because it's a platform we can trust. >> That's great, so, when you look at your journey overall, how far are you along that journey? Anything when you look out, what are some of the things that are exciting you looking forward? >> So while we believe we're ahead of most banks. There are some that are in the mix, Goldmans are pretty far advance, Duetsche, a couple of the others, Capital One, a few. But it's a sort of rare breed. We're about 80%, 90% done on our transformation journey to get stuff to what we'd call cloud ready or optimized. But we think we're just scratching the surface because if you think about plugging ourselves into customers lives, making banking joyful, our external brand promise for that is live more, bank less. And nobody wakes up in the morning and says, oh, I can't wait to go to my local bank branch and go and do some banking. >> (laughing) I heard Steve talking about it yesterday. >> Actually there is one place. My wife loves going there because we do some great free cookies at DBS. >> John: Oh, excellent. >> But other that my wife, the rest of the planet doesn't really do that. >> John: Fair enough. >> If you want to live more, bank less, it's how do we get the toil of banking away from customers yet embed ourselves in their journeys. And for that we believe that this whole play on ecosystems is very important. So being a creator of an ecosystem or participating so that we take the banking toil out, and yet we inject ourselves, be that leisure or travel or insurance or whatever. And you don't see the bank, the bank is invisible. Then you're live more, bank less. To do that, you need great ecosystems. And we think three things help us to plug into ecosystems. Number one is you have to be able to scale very easily. And all the work we've done on the Gandalf stack means that were no longer afraid of scale, just bring it on. The second thing you need a lot of connectivity, and DBS two years ago, we launched the world's largest banking API platform. We went live with 150 different APIs and 60 live partners at the time. That's now grown to over 350 APIs and 100s of corporates and SME partners that wanna partner with us to pug us into their offering. So the more we do that, the more we disappear and let people live more, bank less. >> Well, next time, if you wanna bring some cookies with you, by all means, okay. (David laughs) We're always up for that, David, thanks for the time. >> Sure. >> We appreciate that and good luck on the mission and the journey there at DBS. >> Sure, thanks very much and great to be here, thank you. >> David Gledhill joining us this morning here, as we continue our coverage of the Red Hat Summit. We're in Boston. You're watching theCUBE. (upbeat music)

>> From the SiliconANGLE Media office in Boston, Massachusetts, it's theCube! (funky electronic music) Now, here's your host, Dave Vellante! >> Welcome, everybody, to this Cube conversation here in our Marlborough offices. I am very excited today, I spent a number of years at IDC, which, of course, is owned by IDG. And there's a new book out, relatively new, called Future Forward: Leadership Lessons from Patrick McGovern, the Visionary Who Circled the Globe and Built a Technology Media Empire. And it's a great book, lotta stories that I didn't know, many that I did know, and the author of that book, Glenn Rifkin, is here to talk about not only Pat McGovern but also some of the lessons that he put forth to help us as entrepreneurs and leaders apply to create better businesses and change the world. Glenn, thanks so much for comin' on theCube. >> Thank you, Dave, great to see ya. >> So let me start with, why did you write this book? >> Well, a couple reasons. The main reason was Patrick McGovern III, Pat's son, came to me at the end of 2016 and said, "My father had died in 2014 and I feel like his legacy deserves a book, and many people told me you were the guy to do it." So the background on that I, myself, worked at IDG back in the 1980s, I was an editor at Computerworld, got to know Pat during that time, did some work for him after I left Computerworld, on a one-on-one basis. Then I would see him over the years, interview him for the New York Times or other magazines, and every time I'd see Pat, I'd end our conversation by saying, "Pat, when are we gonna do your book?" And he would laugh, and he would say, "I'm not ready to do that yet, there's just still too much to do." And so it became sort of an inside joke for us, but I always really did wanna write this book about him because I felt he deserved a book. He was just one of these game-changing pioneers in the tech industry. >> He really was, of course, the book was even more meaningful for me, we, you and I started right in the same time, 1983-- >> Yeah. >> And by that time, IDG was almost 20 years old and it was quite a powerhouse then, but boy, we saw, really the ascendancy of IDG as a brand and, you know, the book reviews on, you know, the back covers are tech elite: Benioff wrote the forward, Mark Benioff, you had Bill Gates in there, Walter Isaacson was in there, Guy Kawasaki, Bob Metcalfe, George Colony-- >> Right. >> Who actually worked for a little stint at IDC for a while. John Markoff of The New York Times, so, you know, the elite of tech really sort of blessed this book and it was really a lot to do with Pat McGovern, right? >> Oh, absolutely, I think that the people on the inside understood how important he was to the history of the tech industry. He was not, you know, a household name, first of all, you didn't think of Steve Jobs, Bill Gates, and then Pat McGovern, however, those who are in the know realize that he was as important in his own way as they were. Because somebody had to chronicle this story, somebody had to share the story of the evolution of this amazing information technology and how it changed the world. And Pat was never a front-of-the-TV-camera guy-- >> Right. >> He was a guy who put his people forward, he put his products forward, for sure, which is why IDG, as a corporate name, you know, most people don't know what that means, but people did know Macworld, people did know PCWorld, they knew IDC, they knew Computerworld for sure. So that was Pat's view of the world, he didn't care whether he had the spotlight on him or not. >> When you listen to leaders like Reed Hoffman or Eric Schmidt talk about, you know, great companies and how to build great companies, they always come back to culture. >> Yup. >> The book opens with a scene of, and we all, that I usually remember this, well, we're just hangin' around, waitin' for Pat to come in and hand out what was then called the Christmas bonus-- >> Right. >> Back when that wasn't politically incorrect to say. Now, of course, it's the holiday bonus. But it was, it was the Christmas bonus time and Pat was coming around and he was gonna personally hand a bonus, which was a substantial bonus, to every single employee at the company. I mean, and he did that, really, literally, forever. >> Forever, yeah. >> Throughout his career. >> Yeah, it was unheard of, CEOs just didn't do that and still don't do that, you were lucky, you got a message on the, you know, in the lunchroom from the CEO, "Good work, troops! Keep up the good work!" Pat just had a really different view of the culture of this company, as you know from having been there, and I know. It was very familial, there was a sense that we were all in this together, and it really was important for him to let every employee know that. The idea that he went to every desk in every office for IDG around the United States, when we were there in the '80s there were probably 5,000 employees in the US, he had to devote substantial amount-- >> Weeks and weeks! >> Weeks at a time to come to every building and do this, but year after year he insisted on doing it, his assistant at the time, Mary Dolaher told me she wanted to sign the cards, the Christmas cards, and he insisted that he ensign every one of them personally. This was the kind of view he had of how you keep employees happy, if your employees are happy, the customers are gonna be happy, and you're gonna make a lot of money. And that's what he did. >> And it wasn't just that. He had this awesome holiday party that you described, which was epic, and during the party, they would actually take pictures of every single person at the party and then they would load the carousel, you remember the 35-mm. carousel, and then, you know, toward the end of the evening, they would play that and everybody was transfixed 'cause they wanted to see their, the picture of themselves! >> Yeah, yeah. (laughs) >> I mean, it was ge-- and to actually pull that off in the 1980s was not trivial! Today, it would be a piece of cake. And then there was the IDG update, you know, the Good News memos, there was the 10-year lunch, the 20-year trips around the world, there were a lot of really rich benefits that, you know, in and of themselves maybe not a huge deal, but that was the culture that he set. >> Yeah, there was no question that if you talked to anybody who worked in this company over, say, the last 50 years, you were gonna get the same kind of stories. I've been kind of amazed, I'm going around, you know, marketing the book, talking about the book at various events, and the deep affection for this guy that still holds five years after he died, it's just remarkable. You don't really see that with the CEO class, there's a couple, you know, Steve Jobs left a great legacy of creativity, he was not a wonderful guy to his employees, but Pat McGovern, people loved this guy, and they st-- I would be signing books and somebody'd say, "Oh, I've been at IDG for 27 years and I remember all of this," and "I've been there 33 years," and there's a real longevity to this impact that he had on people. >> Now, the book was just, it was not just sort of a biography on McGovern, it was really about lessons from a leader and an entrepreneur and a media mogul who grew this great company in this culture that we can apply, you know, as business people and business leaders. Just to give you a sense of what Pat McGovern did, he really didn't take any outside capital, he did a little bit of, you know, public offering with IDG Books, but, really, you know, no outside capital, it was completely self-funded. He built a $3.8 billion empire, 300 publications, 280 million readers, and I think it was almost 100 or maybe even more, 100 countries. And so, that's an-- like you were, used the word remarkable, that is a remarkable achievement for a self-funded company. >> Yeah, Pat had a very clear vision of how, first of all, Pat had a photographic memory and if you were a manager in the company, you got a chance to sit in meetings with Pat and if you didn't know the numbers better than he did, which was a tough challenge, you were in trouble! 'Cause he knew everything, and so, he was really a numbers-focused guy and he understood that, you know, his best way to make profit was to not be looking for outside funding, not to have to share the wealth with investors, that you could do this yourself if you ran it tightly, you know, I called it in the book a 'loose-tight organization,' loose meaning he was a deep believer in decentralization, that every market needed its own leadership because they knew the market, you know, in Austria or in Russia or wherever, better than you would know it from a headquarters in Boston, but you also needed that tightness, a firm grip on the finances, you needed to know what was going on with each of the budgets or you were gonna end up in big trouble, which a lot of companies find themselves in. >> Well, and, you know, having worked there, I mean, essentially, if you made your numbers and did so ethically, and if you just kind of followed some of the corporate rules, which we'll talk about, he kind of left you alone. You know, you could, you could pretty much do whatever you wanted, you could stay in any hotel, you really couldn't fly first class, and we'll maybe talk about that-- >> Right. >> But he was a complex man, I mean, he was obviously wealthy, he was a billionaire, he was very generous, but at the same time he was frugal, you know, he drove, you know, a little, a car that was, you know, unremarkable, and we had buy him a car. He flew coach, and I remember one time, I was at a United flight, and I was, I had upgraded, you know, using my miles, and I sat down and right there was Lore McGovern, and we both looked at each other and said right at the same time, "I upgraded!" (laughs) Because Pat never flew up front, but he would always fly with a stack of newspapers in the seat next to him. >> Yeah, well, woe to, you were lucky he wasn't on the plane and spotted you as he was walking past you into coach, because he was not real forgiving when he saw people, people would hide and, you know, try to avoid him at all cost. And, I mean, he was a big man, Pat was 6'3", you know, 250 lbs. at least, built like a linebacker, so he didn't fit into coach that well, and he wasn't flying, you know, the shuttle to New York, he was flyin' to Beijing, he was flyin' to Moscow, he was going all over the world, squeezing himself into these seats. Now, you know, full disclosure, as he got older and had, like, probably 10 million air miles at his disposal, he would upgrade too, occasionally, for those long-haul flights, just 'cause he wanted to be fresh when he would get off the plane. But, yeah, these are legends about Pat that his frugality was just pure legend in the company, he owned this, you know, several versions of that dark blue suit, and that's what you would see him in. He would never deviate from that. And, but, he had his patterns, but he understood the impact those patterns had on his employees and on his customers. >> I wanna get into some of the lessons, because, really, this is what the book is all about, the heart of it. And you mentioned, you know, one, and we're gonna tell from others, but you really gotta stay close to the customer, that was one of the 10 corporate values, and you remember, he used to go to the meetings and he'd sometimes randomly ask people to recite, "What's number eight?" (laughs) And you'd be like, oh, you'd have your cheat sheet there. And so, so, just to give you a sense, this man was an entrepreneur, he started the company in 1964 with a database that he kind of pre-sold, he was kind of the sell, design, build type of mentality, he would pre-sold this thing, and then he started Computerworld in 1967, so it was really only a few years after he launched the company that he started the Computerworld, and other than Data Nation, there was nothing there, huge pent-up demand for that type of publication, and he caught lightning in a bottle, and that's really how he funded, you know, the growth. >> Yeah, oh, no question. Computerworld became, you know, the bible of the industry, it became a cash cow for IDG, you know, but at the time, it's so easy to look in hindsight and say, oh, well, obviously. But when Pat was doing this, one little-known fact is he was an editor at a publication called Computers and Automation that was based in Newton, Massachusetts and he kept that job even after he started IDC, which was the original company in 1964. It was gonna be a research company, and it was doing great, he was seeing the build-up, but it wasn't 'til '67 when he started Computerworld, that he said, "Okay, now this is gonna be a full-time gig for me," and he left the other publication for good. But, you know, he was sorta hedging his bets there for a little while. >> And that's where he really gained respect for what we'll call the 'Chinese Wallet,' the, you know, editorial versus advertising. We're gonna talk about that some more. So I mentioned, 1967, Computerworld. So he launched in 1964, by 1971, he was goin' to Japan, we're gonna talk about the China Stories as well, so, he named the company International Data Corp, where he was at a little spot in Newton, Mass.-- >> Right, right. >> So, he had a vision. You said in your book, you mention, how did this gentleman get it so right for so long? And that really leads to some of the leadership lessons, and one of them in the book was, sort of, have a mission, have a vision, and really, Pat was always talking about information, about information technology, in fact, when Wine for Dummies came out, it kind of created a little friction, that was really off the center. >> Or Wine for Dummies, or Sex for Dummies! >> Yeah, Sex for Dummies, boy, yeah! >> With, that's right, Ruth Westheimer-- >> Dr. Ruth Westheimer. >> But generally speaking, Glenn, he was on that mark, he really didn't deviate from that vision. >> Yeah, no, it was very crucial to the development of the company that he got people to, you know, buy into that mission, because the mission was everything. And he understood, you know, he had the numbers, but he also saw what was happening out there, from the 1960s, when IBM mainframes filled a room, and, you know, only the high priests of data centers could touch them. He had a vision for, you know, what was coming next and he started to understand that there would be many facets to this information about information technology, it wasn't gonna be boring, if anything, it was gonna be the story of our age and he was gonna stick to it and sell it. >> And, you know, timing is everything, but so is, you know, Pat was a workaholic and had an amazing mind, but one of the things I learned from the book, and you said this, Pat Kenealy mentioned it, all American industrial and social revolutions have had a media company linked to them, Crane and automobiles, Penton and energy, McGraw-Hill and aerospace, Annenberg, of course, and TV, and in technology, it was IDG. >> Yeah, he, like I said earlier, he really was a key figure in the development of this industry and it was, you know, one of the key things about that, a lot publications that came and went made the mistake of being platform or, you know, vertical market specific. And if that market changed, and it was inevitably gonna change in high tech, you were done. He never, you know, he never married himself to some specific technology cycle. His idea was the audience was not gonna change, the audience was gonna have to roll with this, so, the company, IDG, would produce publications that got that, you know, Computerworld was actually a little bit late to the PC game, but eventually got into it and we tracked the different cycles, you know, things in tech move in sine waves, they come and go. And Pat never was, you know, flustered by that, he could handle any kind of changes from the mainframes down to the smartphone when it came. And so, that kind of flexibility, and ability to adjust to markets, really was unprecedented in that particular part of the market. >> One of the other lessons in the book, I call it 'nation-building,' and Pat shared with you that, look, that you shared, actually, with your readers, if you wanna do it right, you've gotta be on the ground, you've gotta be there. And the China story is one that I didn't know about how Pat kind of talked his way into China, tell us, give us a little summary of that story. >> Sure, I love that story because it's so Pat. It was 1978, Pat was in Tokyo on a business trip, one of his many business trips, and he was gonna be flying to Moscow for a trade show. And he got a flight that was gonna make a stopover in Beijing, which in those days was called Peking, and was not open to Americans. There were no US and China diplomatic relations then. But Pat had it in mind that he was going to get off that plane in Beijing and see what he could see. So that meant that he had to leave the flight when it landed in Beijing and talk his way through the customs as they were in China at the time with folks in the, wherever, the Quonset hut that served for the airport, speaking no English, and him speaking no Chinese, he somehow convinced these folks to give him a day pass, 'cause he kept saying to them, "I'm only in transit, it's okay!" (laughs) Like, he wasn't coming, you know, to spy on them on them or anything. So here's this massive American businessman in his dark suit, and he somehow gets into downtown Beijing, which at the time was mostly bicycles, very few cars, there were camels walking down the street, they'd come with traders from Mongolia. The people were still wearing the drab outfits from the Mao era, and Pat just spent the whole day wandering around the city, just soaking it in. He was that kind of a world traveler. He loved different cultures, mostly eastern cultures, and he would pop his head into bookstores. And what he saw were people just clamoring to get their hands on anything, a newspaper, a magazine, and it just, it didn't take long for the light bulb to go on and said, this is a market we need to play in. >> He was fascinated with China, I, you know, as an employee and a business P&L manager, I never understood it, I said, you know, the per capita spending on IT in China was like a dollar, you know? >> Right. >> And I remember my lunch with him, my 10-year lunch, he said, "Yeah, but, you know, there's gonna be a huge opportunity there, and yeah, I don't know how we're gonna get the money out, maybe we'll buy a bunch of tea and ship it over, but I'm not worried about that." And, of course, he meets Hugo Shong, which is a huge player in the book, and the home run out of China was, of course, the venture capital, which he started before there was even a stock market, really, to exit in China. >> Right, yeah. No, he was really a visionary, I mean, that word gets tossed around maybe more than it should, but Pat was a bonafide visionary and he saw things in China that were developing that others didn't see, including, for example, his own board, who told him he was crazy because in 1980, he went back to China without telling them and within days he had a meeting with the ministry of technology and set up a joint venture, cost IDG $250,000, and six months later, the first issue of China Computerworld was being published and within a couple of years it was the biggest publication in China. He said, told me at some point that $250,0000 investment turned into $85 million and when he got home, that first trip, the board was furious, they said, "How can you do business with the commies? You're gonna ruin our brand!" And Pat said, "Just, you know, stick with me on this one, you're gonna see." And the venture capital story was just an offshoot, he saw the opportunity in the early '90s, that venture in China could in fact be a huge market, why not help build it? And that's what he did. >> What's your take on, so, IDG sold to, basically, Chinese investors. >> Yeah. >> It's kind of bittersweet, but in the same time, it's symbolic given Pat's love for China and the Chinese people. There's been a little bit of criticism about that, I know that the US government required IDC to spin out its supercomputer division because of concerns there. I'm always teasing Michael Dow that at the next IDG board meeting, those Lenovo numbers, they're gonna look kinda law. (laughs) But what are your, what's your, what are your thoughts on that, in terms of, you know, people criticize China in terms of IP protections, etc. What would Pat have said to that, do you think? >> You know, Pat made 130 trips to China in his life, that's, we calculated at some point that just the air time in planes would have been something like three and a half to four years of his life on planes going to China and back. I think Pat would, today, acknowledge, as he did then, that China has issues, there's not, you can't be that naive. He got that. But he also understood that these were people, at the end of the day, who were thirsty and hungry for information and that they were gonna be a player in the world economy at some point, and that it was crucial for IDG to be at the forefront of that, not just play later, but let's get in early, let's lead the parade. And I think that, you know, some part of him would have been okay with the sale of the company to this conglomerate there, called China Oceanwide. Clearly controversial, I mean, but once Pat died, everyone knew that the company was never gonna be the same with the leader who had been at the helm for 50 years, it was gonna be a tough transition for whoever took over. And I think, you know, it's hard to say, certainly there's criticism of things going on with China. China's gonna be the hot topic page one of the New York Times almost every single day for a long time to come. I think Pat would have said, this was appropriate given my love of China, the kind of return on investment he got from China, I think he would have been okay with it. >> Yeah, and to invoke the Ben Franklin maxim, "Trading partners seldom wage war," and so, you know, I think Pat would have probably looked at it that way, but, huge home run, I mean, I think he was early on into Baidu and Alibaba and Tencent and amazing story. I wanna talk about decentralization because that was always something that was just on our minds as employees of IDG, it was keep the corporate staff lean, have a flat organization, if you had eight, 10, 12 direct reports, that was okay, Pat really meant it when he said, "You're the CEO of your own business!" Whether that business was, you know, IDC, big company, or a manager at IDC, where you might have, you know, done tens of millions of dollars, but you felt like a CEO, you were encouraged to try new things, you were encouraged to fail, and fail fast. Their arch nemesis of IDG was Ziff Davis, they were a command and control, sort of Bill Ziff, CMP to a certain extent was kind of the same way out of Manhasset, totally different philosophies and I think Pat never, ever even came close to wavering from that decentralization philosophy, did he? >> No, no, I mean, I think that the story that he told me that I found fascinating was, he didn't have an epiphany that decentralization would be the mechanism for success, it was more that he had started traveling, and when he'd come back to his office, the memos and requests and papers to sign were stacked up two feet high. And he realized that he was holding up the company because he wasn't there to do this and that at some point, he couldn't do it all, it was gonna be too big for that, and that's when the light came on and said this decentralization concept really makes sense for us, if we're gonna be an international company, which clearly was his mission from the beginning, we have to say the people on the ground in those markets are the people who are gonna make the decisions because we can't make 'em from Boston. And I talked to many people who, were, you know, did a trip to Europe, met the folks in London, met the folks in Munich, and they said to a person, you know, it was so ahead of its time, today it just seems obvious, but in the 1960s, early '70s, it was really not a, you know, a regular leadership tenet in most companies. The command and control that you talked about was the way that you did business. >> And, you know, they both worked, but, you know, from a cultural standpoint, clearly IDG and IDC have had staying power, and he had the three-quarter rule, you talked about it in your book, if you missed your numbers three quarters in a row, you were in trouble. >> Right. >> You know, one quarter, hey, let's talk, two quarters, we maybe make some changes, three quarters, you're gone. >> Right. >> And so, as I said, if you were makin' your numbers, you had wide latitude. One of the things you didn't have latitude on was I'll call it 'pay to play,' you know, crossing that line between editorial and advertising. And Pat would, I remember I was at a meeting one time, I'm sorry to tell these stories, but-- >> That's okay. (laughs) >> But we were at an offsite meeting at a woods meeting and, you know, they give you a exercise, go off and tell us what the customer wants. Bill Laberis, who's the editor-in-chief at Computerworld at the time, said, "Who's the customer?" And Pat said, "That's a great question! To the publisher, it's the advertiser. To you, Bill, and the editorial staff, it's the reader. And both are equally important." And Pat would never allow the editorial to be compromised by the advertiser. >> Yeah, no, he, there was a clear barrier between church and state in that company and he, you know, consistently backed editorial on that issue because, you know, keep in mind when we started then, and I was, you know, a journalist hoping to, you know, change the world, the trade press then was considered, like, a little below the mainstream business press. The trade press had a reputation for being a little too cozy with the advertisers, so, and Pat said early on, "We can't do that, because everything we have, our product is built, the brand is built on integrity. And if the reader doesn't believe that what we're reporting is actually true and factual and unbiased, we're gonna lose to the advertisers in the long run anyway." So he was clear that that had to be the case and time and again, there would be conflict that would come up, it was just, as you just described it, the publishers, the sales guys, they wanted to bring in money, and if it, you know, occasionally, hey, we could nudge the editor of this particular publication, "Take it a little bit easier on this vendor because they're gonna advertise big with us," Pat just would always back the editor and say, "That's not gonna happen." And it caused, you know, friction for sure, but he was unwavering in his support. >> Well, it's interesting because, you know, Macworld, I think, is an interesting case study because there were sort of some backroom dealings and Pat maneuvered to be able to get the Macworld, you know, brand, the license for that. >> Right. >> But it caused friction between Steve Jobs and the writers of Macworld, they would write something that Steve Jobs, who was a control freak, couldn't control! >> Yeah. (laughs) >> And he regretted giving IDG the license. >> Yeah, yeah, he once said that was the worst decision he ever made was to give the license to Pat to, you know, Macworlld was published on the day that Mac was introduced in 1984, that was the deal that they had and it was, what Jobs forgot was how important it was to the development of that product to have a whole magazine devoted to it on day one, and a really good magazine that, you know, a lot of people still lament the glory days of Macworld. But yeah, he was, he and Steve Jobs did not get along, and I think that almost says a lot more about Jobs because Pat pretty much got along with everybody. >> That church and state dynamic seems to be changing, across the industry, I mean, in tech journalism, there aren't any more tech journalists in the United States, I mean, I'm overstating that, but there are far fewer than there were when we were at IDG. You're seeing all kinds of publications and media companies struggling, you know, Kara Swisher, who's the greatest journalist, and Walt Mossberg, in the tech industry, try to make it, you know, on their own, and they couldn't. So, those lines are somewhat blurring, not that Kara Swisher is blurring those lines, she's, you know, I think, very, very solid in that regard, but it seems like the business model is changing. As an observer of the markets, what do you think's happening in the publishing world? >> Well, I, you know, as a journalist, I'm sort of aghast at what's goin' on these days, a lot of my, I've been around a long time, and seeing former colleagues who are no longer in journalism because the jobs just started drying up is, it's a scary prospect, you know, unlike being the enemy of the people, the first amendment is pretty important to the future of the democracy, so to see these, you know, cutbacks and newspapers going out of business is difficult. At the same time, the internet was inevitable and it was going to change that dynamic dramatically, so how does that play out? Well, the problem is, anybody can post anything they want on social media and call it news, and the challenge is to maintain some level of integrity in the kind of reporting that you do, and it's more important now than ever, so I think that, you know, somebody like Pat would be an important figure if he was still around, in trying to keep that going. >> Well, Facebook and Google have cut the heart out of, you know, a lot of the business models of many media companies, and you're seeing sort of a pendulum swing back to nonprofits, which, I understand, speaking of folks back in the mid to early 1900s, nonprofits were the way in which, you know, journalism got funded, you know, maybe it's billionaires buying things like the Washington Post that help fund it, but clearly the model's shifting and it's somewhat unclear, you know, what's happening there. I wanted to talk about another lesson, which, Pat was the head cheerleader. So, I remember, it was kind of just after we started, the Computerworld's 20th anniversary, and they hired the marching band and they walked Pat and Mary Dolaher walked from 5 Speen Street, you know, IDG headquarters, they walked to Computerworld, which was up Old, I guess Old Connecticut Path, or maybe it was-- >> It was actually on Route 30-- >> Route 30 at the time, yeah. And Pat was dressed up as the drum major and Mary as well, (laughs) and he would do crazy things like that, he'd jump out of a plane with IDG is number one again, he'd post a, you know, a flag in Antarctica, IDG is number one again! It was just a, it was an amazing dynamic that he had, always cheering people on. >> Yeah, he was, he was, when he called himself the CEO, the Chief Encouragement Officer, you mentioned earlier the Good News notes. Everyone who worked there, at some point received this 8x10" piece of paper with a rainbow logo on it and it said, "Good News!" And there was a personal note from Pat McGovern, out of the blue, totally unexpected, to thank you and congratulate you on some bit of work, whatever it was, if you were a reporter, some article you wrote, if you were a sales guy, a sale that you made, and people all over the world would get these from him and put them up in their cubicles because it was like a badge of honor to have them, and people, I still have 'em, (laughs) you know, in a folder somewhere. And he was just unrelenting in supporting the people who worked there, and it was, the impact of that is something you can't put a price tag on, it's just, it stays with people for all their lives, people who have left there and gone on to four or five different jobs always think fondly back to the days at IDG and having, knowing that the CEO had your back in that manner. >> The legend of, and the legacy of Patrick J. McGovern is not just in IDG and IDC, which you were interested in in your book, I mean, you weren't at IDC, I was, and I was started when I saw the sort of downturn and then now it's very, very successful company, you know, whatever, $3-400 million, throwin' off a lot of profits, just to decide, I worked for every single CEO at IDC with the exception of Pat McGovern, and now, Kirk Campbell, the current CEO, is moving on Crawford del Prete's moving into the role of president, it's just a matter of time before he gets CEO, so I will, and I hired Crawford-- >> Oh, you did? (laughs) >> So, I've worked for and/or hired every CEO of IDC except for Pat McGovern, so, but, the legacy goes beyond IDG and IDC, great brands. The McGovern Brain Institute, 350 million, is that right? >> That's right. >> He dedicated to studying, you know, the human brain, he and Lore, very much involved. >> Yup. >> Typical of Pat, he wasn't just, "Hey, here's the check," and disappear. He was goin' in, "Hey, I have some ideas"-- >> Oh yeah. >> Talk about that a little. >> Yeah, well, this was a guy who spent his whole life fascinated by the human brain and the impact technology would have on the human brain, so when he had enough money, he and Lore, in 2000, gave a $350 million gift to MIT to create the McGovern Institute for Brain Research. At the time, the largest academic gift ever given to any university. And, as you said, Pat wasn't a guy who was gonna write a check and leave and wave goodbye. Pat was involved from day one. He and Lore would come and sit in day-long seminars listening to researchers talk about about the most esoteric research going on, and he would take notes, and he wasn't a brain scientist, but he wanted to know more, and he would talk to researchers, he would send Good News notes to them, just like he did with IDG, and it had same impact. People said, "This guy is a serious supporter here, he's not just showin' up with a checkbook." Bob Desimone, who's the director of the Brain Institute, just marveled at this guy's energy level, that he would come in and for days, just sit there and listen and take it all in. And it just, it was an indicator of what kind of person he was, this insatiable curiosity to learn more and more about the world. And he wanted his legacy to be this intersection of technology and brain research, he felt that this institute could cure all sorts of brain-related diseases, Alzheimer's, Parkinson's, etc. And it would then just make a better future for mankind, and as corny as that might sound, that was really the motivator for Pat McGovern. >> Well, it's funny that you mention the word corny, 'cause a lot of people saw Pat as somewhat corny, but, as you got to know him, you're like, wow, he really means this, he loves his company, the company was his extended family. When Pat met his untimely demise, we held a crowd chat, crowdchat.net/thankspat, and there's a voting mechanism in there, and the number one vote was from Paul Gillen, who posted, "Leo Durocher said that nice guys finish last, Pat McGovern proved that wrong." >> Yeah. >> And I think that's very true and, again, awesome legacy. What number book is this for you? You've written a lot of books. >> This is number 13. >> 13, well, congratulations, lucky 13. >> Thank you. >> The book is Fast Forward-- >> Future Forward. >> I'm sorry, Future Forward! (laughs) Future Forward by Glenn Rifkin. Check out, there's a link in the YouTube down below, check that out and there's some additional information there. Glenn, congratulations on getting the book done, and thanks so much for-- >> Thank you for having me, this is great, really enjoyed it. It's always good to chat with another former IDGer who gets it. (laughs) >> Brought back a lot of memories, so, again, thanks for writing the book. All right, thanks for watching, everybody, we'll see you next time. This is Dave Vellante. You're watchin' theCube. (electronic music)

>> Live from Las Vegas, it's theCUBE covering AWS Reinvent 2018. Brought to you by Amazon Web Services, Intel and their ecosystem partners. >> And welcome to Las Vegas, we're in the Sands now for AWS re:Invent day one, here for all three days, Tuesday, Wednesday, Thursday, exclusive CUBE coverage here. I'm John Walls with Justin Warner and John Ferrier. Gentlemen, good to see you, it's been a while since we had the band together so it's good to be back. >> Well we can reinvent, everyone is going to run the marathon, it's a hard hitting show, it's the wall-to-wall coverage. Started with what they call Midnight Madness kind of played off March Madness. Sunday at midnight kicks off the show, they have a party that goes well into the evening, to get the launches out there. >> I don't want to ask where you were at that time. >> I was actually coming home from Phoenix, from a family trip but I'll be coming this year but this even, wall-to-wall coverage, here at The Cube, three days of live broadcast. It really kicked off yesterday, there's evening events, 52 000 people, it is packed, it feels like you're walking through Disneyland on the busiest day, really is crazy. A ton of networking, a lot of customers. This is Amazon's biggest show, it's really awesome and it's a great way to see the formation of the industry. So it really is the industry Super Bowl event as Dave (mumbles) says and watching how people form, how their posture is, what their messaging is and our job, we're going to split through that this week, we're going to extract from the messaging and the conversations, get the story, get to the truth, shortcut to the data and should be fun. >> Well, let's talk about the head coach here in AWS. You've had a chance to sit down with him recently. We'll hear the key note tomorrow morning but just give you a little sneak peak of what you think is coming from Mr Jassy and what do you think the message is that he wants to deliver? >> Well, we've been covering Amazon since its founding, or our founding eight years ago and seven years they started reInvent, eight years ago, we are seven years, this is our seventh year at reInvent. So we get to know Jassy So he invites me every year for a one-on-one. This year, I did it at his house. He's got a sport bar in his basement. Tricked out sports bar, great football game was on, Chiefs against the Chargers, we watched that, two and a half hours I spent with him really kind of getting a feel for what's on his mind. How he's thinking about the business because a lot of, he's having a lot of pinch-me moments where certainly they're winning, they're blowing away field in my opinion in cloud computing. I think there's really not even a close second place although Microsoft's got the chops, they're doing their gaming, Google's got the tech and they're repositioning, you know, how does he feel? He's humble as they come and he's got the management discipline, but he was really kind of saying to me, hey, great leaders are listening to customers and he was walking back his position on hybrid cloud because clearly they're going to make some big announcements here around hybrid cloud but I got insight into his mind and he's not done and these guys are not celebrating in the end zone, they're not high fiving each other, they've got a lot of work to do and still, people are not using the cloud like they really are in their mind. I think things like Lambda and the announcements we'll be expecting to see here today is going to set the stage for a new set of apps and I think there's going to be a renaissance of software development, they recognize it, they recognize that the competition's hotter, they recognize that they got to get better and raise the bar and that's what they're doing. They have a cadens to their management style that I think is historic in this era of leadership and the likes of all the Uber scandals, Facebook, the scandals of the management team of Facebook. No one trusts corporate America. Amazon's got this execution style that kind of reminds me back in the old days, Intel had or an HP back in the day. They actually kick ass as a management team. They're focused, they're not celebrating and they're clearly guns glaring. SO they're doing the work. I still think that they see the world as still competitive, there are things out there that I think scares them, although he didn't say CNCF directly but there's things out there forming that could dis-intermediate the greatness of AWS and that's just natural competition and his philosophy, Justin is, bring it on. >> Well, I was just in China funnily enough for CNCF Cube, CNCF club native con, Cube con. The first one that they held in China and it was amazing to see what the Chinese are actually doing. So we ear a lot over here in Europe and over here in the Western world. There's a lot of conversation about Amazon and Google and Microsoft, but you never hear the words Tencent or Alibaba, they don't come up a lot and yet what Alibaba and Tencent are doing over there is amazing so I think if we're thinking about the competition in a global sense, then certainly Amazon needs to be right onto of their game because yeah, we might have some stumbles from Google as we've seen and Microsoft, still a little bit behind the plan but if you look at globally and see what's happening over there in China, there's a lot that they should be worried about. >> Well, give me a such as. When you talk about Alibaba doing things that maybe aren't happening here, for example. >> There was some amazing stuff around our AI machine learning that they were doing around grid management of renewable energy and distribution around the entire country of China. So there are things that are possible in China that are not quite as easy to do over here in the West. It's a lot easier when you have one person in charge of all of the things and they can say, we're going to go and do that. It's a little bit more, there's a lot more negotiation required over this side. >> And you think too about China as the mobile penetration is higher there and they're very data centered. You look at the United States, even in the IT world. Dell, HP's, the Oracle's of the world, the old IT guard essentially had that data but now you got data on phones, with this proximity, you've got edge of the network. The data is going to live in a lot of places and in our legacy infrastructure and IT in North America, Dell doesn't have anything to do with my phone or HP, that's just service so the old way of storing data and where data lives and how data's being used is radically changing. >> Yeah, there's a lot of stuff happening at the edge. We have some presentations on wind farms. So you have compute lives in wind farms and they're actually sampling the air and finding out what the weather patterns are like, feeding that back into central systems and they're having to design systems that are able to be deployed, the same thing, cookie cutter all over the country, distributed around the place where you've got latency and communication issues, where you've got power distribution issues. So you have to think about the way you're deploying these infrastructure, completely differently than if you centralize in one cloud or even in a data center or you're running it yourself. So they're actually thinking about things in a layered sense. So it's not just one size fits all, it's actually we need sides, multiple different sizes to fit lots of different things. >> And what, I mean John you got off the phone with 5G on the horizon. I can only imagine the exponential explosion we're going to see in data coming in from sensors and IoT, you talk about edge and faster, more, where's all that going? >> So I got a little reporter's notebook here from my meeting with Jassy and also connecting the dots what's going to be announced. There's going to be an announcement today around 11 o'clock this morning around maybe Jassy announcing new connectivity option and what you're seeing is that Amazon recognizing that IoT at the edge, Internet of Things is sensors as wind farms so this IoT is about power and connectivity. Without power and connectivity, IoT doesn't really exist. SO these new kinds of internet infrastructure data devices that need computer, you got to have power, you got to have connectivity and they might not have the worst power on a safe phone, although this is a, plenty of power on there. You want to take advantage of bigger data sets. You've got to go back to the cloud. So the cloud is becoming the brain and that's what Andy Jassy said to me, he said the cloud is going to be the brains and the edge can be, use some processing, we're going to send compute there if we need it. We don't want to move data around because latency will kill. So we're expecting Amazon to announce new services around connectivity where you can stand up things like satellites as a service and that's what's going to be announced at 11 o'clock. I just got that out there so we'll see if that's confirmed or not. (John Walls laughs) Two hours early if you watch this, don't tweet this, I'll get in trouble. >> Is that cat out of the bag. I think yeah, go ahead. >> Well you know, it's a brief guess, I heard some rumbles in the hallway but we'll see what the details are but this is a new kind of progressive thinking, this is what I love about AWS and Jassy, they're not afraid to use their scale and power to push new capabilities, not just extract ranch from customers and by standing up connectivity, this is a weak link in the equation of IoT. There's a lot of things that need power and connectivity and if you have good processing power and compute at the edge, that's going to happen. So Andy's philosophy and Amazon's philosophy is consistent with Wikibon research and most analysts have discussed in this strand that you want to move compute to the edge, not move data back to the cloud. This is fundamentally the shift that's going on with services like Lambda, you can power up things in hundreds of milliseconds versus an instance of ten seconds. This is changing the software development paradigm. This is a tailwind, this is going to power new work loads so you see Amazon recognizing this, increasing power compute to the edge, offering connectivity ops where there isn't any. Making things faster with compute and then moving up the stack. This is going to be a big part of this show. We're expecting to see if Amazon is going to move up the stack. Aurora, Sagemaker and levels of services that they're going to allow developers, new kind of software development where truly the dream of (mumbles) of not knowing anything about the infrastructure could be realized. >> That is a pretty big shift for Amazon 'cause they've always been talking about themselves as undifferentiated heavy lifting as one of their analysts told me it some years ago. That was their idea, was that we're just going to be the utility service that is the one true way that you should use it and it will be ubiquitous in the same way that you have power as a utility, you rent it and you just use it and you build other things on top of that. So it's interesting that we're now starting to see that Amazon themselves are building things on top of what they've already created in the same way that S3 was build on top of EC2, so now we're seeing this layering effect of we built the underlying technologies and now we're going to start putting extra value technologies on top of that and that's where to start to see things like as a services, serverless Lambda being built on top of all this underlying stuff. We're going to start seeing some really interesting stuff coming form Amazon. >> I'd like to hear from you guys, you've talked about what you think AWS is going to talk about. What do you want them to talk about. What do you want to hear form them this week, whether it's a challenge they have to take on or whether it's about the competitive landscape what is it between the two of you that's you'd like to hear them address. >> I would like to hear their position on the software development paradigm around moving between clouds. I know they don't like the word multi-cloud, hybrid cloud's the word that they choose. They don't actually use the word multi-cloud, hybrid cloud is their word. They see the world in a very specific way which I don't disagree with. On premises with clouds, operations and seamless consistency around both, how that works and what is means for the customer is what I want to know. WHat's the switching cost involved, what's the benefit to customers, it's going to be a lock inspect. I want to hear about some of the migration stories, I want to hear them talk about migrations. I don't think migration to the cloud has been successful for Amazon as they had hoped. I think when you look at what's going on in the enterprise, legacy workloads that run payroll around mainframes, they're going to stay there and no-one's moving that to the cloud 'cause why would I want to rewrite that. So this is the interesting thing. So I want to hear them talk about how they're going to handle a workload that's on premises, that's legacy, that's part of a production mission critical application and how that's going to work with new services via APIs. Stable data, things of that nature. I want to hear how they're going to handle containers and Kubernetes, 'cause this is going to be the key linchpin between moving data and services via APIs and web services, this is the holy grail. They can address that in a clear way, I would be happy and I expect them to see them do things like put a VM container around containers. A lot of competitive strategy going on, so I'm trying to look for the chess moves on the board. Kubernetes and containers is a big one. >> The customer, in terms of helping customers, I would actually like to see, I think similarly, see Amazon relax we are the one true way message that they've been hammering pretty hard for a long, long time. If you do cloud, it has to be us and we're really the only the cloud that exist. That's caused a lot of issues inside particularly enterprise customers who have, as you say, they've got legacy applications, or we'd like to call them heritage applications. They work, they've been debugged, they're sold applications. Rewriting those adds a lot of risk and a lot of IT projects found, more than 50% of them fail. SO if you're going to say, oh you have to completely rewrite everything and take it all to serverless, if you're going to do anything cloud, that adds a huge amount of risk onto the IT portfolio. So for an enterprise, or anyone who's actually been a successful company already, not the new startups, I'd say yes, brand new, you can start green, field's awesome, but if you have any kind of successful company already, you need to have a migration part. You need to understand it's appropriate to put these things, net news should start in cloud, great. What about the stuff that we've already got that's debugged, how do I get that to talk to cloud and how do I not end up with a bifurcated organization where I've got this legacy stuff that sits in the cupboard which no-one want to touch and play with and I have everyone doing all the new shiny stuff over here and then I end up killing my business because I have no migration part. >> And one final thing and then we got to go wrap up and get started for the day. I want to see more on the net new work loads because I think that is going to be a key part. The application developers are going to be where the power source is. New breeded developer, classic IT experts emerging, changing to devops and kind of a new community, open source community kind of personas them all evolving. So development, of our environment changing with developer persona, IT experts are changing to devops and the role of open source communities, I want to see more of that. At the end of the day, I want to see how Amazon thinks and how their customers are working with their data. Because if they have that Heritage app or legacy or an edge or wherever, the data is going to be a critical design component for the next generation. So that's what I'm looking for, what's going on with the data and trying to survive the slew of announcements. >> Big data, big topics and we have 40 000 of our best friends here to share their knowledge with you. Well, we're not going to have all of them, but we're going to have a lot. Wall-to-wall coverage here, AWS re:Invent kicks off in just a few moments, you are watching The Cube live from Las Vegas. 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>> Live, from Toronto, Canada, it's theCUBE! Covering Global Cloud and Blockchain Summit 2018, brought to you by theCUBE. >> So, welcome to the Global Cloud and Blockchain Summit. I'm about to hand you over to John Furrier, who is the Co-Founder and Co-CEO of SiliconANGLE Media and Executive Editor at theCUBE, he's about to do a Fireside Chat with Al and Mathew, I'll let him introduce you to them as well. He's also involved in a major blockchain project himself, so he's going to get into that with those guys as well. So, and tomorrow we start at nine, in the meantime, enjoy the evening, enjoy the food, enjoy the chat, and I'll let you go. >> Okay. Hello? Thank you Ruth, appreciate it, thanks everyone for being part of this panel, Fireside Chat, want to make it loose, but high impact for you guys, I know, having some cocktails, having a good time. If there's any questions during, then at the end we'll pass the mic around, but. We want to have a conversation, kind of like we always do down in the lobby bar, just talking about crypto and cloud, and we ended up talking about cloud computing and crypto a lot because those are two areas that are kind of converging, and the purpose of this event. So we really wanted to share some thoughts around those two massively growing markets, one is already growing, it's continuing to be great: the cloud, and blockchain certainly is changing everything. These two important topics, we want to flesh them out, Al Burgio is the Serial Entrepreneur/Founder of DigitalBits, he's founded companies both in cloud and blockchain, so he brings a great perspective. And Matt Roszak, leading crypto investor, entrepreneur and advocate, well known in the crypto space for goin' way back, I think you gave a couple bitcoins to some very famous people early on, we'll get into that a little bit later. So guys, thanks for being part of the panel and Fireside. First question is: we know how big the money is, I mean the money is crypto is is flowin' around the world, and cloud computing we've seen specifically, and certainly in coverage now with Amazon's success, Amazon Web Services, and Microsoft and others. Trillions of dollars being disrupted in the traditional kind of the enterprise, data center area, and blockchain is doing that too, so we want to get into that. But first, before we get into it, I want you guys to take a minute to explain for the folks, just to set the context, the kinds of projects you're working on. Now Al, you have DigitalBits, Matt you're investing and you're finding a lot of interesting token dynamics. So just take a minute. Al, start. >> (mic off) So-- Everybody hear me okay? Alright, perfect. Well thanks for that lovely intro. Yes, my name is Al Burgio, I'm, I've founded a few companies, as John mentioned. Before the cloud there was internet, (light laugh) and so it started for me in the late '90s in the e-commerce era. But more recently I pioneered what's known as Interconnection 2.0, and I did that with the company called Console, for those that may know PCCW, recently it was acquired by PCCW. And with that we disrupted the way networks at the core of the internet were connected together More recently I've founded the DigitalBits project, and now DigitalBits blockchain network, and with that, you can kind of think of that as the trading and transaction layer for the points economy and other digital assets, and you can do a lot of really interesting thing with that, it's really about bringing blockchain to the masses. >> Matt, what're you workin' on? >> So, Matthew Roszak, Co-Founder and Chairman of Bloq. Bloq is a enterprise software company, we do two things, the premise is the tokenization of things, so we think the money identity, new layers of the internet are going to be tokenized. And so, we go to market in two ways, one is through Bloq Enterprise, and these are all the software layers you need to to connect to tokenized networks, so think a wallet, a node, a router, etc. And then Bloq Labs we build, and partner with, some of the leading tokenize networks and applications, so we build a connective tissue and then we actually build these new networks. I started this space as an investor over five/six years ago, investing in some of the best entrepreneurs and technologists in the space build a great network. But I love building companies, and so my Co-Founder and I, Jeff Garzik, built Bloq two and a half years ago. And then lastly, also serve of Chairman of the Chamber of Digital Commerce, so, so if you believe in these new tokenized money layers, identity layers, etc, regulation comes into play. Certainly today from an institutional adoption level, and so if you care about this space, you need to spend time to kind of help that dialogue improve; this technology moves way faster than folks in DC and elsewhere, so. >> And the project that we're workin' on at SiliconANGLE, is we've tokenized our media platform, and we're opening it up to a token model, and have kind of changed the game. So all three of us have projects, want to put those in context, we build everything on Amazon Web Services, so, the view of the cloud, we also cover it. The cloud computing market is booming, we see that Amazon Web Services numbers empower the earnings for Amazon's company, obviously Apple's trillion dollar evaluation those are clear case studies; but blockchain could potentially disrupt it all, and Al, I want to get your thoughts, because even today in the news at Microsoft Azure, which is their big cloud provider, announced blockchain as a service. And folks that are in either the data center business or in cloud know the shift that's happening in the IT world, but no ones really connected the dots on where blockchain intersects, and also, is it an opportunity for the cloud guys, what's the landscape look like, so. What's your thoughts on that, how are they connected, what does it mean, how does a cloud company maintain their relevance and competitiveness with blockchain? >> Well, just pointing on the fact that, you know, today we had that new Microsoft, the Azure cloud, their support and evangelism for blockchain. You know, a company, I think it's very important that this isn't an ICO, two kids in a garage saying their doing something blockchain this is a massive, multi-billion dollar company; and making a decision like that is not trivial, it's many, many departments, a lot of resources, before such a thing's announced. So, that's, not only is it validation, but it's a leading indicator as to this trend, that this is clearly something that's important. And a lot of people, if you're not paying attention, you need to be paying attention, including if you're in the cloud industry, 'cause many companies obviously do compete with, with Microsoft and AWS, so. It may be still early, but it's not that early, in light of the news that we saw today. With that, I would say that, a lot of the parallels I like to kind of, if I was an infrastructure provider I'd look at this from the standpoint of the emergence of Linux when it first came on the scene. What was important for companies like Red Hat to be successful, they had competition at the time, and you had shortages of Linux, let's say engineers, and what have you. And so, a company like Red Hat built a business around that, and they did that by how they kind of surfaced and validated themselves to the enterprise of that era, was partnering with hardware companies, so, it was Intel, IBM, and then Dell, HP, and they all followed, and then all of a sudden, which version of Linux do you want to use? It's Red Hat, you're paying for that support, you're paying Red Hat. And, you know, then they had their hockey stick moment. Today, you know, it's not about hardware companies per se, it's about the cloud, right? So cloud is the new hardware per se, and many enterprises obviously are looking at cloud computing companies and cloud computing providers, infrastructure providers, as the company that they need to support them with the infrastructure that they use, or sorry the technologies that they use, right? Because they're not necessarily supporting these things and making sure that they're always on within the basement of that enterprise, they're depending, or outsourcing, to depending on these managed IT providers. This was very important that whatever technologies they're using in the lab, that ultimately their infrastructure partners are able to support the implementation, the integration, the ongoing support of these technologies. So if you think of blockchain like an operating system or a database technology, or whatever you want to call it, it's important that you're able to really identify these key trends, and be able to support your customer and what they're going to need, and ultimately for them, they can't have a clog in their digital supply chain, right? So, it's clearly emerging. Microsoft is validating that today, you know, clearly they have the data, that they're seeing for their existing enterprise customers, and they don't want to lose them. >> Yeah, but remember when cloud came out; you and I have talked about this many times Al that it wasn't easy to use, I remember when Amazon Web Services came out, it was just basically, it was hard to command line, basically you had to use it, so, it became easier now, it's so easy and consumable. Blockchain, similar growing pains, but, we don't want to judge it too early with the opportunity that it has, it's going to get easier, what're your thoughts? And it has to scale by the way, Amazon, at a large scale. >> Yeah, I mean-- >> So blockchain has to scale and be easier, your thoughts? >> Another kind of way to think of it is, to not necessarily think of cloud computing, but the evolution the internet went, you know, in Internet 1.0, you know, we went through this dial-up modem era, things were very raw back then; great visions we had of the future, like, it's going to be amazing for video one day! But, not during dial-up modem era, and eventually, you know, it eventually happened. And user interfaces improved, and tool sets improved and so forth. You know, fast forward to today, we have all of that innovation to leverage, so things will move a lot faster with blockchain, it did start very raw, but it's, it's moving much faster than anything we've seen definitely in the '90s and in the last decade, so. It's just, you know, it's a matter of moments, not years. >> And I think Al brings up a great point on leverage, because Amazon leverages infrastructure to a point where it's larger than Google, Azure, and IBM's public cloud combined, and so yeah, massive leverage there. And so, when these big cloud providers provide this blockchain as a service, it is instrumented and built on top of their existing infrastructure, not necessarily on blockchain infrastructure. So, it's an interesting dynamic where they're putting it on top of existing infrastructure that's there, but what's being build right now is the decentralized Amazon Web Services. So you have every layer of Amazon being re-imagined, like, and incentivized so you have distributed compute and access and storage and database. And so, what will be interesting to see is that, given this massive opportunity, will Amazon and some of these other incumbent cloud providers become the provisioning networks of the future? Of all this new decentralized resources that get, again, if you want storage, you have to start having smarts to say: if I'm going to go to Sia or Filecoin or Genaro or Storj, compute, etc; you have to start being a provisioning layer on top of that to kind of, you know, make that blockchain essentially work. So, it'll be interesting to see the transition 'cause today the lightweight versions to say yeah, I have a blockchain as a service strategy, and that's like, well done, and check the box. Now, the question is how far in this new world will they go down? And, as it gets more decentralized, as universities and governments, corporations, plug their access utility into these networks, and to see how that changes. That is much bigger than the Amazon of today. >> I think that's an interesting point, I want to just drill down on that if you don't mind, 'cause I think that's a fundamental observation that every layer's going to be decentralized. The questions I think I'm asking and I'm seeing is: How does it all work together? And then what's the priorities? And the old model was easy; got to get the infrastructure, got to get servers, (laughs lightly) and you know, work your way up to the top of the stack. What cloud brings also is that: a software developer can whip up an application, maybe a dApp on a test network and go viral, and the next thing you know they have a great opportunity, and then they got to build down. So the question is: What are you seeing in terms of priorities on stacks, portions of the stack that are being decentralized and tokenized, do you see patterns, trends, as an investor, is there a hotter (laughs) area than others, how do you look at that? >> Well, I think it's, it's in motion right now it's, like I said, every layer of AWS is getting thought through in how to create these digital cooperatives, I have excess storage, I'm going to contribute it to this network, and I'm going to get paid in tokens when a user uses that storage network, and pays for it in those native tokens and so that, coupled with all the other layers, is happening. From a user perspective, we may not want to be going to pick a database provider, a storage, a compute, etc, we're likely going to say: I want a provisioning layer, and provision this and execute this, much like if we, you know, there'll be new provisioning layers for moving money, I don't care if routes through Lightning or Litecoin or Doge or whatever, as long as the value gets across the pond or the app gets provisioned appropriately based on you know, time, security, and cost, and whatever other tendance are important, that's all I care about, but; given the depth and the market for all that, I think it'll be interesting to see how these are developed with the provisioning layers, and I would think Amazon or Azure, the future of that is, is more provisioning than actually going and doing all that at the end of the day. >> That's great. I want to get your thoughts guys on innovation. My good friend Andy Kessler wrote an op-ed in today's Wall Street Journal around, an article around the government, the US government getting involved. You know, there's Twitter, Facebook, the big platforms, in terms of how they're handling their media, but it brings up a good point that with more regulation, there's less innovation. You mentioned some things outside the United States, it's a global cloud, cloud's operating globally with regions, it's a global fabric. Startups are really hot in this area so; how do you view the ecosystems of startups, in terms of being innovative, things happening that you think that're good, and things that aren't good, obviously I'm not a big of the government getting involved, and managing startups, the ecosystems but, blockchain has a lot of alpha entrepreneurs jumping in, you've looked at all the top ventures, the legit ventures, they're all alpha entrepreneurs, multi-time serial entrepreneurs, they see the opportunity and they go for it. Is the startup environment good, is there enough innovation opportunities, what're you thoughts on the opportunity to be innovative? >> Yeah, Al and I were just talking about this before the panel here, and were talking about our travels in Asia, and when we go there it is 10, 100 X of energy and get-it factor, and capital, and the markets are just wildly more vibrant than you know, going to some typical markets here in San Fran and New York in North America, and, so it's interesting to see that when you heat map the world, what's really happening. And you know, people are always saying: oh well this, this FinTech, or InsurTech, or whatever tech, is going to make a dent in Silicon Valley or Wall Street. This technology, this new frontier, is definitely going to do that. I think some of that will get put into more focus based on regulation, and there's two things that will happen; there's obviously a lot of whippersnapper countries that are promoting a safe place to innovate with crypto, I think Malta, Gibraltar, Barbados, etc, and there were-- >> Even Bermuda's getting in on the mix now. >> Yeah! I mean so there's no shortage of that, and so, and obviously this ecosystem outpaces the pace of regulation and then we'll see like the US doing something, or you know, other fast followers to try and catch up, and say hey, we're going to do the cryptocurrency act of 2022, miners get free power, tax-free, you know crypto trading, you know just try and play catch up. 'Cause it's kind of hard in the last year or 18 months we've seen this ecosystem go from this groundswell to this now institutional discussion; and how do you back end the the banking, the custody, all these form factors that are still relatively absent. And so, you know, we're right in the middle of it. >> It's a whole new way, you got to follow the money, right? Al, you and I talked about this; capital markets, you know entrepreneurs need to raise money and that's a good thing, you need to get capital to do stuff. >> Yeah, this is a new phenomenon that the world has never experienced before, it's awesomeness when it comes to capital formation; you know, without capital formation there is no innovation. And so the fact that more capital can be raised, it's the ultimate crowd sourcing in such an efficient period of time, capital being able, the ability to track capital from various different corners of the world, and deploy that capital to try to fuel innovation. Of course, you know, not all startups or what have you succeed, but that was true yesterday, right? You know, 90% of startups fail, but they all will give it some meaningful amounts of checks, people were employed and innovation was tried; and every once in a while something emerges that's amazing. If you can do that faster, right, when you have the opportunity to produce more and more innovation. And, of course with something so new as cryptocurrency, things like ICOs and what have you, people may kind of refer to it as the wild wild West, it's not, it's an evolution. And you have-- >> It's still the wild west though, you got to admit. (laughs) >> Well, it is but, we're getting better at it, right? As a world, this isn't the Silicon Valley community getting better at venture capital or some other part of the United States or Canada getting better at venture capital; this is the world as a whole getting better at capital formation. >> Yeah, that's a great point. >> In the new way of capital formation. >> And I wanted to just get an observation on that. I moved to Silicon Valley 20 years ago, and I love it there, for venture capital and new startups, it's the best place in the world. And I've seen people try to replicate Silicon Valley, we're the Silicon Valley of Canada, we're the Silicon Valley of the East or Europe, and it's always been hard to replicate, because it was a venture model, and you needed venture capitalists and you need money, you need a community, the culture, the failure, the starting over, and just, you know, gettin' back on the horse kind of thing. Crypto is the first time that I've seen the replica of that Silicon Valley dynamic, in a new way, because the money's flowing, (laughs) and there's community involved in crypto, crypto has a big community aspect to it. Do you guys see that as well? I mean I'm seeing, outside the United States, a lot of activity. Is that something that you're seeing? >> So, the first time we saw, well, last time we saw everybody trying to replicate Silicon Valley was first internet, you know, there was Silicon Swamp, there was Silicon Alley, there was silicon this-- >> Prairie. >> Every city was >> Silicon Beach. >> A silicon version of something, and then the capital evaporated, right? We had a mass correction happen. What wasn't being disrupted was value exchange, right, and so this is being created now, it is now possible for this to happen, and it's happening, we're seeing amazing things, Matt said, you know, in Asia. It's a truly awesome force, if anybody has an opportunity to go, they should go, it's unbelievable to experience it, and it really opens your eyes. >> And you've lived through a lot of investments during those .com days and through history now, you've seen a lot of different things. Your observations with the current state of the capital formation, startup landscapes, the global ecosystem around crypto and how it's different from say venture or classic rolling up companies and those kinds of things? >> Yeah, you hear a lot of this, you know, we're in a bubble, it's speculative, etc. And I think that when you look back at history of infrastructure, whether it's railroads, telephony, internet, and now crypto and blockchain, it's interesting, like, if you said: it would take this amount of money to innovate and come out the other end of internet with this kind of infrastructure, these kinds of applications, with these kinds of lessons learned, nobody would sign up for that number, right? It needs this fear, and greed, and all the other effervescence of markets to kind of come out the other end and have innovation. I think we're going through a very similar dynamic here with crypto and blockchain where you know, everything's getting tokenized, everything's getting decentralized. We're talking about fundamental things like money, you know, it's not like we're talking about pet food and women's shoes and airline tickets, we are talking about money, identity, things that will enable like other curves to really come into focus like in and out of things and the kind of compounding of intersections when some of these things get right is pretty extraordinary. And so, but I like what Al said in terms of capital formation and that friction to get from, you know, idea to capital to building, is getting compressed Yes, there will be edge cases of people taking advantage of that, but at the other end of this flow will be some amazing innovation. >> What do you guys think about the, if you had to answer the question with one answer, of what is the high order bit of why blockchain's so important? For me, I see it, from my standpoint, I'll just start, I see it making inefficient things more efficient for any use case, and that's being re-imagined, which is everything from IOT or whatever. Efficiency is a big thing, at least I see that. What do you guys see as a high order bit in terms of you know, the one thing that you'd say blockchain really impacts the world in terms of you know, impact, financial, etc? >> Well, I think with decentralization and all these things that we're seeing it's kind of evened the playing field. It's allowing for participation where parts of the world were unable to participate. And it's doing a whole lot of things in that area. And that's truly awesome, to really grow the economy, grow the global market, and the number of participants in that market in all areas. That's the ultimate trend at what's happening here. >> And your information? >> Absolutely, and I think there's two things, there's this blockchain dialogue, and then there's this crypto decentralization, tokenization dialogue, and on the blockchain side you have lots of companies engaging in blockchain and trying to figure out how it applies to their business, and you hear everything from McKinsey and Goldman saying financial services will save 100 billion dollars in operating expenses by applying blockchain technology, and that's great. That is probably low in terms of what they'll save, it's, to me, is just not the point of the technology, I think that when you kind of distill that down to say hey, for a group of folks to use this technology as a shared services thing to lower opex a trading settlement and decrease that, that's great, that is a step stone to creating these tokenized economies, these digital cooperatives. Meaning you contribute something and then you get something back, and it's measured in the value that this token is, like a barometric kind of value of how healthy that ecosystem is. And so, regulated public enterprises, and EC consortiums around insurance and financial services and banking, that is all fantastic, and that gets them in the pool, gets them exercising on what blockchain is, what it isn't, how they apply it, but it's, at the end of the day for them it's cost reduction The minute there's growth or IP, or disruption on the table, they're all going back to their boardrooms to say: hey let's do this, this, or that, but, if there's a way, my favorite class in college was industrial organization, and it sounds weird but, it was, it kind of told ya like how to dissect an industry, you know, what makes them competitive, who the market leaders are, and then, if you overlay like blockchain networks with tokens, with incentives, interesting things could happen, right? And so that future is going to be real interesting to see how market leaders think about how to tokenize their network, how to be, how to say: no I don't want to own this whole industrial network, I have to engage with some other participants and make sure everybody is incentivized to climb on board. So that I think is going to be more of the interesting part than just blockchain-ifying a workflow. >> Well let's just quickly drill down on that, token economics, what you're getting to. So let's assume blockchain just happens, as evolution of technology, let's just assume for a second that it's going to happen in a big way, it's private, public, hybrid chains, with all that good stuff happening, but the token economics is where the business value starts to be extracted, so the question for you is: How do you describe that to someone to look for, what are the key elements of token economics? When does it matter, when is it in play, and how should they be thinking about it? >> Yeah, I mean token economic design and getting a flywheel going to create a network and network effects is really important. You could have great technology, but Al could be a better marketer, and he gets tokens adopted better, and his network will do better because, you know, he was better able to get people to adopt and market a particular, you know, layer application. And so, it's really important to think about how you get that flywheel going, and how you get that kindling going on a particularly new ecosystem, and get users adoption and growth. That is really hard to do these days because some people don't even know what Bitcoin is, let alone to say I'm going to tokenize this layer, and every time you contribute, every time you take an action, you're going to get rewarded for it, and you're share the value of this network. >> Can you give me a good example of what's happening today that you can point to and say: that's a great example of token economics? >> Well, you see, I mean the most basic one is shared file storage, right? You know, it's like the Filecoin, Sia, Genaro model where, you know, you contribute you know, the unused storage in your laptop or your university data center or a corporate data center, and you say I'm going to contribute this, and when it's used I get these tokens and, you know at the end of the day or week or year you see what these tokens are worth, and was that worth your contribution? And so as these markets develop, and as utility develops, we'll see what that holds. >> Al, you got an example you could share? DigitalBits is a good use case obviously. >> Actually, I'm not going to use DigitalBits (John laughs) just to be neutral. This is one that Matt will know very well, definitely better than I, but one that I've-- the simpler something is, the easier it is for people to understand, and its like oh that makes sense, you know. You know, Binance is one that's very simple, you know it's a payment token, if you pay with some other currency, you pay, you know, Pricex, if you pay in the next few years with their token, you'll get the service at a discount. And in addition to that, they're using a percentage of profits, I think it's every quarter, to buy back up to, ultimately up to, 50% of tokens that are in circulation. So, you know, it's driving value, and driving return, in essence, if I can use that word. So for a user it's simple to understand, for someone that likes to speculate it's easy for someone to understand in terms of how the whole model works, so it's not some insanely complicated mathematical equation, that we can yes we can trust the math. And so in some cases, some adoption is going to just be, you know, attract participants based on simplicity. In other cases the math is important, and people will care about that, so, you know not all things are necessarily equal, and not necessarily one method is right, but there are some simple examples out there that that have proven to be successful. >> That's awesome, one last question, before we open it up if anyone has any questions. If anyone has any questions, if they want to come up, grab the microphone, and ask the three of us if you've got anything on your mind. And while you're thinking about that I'll get the final question for these guys is: A lot of people ask me hey, I want to be on the right side of history, what side of the street should I be on when the reality comes down that decentralization, blockchain, token economics, decentralized applications, becomes the norm, and that re-imagining actually happens? I don't want to be on the wrong side of history. What should I be doing, how should I be thinking differently, who should I be following, what should I be paying attention to? How do you answer that question? >> I think, at the basic level, you know, turn off your phone, lock your door, and study this technology for a day, it's the best advice I could give. Two: buy some crypto. Once you kind of have crypto on your phone, in your wallet, something changes in your brain, I think you just feel like you-- >> You check the prices every day. (all laugh) >> You lose a lot of sleep. And then after that, you know, I think you start engaging in this space in a very different way. So I think starting small, starting basic, is an important tenet. And then, what's amazing about this space is that it attracts the best and brightest out of industry, and law, and government, and technology, and you name it, and I'm always fascinated the people that show up and they're like yeah, I'm in a 20 year, you know, veteran in this space and I want to get into blockchain, it just attracts some of the best and brightest. And, I think we're going to see a lot of experience coming into the space, you know, this has been a, what I'd say a bottoms up groundswell of crypto and blockchain and the evolution of the space. And I think we're starting to see more some more mature folks come in the space to to add some history and perspective and helpin' the build out of this, and to build a lot of these networks. I think that the kind of intersection of both is going to be very healthy for the space. >> Al, your thoughts? >> Definitely agree with Matt. Definitely to lock yourself up and just try to absorb information, everyone has access to the internet, there's plenty of information. If you don't like to read go watch a few YouTube videos, just people explaining the stuff, it's really fascinating, the various different use cases and so forth. You definitely have to buy some, and, you know, whether it's five dollars worth, just go through the whole experience of being able to trade something of value that a few years ago didn't exist, and be able to trade it for something else of value is a pretty phenomenal experience. Then trying to go buy something with it, it's even more of a fascinating experience, I just bought something that used, again, something that didn't exist a few years ago. But, what I would add to that as well, you really have to get out there; if you keep surrounding yourself with people saying aw, this is, eh, whatever, >> It's never going to work. >> It's crazy, it's for criminals, and all that fun stuff. You're going to be last place. So coming to conferences, obviously future's conference you're going to meet a lot of interesting, great people, and that consistent experience, you'll learn something every time. You know, at the end of the day, I remember, I'm sure all three of us remember, with the birth of the internet there was many people that said you know the internet thing, it's crap, it's for kids, you know. And we had first movers, we had willing followers, and then the unwilling followed, you don't want to end up being-- >> The unwilling followers. >> Yeah, the unwilling. >> Alright. Does anyone have any questions they'd like to ask? Come on up. Yeah. We're recording, so we want to get it on film. >> So I have two questions. The first one is for you, Al: Two years ago I interviewed with IIX before it was Console, and I want to know why you didn't hire me? (Sparse laughs) No I'm kidding! That was a joke. Actually, I thought each of you brought up some good points, minus you Al. (chuckles) I'm just kidding. But what I really wanted to ask you guys is: so you talk a lot about this, the tokenized economy and kind of the roadmap and the things to get there, you talk about sediment layer, right, Fiat to crypto, sediment layer, your identity protocols, your dApps, X, Y, Z, right? The whole web 3.0 stack, I want each of you, or I want at least input from both of you or all of you, what are the hurdles to getting to a full adoption of web 3.0 stack, and make a bold prediction on the timing before we have a full web 3.0 stack that we use every day. >> That is a awesome question actually, timelines. You could be, being in technology, being in venture, you could be right, and you could be off by three, five, seven, 10 years, and be so wrong, right? And then at your retirement dinner you could say: I was right, but Tommy wasn't right. So, this is really hard technology, in terms of building systems that are distributed, creating the economic models, the incentive models, it takes a lot to go right in the intersection of all this. But it's not a question like is this happening? No, this is happening, this is like, it's in motion. The timelines are going to be a little elusive, I'm way more pragmatic, I was one of the early guys in the early internet, and you know everything was going to be .com and awesome and fantastic. But the timelines were a little elusive then, right? You know, it's like when was, people are thinking of today's Amazon was going to be the 2005 Amazon, you know, it's like, that took about another decade to get there, right? And people could easily just buy stuff and a drone or a UPS guy would just deliver it, and so, similar things apply today. And you know at the same time we all have a super computer in our pocket, and so it's a lot different. At the same time we're dealing with trusted mediums right? The medium of money, the medium of identity, all these different things they're, they're things that you know if I say download Instagram, and let's share cat pictures or whatever, it's not a big deal, our trust is really low for that, let's do it. For money, it's a different mental state, it's a different dynamic, especially if you're an individual, a government, or an enterprise, you go through a whole different adoption curve on that, so, you know, it is at grand scale five to 10 years, right? In any meaningful way. And so we still have a lot of work to do. >> My answer to that question, it's a good one, your question was a good one, my answer's a little bit weird because it's multi-generational. The first generation pivot was when the internet was born was because of standards, right? The government had investment. The OSI model, open system interconnect, actually never happened, the seven layers didn't get standardized, only a few key ones did; that created a lot of great things. And then when the we came out, that was very interesting protocol development there, the TCP/IP stuff, I mean HTP stuff. I don't see the standardization happening, because cloud flipped the stack model upside down because Amazon and these guys let the software developers drive the value. It used to be infrastructure drove the value of what software could do, then software became so proliferated that that drove the value of the infrastructure, so the whole cloud computing equation is making the infrastructure programmable for the first time, not the other way around, so. The cloud phenomenon's all about software driving the value, and that's happening, so. It's interesting because with blockchain you can almost do levels of services in a cloud-like way with crypto, I mean with blockchain and token economics, and have a partial stack. So think that this whole web 3.0 might be something that no one's every seen before. So, that's kind of my answer, I don't really know if that's going to be right or not, but just looking at the future, connecting the dots, it's probably not going to look like what we've seen before, and if the cloud's an indicator it's probably going to be some weird looking stack where certain sections are working, and then evolution might fill in the other ones, so. I mean, that's my take, I mean, but standards will play a role, the communities will have to get involved around certain things, and I think that's a timeless concept. >> Timing. >> Oh, timing. I think it's going to be pretty quick, I think if you look at the years it took for internet, and then the web, everything's being compressed down, but I think it's going to be much shorter. If it was a 20 year cycle in the past, that gets shortened down to 15 with the internet, and this could be five years. So five to 10 years, that could be the impact in my mind. The question I always ask is: what year will banks no longer be involved in anything? Is that 20 years or 10 years? (laughs) Exactly, so, yeah, follow the money. >> So I would say that in terms of trying to keep your finger on the pulse with things and how you kind of things, see things evolve; things are definitely moving a lot faster, you know in the past you would probably say seven to 10, I'm not sure if I would say five, sorry five to 10, it definitely feels to me that it's five max til we could start to see some of these key things fall into place, so. >> So could you answer the first question? >> What was the first question? >> Why didn't you hire me? (audience cringes) >> We've met before? Sorry. (all laugh) >> I have a question, this is Dave Vellante, Co-Host of theCUBE. And I want to pick up on something John you just said, and Matt you were talking about Goldman Sachs and Morgan Stanley, it's not about them saving hundreds of millions of dollars, it's really about them transforming business, so. And John, you just asked the question about banks, I want to actually get your answer to this: Will traditional banks, in your opinion, lose control of payment systems? Not withstanding your bias. (laughter) >> Yeah, I am definitely biased on this. But, I mean, I've been in front of the C-suite of banks, credit card companies, etc, and I said, you know, in about a decade, the center of what you do and how you make money is going to be zero. And, 'cause there'll be networks, and ways to transmit money that'll be by far cheaper, or will be subsidized by other networks, meaning, and those networks are Apple, Amazon, Alibaba, you know, Tencent, whatever networks that're out there, that're engaging in collaboration and commerce and everything else, they will give away payments as just a courtesy, like people give away messaging or email or something, as a courtesy to that network, and will harden that network, and it'll be built and based on blockchain technology and cryptocurrencies, so they don't necessarily have to worry about, you know, kind of subtle payments. But these new networks will start to encroach on banks, the banks are not worried about other banks today, the banks should be worried about these new networks that're being developed. >> How many people still have a home phone line? >> That was elegant, I like that. >> You know, I mean there's a generation of people that still like going to banks, they'll keep them in business for a while. But I think that comes to an end. >> I mean, when we covered a lot of the big data market when it started, the argument was mobile will kill the banks outlets, and now with ATMs there's more bank, more baking branches than ever before, so I think the services piece is interesting. >> And also, if you look at even the cloud basis, the software as a service, SaaS space, a decade, decade and a half ago, you would ask SAP, Oracle, what have you, what's your cloud strategy? And they'd be like cloud? That's just more efficient delivery model, not interested. 90 some billion dollars of M and A later, SAP, Oracle, etc, are cloud companies, right? And so, if banks kind of get into that same mode to say well, yeah, we need to play catch up and buy digital currency exchanges and multi-currency wallets, and this infrastructure and plumbing to be relevant in the next world, that would be interesting. But I think technology companies have as much an advantage to do that as as financial services companies, so it'll be interesting to see who kind of goes into that, goes into the crypto ecosystem to make that their own. >> It's interesting. We were talking before we came on and the OSS market, operational support systems is booming, and that's traditionally been these big operational outsource companies would manage big projects, but, if you look at in the first half of 2018, there's been a greater than 20 billion dollar commercial exits of companies through private equity merchants, IPOs, around OSS, and that's where we see operational things happening, CoreOS, Alfresco, MuleSoft, Pivotal went public, Magneto, GitHub, Treasure Data, Fastly, Elastic, DataStax, they're all in the pipeline. These are all companies that aren't cloud, they're like running stuff in cloud, so, this could be a tell sign that potentially the the blockchain operating market is going to be potentially a big one. >> Yeah, and then even look at BitMate, the world's largest miner in crypto. So, they did about a billion dollars in profit last year, did about a billion dollars in profit just in the first quarter going public, just raised a billion dollars last month, at a reportedly 50 to 70 billion dollar evaluation in Hong Kong in the next month, and the amount of money they'll raise will eclipse what Facebook raised. And so I think the institutional, the hardware, the cloud computing, the whole ecosystem starts to like resonate and think about this space a lot differently, and we need these milestones, we need these, whether they're room huddles or data points to kind of like think about how this is going to affect your business and what you do tomorrow morning. >> Any more questions from the crowd? Audience? Okay, great, well thanks for attending, appreciate you guys watching and listening, and guys thanks for the conversation; cloud and blockchain convergence. Collision course, or is it going to happen nicely, Al? >> Yeah, I think it's going to be a convergence, I don't see it necessarily as a collision course. >> And a lot of money to be made on this opportunity these days, and cloud convergence with blockchain. >> I concur with Al, I think there's going to be convergence, I think us most smarter players will engage and figure out their models in this new crypto and tokenized era. >> Thanks so much guys, appreciate it, give these guys a round of applause. (audience applause) Thank you very much. (bubbly music)

>> Live from Orlando, Florida. It's theCUBE. Covering Cisco Live 2018. Brought to you by Cisco, NetApp, and theCUBE's ecosystem partners. >> Welcome back. This is Stu Miniman and you're watching theCUBE's coverage of Cisco Live 2018 in Orlando, Florida. Happy to welcome to the program, welcome back to the program first, Vinu Thomas, who's the CTO of Presidio and welcome to the program for the first time Brad Haczynski, who's a general manager with Intel. Gentleman, thanks so much for joining us. >> Thank you Stu for having us. >> Alright so, we're about the midway point of the show. It actually been many years since I'd been at Cisco Live. 26,000 people here. Seeing a large transformation in what's going on from Cisco, you know, still dominant in the network space, but talk a lot about cloud. We're here in the DevNet Zone, where, you know, one of the big news pieces was 500,000 developers registered on the platform here. What's your take been of the show so far? >> Yeah, I mean Presidio has been a long term proud partner with Cisco. We've been a gold and master partner for the longest time. As Cisco started to really transition into the software design world, Presidio started investing along with Cisco. So back at the DevNet Zone, you'll find that Presidio has a number of showcase items about DevOps, especially about things like Cat9k and HyperFlex. So we are excited on this partnership with Cisco, and with Intel, and what we are trying to do. So, good times. >> Yeah, Brad, same for you. >> Oh absolutely. I think this is my fifth Cisco Live. And seeing the evolution of Cisco as they traverse from becoming a hardware centric company into a company that's truly evolving around software, and services, and capabilities. As the world becomes more complicated, they're truly innovating in ways to create the business outcomes that customers are looking for in these complicated environments. And as Intel, it's been really exciting because we transform into a data centric company. We talk a lot about that. The Intel technology has been the underpinning of many of the Cisco technologies that are continuing then down this path. And of course our great partnership with Presidio it's a great triangulation effect and it's great to see at Cisco Live. >> Vinu, change isn't always easy. I think back actually, you know, I've worked a long time on the vendor side. And when Cisco came out with UCS and started doing things like Vblock, you know there were some folks at Presidio who were like, "We make a lot of money racking, stacking, cabling" "these solutions." Conversion infrastructure, hyper conversion structure, cloud solutions. Talk a little bit about the partnership. How Presidio's been, you know, helping to expand and mature with these offerings. >> Yeah, you know the whole digital transformation is the one that's driving this move from legacy three tier architecture into conversation to hyper conversion to multicloud. And what we've realized along this journey is we had to transform ourselves. So we went from saying, "You know, look we wanted to be" "the number one digital transformation" "solutions provider building secure" "digital infrastructure in a multicloud world." And for us to be in a position to put that vision into execution, we had to really partner with Cisco, partner with companies like VMware and Vblock and obviously the other providers in the hyper converg space and also with Intel to really try and take our ability to, not just rack and stack, but to design solutions so we created what we call as Presidio Data Center Solutions Set where we bring all this together. We're able to do some custom modification on these things. And we had to that because that's what our customers were asking us for. And then wrap that around with managed services so we can essentially offer a true platform as a service. >> Yeah, I'd love to hear from your viewpoint. What are your customers saying to you when you know, they say "I've got a cloud strategy" or "I'm building my cloud strategy." What does that mean to them? What's important to them? And you know, I'm sure you got solutions that fit. >> Yeah, we, you know Stu, we've seen a slight change. It used to be that it was a cloud first strategy. And now I would kinda as a cloud right strategy. Which is let me choose the right cloud for the right type of workload. Make sure that I have an optimized workload placement in which cloud. One of the value adds that we bring is we can evaluate all those workloads and applications and your use cases, like your data center, and then recommend to you, in partnership with Cisco and Intel, what is the right placement for your workload. Now when you look at what is coming up in the future is, you know, the world is getting into containers. And you look at Cisco's strategy with containers. You know, their Cisco container platform, what they're doing with Google, Presidio's right in the center of that along with Intel. Where we are building solutions in a multicloud fashion. So HyperFlex for the on-prem. Running on top of HyperFlex is a Cisco container platform and then we are able to then take that and merge that with Google Cloud. That's what customers want. They want that flexibility to say, "If this is the workload that needs to be on-prem, great." "If this is something that I need to move" "as my applications get containerized," that's what they want to go to. >> Yeah, Brad. You've got a large team playing in all of these environments. I remember, you know, optimization for virtualization, back in the day. When I was first learning about containers, Intel Developer Form was one of the places I went to go learn about this. Build on what Vinu was saying as to, you know, where your teams are making bets and helping to, you know, optimize and build solutions for customers. >> Yeah, absolutely. I think Vinu said it very well. Especially if your auger in on the world of cloud. One of the challenges, I think, enterprise customers have really had is, it's about cloud's economics. I think that's basically the underpinning of what Vinu was talking about is the economies of scale and capability of the large public cloud service providers have caused most enterprise customers to pause. So I think what customers are really looking for is, "How do I deploy applications?" The scalability with ease of deployment while having policy round security, networking, compute storage, et cetera. And then move the applications around the data center. What Intel does is we work very closely with Cisco as they're designing a lot of these platforms. HyperFlex is an example is you know, utilizing, best utilizing some of the underpinnings of the C compiler or whether it's the ISL instruction set. The storage acceleration libraries which are part of the CPU telemetry. In which they can, you know, take the code from Springpath and really fine tune it to get the best performance. And then by the time, you know, Presidio gets it in house, they further fine tune it for the customer needs. So it's just a great triangulation. And then we want a scale when Cisco scales in the market, Intel wins. Across the entire stack of compute, network, and storage. So, therefore, it's very very you know, we're all in the same boat rowing in the same direction. >> It's a very good cohesive partnership. >> Yes, cohesiveness. >> It's so funny, cuz so much has wave. We talk a lot about simplicity. And it's like, oh well, you know, HCI and public cloud we're gonna make it really simple. It's gonna be heterogeneous. Some people like, oh remember it was like white box and nothing fancy. It's like, underneath the covers there's a lot that goes in to make sure that. I say we're in a world of hyper optimization. >> Yes. >> Because there's a lot of things that have to. Talk a little bit about that balance. >> So a perfect example of that is what we build in partnership with Intel and Cisco is a Presidio Data Center Solutions Set. So the challenge our customers were having is, yeah, it's great to get a hyper converg, but the hyper converg has to plug into something. It has to be on a rack. It has to be, you know, power cooling has to be measured. You know, we have to get telemetry data you know, using Intel CPUs. So what we decided to do was, we built a custom based solution, call it a cloud in a box, with hyper converged, with the networking gear in it, with advance software solutions, with power cooling, and we wrapped around our professional services and managed services. And what we also helped our customers to do is if they decided that they want to consume this as a service in a OpEx model, we could do that. If they wanted to do it in a CapEx, we could do that. So we made it very flexible. Because it's not just about hyper converg. Hyper converg has to connect. Hyper converg has to be load balanced. Then there's a possibility that you want to connect to a GCP or an AWS so, there was a lot of things that we could do with that. >> Yeah Brad, we talk about customers want to have a similar operating model. Whether it's in their data center or you know, outside of their environment. You know, I think Intel at the bottom layer helps but how do you help make sure there's flexibility as customers choose all of their various solutions in a multicloud world? >> Well, first and foremost, I think that has a lot to do with, we have a significant partnership with most of the public cloud service providers. It's no secret that, you know, whether it's GCP, it's AWS or it's Azure, or even Baidu, Alibaba, Tencent, that these data centers are built upon Intel technologies. And then as you get back into the on-prem data center at the enterprise, the close work we do with Cisco and with partners like Presidio. I'll give you a perfect example is, when you look at one of the strengths Cisco's had traditionally over the years, it's this developer community. And it was the developer community what seems to have been born in networking and the networking spaces, and it's really created scale for Cisco. Well as you look at the nascent technologies there's two things we see. One is application developers inside of the enterprise IT, don't have a simple way to build applications. So they go do a swipe on AWS. Start a instantiation to write an application, but with things like OpenShift and working with Cisco on a redhat, enterprise easy DevOps platform, or things like container development. We work very closely with Google and GKE on the Kubernetes development and the Kubernetes engine. As well as with Cisco. And then so, when you bring that all together and you say, "Now we have a developer community" "of a technology, which is clearly the future," "which is containers." And Cisco working with Intel, Cisco working with Presidio, Intel working with Presidio, it's really a three legged stool. And how do we refine the capabilities and also help define the future roadmap requirements in order to become, add more value for the customers. >> And I think that's a, just to, you know, piggyback to what Brad said. I think that's a key aspect too, right, is. When you look at our customers when they ask us to come up with stuff. Cisco, Presidio, Intel, we're not shy to make those investments, because there might be customer requirements that are very unique. And it's almost bespoke. That we have to work on those kind of solutions and it's great to have partners that are ready to invest with us and make those investments, and, you know, make those changes. >> Great. Want to give you both a final world. What should we look for going forward? You know, some areas, maybe, that you're pushing new solutions in? You talked about, you know, analytics and the like. >> Yup. >> What should we look for as the partnership continues to grow in the future? >> Yeah so, when you look at Presidio's go to market here, we are focused on three key areas. One is digital infrastructure, multicloud, and then security. And in addition we want to really focus on data analytics and business insights. So, digital infrastructure for us is the whole software defined infrastructure. That's getting more and more automated and orchestrated. Multicloud, you know, you gonna see us make more investments in container technology as well as working with companies like Google and Intel, and the whole GKE, the Google Kubernetes engine. And then in the security part at the end of the day, everything we do has to be secure. It's not about pulling point products, it has to be a full fledged strategy. And then the last thing our customers are asking us is "We've build us this software defined infrastructure," "in a multicloud along with security." "Can you give me business insights?" So this is where we are working very closely with Intel and Cisco on tetration, which is the whole network flow and security analytics that, you know, obviously is powered by the telemetry from Intel CPUs, and you're gonna see us make more investments there with tetration, with you know, obviously app dynamics and companies like, Splunk. So. I think that's what you're gonna see us do a lot in the future. >> Yeah, I think, well said Vinu. And I think at a very basic level, all of this software, all the complexity, all of the security is gonna require more insatiable desire for Compute. But Intel's clearly investing beyond Compute. We're very open about becoming a data centric company, looking at about how this tidal wave of data's coming in a world of billions of connected devices. So as Intel continues to invest, whether it's in FPGAs, storage memory technologies, you know, the blog for the launch of HyperFlex 3.5 just went out, an all NVNe version, of HyperFlex. And then we're gonna talk on Thursday about using Optane, Intel Optane technology as a caching tier. FPGAs, over into silicon photonics technology. There's just a wealth of capabilities in silicon, that Intel's bringing the market to bear. And working with our partners, again like, Presidio to understand. By the way, the way we do business at Intel is, we have an account team that also calls on Presidio. And what we do is, our team triangulates with them. So Presidio is understanding the future roadmap of technologies from Intel at the same time Cisco's understanding it. Cisco then can innovate on platforms based on Intel technologies, but as Presidio knows what's comin' down the pike, they can start building their plans for how they can then take it from Cisco's hands, further encapsulate it in a valuable offering, say cloud in a box as you said so well, and deliver easy business outcomes for the customers. >> Yup. >> Yeah. >> Yeah, absolutely. For a long we watched the tick tock coming out of Intel, as what drove innovation and you know, new advancements in the industry. Now everyone's moving faster, even Intel. You know, it's not the chip itself that is the you know, driving factor of all the change. So, Brad, Vinu, thank you so much for joining us. >> Thank you Stu. >> Absolutely, thank you Stu. >> Thank you so much for having us. >> Really appreciate all the updates and congrats on the progress. >> Thank you. Alright we'll be back here with lots more coverage three days wall to wall coverage of Cisco Live 2018 here in Orlando. I'm Stu Miniman and thanks so much for watching theCUBE. (electronic music)

>> Narrator: Live from Las Vegas, it's the Cube, covering IBM Think 2018, brought to you by IBM. >> We're back at IBM Think 2018. You're watching the Cube, the leader in live tech coverage. My name is Dave Vellante and I'm here with my co-host, Peter Burris. Ken King is here; he's the general manager of OpenPOWER from IBM, and Sumit Gupta, PhD, who is the VP, HPC, AI, ML for IBM Cognitive. Gentleman, welcome to the Cube >> Sumit: Thank you. >> Thank you for having us. >> So, really, guys, a pleasure. We had dinner last night, talked about Picciano who runs the OpenPOWER business, appreciate you guys comin' on, but, I got to ask you, Sumit, I'll start with you. OpenPOWER, Cognitive systems, a lot of people say, "Well, that's just the power system. "This is the old AIX business, it's just renaming it. "It's a branding thing.", what do you say? >> I think we had a fundamental strategy shift where we realized that AI was going to be the dominant workload moving into the future, and the systems that have been designed today or in the past are not the right systems for the AI future. So, we also believe that it's not just about silicon and even a single server. It's about the software, it's about thinking at the react level and the data center level. So, fundamentally, Cognitive Systems is about co-designing hardware and software with an open ecosystem of partners who are innovating to maximize the data and AI support at a react level. >> Somebody was talkin' to Steve Mills, probably about 10 years ago, and he said, "Listen, if you're going to compete with Intel, "you can copy them, that's not what we're going to do." You know, he didn't like the spark strategy. "We have a better strategy.", is what he said, and "Oh, strategies, we're going to open it up, "we're going to try to get 10% of the market. "You know, we'll see if we can get there.", but, Ken, I wonder if you could sort of talk about, just from a high level, the strategy and maybe go into the segments. >> Yeah, absolutely, so, yeah, you're absolutely right on the strategy. You know, we have completely opened up the architecture. Our focus on growth is around having an ecosystem and an open architecture so everybody can innovate on top of it effectively and everybody in the ecosystem can profit from it and gains good margins. So, that's the strategy, that's how we design the OpenPOWER ecosystem, but, you know, our segments, our core segments, AIX in Unix is still a core, very big core segment of ours. Unix itself is flat to declining, but AIX is continuing to take share in that segment through all the new innovations we're delivering. The other segments are all growth segments, high growth segments, whether it's SAP HANA, our cognitive infrastructure in modern day to platform, or even what we're doing in the HyperScale data centers. Those are all significant growth opportunities for us, and those are all Linux based, and, so, that is really where a lot of the OpenPOWER initiatives are driving growth for us and leveraging the fact that, through that ecosystem, we're getting a lot of incremental innovation that's occurring and it's delivering competitive differentiation for our platform. I say for our platform, but that doesn't mean just for IBM, but for all the ecosystem partners as well, and a lot of that was on display on Monday when we had our OpenPOWER summit. >> So, to talk about more about the OpenPOWER summit, what was that all about, who was there? Give us some stats on OpenPOWER and ecosystem. >> Yeah, absolutely. So, it was a good day, we're up to well over 300 members. We have over 50 different systems that are coming out in the market from IBM or our partners. Over 20 different manufacturers out there actually developing OpenPOWER systems. A lot of announcements or a lot of statements that were made at the summit that we thought were extremely valuable, first of all, we got the number one server vendor in Europe, Atos, designing and developing P9, the number on in Japan, Hitachi, the number one in China, Inspur. We got top ODMs like Super Micro, Wistron, and others that are also developing their power nine. We have a lot of different component providers on the new PCIe gen four, on the open cabinet capabilities, a lot of announcements made by a number of component partners and accelerator partners at the summit as well. The other thing I'm excited about is we have over 70 ISVs now on the platform, and a number of statements were made and announcements on Monday from people like MapD, Anaconda, H2O, Conetica and others who are leveraging those innovations bought on the platform like NVLink and the coherency between GPU and CPU to do accelerated analytics and accelerated GPU database kind of capabilities, but the thing that had me the most excited on Monday were the end users. I've always said, and the analysts always ask me the questions of when are you going to start penetration in the market? When are you going to show that you've got a lot of end users deploying this? And there were a lot of statements by a lot of big players on Monday. Google was on stage and publicly said the IO was amazing, the memory bandwidth is amazing. We are deploying Zaius, which is the power nine server, in our data centers and we're ready for scale, and it's now Google strong which is basically saying that this thing is hardened and ready for production, but we also (laughs) had a number of other significant ones, Tencent talkin' about deploying OpenPOWER, 30% better efficiency, 30% less server resources required, the cloud armor of Alibaba talkin' about how they're putting on their on their X-Dragon, they have it in a piler program, they're asking everybody to use it now so they can figure out how do they go into production. PayPal made statements about how they're using it, but the machine learning and deep learning to do fraud detection, and we even had Limelight, who is not as big a name, but >> CDN, yeah. >> They're a CDN tool provider to people like Netflix and others. We're talkin' about the great capability with the IO and the ability to reduce the buffering and improve the streaming for all these CDN providers out there. So, we were really excited about all those end users and all the things they're saying. That demonstrates the power of this ecosystem. >> Alright, so just to comment on the architecture and then, I want to get into the Cognitive piece. I mean, you guys did, years ago, little Indians, recognizing you got to get software based to be compatible. You mentioned, Ken, bandwidth, IO bandwidth, CAPI stuff that you've done. So, there's a lot of incentives, especially for the big hyperscale guys, to be able to do more with less, but, to me, let's get into the AI, the Cognitive piece. Bob Picciano comes over from running a $15 billion analytics business, so, obviously, he's got some knowledge. He's bringin' in people like you with all these cool buzzwords in your title. So, talk a little bit about infrastructure for AI and why power is the right platform. >> Sure, so, I think we all recognize that the performance advantages and even power advantages that we were getting from Dennard scaling, also known as Moore's law, is over, right. So, people talk about the end of Moore's Law, and that's really the end of gaining processor performance with Dennard scaling and the Moore's Law. What we believe is that to continue to meet the performance needs of all of these new AI and data workloads, you need accelerators, and not just computer accelerators, you actually need accelerated networking. You need accelerated storage, you need high-density memory sitting very close to the compute power, and, if you really think about it, what's happened is, again, system view, right, we're not silicon view, we're looking at the system. The minute you start looking at the silicon you realize you want to get the data to where the computer is, or the computer where the data is. So, it all becomes about creating bigger pipelines, factor of pipelines, to move data around to get to the right compute piece. For example, we put much more emphasis on a much faster memory system to make sure we are getting data from the system memory to the CPU. >> Coherently. >> Coherently, that's the main memory. We put interfaces on power nine including NVLink, OpenCAPI, and PCIe gen four, and that enabled us to get that data either from the network to the system memory, or out back to the network, or to storage, or to accelerators like GPUs. We built and embedded these high-speed interconnects into power nine, into the processor. Nvidia put NVLink into their GPU, and we've been working with marketers like Xilinx and Mellanox on getting OpenCAPI onto their components. >> And we're seeing up to 10x for both memory bandwidth and IO over x86 which is significant. You should talk about how we're seeing up to 4x improvement in training of MLDL algorithms over x86 which is dramatic in how quickly you can get from data to insight, right? You could take training and turn it from weeks to days, or days to hours, or even hours to minutes, and that makes a huge difference in what you can do in any industry as far as getting insight out of your data which is the competitive differentiator in today's environment. >> Let's talk about this notion of architecture, or systems especially. The basic platform for how we've been building systems has been relatively consistent for a long time. The basic approach to how we think about building systems has been relatively consistent. You start with the database manager, you run it on an Intel processor, you build your application, you scale it up based on SMP needs. There's been some variations; we're going into clustering, because we do some other things, but you guys are talking about something fundamentally different, and flash memory, the ability to do flash storage, which dramatically changes the relationship between the processor and the data, means that we're not going to see all of the organization of the workloads around the server, see how much we can do in it. It's really going to be much more of a balanced approach. How is power going to provide that more balanced systems approach across as we distribute data, as we distribute processing, as we create a cloud experience that isn't in one place, but is in more places. >> Well, this ties exactly to the point I made around it's not just accelerated compute, which we've all talked about a lot over the years, it's also about accelerated storage, accelerated networking, and accelerated memories, right. This is really, the point being, that the compute, if you don't have a fast pipeline into the processor from all of this wonderful storage and flash technology, there's going to be a choke point in the network, or they'll be a choke point once the data gets to the server, you're choked then. So, a lot of our focus has been, first of all, partnering with a company like Mellanox which builds extremely high bandwidth, high-speed >> And EOF. >> Right, right, and I'm using one as an example right. >> Sure. >> I'm using one as an example and that's where the large partnerships, we have like 300 partnerships, as Ken talked about in the OpenPOWER foundation. Those partnerships is because we brought together all of these technology providers. We believe that no one company can own the agenda of technology. No one company can invest enough to continue to give us the performance we need to meet the needs of the AI workloads, and that's why we want to partner with all these technology vendors who've all invested billions of dollars to provide the best systems and software for AI and data. >> But fundamentally, >> It's the whole construct of data centric systems, right? >> Right. >> I mean, sometimes you got to process the data in the network, right? Sometimes you got to process the data in the storage. It's not just at the CPU, the GPUs a huge place for processing that data. >> Sure. >> How do you do that all coherently and how do things work together in a system environment is crucial versus a vertically integrated capability where the CPU provider continues to put more and more into the processor and disenfranchise the rest of the ecosystem. >> Well, that was the counter building strategies that we want to talk about. You have Intel who wants to put as much on the die as possible. It's worked quite well for Intel over the years. You had to take a different strategy. If you tried to take Intel on with that strategy, you would have failed. So, talk about the different philosophies, but really I'm interested in what it means for things like alternative processing and your relationship in your ecosystem. >> This is not about company strategies, right. I mean, Intel is a semiconductor company and they think like a semiconductor company. We're a systems and software company, we think like that, but this is not about company strategy. This is about what the market needs, what client workloads need, and if you start there, you start with a data centric strategy. You start with data centric systems. You think about moving data around and making sure there is heritage in this computer, there is accelerated computer, you have very fast networks. So, we just built the US's fastest supercomputer. We're currently building the US's fastest supercomputer which is the project name is Coral, but there are two supercomputers, one at Oak Ridge National Labs and one at Lawrence Livermore. These are the ultimate HPC and AI machines, right. Its computer's a very important part of them, but networking and storage is just as important. The file system is just as important. The cluster management software is just as important, right, because if you are serving data scientists and a biologist, they don't want to deal with, "How many servers do I need to launch this job on? "How do I manage the jobs, how do I manage the server?" You want them to just scale, right. So, we do a lot of work on our scalability. We do a lot of work in using Apache Spark to enable cluster virtualization and user virtualization. >> Well, if we think about, I don't like the term data gravity, it's wrong a lot of different perspectives, but if we think about it, you guys are trying to build systems in a world that's centered on data, as opposed to a world that's centered on the server. >> That's exactly right. >> That's right. >> You got that, right? >> That's exactly right. >> Yeah, absolutely. >> Alright, you guys got to go, we got to wrap, but I just want to close with, I mean, always says infrastructure matters. You got Z growing, you got power growing, you got storage growing, it's given a good tailwind to IBM, so, guys, great work. Congratulations, got a lot more to do, I know, but thanks for >> It's going to be a fun year. comin' on the Cube, appreciate it. >> Thank you very much. >> Thank you. >> Appreciate you having us. >> Alright, keep it right there, everybody. We'll be back with our next guest. You're watching the Cube live from IBM Think 2018. We'll be right back. (techno beat)

(electronic music) >> Narrator: From the SiliconANGLE Media office in Boston Massachusetts, it's the CUBE. Now here are your hosts, Dave Vellante and Stu Miniman. >> Cloud is dead, it's all going to the edge. Or is it? Hi everybody, this is Dave Vellante and I'm here with Stu Miniman. Stu, where does this come from, this narrative that the cloud is over? >> Well Dave, you know, clouds had a good run, right? It's been over a decade. You know, Amazon's dominance in the marketplace but Peter Levine from Andreessen Horowitz did an article where he said, cloud is dead, the edge is killing the dead. The Edge is killing the cloud and really we're talking about IoT and IoT's huge opportunity. Wikibon, Dave we've been tracking for many years. We did you know the original forecast for the Industrial Internet and obviously there's going to be lots more devices at the edge so huge opportunity, huge growth, intelligence all over the place. But in our viewpoint Dave, it doesn't mean that cloud goes away. You know, we've been talking about distributed architectures now for a long time. The cloud is really at the core of this building services that surround the globe, live in just hundreds of places for all these companies so it's nuanced. And just as the cloud didn't overnight kill the data center and lots of discussion as to what lives in the data center, the edge does not kill the cloud and it's really, we're seeing some major transitions pull and push from some of these technologies. A lot of challenges and lots to dig into. >> So I've read Peter Levine's piece, I thought was very thought-provoking and quite well done. And of course, he's coming at that from the standpoint of a venture capitalist, all right. Do I want to start you know, do I want to pour money into the trend that is now the mainstream? Or do I want to get ahead of it? So I think that's what that was all about but here's my question Stu is, in your opinion will the activity that occurs at the edge, will it actually drive more demand from the cloud? So today we're seeing the infrastructure, the service business is growing at what? Thirty five percent? Forty percent? >> Sure, sure. Amazon's growing at the you know, 35 to 40 percent. Google, Microsoft are growing double that right now but overall you're right. >> Yeah, okay and so, and then of course the enterprise players are flat if they're lucky. So my question is will the edge actually be a tailwind for the cloud, in your opinion? >> Yeah, so first on your comment there from an investment standpoint, totally can understand why edge is greenfield opportunity. Lots of different places that I can place bets and probably can win as opposed to if I think that today I'm going to compete against the hyperscale cloud guys. You know, they're pouring 10 billion dollars a year into their infrastructure. They have huge massive employment so the bar to entry is a lot higher. I'm sorry, the second piece was? >> So will the edge drive more demand for the cloud? >> Yeah, absolutely. I think it does Dave because you know, let's take something like autonomous vehicles. Something that we talk about. I need intelligence of the edge. I can't wait for some instruction to go back to the cloud before my Tesla plows into an individual. I need to know that it's there but the models themselves, really I've got all the compute in the cloud. This is where I'm going to train all of my models but I need to be able to update and push those to the edge. If I think about a lot of the industrial applications. Flying a plane is, you know, things need to happen locally but all the anomalies and new things that we run into there's certain pieces that need to be updated to the cloud. So you know, it's kind of a multi-layer. If we look at how much data will there be at the edge, well there's probably going to be more data at the edge than there will be in the central cloud. But how much activity, how much compute do I need, how much things do I need to actually work on. The cloud is probably going to be that central computer still and it's not just a computer, as I said, a distributed architecture. That's where, you know. When we've looked at big data in the early days Dave, when we can put those data lines in the cloud. I've got thousands or millions of compute cycles that I can throw at this at such a lower price and use that there as opposed to at the edge especially. What kind of connectivity do I have? Am i isolated from those other pieces? If you go back to my premise of we're building distributed architectures, the edge is still very early. How do I make sure I secure that? Do I have the network? There's lots of things that I'm going to build in a tiny little component and have that be there. And there's lots of hardware innovation going on at that edge too. >> Okay, so let's talk about how this plays out a little bit and you're talking about a distributed model and it's really to me a distributed data model. The research analysts at Wikibon have envisioned this three-tier data model where you've got data at the edge, which you may or may not persist. You've got some kind of consolidation or aggregation layer where it's you know, it's kind of between the edge and the deep data center and then you've got the cloud. Now that cloud can be an on-prem cloud or it could be the public cloud. So that data model, how do you see that playing out with regard to the adoption of cloud, the morphing of cloud and the edge and the traditional data center? >> Yeah we've been talking about intelligent devices at the edge for a couple decades now. I mean, I remember I built a house in like 1999 and the smart home was already something that people were talking about then. Today, great, I've got you know. I've got my Nest if I have, I probably have smart assistants. There's a lot of things I love-- >> Alexa. >> Saw on Twitter today, somebody's talking like I'm waiting for my light bulbs to update their firmware from the latest push so, some of its coming but it's just this slow gradual adoption. So there's the consumer piece and then there's the business aspect. So, you know, we are still really really early in some of these exciting edge uses. Talk about the enterprise. They're all working on their strategy for how devices and how they're going to work through IoT but you know this is not something that's going to happen overnight. It's they're figuring out their partnerships, they're figuring out where they work, and that three-tiered model that you talked about. My cloud provider, absolutely hugely important for how I do that and I really see it Dave, not as an or but it's an and. So I need to understand where I collect my data, where it's at certain aspects are going to live, and the public cloud players are spending a lot of time working on on that intelligence, the intelligence layer. >> And Stu, I should mention, so far we're talking about really, the infrastructure as a service layer comprises database and middleware. We haven't really addressed the the SAS space and we're not going to go deep into that but just to say. I mean look, packaged software as we knew it is dead, right? SAS is where all the action is. It's the highest growth area, it's the highest value area, so we'll cover that in another segment. So we're really talking about that, the stack up to the middleware, the database, and obviously the infrastructures as a service. So when you think about the players here, let's start with AWS. You've been to I think, every AWS re:Invent maybe, with the exception of one. You've seen the evolution. I was just down in D.C. the other day and they have this chart on the wall, which is their releases, their functional releases by year. It's just, it's overwhelming what they've done. So they're obviously the leader. I saw a recent Gartner Magic Quadrant. It looked like, I tweeted it, it looked like Ronnie Turcotte looking back on Secretariat from the Belmont and whatever it was. 1978, I think it was. (laughs) 31 lengths. I mean, massive domination in the infrastructure as a service space. What do you see going on? >> Yeah so, Dave, absolutely. Today the cloud is, it's Amazon's market out there. Interestingly if you say, okay what's some of the biggest threats in the infrastructure as a service? Well, maybe China, Dave. You know, Alibaba was one that you look at there. But huge opportunity for what's happened at the edge. If you talk about intelligence, you talk about AI, talk about machine learning. Google is actually the company that most people will talk about it, can kind of have a leadership. Heck, I've even seen discussion that maybe we need antitrust to look at Google because they're going to lock things up. You know, they have Android, they have Google Home, they have all these various pieces. But we know Dave, they are far behind Amazon in the public cloud market and Amazon has done a lot, especially over the last two years. You're right, I've been to every Amazon re:Invent except for the first one and the last two years, really seen a maturation of that growth. Not just you know, devices and partnerships there but how do they bring their intelligence and push that out to the edge so things like their serverless technology, which is Lambda. They have Lambda Greengrass that can put to the edge. The serverless is pervading all of their solutions. They've got like the Aurora database-- >> And serverless is profound, not just that from the standpoint of application development but just an entire new business model is emerging on top of serverless and Lambda really started all that but but carry on. >> Yeah and when you look in and you say okay, what better use case than IoT for, well I need infrastructure but I only need it when I need it and I want to call it for when it's there. So that kind of model where I should be able to build by the microsecond and only use what I need. That's something that Amazon is at the forefront, clear leadership position there and they should be able to plug in and if they can extend that out to the edge, starting new partnerships. Like the VMware partnerships, interesting. Red Hat's another partnership they have with OpenShift to be able to get that out to more environments and Amazon has a tremendous ecosystem out there and absolutely is on their radar as to how their-- >> They're crushing it So we were at Google Next last year. Big push, verbally anyway, to the enterprise. They've been making some progress, they're hiring a lot of people out of formerly Cisco, EMC, folks that understand the enterprise but beyond sort of the AI and sort of data analytics, what kind of progress has Google made relative to the leader? >> So in general, enterprise infrastructure service, they haven't made as much progress as most of us watching would expect them to make. But Dave, you mentioned something, data. I mean, at the center of everything we're talking about is the data. So in some ways is Google you know, come on Google, they're smarter than the rest of us. They're skating to where the puck is Dave and infrastructure services, last decades argument if it's the data and the intelligence, Google's got just brilliant people. They're working at the some of these amazing environments. You look at things like Google's Spanner. This is distributed architecture. Say how do I plug in all of these devices and help the work in a distributed gradual work well. You know, heck, I'd be reading the whitepapers that Google's doing in understanding that they might be really well positioned in this 3D chess match that were playing. >> Your eyes might bleed. (laughs) I've read the Google Spanner, I was very excited about it. Understood, you know, a little bit of it. Okay, let's talk about Microsoft. They're really of the big cloud guys. They're really the one that has a partnership strategy to do both on-prem and public cloud. What are your thoughts on that now that sort of Azure stack is starting to roll out with some key partners? >> Yeah absolutely, it's the one that you know. Dave, if you use your analogy looking back, it's like well the next one, it's gaining a little bit, gaining a little bit but still far back. There is Microsoft. Where Microsoft has done best of course is their portfolio of business applications that they have. That they've really turned the green light on for enterprises to adopt SAS with Office 365. Azure stack, it's early days still but companies that use Microsoft, they trust Microsoft. Microsoft's done phenomenal working with developers over the last couple of years. Very prominent like the Kubernetes shows that I've been attending recently. They've absolutely got a play for serverless that we were talking about. I'm not as up to speed as to where Microsoft sits for kind of the IoT edge discussions. >> But you know they're playing there. >> Yeah, absolutely. I mean, Microsoft does identity better than anyone. Active Directory is still the standard in enterprises today. So you know, I worry that Microsoft could be caught in the middle. If Google's making the play for what's next, Microsoft is still chasing a little bit what Amazon's already winning. >> Okay and then we don't have enough time to really talk about China, you mentioned it before. Alibaba's you know, legit. Tencent, Baidu obviously with their captive market in China, they're going to do a lot of business and they're going to move a lot of compute and storage and networking but maybe address that in another segment. I want to talk about the traditional enterprise players. Dell EMC, IBM, HPE, Cisco, where do they stand? We talk a lot at Wikibond about true private cloud. The notion that you can't just stick all your data into the public cloud. Andy Jassy may disagree with that but there are practical realities and certainly when you talk to CIOs they they underscore that. But that notion of true private cloud hasn't allowed these companies to really grow. Now of course IBM and Oracle, I didn't mention Oracle, have a different strategy and Oracle's strategy is even more different. So let's sort of run through them. Let's take the arms dealers. Dell EMC, HPE, Cisco, maybe you put Lenovo in there. What's their cloud strategy? >> Well first of all Dave I think most of them, they went through a number of bumps along the road trying to figure out what their cloud strategy is. Most of them, especially let's take, if you take the compute or server side of the business, they are suppliers to all the service providers trying to get into the hyperscalers. Most of them have, they all have some partnership with Microsoft. There's a Assure stack and they're saying, okay hey, if I want an HPE server in my own data center and in Azure, Microsoft's going to be happy to provide that for you. But David, it's not really competing against infrastructure as a service and the bigger question is as that market has kind of flattened out and we kind of understand it, where is the opportunity for them in IoT. We saw, you know Dave. Last five years or so, can I have a consumer business and an enterprise business in the same? HPE tore those two apart. Michael Dell has kept them together. IBM spun off to Lenovo everything that was on the more consumer side of the business. Where will they play or will companies like Google, like Apple, the ones that you know, Dave. They are spending huge amounts of money in chips. Look at Google and what they're doing with TP use. Look at Apple, I believe it was, there was an Israeli company that they bought and they're making chips there. There's a different need at the edge and sure, company like Dell can create that but will they have the margin, will they have the software, will they have the ecosystem to be able to compete there? Cisco, I haven't seen on the compute side, them going down that path but I was at Cisco Live and a big talk there. I really like the opening keynote and we had a sit down on the CUBE with the executive, it said really if I look out to like 2030. If Cisco still successful and we're thinking about them, we don't think of them as a network company anymore. They are a software company and therefore, things like collaboration, things like how it's kind of a new version of networking that's not on ports and boxes. But really as I think about my data, think about my privacy and security, Cisco absolutely has a play there. They've done some very large acquisitions in that space and they've got some deep expertise there. >> But again, Dell, HPE, Cisco, predominantly arms dealers. Obviously don't have, HPE at one point had a public cloud, they've pulled back. HP's cloud play really is cloud technology partners that they acquire. That at least gives them a revenue stream into the cloud. Now maybe-- >> But it's a consultancy. >> It's a consultancy, maybe it's a one-way trip to the cloud but I will say this about CTP. What it does is it gives HPE a footprint in that business and to the extent that they're a trusted service provider for companies trying to move into the cloud. They can maybe be in the catbird seat for the on-prem business but again, largely an arms dealer. it's going to be a lower margin business certainly than IBM and Oracle, which have applications. They own their own public cloud with the Oracle public cloud and IBM cloud, formerly SoftLayer, which was a two billion dollar acquisition several years ago. So those companies from a participation standpoint, even a tiny market share is compared to Amazon, Google, and Microsoft. They're at least in that cloud game and they're somewhat insulated from that disruption because of their software business and their large install base. Okay, I want to sort of end with, sort of where we started. You know, the Peter Levine comment, cloud is dead, it's all going to the edge. I actually think the cloud era, it's kind of, it's here, we're kind of. It's kind of playing out as many of us had expected over the last five years. You know what blew me away? Is Alexa, who would have thought that Amazon would be a leader in this sort of natural language processing marketplace, right? You would have thought it would come from, certainly Google with all the the search capability. You would have thought Apple with Siri, you know compared to Alexa. So my point is Amazon is able to do that because it's got a data model. It's a data company, all these companies, including Apple, Google, Microsoft, Amazon, Facebook. The largest market cap companies in the world, they have data at the core. Data is foundational for those companies and that's why they are in such a good position to disrupt. So cloud, SAS, mobile, social, big data, to me still these are kind of the last 10 years. The next 10 years are going to be about AI, machine intelligence, deep learning, machine learning, cognitive. We're trying to even get the names right but it starts with the data. So let me put forth the premise and get your commentary. and tie it back in the cloud. So the innovation, in the next 10 years is going to come from data and to the extent that your data is not in silos, you're going to be in a much better position than if it is. Number two is your application of artificial intelligence, you know whatever term you want to use, machine intelligence, etc. Data plus AI, plus I'll bring it back to cloud, cloud economics. If you don't have those cloud economics then you're going to be at a disadvantage of innovation. So let's talk about what we mean by cloud economics. You're talking about the API economy, talking about global scale, always on. Very importantly something we've talked about for years, virtually zero marginal costs at volume, which you're never going to get on-prem because this creates a network effect. And the other thing it does from an innovation context, it attracts startups. Or startups saying, hey I want to build on-prem. No, they don't want to build in the cloud. So it's data plus artificial intelligence plus cloud economics that's going to drive innovation in the next ten years. What are your thoughts? >> Yeah Dave, absolutely. Something I've been saying for the last couple of years, we watched kind of the the customer flywheel that the public clouds have. Data is that next flywheel so companies that can capture that. You mentioned Amazon and Alexa, one of the reasons that Amazon can basically sell that as a loss is lots of those people, they're all Amazon Prime customers and they're ordering more things from Amazon and they're getting so much data that drive all of those other services. Where is Amazon going to threaten in the future? Everywhere. It is basically what they see. The thing we didn't discuss there Dave, you know I love your premise there, is it's technology plus people. What's going to happen with jobs? You and I did the sessions with Andy McAfee and Eril Brynjolfsson, it's racing with the machine. Where is, we know that people plus machines always beat so we spent the last five years talking about data scientist, the growth of developers and developers and the new king makers. So you know what are those new jobs, what are those new roles that are going to help build the solutions where people plus machine will win and what does that kind of next generation of workforce going to look like? >> Well I want to add to that Stu, I'm glad you brought that up. So a friend of mine David Michelle is just about to publish a new book called Seeing Digital. And in that book, I got an advance copy, in there he talks about companies that have data at their core and with human expertise around the data but if you think about the vast majority of companies, it's human expertise and the data is kind of bolted on. And the data lives in silos. Those companies are in a much more vulnerable position in terms of being disrupted, than the ones that have a data model that everybody has access to with human expertise around it. And so when you think about digital disruption, no industry is safe in my opinion, and every industry has kind of its unique attributes. You know, obviously publishing and books and music have disrupted very quickly. Insurance hasn't been disrupted, banking hasn't been disrupted, although blockchain it's probably going to affect that. So again, coming back to this tail-end premise is the next 10 years is going to be about that digital disruption. And it's real, it's not just a bunch of buzzwords, a cloud is obviously a key component, if not the key component of the underlying infrastructure with a lot of activity in terms of business models being built on top. All right Stu, thank you for your perspectives. Thanks for covering this. We will be looking for this video, the outputs, the clips from that. Thanks for watching everybody. This is Dave Vellante with Stu Miniman, we'll see you next time. (electronic music)

>> Narrator: Live from Austin, Texas, it's theCUBE, covering KubeCon and CloudNativeCon 2017, brought to you by Red Hat, the Linux Foundation, and theCUBE's ecosystem partners. >> Okay, welcome back, everyone. This is theCUBE's exclusive coverage live here in Austin, Texas for the CNCF's two conferences, CloudNativeCon, which was yesterday, and two days, today and tomorrow, KubeCon for Kubernetes' conference. This is theCUBE, of course, from SiliconANGLE Media. I'm John Furrier with my cohost, Stu Miniman. Our next guest, Dan Kohn, is the executive director of the CNCF, the man who put it all together. Congratulations. Welcome back to theCUBE. Good to see you. >> Oh, absolutely. Thrilled to have you guys back here again. >> So you kind of doing a victory lap here now, high fiving each other? >> Dan: Great hugs. >> John: Great event. >> Laughing: I'm glad it's a good event, and I am hearing fantastic feedback that folks are thrilled to be here. But we sort of describe this moment for the organization and the community as being the end of the beginning. >> John: Yeah. >> Where we now have all the major cloud vendors, all of the biggest enterprise software companies. We have a core group of 14 projects anchored by Kubernetes, but tons and tons of work in front of us. >> And tons of success, so I'm just going to read a couple of highlights from yesterday. There's a lot today. Baidu joins the CNCF, a lot of scaling production application examples, 31 new silver end-user members joined, Alibaba Cloud update to platinum, CoreDNS 1.0, Containerd, Fluentd, Jaeger, tons of news. Obviously, we've been pumping out the coverage. Today, again, more and more great goodness. But really interesting is that you guys have put a frame around this community to allow it to grow, to fertilize the open source vibe, which is all cloud but yet scaled. And you put up a slide I want to get your reaction to that I thought was compelling yesterday during your keynote. It was the flywheel, circle, and it said projects, products, profit. >> Dan: Right. >> And not that you're promoting profit, but you're not hiding the ball, either, saying, hey, you know what? There's a lot of commercial interest in cloud, obviously. We saw AWS' success last week. And that is if you create good products in this community framework, there's profit to be had. >> Right. So first of all, I should admit to plagiarizing that slide from Linux Foundation Executive Director Jim Zemlin. >> And similarly, I think you can look at a lot of aspects... >> It's an open source feature. >> Dan: Yes. >> Free for you to use. >> John: Right. >> Similarly, I think there's a lot of ways in which Kubernetes is trying to build on the success of Linux. And Jim even describes Kubernetes as the Linux of the cloud. >> John: Yeah. >> Stu: Yeah. >> John: That's a good point. >> Dan, one of the things we've been talking around Kubernetes is you talk about scale. >> Dan: Right. >> Talk about scale of the CNCF. You have 4 to 14 projects. People are a little worried when you get all the vendors around here and there's all these projects. It's a foundation thing, it's going to go off the rails. >> Dan: Yeah. >> Customers aren't going to have a voice. How do we make sure we kind of learn from some of the things that other projects have had challenges with in the past? >> And I think that's our advantage, which is the great thing about coming later than some of the other foundations, is we can look at where they had successes and where they had issues. And our aspiration for CNCF is to get to go make entirely new mistakes rather than replicating some of the issues that have come before. And so really from the beginning of CNCF, we had a somewhat unusual and frankly a little bit cumbersome charter where I describe it at times as a three-ring circus. We have a governing board made up of the vendors that are putting a lot of money into the community, but they don't get to run the projects and they don't even get to pick the projects. Instead, they appoint six of the nine members of an independent technical oversight committee, kind of like the Supreme Court. And then we have a third group in the end-user community that I'm thrilled to say is now up to 28 members in it. They appoint one of those folks. We finally got that working. We have Sam Lambert, the director of infrastructure at GitHub, who has just made a huge commitment to Kubernetes and is moving all their infrastructure over into it. Those seven appoint the last two. And so that body, and they just had their public meeting a couple hours ago. They feel very strongly about their independence, about their reputation, that they're trying to make very good judgments based on what they're seeing in the marketplace. >> That's interesting, the three-ring circle. I like how you put it. But let's talk about the end-user piece because I think that's critical. One of the things we were commenting earlier from the Lyft folks was you have a lot of end users who have built some large-scale systems out of their own sheer necessity. >> Dan: Definitely. >> And that is now being donated in. We saw Kubernetes come in with, you shepherded beautifully, went from Google, but you've got Lyft donating an amazing product convoy. >> This first convoy has a huge amount of excitement. And what was fun was, actually, on the same stage that they contributed back in LA in September, Uber contributed a separate project. Now, unlike Uber and Lyft, the two projects are in no way competitive- >> John: Yeah. >> Like Jaeger is really fantastic tracing one. But what they have in common is that they're companies that have had to grow from nothing to extremely high scale and then had problems that they solved. And they wanted to share that expertise with us. >> I want to get your thoughts on this. Because we've been speculating, on theCUBE, we've been kind of thinking, an editorial, but just that this is all good business. Now, that's pretty obvious, right? You're starting to see this kind of contribution, the gifts that keep on giving. These are significant code. >> Dan: Yeah. >> Not like, okay, let's start a little group and huddle and build something organically. You have real goodness coming in from Google, Uber, Lyft, and there's a million others. >> Dan: Right. >> How is that changing the game? Certainly accelerating it. That's really bringing goods to the table. >> Right. I think the whole... >> You have to manage it. >> Well, and for what it's worth, I don't actually manage the projects. And so we do provide a set of services- >> John: The community? >> -to them and we help them, we market them. But one of the unusual aspects of CNCF is that the projects do actually manage themselves. A little bit of guidance from the TOC, but we really are unusual in that sense. And that's one of the reasons the projects have been... >> And what's interesting is, to connect the dots, though, one step further, you're talking about a commercial entity donating massive intellectual property in the open for all the goodness of everyone else. But yet that flywheel is continuing. They're still using it. So it is inherently commercial dynamic. >> Right. And back to that circle, I think really the underlying concept is that companies agree that sharing key parts of their infrastructure has a huge amount of value to the whole ecosystem, to each other. And then they're absolutely eager to compete above that. And so you can look at it with the public clouds where we have now Amazon, Microsoft, Google, Alibaba, IBM, Oracle all at the table. They are absolutely fierce competitors. But they're saying that this specific software infrastructure layer isn't the area that they want to compete. They want to compete on all the value-added services, customer service, et cetera. >> Dan, I wonder if you can speak to how CNCF connects to some of the broader communities out there. Things like Kata containers got announced coming out of the OpenStack group. You've got a serverless track happening here, kind of extends some of where Kubernetes is going. How does CNCF fit into the broader... >> Sure. And it's definitely the case that all the innovation out there cannot happen in CNCF. Most obviously, everything that we do, almost everything depends on Linux. And so that's our parent organization, the Linux Foundation. But we've had a good collaboration with Jonathan Bryce from OverStack. They have two booths on the floor here at the show. And we've spoken to Clear Containers and RunV, the two predecessors in the past. But the part that I'm particularly pleased with for Kata containers is that it is an OCI-compliant runtime, that's another sister organization, and is really designed to work well for Kubernetes. And then they can pitch that and let the market go decide which container runtimes they find the most valuable. >> Obviously a lot of traction here in terms of the sentiment around service meshes and pluggable lock-in textures. That's been very cool. But security came up. So I want to get your thoughts around security, obviously storage and these older models around how to deal with storage and networking. Obviously, always in the action. >> Yeah. >> But security is top of mind for everyone. How is that being addressed? You know, talk is out there... >> Sure. I mean our philosophy on this is that moving to cloud-native and particularly the continuous integration and continuous development that goes along with that is the most important step that you can do to help secure your infrastructure. And Equifax is the example everyone always brings up. But there was a case where they were using known insecure software and they didn't have the processes up to place where instead of doing quarterly updates or monthly updates, you want to be doing dozens of updates per day. And a cloud-native infrastructure allows you to do that. >> What's next for you? Because you've got great traction with both community response, and the community has been absolutely amazing, the quality of people, level has been great, but also at the funding sponsors. You've got a lot of people that are involved. What's next? What happens next? What do you envision happening? What's the plan, and then how do you view that evolving? >> Well, I hate to fall into the buzzword implosion here, but if you go back to the crossing the chasm metaphor, I think we're still very much just in the early adopter phase. 2018 could very well be the moment that we jump over to the early majority. And I do feel like this whole community now has the velocity to do that and that we're on track for it. But as that happens, there's just far, far more people who need to be educated so they understand the projects and the options and how to work with them. And then hopefully they go from just being consumers of these technologies to contributors and that we can welcome them into our community and hopefully get the advantage of their expertise as well. >> I want to get your thoughts on a comment that Stu and I were talking about. Stu, you and I were talking about the notion of value creation above the stack, and then how Kubernetes, although some could say being commoditized, but it's also creating value because with that consistency of Kubernetes, you can now create value. So we believe, and I want to get your reaction to this, because we think a whole new ecosystem dynamic will emerge of a new kind of ecosystem. And if this new app developer combined with software engineering, which is really going on, you're talking about the cloud, the app developers will just build in value, that value creation will be rewarded. That's where monetization will be happening. >> And if I could build off that... >> John: Yeah. >> Dan, I loved one of your opening comments. You quoted, "exciting times for boring infrastructure, "maybe too exciting." So this week we've been teasing out there's a lot of work to make that infrastructure boring. You've got everybody on this floor, the CNCF board, lots of new projects making that. Where the action is and what this is going to create is that application monetization and the speed and agility of being able to create these cool new cloud-native applications out there. So it's interesting dynamic, spans broad pieces of this, layers of the stack there. >> Yeah. Well, I will point out that there was an odd level of unanimity of just a ton of different leaders in the community, in keynotes from Craig McLuckie and Chen Goldberg and others where they all agree that Kubernetes is not by any means the ultimate answer or the final answer. I think everybody now expects to see Kubernetes as a core aspect of the infrastructure for software for the next decade or more. But there's a belief that there's a whole ton of value that needs to be added above it, particularly to try and show for a regular application developer who just has a PHP app or no-GS microservices or anything else what's the easiest way to go from having a piece of software and deploying it effectively. >> Dan, so it's interesting. You watch the people on the outside. They're like, oh, look at Kubernetes. They're all holding hands and saying Kumbaya. We know there's some spirited debates that happen- >> Dan: Definitely. >> In the code, some projects that are sometimes competing up there. Why has the community come together, and where are some of the areas that we still need to work on and improve to help customers going forward? >> And again, I think they have the big advantage of having watched other communities that didn't value community and consensus and the ability to work through their issues. And so thankfully, we just have a ton of really capable engineers who also have some of those social or personal qualities that they care about working these things out. And to date, at least, I think most of those disagreements have been settled pretty amicably and in a positive direction. I think there's still huge swathes of this space that are still up in the air. Storage is an obvious one where there's a ton of work going on in a storage working group of CNCF. Serverless is another where I think everyone agrees that the application deployment model of AWS Lambda is really exciting and has things that people should replicate and should be brought over to Kubernetes. But how that should happen, what the software is, et cetera, there's still, in fact, we have our first serverless track today here at KubeCon where several different competing approaches are all talking about what they'd like to do. >> Awesome stuff. And you also announced some dates for next year, December 11 and 13 in Seattle. >> Dan: Yes. >> Okay. >> Dan: That's a year from now. >> November 14 and 15 in Shanghai. >> Now, you and I met in Hangzhou in the lobby, which was just amazing. But I certainly am hoping to convince you to go back to China with us. This will be our first event... >> I got a three-year visa. >> Good, yeah, that's the exactly right one. But this will be our first event in China, which I think is just a huge opportunity. We now have Baidu, Tencent, Huawai, ZTE, a number of startups. There's just so much excitement for this space over there that we're really excited to satisfy. >> Stu: And Copenhagen in May. >> And that's the last one. Thank you. May 2 to 4 in Copenhagen, and we're really excited for the event, to bring it to Europe and the rest of the world. >> Okay. So you've been working like a dog, you've been working hard. I've seen you in China. It's serendipitous. But it's not without being mentioned that this has been great effort by your team and the Linux Foundation and Jim and the whole team. But congratulations. Are you having a pinch me moment? I know it's too early to do a victory lap. >> But you've got to be pretty excited. >> Yeah. It really has been a great thing for the foundation that we sort of accomplished many of our 2018 and 2019 goals this year. But I'm sure we're going to find plenty of stuff to do next year. >> And your goal for the next 6 to 12 months, what's on your top three to-do's, continue the momentum? Share your API for... >> Yeah. What's great is that we really have plenty of members. We'd always like to add new ones and serve the ones we have better. But right now, the focus is really about providing better services to our projects. All of them feel overworked. They would love help on documentation, on marketing, on messaging about it, and some of them need help with testing development and other things. So that's really what we're buckling down on. >> Great community are going to test them, being here on the ground, personally present at creation. And I was standing there with J.J. and Lew Tucker, OpenStack three years ago, talking about Kubernetes. We were kind of ripping. We couldn't have imagined, then, obviously, they bolted it on last year with your event. Now second year here, huge community... >> But you have 4,100 folks here, is more than the previous four events combined. >> Yeah, awesome. >> So it really is exciting. >> TheCUBE, always on the ground. And sometimes the squirrel finds a nut. We found a cloud-native foundation, part of the Linux Foundation. CNCF, Cloud-Native Compute Foundation, really a new, growing, and relevant community for cloud and a new way to do software and reimagine the future from software engineering to full application development, a new way. This is theCUBE's coverage, and we are here live in Austin. More live coverage after this short break. We'll be right back. [Techno Music]

>> Announcer: Live from Las Vegas, it's theCUBE. Covering AWS re:Invent 2017. Presented by AWS, Intel, and our ecosystem of partners. >> Hello and welcome to day three of exclusive CUBE coverage here at Las Vegas for live coverage of AWS re:Invent 2017. This is theCUBE's fifth year covering AWS re:Invent, and what a transformation it's been. Rocket ship growth. They got the tiger by the tail Full speed ahead. They're not looking in the rearview mirror. This is the mojo of Amazon Web Services. They're kicking ass and taking names, as we say here in theCUBE. But really, they're changing the game. A lot of game changing announcements, architectural rehab for engineering. Reimagining the future is really what they want, and they're trying to be everything to everyone. And, of course, that's always hard to do. I'm John Furrier with Stu Miniman on our kick off of day three. Breaking down Werner Vogel's keynote as well as kind of a review of what's been going on for the past few days. There is a lot of signal here. There's almost a noise around the signal meaning there is so much good content that it's really hard to get a hold of Stu. Great to kick it off day three. Rested. Didn't go out late last night. Went to bed by 10. I know you stayed out to three in the morning, but... >> Hoping my voice can hold out for another day in Vegas. John, good to see you, and I'm really excited. 3,951 announcements since the first re:Invent. We're going to go through every one of them. No, no, no. Werner Vogel. It was interesting because he's like, Oh, we've been told ahead of time, it's not going to be announcement heavy. Of course, there's some really awesome announcements. I hate we sound like fanboys sometimes, but you know, Alexa for business, the serverless marketplace. Some really good segments from Netflix, they were just talking about iRobot. Somebody who I had on theCUBE earlier this year. But Werner really kind of stepping back. Some people are like, what is this, a kinda computer science 101? But no, here's how you architect the future. Here's how Amazon's going to fit everything from how voice is going to be a major interface to a theme that I've really liked we've been covering for a number of years. The digital future is not robots taking over the world, but how do I take people and technology, put them together to really create that explosive future? 'Cause even the things like machine learning, the things that I've been talking to the people who are really in this environment is how are we going to train the people that are gonna put these things together? It's not just something that runs off by itself. >> And we had Sanjay Poonen who is the CEO, COO of VM Ware. Not CEO, that's Pat Gelsinger. But he kind of pointed out something that I wanna bring up here, which is Andy Jassy and the team at Amazon are highly competent, and they're executing. But, Stu, they're not just executing on the technical prowess, they're kicking ass on the technology. Certainly, I want to have a longer conversation with you about that. But they're really hitting some real high notes on societal change. So, if you look at what Amazon enables both at the startup level and the business transformation, even in the public sector with Teresa Carlson, who we'll have on later, they're enabling a new way to reimagine how to solve problems that never could be solved before. Two, they're kind of on the right vectors, and it's causing some competitive ripples. Just today in the news, you can see stories out there in the Wall Street Journal and other places where Apple is part of Stamford University to solve heart disease with the iWatch. Google's folding nest back into the hardware division as pressure because their playbook's not working because Amazon's kicking their ass on Alexa and you got Siri. So, Google's fumbling on that point. They're trying to figure it out. So, you're seeing the forces start to line up in this new era of competing on value, competing on software, competing on community and open source. Amazon has the right formula. If they keep this up, Microsoft and Google will not be able to catch them. And that is so obvious. So, until Amazon makes a misfire, which they have not yet, they experiment, but their solid track record, we're gonna call it as we see it. But calling balls and strikes right now on the cloud game, there is not even a close second place. >> Yes, so John, I've been searching for a word. We used to talk about a platform that you built or the marketplace or the ecosystem that we have around here. Amazon is enabling new things. The new AWS marketplace enabling anyone really to go in there, really could do for cloud and technology what Amazon.com helped do for retail and business. You know, I say, look, not every single one of the features that Amazon had is leaps and bounds ahead of what a Google or Microsoft has. I know you've done lots of reporting on the machine learning and everything happening, even Facebook and the like, going in there. But Amazon absolutely is in a class by itself and it's still, in our fifth year coming here, they impress and they continue to keep us-- >> Stu, let's dissect the competition. Let's lay it all out. To me, the top three are no doubt Amazon and then, way distance second place, Microsoft, and then, third on technology and then kind of, clustered like a bunch of Nascar clusters all trying to figure out what to do, is Oracle, IBM, and everybody else. >> Hold on, you didn't mention Google. You didn't mention Alibaba. >> I mean, sorry, Google would be third, Alibaba would be fourth. But their US presence, they're number four by sheer China volume, but Amazon's business in China's growing. They just cut a deal with China so we're gonna see that play out, we'll see. But Alibaba is a force to be reckoned with, as well as Tencent and Baidu and all those other platforms. But here's the deal, you can't be a pure play anymore. Look at Google, the search engine business, they're milking that cow dry, but the thing is that the business is shifting. So, I think Google, of all the competitors, probably has the best chance to accelerate because I think innovation has to be at the heart of that accelerated leadership position. Two, culture. The culture of solving not just tech problems, Stu. And this is where Amazon, no one's really unpacked this, is that if you look at Intel, for instance, they always have great tech, and they always do good things. Amazon is kind of doing the same thing. They're solving societal problems, but they're kicking ass on the business front. Google has that DNA. It's just not organized into the machinery. >> Yeah, I mean, John, we know Google has amazing technology, really good talent. We think Google spanner, oh my God, that's amazing. The thing we say is there's things that Google comes out with, and it's like, Wow, this is really cool. I really need to think about a while how can I do it. As opposed to most of the announcements you hear. In the sessions, people are like, Oh my God, I can't believe Amazon did this. I can immediately take this. I can change the way I'm doing something. I can increase my Codility. I can make my, how I just do my entire business different, better. >> Yeah, and so, Stu, I bring up the Alibaba comment. I wanna bring that back in because one of the things that Amazon's doing that Alibaba is kinda copying, I won't say copying, but emulating, is this notion of craftsmanship. If you look at the past 10 years the programmer culture, the Y Combinator, the Agile, lean, start-up kind of mindset, you look at a loss in craft in software development. Software development used to be a craft. You build software. We had to keep alumni benched from Apple, I talked about, you build a shrink-wrapped product, you ship it, you QA it, you ship it, but you don't know it's going to run. But in the Agile, you're shipping, you're shipping, and shipping, it kind of takes the craft and the artisan out of it. Yeah, US could be cool. But I think now you're going to start to see a swing-back, and whoever, whichever cloud can bring that artisan kind of craft, and blend the open source kind of community model, to me, will be the winning formula. Because that will change the game on these new use cases, the new user expectations, the new user experiences. >> And John, that's exactly what Werner was talking about in his keynote, is this is how we're architecting into the future, you know, everybody needs to be thinking about security. One of the critiques I saw is like, oh, well, you need to think about, you know, everything up and down the stack. It's like, you know, everybody needs to be the unicorn full-stack developer, you know, understand security, be on top of serverless, do all this, well, look, that's asking a lot as to, you know, not everybody's going to be able to do everything. Amazon might be everything is everything, but, you know, we need to be able to understand, you know, how do we take the vast majority of enterprises out there and move them along? I love, Keith Townsend and I did an interview with Chris Wolf from VMware, here at the show, and Keith said, you know, VMware used to move, you know, the speed of the CIO. Amazon's moving way faster than the CIO, you know, how do we help the enterprises move faster, and it's tough. I've talked, every customer I talk to is -- >> Well, we heard, we heard, we heard Intel saying they're moving faster than Intel. So, I mean, Intel has to get in these reference architectures, so, with FPGNAs and these new technologies, they have to accelerate and keep pace. But I think the Werner Vogels keynote here is kind of historic, and you brought this up before we came on, was that he was not going to do a lot of announcements. Although he did launch Alexa for business, and the Lambda Service is all in on that area, he kind of did a throwback to five years ago, or six years ago when he did his first keynote here, when he talked about the new architecture and reimagining it. But he took a modern version of what he was talking about then, and I think that highlights the Amazon greatness, but also their challenge. The one thing I'd be critical of Amazon is, well, two things, one is, I mentioned yesterday, Andy Jassy shouldn't be putting Gardener slides in a new guard presentation, because they're old guard. But that's one thing. What they're doing with the sales motion, it's hard. They have to convince customers and show them the new way. So what Werner painted the picture of is this is how we're thinking. This is how you should be thinking with customers. You have to reimagine what was traditional architecture, and think about it in a completely different way, which will change ultimately software methodologies, the life cycle of Agile, and hopefully bring in some, you know, value-oriented craftsmanship and artisan. >> Yeah, John, you know, this reminds me of many of the waves that we've seen throughout our careers. The customers, when they get in this ecosystem and they really start using it, they get religion. And, you know, number one advice I hear from a lot of the companies I talk to say, talking to your peers, what would you say? Say, get on it faster, and really just dive in. It's like, yeah, yeah, you start with one application. But get off the old stuff as fast as you can. Get on this, because there's, when you have access to all of these services, it just transforms your business. You can get, you know, these changes in these services, into more pieces of the organization, you know, John, we haven't brought up, you know, does IT matter? What's the role of IT in this versus the business lines and the developers? IT radically changing. Amazon looking to change that model. >> They are. I mean, there's no doubt. This show is kind of the final exclamation point on the fact that not only was it a collision course, it has absolutely happened. IT and Amazon have come together in a massive collision, and there's going to be carnage, too. There's going to be people, Lying on the side of the road. >> So, question for you. I've heard there's some people that like, this is the industry's biggest infrastructure show. And I'm an infrastructure guy by background, but I take, I don't think, this is not an infrastructure show. This is, you know, really about business. You know, absolutely, there's technology. Somebody I love, they said, you know, CES, this is now EES. This is the enterprise version of what's happening in technology. >> Well, I mean, we're going to have Teresa Carlson on. It's, you know, it's all digital, right, I mean, it's a digital culture, because their public sector business is booming. It's not just the enterprise. They nailed the start-up. They nailed the ElastiCLOUD, check. Tom Siebel pointed it out yesterday. And what they're nailing now with IT is they're becoming the lever, the catalyst for IT transformation at price points and functionality never seen before, and it's mind-boggling. Google's gotta re-organize, because they can't compete with Alexa. Alright, so things of that nature. So then you have the public sector, your government, and then global, regional, China, Europe, huge issues. So they're winning. And to me, this is a huge new thing. And why rant on the Gardener slide that Jessy puts up is, Amazon is the new guard, and they're putting up old guard metrics. So Stu, this is not an infrastructure as a service magic quadrant, so, the question we share, is what are the new guard metrics? My opinion, no one's developed it yet. So how would you define a modern metric for who's winning and who's losing? Because if you say number of customers, Oracle has a lot of customers, IBM's got a lot of customers. >> So John, Amazon's leading the vanguard in helping customers through digital transformation. I don't know how to measure that yet, but absolutely they're the ones that are doing this. It's not a product-centric. It's about the mindset and how we build things. I've really loved this week talking about, you know, how real is serverless? And like, well, really, Lambda's getting embedded everywhere. It's not about, you know, a product, and oh, hey, you're only going to pay for it by the microsecond, and it's 90% cheaper, no, no, no. It's about the triggers and the APIs and just integrating into the way I can build things faster, you know, yes, I can really get benefit out of microservices. That serverless application repository that Werner talked about, I mean, it's, we got really excited when we got for containers, like the Docker Hub, we had in virtualization, we had the same way, we could get kind of standard images out there. Serverless application repository's going to do the same thing for serverless. You know, is there a lock-in from AWS Lambda, how much is there going to be standards that come in? The CNCF next week is going to be digging into those. >> Is there a cost reduction? Or is it a cost increase? These are questions. >> Yeah. >> Alright, so final question for you. I know we've gotta move on to our full day here, but Stu, you, you know, you study it, you do the hallway conversations, you're at all the influencer events, how do you connect the dots between Andy Jassy's keynote and Werner's, where is the dots connecting? What is jumping out at you? Obviously Lambda, but what are the highlights, from your perspective, that you see just jumping out that Amazon's connecting and trying to present? >> Yeah, so, we always used to say it was like, you know, okay, is day one developer and day two enterprise? We're starting to see those lines blur. As the enterprise, we are still early in kind of the massive adoption there, but that's where it's coming together. There's, you know, lots of excitement, but, you know, as we talked about the continuum, now we had bare metal, we have instances, we have containers, we have serverless. And the enterprise is starting throughout that. I know there's a Sumo Logic report you've been quoting, and we've been-- >> And it came on yesterday. >> Absolutely. So good data there. New Relic had some good reports digging into this. So the wave, change is happening faster than ever. And, you know, Amazon is the lead horse driving this change throughout the industry. >> And don't forget Intel. Intel's just minding their business just watching all these compute requests come in. I mean, as more compute comes out, Intel just is a rising tide, and you know, they're a big boat in the harbor there. >> Absolutely. >> Alright, I'm John Furrier and Stu Miniman breaking down day three of theCUBE, day three here we've actually started on Sunday night at midnight. A lot of great action, a lot of great analysis, of course, check out our new Twitch channel, so, twitch.tv/siliconangle, twitch.tv/thecube, two new channels, or one rebooted channel, one new channel. And of course thecube.net. We're on Ustream, we're on YouTube. But check out our Twitch and join our community if you're a gamer. Back with more live coverage here, live in Las Vegas, for AWS re:Invent after the short break.

(upbeat music) >> Hello everyone, welcome to a special CUBE Conversation here at the SiliconANGLE Media, CUBE and Wikibon studio in Palo Alto. I'm John Furrier, co-founder of SiliconANGLE Media, Inc. I'm here with Peter Burris, head of research, for a special Amazon Web Services re:Invent preview. We just had a great session with Peter's weekly Action Item roundtable meeting with analysts surrounding the trend. So that'll be up on YouTube, check that out. Really in-depth conversation around what to expect at Amazon Web Service's re:Invent coming up in about a week and a half, and great content in there. But I want to go here, Peter, have a conversation with you back and forth, 'cause we've been having a debate, ping-ponging back and forth around what we think might happen. We certainly have some visibility in some of the news that might be happening at re:Invent. But you guys have been doing a great job with the research. I want to get your thoughts and I want to just have a conversation around Amazon Web Services. Continuing to kick ass, they've had a run on their own for many, many years now. But they got competition. The visibility in Wall Street is clear. They know the profitability. The numbers are all taking shape. Microsoft stock's up from 26 to wherever it is now. It's clear the cloud is the game. That's what's going on, and you have, again, the top three: Amazon, Azure, Google. And then, you can argue four through seven, including Alibaba and others, big game going on. This is causing a lot of opportunities, but disruption to business models, technology architectures, and ultimately how customers are going to deploy their IT and/or their digital business. Your thoughts? >> I think one of the most interesting things about this, John, is that in the first 10 years of the cloud, it was implied that it was a cost play. Don't do IT anymore, it's blah, blah, blah, blah, blah, do the cloud, do AWS. And I think that because the competition is so real now, and a lot of businesses are starting to realize what actually could be done if you're able to use your data in new and different ways, and dramatically accelerate and transform your businesses, that all this has become a value play. And the minute that it becomes a value play, in other words, new types of work, new types of capabilities, then for Amazon, for AWS, it becomes an ecosystem play. So I think one of the things that's most interesting about this re:Invent, is it's, from my opinion, it's going to be the first one where it's truly a strong ecosystem story. It's about how Amazon is providing services that the rest of the world's going to be able to consume and create new types of value through the Amazon ecosystem. >> Great point, I want to bring up a topic that we've been talking on theCUBE in some of my other CUBE Conversations, as it relates to the ecosystem is, in all these major ways, and we've seen many, you've covered many ways as an analyst over the years, there's always been a gestation period between a disruptive enabler, you could talk about TCP/IP, you could talk about HTTP, there's always a period of gestation. Sometimes it's accelerated now more than ever, but you start to see the impact of that disruptive enabler. Certainly cloud, and what Amazon has done, has been a disruptive enabler. Value's been created, more value's being created, more and more everyday we're seeing it. You're starting to see new things pop up from this gestation period, problems that become opportunities. And competitors that are now partners, partners that are now competitors. So a full changeover is happening in the landscape because of it. So the question for you is, what are you seeing, given your experience in seeing other ways before, what is starting to be clear in terms of visibility that are becoming known points of obvious straight and narrow trends that are happening with this cloud enabling? >> Well, let's talk about perhaps one of the biggest differences between traditional IT and cloud-oriented IT. And to kind of tell that story, I'll do something that a lot of people don't think about when they think about innovation. But if you really think about innovation, you got to break it down into two distinct acts. There's the act of inventing, which is an engineering act. It's, how do I take knowledge of physics, or knowledge of sociology, or knowledge of something, and invent something new that reflects my understanding of the problem and creating a solution? And then there's an innovation act, which is always a social act. It's getting people to change the way they do things. Businesses to change the way they do things. That's a social act. And one of the interesting things about the transition, this transition, this cloud-based transition, is we're moving into a world where the social acts are much more synonymous with the actual engineering act. And by that I mean, when something is positioned as a service, that the customer gets and just acts on it because they're now renting a service, that is truly an innovation process. You are adopting it as a service and embedding it more quickly. What we're seeing now in many respects, going back to your core point, is everything being done as a service, it means that the binding of the inventing and the innovating is much more strong, and much more immediate. And AWS re:Invent's been a forum where we see this. It's not just inventing or putting forward a new product that may get out to market in six months or nine months. It is, here is a service, people are consuming it, we're embedding it in our other AWS stuff. We're putting this AI into how folks are going to manage AWS, and the invention innovation process collapses very quickly. >> That's a good point. I would just give you some validation on that by seeing other trend points that talk about that social piece. You hear about social engineering in cyber security, that that's now a big part of how hackers are getting in, through social engineering. Open-source software is a social engineering act, 'cause it's got a community dynamic. Blockchains, huge social engineering around how these companies are forming. So I would 100% agree, that's a great, great point. The other thing I'd ask you to elaborate on is something that is a trend that's obvious, 'cause everyone talks about the old way, new way. Legacy is being disrupted. New players like Amazon are disrupting the people like Oracle. And Oracle thinks they're winning, Amazon thinks they're winning. The scoreboards aren't the same, but here's the question. Technology used to be built to solve technology problems. You build a box, you ship it, and it works. Software, craft it, ship it. It does work or it doesn't work. Now software and technology we can use to solve non-technology problems. This brings it to a whole nother level when you take your social comment, an invention. This is now a new dynamic that tend to be, I don't want to say minimized in the old days, but the old ways was, load some boxes, rack it up, and you got a PC on your desk. We could work effectively on a network. Now it's completely going non-technology problems, healthcare, verticals. >> Here's the way we look at it, John. >> John: What's your thoughts on that? >> Our simple bromide is that we are in the midst of the transition in computing. And by that I mean, for the first 50 years we talked about known process, unknown technology. By that I mean, for example, have you ever seen a GAAP accounting convention wandering out in the wild? No, it doesn't exist, it's manmade, it's artifice. There's nothing wrong with it. We all agree what an accounting thing is, but it's all highly stylized and extremely well-defined. It's a known process. And the first 50 years were about taking those known processes in accounting, and in HR, and a lot of other domains, and then saying, okay, what's the right technology to automate as much of this as possible? And we did a phenomenal job of it. It started with mainframes, then client/server. And was it this server, or that server? Unix or something else? TCP/IP or some other network? But that was the first 50 years of computing. Now we've got a lot of those things out. In fact, cloud kind of summarizes and puts forward a common set of experiences, still a lot of technology questions are going to be important. I don't want to suggest that that's not important. But increasingly it's, okay, what are the processes that we're going to try to automate? So we're now in a world where the technology's much more known, but the processes are incredibly unknown. So we went from a known-- >> So what is that impact to the cloud players, like Amazon? Because what I'm trying to figure out is, what will be the posture on the keynotes? Is it going to be a speeds and feeds show? Or is it going to be much more holistic, business impact, or societal impact? >> The obvious one is that Amazon increasingly has to be able to render these common building blocks for infrastructure up through to developers, and a new way of thinking about how do you solve problems. And so a lot more of what we're likely to see this year is Amazon continuing to move up the stack and say, here's how you're going to look at a problem, here's how you're going to solve the problem, here's the tooling, and here's the ecosystem that we're going to bring along with us. So it's much more problem-solving at the value level, going back to what we talked about earlier, problem solving that creates new types of business value, as opposed to problem solving to reduce the costs of existing infrastructure. >> Now we have a VIP chat on crowdchat.net/awsreinvent. If you want to participate, we're going to open it. We're going to keep it open for a long time, weigh in on that. We just had a great research meeting that you do weekly called Action Item, which is a format that's designed to flush out the latest and greatest research that's tied to current events or trends. And then unpack the action item for buyers and customers, large businesses in the industry. What's the summary for the meeting we just had here? A lot of stuff being talked about, Unigrid, we're talking about under the hood with data, a lot of good stuff. What's the bottom line? How do you up-level it for the CIO or CXO that's watching or listening, doesn't have time to get in the weeds? >> Well, I think the three fundamental conclusions that we reached this year is that we expect AWS to spend a lot of time talking about AI, both as a generalized way of moving up the stack, as we talked about. Here's the services the developers are going to work with. Here's the tool kits that they're going to utilize, et cetera, to solve more general problems. But also AI being embedded more deeply within AWS and how it runs as a service, and how it integrates and works with other clouds. So AI machine learning for IT operations management through AWS. So AI's going to be a major feature. The second one we think that we're going to hear a lot about is, Amazon's been putting forward this notion that they were going to facilitate migration of Legacy applications into AWS. That's been a slog, but we expect to see a more focused effort by going after specific big software houses, that have large installed bases of on-premise stuff, and see if they can't, with the software house, bring more of that infrastructure, or more of those installations, into AWS. Now, I don't want to call VMware an application house, but not unlike what they did with VMware about a year and a half ago. The last one is that we don't think that Amazon is going to put forward a general purpose IoT Edge solution this year. We think that they're going to reveal further what their approach to those problems are, which is, bigger networks, more PoPs. >> More scale. >> More scale, a lot of additional services for building applications that operate within that framework, but not that kind of, here's what the hybrid cloud by Amazon is going to look like. >> Let's talk about competition in China. Obviously, they kind of go hand in hand. Obviously, Andy Jassy and the Amazon Web Services team are seeing for the first time, massive competition. Obviously Microsoft stocks, I might have mentioned earlier. So you're starting to see the competition wheels cranking. Oracle's certainly been all over Amazon, we know that. Microsoft's just upping their game, trying to catch up, and their numbers are looking good. You got SAP playing the multicloud game. You got Google differentiating on things like TenserFlow and other AI and developer tools. This is interesting. This is the first time Amazon's really had some competition, I won't say nipping at its heels, but putting pressure. It's not the one game in town. People are talking multicloud, kind of talking about lock-in. And then you got the China situation. You got Alibaba, technically the number four cloud by some standards. Some will argue that position. The point is, it's massive. >> Yeah, I think it's by any reasonable standard. They are a big cloud player. >> So let's go through that. China, let's start with China. Amazon just announced, and the news was broken by the Wall Street Journal, who actually got it wrong and didn't correct their story for almost 24 hours. Really kind of screwed up the market, everyone thought that they were selling AWS to China. It was a unique deal. Rob Hof and the team reported and corrected, >> Peter: At SiliconANGLE. >> At siliconangle.com, we got it right, and that is is that it was a $300 million data center deal, not intellectual property, but this is the China playbook. >> They sold their physical assets. They didn't sell their IP. They didn't sell the services or the ability to provide the services. >> Based upon my reporting, and this is again still, the facts on the ground are loose, 'cause China, it's hard to get the data. But from what I can gather, they were already doing business in China. Apple went through this, even though they're hardware, they still have software. Everyone has that standoff, but ultimately getting into China requires a government-owned partner, or a Chinese company. Government-owned is quasi, you could argue that. And then they expand from there. Apple now has, I think, six stores or more in Shanghai and all over China. So this is a growth opportunity for Amazon if they play it right. Thoughts on that? I mean, obviously we cover a lot of the Chinese companies here. >> Well, I don't want to present myself as an expert on this, John. I've been watching, the Silicon Valley ANGLE reporting has been my primary information source. But I think that it's interesting. We talk about hard assets and soft assets. Hard assets are buildings, machines, and in the IT world, it's the hardware, it's the building, et cetera. And when China talks about ownership, they talk about ownership of those assets. And it sounds to me anyway, like AWS has done a very interesting thing, where they said, okay, fine, you want 51% of the hard assets? Have 51% of the hard, have 100% of the hard assets. But we are going to decide what those assets look like, and we are going to continue to own and operate the software that runs on those assets. So it sounds like, through that, they're going to provide a service into China, whatever the underlying hardware assets are running on. Interesting play. >> Well, we get the story right, and the story is, they're going into China, and they had to cut a deal. (laughs) That's the story. >> But for the hard assets. >> For the hard assets, they didn't get intellectual property. I think it's a good deal for Amazon. We'll see, we're going to watch that closely. I'm going to ask Andy Jassy that specific question. Now on the competition. The FUD is off the charts, fear, uncertainty and doubt. You see that in competitive markets, the competition throwing FUD. Sometimes it's really blatantly obvious FUD, sometimes it's just how they report numbers. I've been, not critical, but pointing out that Azure includes Office 365. Well when you start getting down that road, do you bundle in the sales floor as a cloud player? So all these things start to-- >> Peter: Yeah. >> Of course, so what is true cloud? Are people parsing the categories too narrowly, in your opinion? What's the opinion from the research team on, on what is cloud? >> Well, what is cloud? We like to talk about the cloud experience where the data demand's free or business. So the cloud experience is basically, it's self-provisioning, it's a service, it is continuous, and it allows you a range of different options about what assets you do or do not want to own, according to the physical realities, the legal realities, and intellectual property realities of the data that runs your business. So that's kind of what we mean by cloud. So let's talk about a couple of these. First-- >> Hold on, before you get to those, Andy Jassy said a couple years ago, he believes all enterprises will move to the cloud. (laughs) I mean, he was kind of, of course, he's buying 100% Amazon, and Amazon's defined as cloud. But he's kind of referring to that the enterprise on-premise current business model, and the associated technology, will move to cloud. Now, I'm not sure he would agree that the true private cloud is the same as Amazon. But if he cuts a deal with VMware like he did, is that AWS? So will his prediction come true? Ultimately, everyone's saying that will never be full cloud. >> I think this is one of those things where we got to be a little bit careful about trying to read too much into what he said. But here's what we think. Our advice to customers is don't think about moving your enterprise to the cloud, think about moving the cloud to your enterprise. And I think that's the whole basis for the hybrid cloud conversation that we're having. And the reason why we say the cloud experience where your data demands, is that there are physical realities that every enterprise is going to have to deal with, latency, bandwidth. There are legal realities that every enterprise is going to have to deal with. GDPR, what it means to handle privacy and handle data. And then there's finally intellectual property realities that every enterprise is going to have to deal with. Amazon not wanting to sell its IP to a Chinese partner, to comply with Chinese laws. Every business faces these issues. And they're not going to go away. And that's what's going to shape every businesses configuration of how they're using the cloud. >> And by the way, when I did ask him that question, it might have been three years ago. I can't actually remember, I'm losing my mind here. But at that time, cloud was not yet endorsed as the viable way. So he might have been referring to, again, I'm going to ask him this when I see him in my one on one. He might have been referring to old enterprise ways. So I mean-- >> Let's be honest. Amazon has done such an incredible job of making this a real thing. And our opinion is that they're going to continue to grow as fast as the cloud industry, however we define it. What we tend to define, we think that SaaS is going to be a big player, and it's going to be the biggest part of the player. We think Infrastructure as a Service is going to continue to be critically important. We think that the competition for developers is going to heat up in a big way. AI, machine learning, deep learning, all of those things are going to be part of that competition. In our view of things, we're going to see SaaS be much bigger in a few years. We're going to see this notion of true private cloud, which is a cloud experience on-premise with your assets, because you need to control your data in different ways, is going to be bigger than IaaS, but it's all going to be cloud. >> I mean, in all poise, my opinion and what I'm looking for this year, Peter, just to kind of wrap up the segment is, I think, and if you look at Amazon's new ad campaign, the builders, that's a topic that we talked about last year. >> Peter: Developers. >> Developers. We are living in a world where DevOps is now going mainstream. And there are still cultural issues around, what does that actually mean for a business? The personnel, how they operate, and some of the things you guys point out in your true private cloud report, illuminates those things. And that is, whoever can automate and create great tooling for the DevOps culture going forward, whatever that's called, new developers, new normal? Whatever it is, that to me is going to be the competitive landscape. >> Let me parse that slightly, or put it slightly differently. I think everybody put forward this concept of DevOps as, hey, business, redefine yourself around DevOps. And it hasn't gone as well as a lot of people thought it would. I think what's really going to happen, I don't think you're disagreeing with me, John, is that we need to bring more developers into cloud building that cloud experience, building more of the application value, building more of the enterprise value, in cloud. Now that's happening, and they are going to start snapping this DevOps concept into place. But I think it really is going to boil down to, how are developers going to fully embrace the cloud? What's it going to look like? It's going to be multicloud. Let's go back to the competition. Microsoft, you're right, but they're a big SaaS player. Companies are building enormous relations, big contracts, with Microsoft. They're going to be there. Google, last year they couldn't get out of their own way. Diane Greene comes in, we see a much more focused effort. There's some real engineering that's going on for Google Cloud Services, or Platform, that wasn't there before. Google is emerging as a big player. We're having a lot of conversations with users, where they're taking Google very seriously. IBM is still out there, still got some things going on. You've already mentioned Alibaba, Tencent, a whole bunch of other players in the globe. This is going to be a market that's going to be very, very contentious, but Amazon's going to get there first share. >> And I think we pointed out years ago, that DevOps will merge to cloud developers. You nailed it, I think you just said it. Okay, Peter Burris, here for the Amazon Web Service preview. Of course theCUBE will be there with two sets. We're going to have over 75 interviews over the course of 3 days. In the hall, look for theCUBE, if you've watched this video and you want to come by. If you got a ticket, it's sold out. But come by if you have a ticket. We'll be there, in Las Vegas, for Amazon Web Services re:Invent. I'm John Furrier, thanks for watching this CUBE Conversation from Palo Alto. (upbeat techno music)

>> Hi, welcome once again to Action Item. (funky electronic music) I'm Peter Burris and this is Wikibon's weekly research meeting where we bring together some of the best minds in Silicon Valley to talk about some of the trends that are most important. We're broadcasting from here in the Cube studios in beautiful Palo Alto, California. And in the studio, I'm being joined by George Gilbert and David Floyer and on the phone we have Neil Raden, Jim Kobielus, Dave Vellante. Team, thanks very much for being part of this conversation today. What we're going to do today is we're going to bring forward some of Wikibon's predictions for 2018. In a previous show, we discussed what we learned in 2017, so some of the trends and some of the expectations that didn't play out as expected. This year we're going to dig a little bit deep into what we think is going to happen in 2018 and it all starts with a proposition that even as we go through significant industry change, we're not necessarily going to see the economics of the industry change as fast, which leads to prediction number one. David Floyer, what is it? >> So, my prediction is that volume is going to take a key role in the evolution of disruptive technologies. So for example, in AI and IOT and in true private cloud, volume is going to be the key determination of when it starts to take off, when it starts to hockey stick. >> So this has been something that's been featured in the industry for a while, Dave, but give us an example. What's the relationship between volume and AI? >> So if we take the relationship between AI and volume, AI is going sideways, and I would predict that it's going to go sideways in 2018 because every implementation is a snowflake until there are solutions out there which can be delivered in volume by vendors. Then that will the point at which things will take off. So an example, for example, automated cars. They are AI, when they start to come out in volume, there'll be volume manufacturers, volume of the census, volume of the processes, the on-processes, volume of everything that will drive down costs and make those implementations so quickly. >> And it's still software, so we're still worried about support and service on a very, very broad scale. >> David: Yeah. >> So that leads to our second quick prediction. Dave Vellante, build on this notion of volume. What's going to be the impact on a lot of the innovative smaller companies in 2018? >> Dave: So Peter, my prediction is got to go scale or go home, AKA go out of business. So we expect massive industry consolidation is going to take place in the next two years, certainly through 2019 as the business models of VC-backed tech startups are getting smashed by cloud and, to a great extent, open source. In a turnabout from the historical norms, innovations and cost reductions from the largest cloud players are moving at a pace that's faster than many, if not most startups are able to deliver. So finding white space is much, much harder. We see private equity as playing a key role here, providing capital for M and A and doing roll-ups that are going to create scale and large portfolios that can compete. >> So Neil Raden, as we think about what Dave just said, one of the key things that's happening is a lot of money's being put into some of the new technologies that are intended to provide more intelligence in a lot of different places. One of the large company leaders indicating or describing how this was going to play out was IBM with its Watson story. What's been going on with Watson? What's our prediction for how that's playing out and likely, what's a likely 2018 scenario for IBM and Watson? >> Neil: Well, not to sugarcoat it but Watson's been a dismal failure, and I think that IBM is going to reassess their whole approach to cognitive computing in 2018. Numbers don't lie, let me give you some numbers from 2016. They obviously don't have '17 yet. But these are reliable numbers from some institutional clients of mine. Their goal for 2016 was over 8,000 clients. They achieved 500. Their goals for business partners was over 4,000 and they achieved 329. So, you know, the numbers speak for themselves, but Watson hasn't caught on. It's a solution in search of a problem. It was a marketing stunt, really, that someone thought to be turned into a 20 billion dollar per year business. It's not even a product, really. It's dozens of subsystems that are linked with APIs. Some of them are interesting, but most already are available in the open source world. >> Well one of the things we talked about last week, Neil, was the idea that we're going to see more buy, as opposed to build, and we talked about the volume play there, and then we asked the question, is there going to be more software or is there going to be more services? It sounds like IBM's play to be a dominate player in AI-related services has not gone as well as expected. Is that kind of where we are right now? >> Neil: Well, yeah. If you look at one of the more public failures of Watson, which was MD Anderson Cancer Center, they pulled the plug on the project after 62 million dollars, but IBM only got about 20 million dollars of that, the rest of it went to PWC. So how they intend to split that business between global services and their partners, I really don't know. And the failure of Watson at MD Anderson wasn't entirely IBM's fault. A lot of it had to do with PWC's project management, and a lot of it had to do with the people at Anderson who basically started the project by looking at a very well-understood type of leukemia that had a well-understood etiology and treatment options. So when the auditors looked at it, they said we haven't learned anything for 62 million dollars, and that's been repeated at other projects. >> So it sounds like this is, again, tied back to the idea of scale, volume, and related issues. But it also sounds like there's a lot of question, ultimately, about what is AI? What isn't AI? What role is Watson going to play? Is it going to be private data? Is it going to be public data? A lot of questions are going to emerge over the course of next year. But there are domains where AI, ML, DL are likely to have some important success. And George, we've got a prediction about where they're likely to be successful in 2018. What are we thinking, what's one domain where we think at least machine learning is going to have a significant impact in 2018? >> Well, keying off David's point about volume, volume economics, we think that IT operations management is going to be one of the first horizontal applications that embeds machine learning. It's not about presenting, modeling, and tools to developers, it's just part of the application. The reason it's important, there's really two key reasons. We're building out shared ephemeral infrastructure, which is very different from the dedicated silos that we had for mission-critical applications. And this infrastructure, and the application landscape on top of it, is extremely hard to manage, and machine learning can help greatly. And I think investment in that will be driven also by a realization that this is training wheels for IOT in the sense that you're monitoring machines through data telemetry that they throw off, and you're using models to figure out how they should be operating versus how they are operating. >> So this has significant applications across IOT, ML, and how we get to volume because it's a controlled and pretty well-defined space. By that I mean, but nonetheless, it's related to the problem space, and by that I mean that bespoke applications, whether they're from AI or whatnot, are going to create new needs for new types of monitoring. But the classification of the tools and the classifications of the devices that will be monitored are pretty well-understood and they're controlled by the IT industry, so they ought to have pretty good definitions. Is that what we're thinking here, George? >> Yes, precisely, and the bespoke pieces can be modeled because they fall within a well-known domain. But I just want to add on the go to market side that keys off of what Dave Vellante said, which is that these IT operations management applications, they can come from cloud vendors, they can come from enterprise software vendors, but especially the ones that are going to be hybrid cloud are going to need enterprise sales forces to get them to market. You hear millions of, virtually millions of startups say our go to market strategy is land and expand. That doesn't get you enterprise wide, and for that you need an enterprise sales force, most expensive migratory workforce in the world, and startups don't have them. And that's why, one of the reasons, we will see roll-ups for scale. >> So we've talked about the need for scale, the impact on start-ups, the impact on big companies like IBM. One of the domains we think this is going to play out most successfully is in ITOM, IT operations management for some of these new technologies. But underneath all of this is a lot of new complexity because of distribution of function, distribution of data, distribution of application, and there needs to be a new technology concept that allows for that distribution to take place under control. And we talked about this a few weeks ago, but Jim Kobielus, what's our prediction for the world of blockchain or blockchain-like technologies are going to take in facilitating this new distribution of capability around digital business? >> Jim: Yeah, blockchain, we're predicting, it will be as fundamental to the growth of the worldwide digital infrastructure and digital markets as 40 plus, 30 to 40 years ago TCPIP was to the growth of what became the web and the internet. And why is that? Well, you know, when you look at the basic principles for development of any infrastructure where there's an innovation on the infrastructure side that is shared or standardized, robust, meaning secure, and distributed, it quickly becomes a common bond enabling growth of sharing and teaming and markets and so forth. So really, it's a layering process where we have TCPIP and you know, DNS and URL providing this shared address space. Layered on top of that was public key infrastructure, which is the foundation of the security that makes blockchain so strong. You know, PKI and SSL and all that is an enabler, that's another robust, shared common infrastructure. And then on top of that, what we see on top of that is they distributed robust shared record of transactions. That's blockchain, and really blockchain as an enabler for the new generation of digital crypto currencies such as bitcoin, enabling a shared robust and distributed currency or means of payment across the worldwide economy. So, in many ways, blockchain is an enabler for this new generation of truly robust and shared currency and transactions with a mutable, secured, shared record. It's just going to be a growth accelerator for the world economy in the 21st century going forward. >> So in many respects, technology takes off when network formation occurs. TCPIP was a foundation for network formation for distributed computing. What we're basically saying is a blockchain becomes a crucial feature of how application networks get constructed over the course of the next 10 years. Have I got that right, David Floyer? >> Absolutely, that's the key. The guy who sold the first telephone was a genius, the second was easier, and it gets easier and easier as that work grows, and blockchain is a key contributor to the development of those networks, and a one-to-one relationship, many, many one-to-one relationships that can occur from that, away from centralization and to a much more distributed environment. >> So I think we've got time for one more prediction really quickly, and I'll bring it up, and then I want to open it up for conversation because this is an interesting one. We come back to this notion of global network formation, blockchain being what we think, or blockchain-like technologies being a crucial element of that. But let's talk about how the relationship between technology, the cloud, and global economies are likely to evolve. For the most part, when people think about the cloud today, we think about US-based companies: Amazon, Microsoft, Google, Facebook, IBM also in there. But there's some other companies are going to have a say on how the cloud industry evolves over the course of the next five years: Alibaba, Tencent, Baidu. So our prediction is that in 2018, we're going to see a lot more conversation about the role that China plays in establishing some of the new rules for how cloud, application networks, and security plays on a global basis, and that's going to facilitate the emergence of Alibaba, Tencent, and Baidu, also on the global stage as cloud-computing companies. What are you guys' thoughts? Dave Vellante, let me start with you. >> Dave: Well I think we're going to see the emergence of, we've seen the emergence of the China cloud and we're going to see that seep through other parts of Asia Pacific. As we discussed earlier as a team in our private meeting, Europe is going to be a very interesting pivot point because if China can control at least portions of Europe and use that as a lure for China, that's going to give them a leg up on global cloud. >> So that leads ultimately to a series of questions about what will be the relationship between formation of cloud industries, the evolution of the cloud industries, and geopolitical concerns. And I think what we need to do, guys, is dedicate an entire research meeting to that question because it's going to be one of the most important dictators of how the industry evolves over the next few years, and ultimately how businesses and enterprises need to start establishing crucial partnerships with their key and strategic suppliers. So look in the last couple minutes we want to do our Action Item round. Now, what we do here at the Action Item show is we start off having a conversation and then we go into the Action Item, what are you going to do differently Monday as a consequence of the information we're talking about? So let's do that now, hit some Action Items, what you heard from the five, six predictions that we talked about. David Floyer, what's your Action Item? >> So my Action Item is for CIOs and CTOs, is to take a pause on IOT and look for vendors that have solutions which can be put in easily and quickly and span OT and IT in the IOT space. >> Neil Raden, what's your Action Item? >> Neil: Well, I think there's a lot of activity around AI and there's going to be an explosion of it in 2018 but most of it's not really going to be AI, it's going to be machine learning, and machine learning is really just math and floating points. AI is different. AI is neuroscience, it's neurology, it's biology and physics and sociology, it's more science. I think that some machine learning is there on the event horizon of AI, but it's not. So we need to make sure we're clear about what announcements and what technology is machine-learning versus artificial intelligence. >> Jim Kobielus, what's your Action Item? >> Jim: I think my Action Item is to revisit IBM's prospects in the AI market in deep learning going forward. And revisit on a positive note actually because IBM officially turned around their cognitive strategy in the last year. Do they focus on the power AI flight form which is really framework agnostic and so forth. And really the AI space that's actually shaping up is different from the one that IBM and others envisioned at the start of this decade, and so it really is 2018, we're going to see IBM come out strong, I believe, as a provider of, one of the providers of the core framework agnostic data deep learning development platforms in the industry, that's my prediction. >> David Vellante, what's your Action Item? >> Dave: I think if you're a startup, you really have to take a hard look at your business and the value that you're bringing to market and be honest, if you're not delivering something that the cloud guys can't deliver or don't want to deliver, then I think you've really got to think about pivoting or exiting the business that you're in. And as part of that, I think you've got to find, to George's point, distribution channels and distribution partners that can help you with go to market at scale or you're in big trouble. >> George Gilbert, Action Item. >> We've been talking about sort of the cloud wars and my recommendation to CIOs and senior IT leaders would be that if you want to hedge your bets, you don't want to be all in on one cloud, it's not dividing a workload across different clouds. Pick a cloud for a workload or for an application because its portability is, it's sort of more of a dream than a reality. It's not about moving containers around, you're in an API ecosystem, you're subject to data gravity, so it's almost like if you're going to do the equivalent of distributed computing, you're going to put some part of the application on one cloud and some part in another cloud. >> So the Action Item is be smart about the relationship between new style of applications and architecture and cloud choices. Okay, let me summarize the meeting very quickly. This has been a great conversation about predictions in 2018, you expect to see more from us over the course of the next month, this is going to be a major theme of ours in November and into December. So, quickly the findings are these. The technology industry made a major mistake with the dot com boom, and the mistake was a presumption that technology change necessarily meant economic change. That is a false assumption. The economics of technology have been pretty well understood for quite some time and they're going to assert themselves even as we go through this significant transformative period in the technology industry. And the economics of volume are going to continue to be important. And we expect that those economics, coupled with the three factors of what's driving cloud architecture decisions, the realities of physics, geopolitical concerns, and literature property concerns, are going to lead to some significant changes in 2018 that we've only just conceived of. One, we expect that we're going to see an emergence of true private cloud that will continue to be crucial to how businesses think about their information technology overall infrastructure and plant, and that's going to have an impact ultimately on where AI gets developed, more from software vendors based on volume. Two, we expect to see a significant impact on, ultimately, what happens in the VC fronted world as startups, which have historically just presumed that there was no need for go to market, that everything was going to be try and buy and then we'd scale from there, start to hit the business realities of the consistency of the economics of volume. Three, IBM we think is repositioning, and somewhat paradoxically is likely to become more successful as a consequence, as a provider of the technologies that make possible some of these new comprehensive, complex AI and related oriented technologies, and not just as a service provider. Very importantly, ITOM is going to become increasingly important and we'll see AI, machine learning be an essential feature of that, in fact, one of the places where we learn how to do it right. And the final one is lots going on with blockchain, but we expect greater distribution of applications, greater distribution of data, and the security technologies and the technologies for bringing that together and supporting the network formation of data and applications must be in place, and that's going to be a major area of technology and innovation in 2018. Alright, so this closes out our Action Item for this week. Once again, I'm Peter Burris. I'd like to, as always, thank the Wikibon team for participating with me today and we look forward to once again visiting with you from the Cube studios here in Palo Alto, California on the next Action Item. Thank you very much. (funky electronic music)

(upbeat techno music) >> Announcer: Good morning ladies and gentlemen. This is Lenovo Transform. Please welcome to the stage Lenovo's Rod Lappin. (upbeat instrumental) >> Alright, ladies and gentlemen. Here we go. I was out the back having a chat. A bit faster than I expected. How are you all doing this morning? (crowd cheers) >> Good? How fantastic is it to be in New York City? (crowd applauds) Excellent. So my name's Rod Lappin. I'm with the Data Center Group, obviously. I do basically anything that touches customers from our sales people, our pre-sales engineers, our architects, et cetera, all the way through to our channel partner sales engagement globally. So that's my job, but enough of that, okay? So the weather this morning, absolutely fantastic. Not a cloud in the sky, perfect. A little bit different to how it was yesterday, right? I want to thank all of you because I know a lot of you had a lot of commuting issues getting into New York yesterday with all the storms. We have a lot of people from international and domestic travel caught up in obviously the network, which blows my mind, actually, but we have a lot of people here from Europe, obviously, a lot of analysts and media people here as well as customers who were caught up in circling around the airport apparently for hours. So a big round of applause for our team from Europe. (audience applauds) Thank you for coming. We have some people who commuted a very short distance. For example, our own server general manager, Cameron (mumbles), he's out the back there. Cameron, how long did it take you to get from Raleigh to New York? An hour-and-a-half flight? >> Cameron: 17 hours. >> 17 hours, ladies and gentleman. That's a fantastic distance. I think that's amazing. But I know a lot of us, obviously, in the United States have come a long way with the storms, obviously very tough, but I'm going to call out one individual. Shaneil from Spotless. Where are you Shaneil, you're here somewhere? There he is from Australia. Shaneil how long did it take you to come in from Australia? 25 hour, ladies and gentleman. A big round of applause. That's a pretty big effort. Shaneil actually I want you to stand up, if you don't mind. I've got a seat here right next to my CEO. You've gone the longest distance. How about a big round of applause for Shaneil. We'll put him in my seat, next to YY. Honestly, Shaneil, you're doing me a favor. Okay ladies and gentlemen, we've got a big day today. Obviously, my seat now taken there, fantastic. Obviously New York City, the absolute pinnacle of globalization. I first came to New York in 1996, which was before a lot of people in the room were born, unfortunately for me these days. Was completely in awe. I obviously went to a Yankees game, had no clue what was going on, didn't understand anything to do with baseball. Then I went and saw Patrick Ewing. Some of you would remember Patrick Ewing. Saw the Knicks play basketball. Had no idea what was going on. Obviously, from Australia, and somewhat slightly height challenged, basketball was not my thing but loved it. I really left that game... That was the first game of basketball I'd ever seen. Left that game realizing that effectively the guy throws the ball up at the beginning, someone taps it, that team gets it, they run it, they put it in the basket, then the other team gets it, they put it in the basket, the other team gets it, and that's basically the entire game. So I haven't really progressed from that sort of learning or understanding of basketball since then, but for me, personally, being here in New York, and obviously presenting with all of you guys today, it's really humbling from obviously some of you would have picked my accent, I'm also from Australia. From the north shore of Sydney. To be here is just a fantastic, fantastic event. So welcome ladies and gentlemen to Transform, part of our tech world series globally in our event series and our event season here at Lenovo. So once again, big round of applause. Thank you for coming (audience applauds). Today, basically, is the culmination of what I would classify as a very large journey. Many of you have been with us on that. Customers, partners, media, analysts obviously. We've got quite a lot of our industry analysts in the room. I know Matt Eastwood yesterday was on a train because he sent a Tweet out saying there's 170 people on the WIFI network. He was obviously a bit concerned he was going to get-- Pat Moorhead, he got in at 3:30 this morning, obviously from traveling here as well with some of the challenges with the transportation, so we've got a lot of people in the room that have been giving us advice over the last two years. I think all of our employees are joining us live. All of our partners and customers through the stream. As well as everybody in this packed-out room. We're very very excited about what we're going to be talking to you all today. I want to have a special thanks obviously to our R&D team in Raleigh and around the world. They've also been very very focused on what they've delivered for us today, and it's really important for them to also see the culmination of this great event. And like I mentioned, this is really the feedback. It's not just a Lenovo launch. This is a launch based on the feedback from our partners, our customers, our employees, the analysts. We've been talking to all of you about what we want to be when we grow up from a Data Center Group, and I think you're going to hear some really exciting stuff from some of the speakers today and in the demo and breakout sessions that we have after the event. These last two years, we've really transformed the organization, and that's one of the reasons why that theme is part of our Tech World Series today. We're very very confident in our future, obviously, and where the company's going. It's really important for all of you to understand today and take every single snippet that YY, Kirk, and Christian talk about today in the main session, and then our presenters in the demo sections on what Lenovo's actually doing for its future and how we're positioning the company, obviously, for that future and how the transformation, the digital transformation, is going ahead globally. So, all right, we are now going to step into our Transform event. And I've got a quick agenda statement for you. The very first thing is we're going to hear from YY, our chairman and CEO. He's going to discuss artificial intelligence, the evolution of our society and how Lenovo is clearly positioning itself in the industry. Then, obviously, you're going to hear from Kirk Skaugen, our president of the Data Center Group, our new boss. He's going to talk about how long he's been with the company and the transformation, once again, we're making, very specifically to the Data Center Group and how much of a difference we're making to society and some of our investments. Christian Teismann, our SVP and general manager of our client business is going to talk about the 25 years of ThinkPad. This year is the 25-year anniversary of our ThinkPad product. Easily the most successful brand in our client branch or client branch globally of any vendor. Most successful brand we've had launched, and this afternoon breakout sessions, obviously, with our keynotes, fantastic sessions. Make sure you actually attend all of those after this main arena here. Now, once again, listen, ask questions, and make sure you're giving us feedback. One of the things about Lenovo that we say all the time... There is no room for arrogance in our company. Every single person in this room is a customer, partner, analyst, or an employee. We love your feedback. It's only through your feedback that we continue to improve. And it's really important that through all of the sessions where the Q&As happen, breakouts afterwards, you're giving us feedback on what you want to see from us as an organization as we go forward. All right, so what were you doing 25 years ago? I spoke about ThinkPad being 25 years old, but let me ask you this. I bet you any money that no one here knew that our x86 business is also 25 years old. So, this year, we have both our ThinkPad and our x86 anniversaries for 25 years. Let me tell you. What were you guys doing 25 years ago? There's me, 25 years ago. It's a bit scary, isn't it? It's very svelte and athletic and a lot lighter than I am today. It makes me feel a little bit conscious. And you can see the black and white shot. It shows you that even if you're really really short and you come from the wrong side of the tracks to make some extra cash, you can still do some modeling as long as no one else is in the photo to give anyone any perspective, so very important. I think I might have got one photo shoot out of that, I don't know. I had to do it, I needed the money. Let me show you another couple of photos. Very interesting, how's this guy? How cool does he look? Very svelte and athletic. I think there's no doubt. He looks much much cooler than I do. Okay, so ladies and gentlemen, without further ado, it gives me great honor to obviously introduce our very very first guest to the stage. Ladies and gentlemen, our chairman and CEO, Yuanqing Yang. or as we like to call him, YY. A big round of applause, thank you. (upbeat techno instrumental) >> Good morning everyone. Thank you, Rod, for your introduction. Actually, I didn't think I was younger than you (mumbles). I can't think of another city more fitting to host the Transform event than New York. A city that has transformed from a humble trading post 400 years ago to one of the most vibrant cities in the world today. It is a perfect symbol of transformation of our world. The rapid and the deep transformations that have propelled us from the steam engine to the Internet era in just 200 years. Looking back at 200 years ago, there was only a few companies that operated on a global scale. The total value of the world's economy was around $188 billion U.S. dollars. Today, it is only $180 for each person on earth. Today, there are thousands of independent global companies that compete to sell everything, from corn and crude oil to servers and software. They drive a robust global economy was over $75 trillion or $1,000 per person. Think about it. The global economy has multiplied almost 450 times in just two centuries. What is even more remarkable is that the economy has almost doubled every 15 years since 1950. These are significant transformation for businesses and for the world and our tiny slice of pie. This transformation is the result of the greatest advancement in technology in human history. Not one but three industrial revolutions have happened over the last 200 years. Even though those revolutions created remarkable change, they were just the beginning. Today, we are standing at the beginning of the fourth revolution. This revolution will transform how we work (mumbles) in ways that no one could imagine in the 18th century or even just 18 months ago. You are the people who will lead this revolution. Along with Lenovo, we will redefine IT. IT is no longer just information technology. It's intelligent technology, intelligent transformation. A transformation that is driven by big data called computing and artificial intelligence. Even the transition from PC Internet to mobile Internet is a big leap. Today, we are facing yet another big leap from the mobile Internet to the Smart Internet or intelligent Internet. In this Smart Internet era, Cloud enables devices, such as PCs, Smart phones, Smart speakers, Smart TVs. (mumbles) to provide the content and the services. But the evolution does not stop them. Ultimately, almost everything around us will become Smart, with building computing, storage, and networking capabilities. That's what we call the device plus Cloud transformation. These Smart devices, incorporated with various sensors, will continuously sense our environment and send data about our world to the Cloud. (mumbles) the process of this ever-increasing big data and to support the delivery of Cloud content and services, the data center infrastructure is also transforming to be more agile, flexible, and intelligent. That's what we call the infrastructure plus Cloud transformation. But most importantly, it is the human wisdom, the people learning algorithm vigorously improved by engineers that enables artificial intelligence to learn from big data and make everything around us smarter. With big data collected from Smart devices, computing power of the new infrastructure under the trend artificial intelligence, we can understand the world around us more accurately and make smarter decisions. We can make life better, work easier, and society safer and healthy. Think about what is already possible as we start this transformation. Smart Assistants can help you place orders online with a voice command. Driverless cars can run on the same road as traditional cars. (mumbles) can help troubleshoot customers problems, and the virtual doctors already diagnose basic symptoms. This list goes on and on. Like every revolution before it, intelligent transformation, will fundamentally change the nature of business. Understanding and preparing for that will be the key for the growth and the success of your business. The first industrial revolution made it possible to maximize production. Water and steam power let us go from making things by hand to making them by machine. This transformed how fast things could be produced. It drove the quantity of merchandise made and led to massive increase in trade. With this revolution, business scale expanded, and the number of customers exploded. Fifty years later, the second industrial revolution made it necessary to organize a business like the modern enterprise, electric power, and the telegraph communication made business faster and more complex, challenging businesses to become more efficient and meeting entirely new customer demands. In our own lifetimes, we have witnessed the third industrial revolution, which made it possible to digitize the enterprise. The development of computers and the Internet accelerated business beyond human speed. Now, global businesses have to deal with customers at the end of a cable, not always a handshake. While we are still dealing with the effects of a digitizing business, the fourth revolution is already here. In just the past two or three years, the growth of data and advancement in visual intelligence has been astonishing. The computing power can now process the massive amount of data about your customers, suppliers, partners, competitors, and give you insights you simply could not imagine before. Artificial intelligence can not only tell you what your customers want today but also anticipate what they will need tomorrow. This is not just about making better business decisions or creating better customer relationships. It's about making the world a better place. Ultimately, can we build a new world without diseases, war, and poverty? The power of big data and artificial intelligence may be the revolutionary technology to make that possible. Revolutions don't happen on their own. Every industrial revolution has its leaders, its visionaries, and its heroes. The master transformers of their age. The first industrial revolution was led by mechanics who designed and built power systems, machines, and factories. The heroes of the second industrial revolution were the business managers who designed and built modern organizations. The heroes of the third revolution were the engineers who designed and built the circuits and the source code that digitized our world. The master transformers of the next revolution are actually you. You are the designers and the builders of the networks and the systems. You will bring the benefits of intelligence to every corner of your enterprise and make intelligence the central asset of your business. At Lenovo, data intelligence is embedded into everything we do. How we understand our customer's true needs and develop more desirable products. How we profile our customers and market to them precisely. How we use internal and external data to balance our supply and the demand. And how we train virtual agents to provide more effective sales services. So the decisions you make today about your IT investment will determine the quality of the decisions your enterprise will make tomorrow. So I challenge each of you to seize this opportunity to become a master transformer, to join Lenovo as we work together at the forefront of the fourth industrial revolution, as leaders of the intelligent transformation. (triumphant instrumental) Today, we are launching the largest portfolio in our data center history at Lenovo. We are fully committed to the (mumbles) transformation. Thank you. (audience applauds) >> Thanks YY. All right, ladies and gentlemen. Fantastic, so how about a big round of applause for YY. (audience applauds) Obviously a great speech on the transformation that we at Lenovo are taking as well as obviously wanting to journey with our partners and customers obviously on that same journey. What I heard from him was obviously artificial intelligence, how we're leveraging that integrally as well as externally and for our customers, and the investments we're making in the transformation around IoT machine learning, obviously big data, et cetera, and obviously the Data Center Group, which is one of the key things we've got to be talking about today. So we're on the cusp of that fourth revolution, as YY just mentioned, and Lenovo is definitely leading the way and investing in those parts of the industry and our portfolio to ensure we're complimenting all of our customers and partners on what they want to be, obviously, as part of this new transformation we're seeing globally. Obviously now, ladies and gentlemen, without further ado once again, to tell us more about what's going on today, our announcements, obviously, that all of you will be reading about and seeing in the breakout and the demo sessions with our segment general managers this afternoon is our president of the data center, Mr. Kirk Skaugen. (upbeat instrumental) >> Good morning, and let me add my welcome to Transform. I just crossed my six months here at Lenovo after over 24 years at Intel Corporation, and I can tell you, we've been really busy over the last six months, and I'm more excited and enthusiastic than ever and hope to share some of that with you today. Today's event is called "Transform", and today we're announcing major new transformations in Lenovo, in the data center, but more importantly, we're celebrating the business results that these platforms are going to have on society and with international supercomputing going on in parallel in Frankfurt, some of the amazing scientific discoveries that are going to happen on some of these platforms. Lenovo has gone through some significant transformations in the last two years, since we acquired the IBM x86 business, and that's really positioning us for this next phase of growth, and we'll talk more about that later. Today, we're announcing the largest end-to-end data center portfolio in Lenovo's history, as you heard from YY, and we're really taking the best of the x86 heritage from our IBM acquisition of the x86 server business and combining that with the cost economics that we've delivered from kind of our China heritage. As we've talked to some of the analysts in the room, it's really that best of the east and best of the west is combining together in this announcement today. We're going to be announcing two new brands, building on our position as the number one x86 server vendor in both customer satisfaction and in reliability, and we're also celebrating, next month in July, a very significant milestone, which will we'll be shipping our 20 millionth x86 server into the industry. For us, it's an amazing time, and it's an inflection point to kind of look back, pause, but also share the next phase of Lenovo and the exciting vision for the future. We're also making some declarations on our vision for the future today. Again, international supercomputing's going on, and, as it turns out, we're the fastest growing supercomputer company on earth. We'll talk about that. Our goal today that we're announcing is that we plan in the next several years to become number one in supercomputing, and we're going to put the investments behind that. We're also committing to our customers that we're going to disrupt the status quo and accelerate the pace of innovation, not just in our legacy server solutions, but also in Software-Defined because what we've heard from you is that that lack of legacy, we don't have a huge router business or a huge sand business to protect. It's that lack of legacy that's enabling us to invest and get ahead of the curb on this next transition to Software-Defined. So you're going to see us doing that through building our internal IP, through some significant joint ventures, and also through some merges and acquisitions over the next several quarters. Altogether, we're driving to be the most trusted data center provider in the industry between us and our customers and our suppliers. So a quick summary of what we're going to dive into today, both in my keynote as well as in the breakout sessions. We're in this transformation to the next phase of Lenovo's data center growth. We're closing out our previous transformation. We actually, believe it or not, in the last six months or so, have renegotiated 18,000 contracts in 160 countries. We built out an entire end-to-end organization from development and architecture all the way through sales and support. This next transformation, I think, is really going to excite Lenovo shareholders. We're building the largest data center portfolio in our history. I think when IBM would be up here a couple years ago, we might have two or three servers to announce in time to market with the next Intel platform. Today, we're announcing 14 new servers, seven new storage systems, an expanded set of networking portfolios based on our legacy with Blade Network Technologies and other companies we've acquired. Two new brands that we'll talk about for both data center infrastructure and Software-Defined, a new set of premium premiere services as well as a set of engineered solutions that are going to help our customers get to market faster. We're going to be celebrating our 20 millionth x86 server, and as Rod said, 25 years in x86 server compute, and Christian will be up here talking about 25 years of ThinkPad as well. And then a new end-to-end segmentation model because all of these strategies without execution are kind of meaningless. I hope to give you some confidence in the transformation that Lenovo has gone through as well. So, having observed Lenovo from one of its largest partners, Intel, for more than a couple decades, I thought I'd just start with why we have confidence on the foundation that we're building off of as we move from a PC company into a data center provider in a much more significant way. So Lenovo today is a company of $43 billion in sales. Absolutely astonishing, it puts us at about Fortune 202 as a company, with 52,000 employees around the world. We're supporting and have service personnel, almost a little over 10,000 service personnel that service our servers and data center technologies in over 160 countries that provide onsite service and support. We have seven data center research centers. One of the reasons I came from Intel to Lenovo was that I saw that Lenovo became number one in PCs, not through cost cutting but through innovation. It was Lenovo that was partnering on the next-generation Ultrabooks and two-in-ones and tablets in the modem mods that you saw, but fundamentally, our path to number one in data center is going to be built on innovation. Lastly, we're one of the last companies that's actually building not only our own motherboards at our own motherboard factories, but also with five global data center manufacturing facilities. Today, we build about four devices a second, but we also build over 100 servers per hour, and the cost economics we get, and I just visited our Shenzhen factory, of having everything from screws to microprocessors come up through the elevator on the first floor, go left to build PCs and ThinkPads and go right to build server technology, means we have some of the world's most cost effective solutions so we can compete in things like hyperscale computing. So it's with that that I think we're excited about the foundation that we can build off of on the Data Center Group. Today, as we stated, this event is about transformation, and today, I want to talk about three things we're going to transform. Number one is the customer experience. Number two is the data center and our customer base with Software-Defined infrastructure, and then the third is talk about how we plan to execute flawlessly with a new transformation that we've had internally at Lenovo. So let's dive into it. On customer experience, really, what does it mean to transform customer experience? Industry pundits say that if you're not constantly innovating, you can fall behind. Certainly the technology industry that we're in is transforming at record speed. 42% of business leaders or CIOs say that digital first is their top priority, but less than 50% actually admit that they have a strategy to get there. So people are looking for a partner to keep pace with that innovation and change, and that's really what we're driving to at Lenovo. So today we're announcing a set of plans to take another step function in customer experience, and building off of our number one position. Just recently, Gartner shows Lenovo as the number 24 supply chains of companies over $12 billion. We're up there with Amazon, Coca-Cola, and we've now completely re-architected our supply chain in the Data Center Group from end to end. Today, we can deliver 90% of our SKUs, order to ship in less than seven days. The artificial intelligence that YY mentioned is optimizing our performance even further. In services, as we talked about, we're now in 160 countries, supporting on-site support, 50 different call centers around the world for local language support, and we're today announcing a whole set of new premiere support services that I'll get into in a second. But we're building on what's already better than 90% customer satisfaction in this space. And then in development, for all the engineers out there, we started foundationally for this new set of products, talking about being number one in reliability and the lowest downtime of any x86 server vendor on the planet, and these systems today are architected to basically extend that leadership position. So let me tell you the realities of reliability. This is ITIC, it's a reliability report. 750 CIOs and IT managers from more than 20 countries, so North America, Europe, Asia, Australia, South America, Africa. This isn't anything that's paid for with sponsorship dollars. Lenovo has been number one for four years running on x86 reliability. This is the amount of downtime, four hours or more, in mission-critical environments from the leading x86 providers. You can see relative to our top two competitors that are ahead of us, HP and Dell, you can see from ITIC why we are building foundationally off of this, and why it's foundational to how we're developing these new platforms. In customer satisfaction, we are also rated number one in x86 server customer satisfaction. This year, we're now incentivizing every single Lenovo employee on customer satisfaction and customer experience. It's been a huge mandate from myself and most importantly YY as our CEO. So you may say well what is the basis of this number one in customer satisfaction, and it's not just being number one in one category, it's actually being number one in 21 of the 22 categories that TBR talks about. So whether it's performance, support systems, online product information, parts and availability replacement, Lenovo is number one in 21 of the 22 categories and number one for six consecutive studies going back to Q1 of 2015. So this, again, as we talk about the new product introductions, it's something that we absolutely want to build on, and we're humbled by it, and we want to continue to do better. So let's start now on the new products and talk about how we're going to transform the data center. So today, we are announcing two new product offerings. Think Agile and ThinkSystem. If you think about the 25 years of ThinkPad that Christian's going to talk about, Lenovo has a continuous learning culture. We're fearless innovators, we're risk takers, we continuously learn, but, most importantly, I think we're humble and we have some humility. That when we fail, we can fail fast, we learn, and we improve. That's really what drove ThinkPad to number one. It took about eight years from the acquisition of IBM's x86 PC business before Lenovo became number one, but it was that innovation, that listening and learning, and then improving. As you look at the 25 years of ThinkPad, there were some amazing successes, but there were also some amazing failures along the way, but each and every time we learned and made things better. So this year, as Rod said, we're not just celebrating 25 years of ThinkPad, but we're celebrating 25 years of x86 server development since the original IBM PC servers in 1992. It's a significant day for Lenovo. Today, we're excited to announce two new brands. ThinkSystem and ThinkAgile. It's an important new announcement that we started almost three years ago when we acquired the x86 server business. Why don't we run a video, and we'll show you a little bit about ThinkSystem and ThinkAgile. >> Narrator: The status quo is comfortable. It gets you by, but if you think that's good enough for your data center, think again. If adoption is becoming more complicated when it should be simpler, think again. If others are selling you technology that's best for them, not for you, think again. It's time for answers that win today and tomorrow. Agile, innovative, different. Because different is better. Different embraces change and makes adoption simple. Different designs itself around you. Using 25 years of innovation and design and R&D. Different transforms, it gives you ThinkSystem. World-record performance, most reliable, easy to integrate, scales faster. Different empowers you with ThinkAgile. It redefines the experience, giving you the speed of Cloud and the control of on-premise IT. Responding faster to what your business really needs. Different defines the future. Introducing Lenovo ThinkSystem and ThinkAgile. (exciting and slightly aggressive digital instrumental) >> All right, good stuff, huh? (audience applauds) So it's built off of this 25-year history of us being in the x86 server business, the commitment we established three years ago after acquiring the x86 server business to be and have the most reliable, the most agile, and the most highest-performing data center solutions on the planet. So today we're announcing two brands. ThinkSystem is for the traditional data center infrastructure, and ThinkAgile is our brand for Software-Defined infrastructure. Again, the teams challenge themselves from the start, how do we build off this rich heritage, expanding our position as number one in customer satisfaction, reliability, and one of the world's best supply chains. So let's start and look at the next set of solutions. We have always prided ourself that little things don't mean a lot. Little things mean everything. So today, as we said on the legacy solutions, we have over 30 world-record performance benchmarks on Intel architecture, and more than actually 150 since we started tracking this back in 2001. So it's the little pieces of innovation. It's the fine tuning that we do with our partners like an Intel or a Microsoft, an SAP, VMware, and Nutanix that's enabling us to get these world-record performance benchmarks, and with this next generation of solutions we think we'll continue to certainly do that. So today we're announcing the most comprehensive portfolio ever in our data center history. There's 14 servers, seven storage devices, and five network switches. We're also announcing, which is super important to our customer base, a set of new premiere service options. That's giving you fast access directly to a level two support person. No automated response system involved. You get to pick up the phone and directly talk to a level two support person that's going to have end-to-end ownership of the customer experience for ThinkSystem. With ThinkAgile, that's going to be completely bundled with every ThinkAgile you purchase. In addition, we're having white glove service on site that will actually unbox the product for you and get it up and running. It's an entirely new set of solutions for hybrid Cloud, for big data analytics and database applications around these engineered solutions. These are like 40- to 50-page guides where we fine-tuned the most important applications around virtual desktop infrastructure and those kinds of applications, working side by side with all of our ISP partners. So significantly expanding, not just the hardware but the software solutions that, obviously, you, as our customers, are running. So if you look at ThinkSystem innovation, again, it was designed for the ultimate in flexibility, performance, and reliability. It's a single now-unified brand that combines what used to be the Lenovo Think server and the IBM System x products now into a single brand that spans server, storage, and networking. We're basically future-proofing it for the next-generation data center. It's a significantly simplified portfolio. One of the big pieces that we've heard is that the complexity of our competitors has really been overwhelming to customers. We're building a more flexible, more agile solution set that requires less work, less qualification, and more future proofing. There's a bunch of things in this that you'll see in the demos. Faster time-to-service in terms of the modularity of the systems. 12% faster service equating to almost $50 thousand per hour of reduced downtime. Some new high-density options where we have four nodes and a 2U, twice the density to improve and reduce outbacks and mission-critical workloads. And then in high-performance computing and supercomputing, we're going to spend some time on that here shortly. We're announcing new water-cooled solutions. We have some of the most premiere water-cooled solutions in the world, with more than 25 patents pending now, just in the water-cooled solutions for supercomputing. The performance that we think we're going to see out of these systems is significant. We're building off of that legacy that we have today on the existing Intel solutions. Today, we believe we have more than 50% of SAP HANA installations in the world. In fact, SAP just went public that they're running their internal SAP HANA on Lenovo hardware now. We're seeing a 59% increase in performance on SAP HANA generation on generation. We're seeing 31% lower total cost to ownership. We believe this will continue our position of having the highest level of five-nines in the x86 server industry. And all of these servers will start being available later this summer when the Intel announcements come out. We're also announcing the largest storage portfolio in our history, significantly larger than anything we've done in the past. These are all available today, including some new value class storage offerings. Our network portfolio is expanding now significantly. It was a big surprise when I came to Lenovo, seeing the hundreds of engineers we had from the acquisition of Blade Network Technologies and others with our teams in Romania, Santa Clara, really building out both the embedded portfolio but also the top racks, which is around 10 gig, 25 gig, and 100 gig. Significantly better economics, but all the performance you'd expect from the largest networking companies in the world. Those are also available today. ThinkAgile and Software-Defined, I think the one thing that has kind of overwhelmed me since coming in to Lenovo is we are being embraced by our customers because of our lack of legacy. We're not trying to sell you one more legacy SAN at 65% margins. ThinkAgile really was founded, kind of born free from the shackles of legacy thinking and legacy infrastructure. This is just the beginning of what's going to be an amazing new brand in the transformation to Software-Defined. So, for Lenovo, we're going to invest in our own internal organic IP. I'll foreshadow: There's some significant joint ventures and some mergers and acquisitions that are going to be coming in this space. And so this will be the foundation for our Software-Defined networking and storage, for IoT, and ultimately for the 5G build-out as well. This is all built for data centers of tomorrow that require fluid resources, tightly integrated software and hardware in kind of an appliance, selling at the rack level, and so we'll show you how that is going to take place here in a second. ThinkAgile, we have a few different offerings. One is around hyperconverged storage, Hybrid Cloud, and also Software-Defined storage. So we're really trying to redefine the customer experience. There's two different solutions we're having today. It's a Microsoft Azure solution and a Nutanix solution. These are going to be available both in the appliance space as well as in a full rack solution. We're really simplifying and trying to transform the entire customer experience from how you order it. We've got new capacity planning tools that used to take literally days for us to get the capacity planning done. It's now going down to literally minutes. We've got new order, delivery, deployment, administration service, something we're calling ThinkAgile Advantage, which is the white glove unboxing of the actual solutions on prem. So the whole thing when you hear about it in the breakout sessions about transforming the entire customer experience with both an HX solution and an SX solution. So again, available at the rack level for both Nutanix and for Microsoft Solutions available in just a few months. Many of you in the audience since the Microsoft Airlift event in Seattle have started using these things, and the feedback to date has been fantastic. We appreciate the early customer adoption that we've seen from people in the audience here. So next I want to bring up one of our most important partners, and certainly if you look at all of these solutions, they're based on the next-generation Intel Xeon scalable processor that's going to be announcing very very soon. I want to bring on stage Rupal Shah, who's the corporate vice president and general manager of Global Data Center Sales with Intel, so Rupal, please join me. (upbeat instrumental) So certainly I have long roots at Intel, but why don't you talk about, from Intel's perspective, why Lenovo is an important partner for Lenovo. >> Great, well first of all, thank you very much. I've had the distinct pleasure of not only working with Kirk for many many years, but also working with Lenovo for many years, so it's great to be here. Lenovo is not only a fantastic supplier and leader in the industry for Intel-based servers but also a very active partner in the Intel ecosystem. In the Intel ecosystem, specifically, in our partner programs and in our builder programs around Cloud, around the network, and around storage, I personally have had a long history in working with Lenovo, and I've seen personally that PC transformation that you talked about, Kirk, and I believe, and I know that Intel believes in Lenovo's ability to not only succeed in the data center but to actually lead in the data center. And so today, the ThinkSystem and ThinkAgile announcement is just so incredibly important. It's such a great testament to our two companies working together, and the innovation that we're able to bring to the market, and all of it based on the Intel Xeon scalable processor. >> Excellent, so tell me a little bit about why we've been collaborating, tell me a little bit about why you're excited about ThinkSystem and ThinkAgile, specifically. >> Well, there are a lot of reasons that I'm excited about the innovation, but let me talk about a few. First, both of our companies really stand behind the fact that it's increasingly a hybrid world. Our two companies offer a range of solutions now to customers to be able to address their different workload needs. ThinkSystem really brings the best, right? It brings incredible performance, flexibility in data center deployment, and industry-leading reliability that you've talked about. And, as always, Xeon has a history of being built for the data center specifically. The Intel Xeon scalable processor is really re-architected from the ground up in order to enhance compute, network, and storage data flows so that we can deliver workload optimized performance for both a wide range of traditional workloads and traditional needs but also some emerging new needs in areas like artificial intelligence. Second is when it comes to the next generation of Cloud infrastructure, the new Lenovo ThinkAgile line offers a truly integrated offering to address data center pain points, and so not only are you able to get these pretested solutions, but these pretested solutions are going to get deployed in your infrastructure faster, and they're going to be deployed in a way that's going to meet your specific needs. This is something that is new for both of us, and it's an incredible innovation in the marketplace. I think that it's a great addition to what is already a fantastic portfolio for Lenovo. >> Excellent. >> Finally, there's high-performance computing. In high-performance computing. First of all, congratulations. It's a big week, I think, for both of us. Fantastic work that we've been doing together in high-performance computing and actually bringing the best of the best to our customers, and you're going to hear a whole lot more about that. We obviously have a number of joint innovation centers together between Intel and Lenovo. Tell us about some of the key innovations that you guys are excited about. >> Well, Intel and Lenovo, we do have joint innovation labs around the world, and we have a long and strong history of very tight collaboration. This has brought a big wave of innovation to the marketplace in areas like software-defined infrastructure. Yet another area is working closely on a joint vision that I think our two companies have in artificial intelligence. Intel is very committed to the world of AI, and we're committed in making the investments required in technology development, in training, and also in R&D to be able to deliver end-to-end solutions. So with Intel's comprehensive technology portfolio and Lenovo's development and innovation expertise, it's a great combination in this space. I've already talked a little bit about HPC and so has Kirk, and we're going to hear a little bit more to come, but we're really building the fastest compute solutions for customers that are solving big problems. Finally, we often talk about processors from Intel, but it's not just about the processors. It's way beyond that. It's about engaging at the solution level for our customers, and I'm so excited about the work that we've done together with Lenovo to bring to market products like Intel Omni-Path Architecture, which is really the fabric for high-performance data centers. We've got a great showing this week with Intel Omni-Path Architecture, and I'm so grateful for all the work that we've done to be able to bring true solutions to the marketplace. I am really looking forward to our future collaboration with Lenovo as we have in the past. I want to thank you again for inviting me here today, and congratulations on a fantastic launch. >> Thank you, Rupal, very much, for the long partnership. >> Thank you. (audience applauds) >> Okay, well now let's transition and talk a little bit about how Lenovo is transforming. The first thing we've done when I came on board about six months ago is we've transformed to a truly end-to-end organization. We're looking at the market segments I think as our customers define them, and we've organized into having vice presidents and senior vice presidents in charge of each of these major groups, thinking really end to end, from architecture all the way to end of life and customer support. So the first is hyperscale infrastructure. It's about 20% on the market by 2020. We've hired a new vice president there to run that business. Given we can make money in high-volume desktop PCs, it's really the manufacturing prowess, deep engineering collaboration that's enabling us to sell into Baidu, and to Alibaba, Tencent, as well as the largest Cloud vendors on the West Coast here in the United States. We believe we can make money here by having basically a deep deep engineering engagement with our key customers and building on the PC volume economics that we have within Lenovo. On software-defined infrastructure, again, it's that lack of legacy that I think is propelling us into this space. We're not encumbered by trying to sell one more legacy SAN or router, and that's really what's exciting us here, as we transform from a hardware to a software-based company. On HPC and AI, as we said, we'll talk about this in a second. We're the fastest-growing supercomputing company on earth. We have aspirations to be the largest supercomputing company on earth, with China and the U.S. vying for number one in that position, it puts us in a good position there. We're going to bridge that into artificial intelligence in our upcoming Shanghai Tech World. The entire day is around AI. In fact, YY has committed $1.2 billion to artificial intelligence over the next few years of R&D to help us bridge that. And then on data center infrastructure, is really about moving to a solutions based infrastructure like our position with SAP HANA, where we've gone deep with engineers on site at SAP, SAP running their own infrastructure on Lenovo and building that out beyond just SAP to other solutions in the marketplace. Overall, significantly expanding our services portfolio to maintain our number one customer satisfaction rating. So given ISC, or International Supercomputing, this week in Frankfurt, and a lot of my team are actually over there, I wanted to just show you the transformation we've had at Lenovo for delivering some of the technology to solve some of the most challenging humanitarian problems on earth. Today, we are the fastest-growing supercomputer company on the planet in terms of number of systems on the Top 500 list. We've gone from zero to 92 positions in just a few short years, but IDC also positions Lenovo as the fast-growing supercomputer and HPC company overall at about 17% year on year growth overall, including all of the broad channel, the regional universities and this kind of thing, so this is an exciting place for us. I'm excited today that Sergi has come all the way from Spain to be with us today. It's an exciting time because this week we announce the fastest next-generation Intel supercomputer on the planet at Barcelona Supercomputer. Before I bring Sergi on stage, let's run a video and I'll show you why we're excited about the capabilities of these next-generation supercomputers. Run the video please. >> Narrator: Different creates one of the most powerful supercomputers for the Barcelona Supercomputer Center. A high-performance, high-capacity design to help shape tomorrow's world. Different designs what's best for you, with 25 years of end-to-end expertise delivering large-scale solutions. It integrates easily with technology from industry partners, through deep collaboration with the client to manufacture, test, configure, and install at global scale. Different achieves the impossible. The first of a new series. A more energy-efficient supercomputer yet 10 times more powerful than its predecessor. With over 3,400 Lenovo ThinkSystem servers, each performing over two trillion calculations per second, giving us 11.1 petaflop capacity. Different powers MareNostrum, a supercomputer that will help us better understand cancer, help discover disease-fighting therapies, predict the impact of climate change. MareNostrom 4.0 promises to uncover answers that will help solve humanities greatest challenges. (audience applauds) >> So please help me in welcoming operations director of the Barcelona Supercomputer Center, Sergi Girona. So welcome, and again, congratulations. It's been a big week for both of us. But I think for a long time, if you haven't been to Barcelona, this has been called the world's most beautiful computer because it's in one of the most gorgeous chapels in the world as you can see here. Congratulations, we now are number 13 on the Top500 list and the fastest next-generation Intel computer. >> Thank you very much, and congratulations to you as well. >> So maybe we can just talk a little bit about what you've done over the last few months with us. >> Sure, thank you very much. It is a pleasure for me being invited here to present to you what we've been doing with Lenovo so far and what we are planning to do in the next future. I'm representing here Barcelona Supercomputing Center. I am presenting high-performance computing services to science and industry. How we see these science services has changed the paradigm of science. We are coming from observation. We are coming from observation on the telescopes and the microscopes and the building of infrastructures, but this is not affordable anymore. This is very expensive, so it's not possible, so we need to move to simulations. So we need to understand what's happening in our environment. We need to predict behaviors only going through simulation. So, at BSC, we are devoted to provide services to industry, to science, but also we are doing our own research because we want to understand. At the same time, we are helping and developing the new engineers of the future on the IT, on HPC. So we are having four departments based on different topics. The main and big one is wiling to understand how we are doing the next supercomputers from the programming level to the performance to the EIA, so all these things, but we are having also interest on what about the climate change, what's the air quality that we are having in our cities. What is the precision medicine we need to have. How we can see that the different drugs are better for different individuals, for different humans, and of course we have an energy department, taking care of understanding what's the better optimization for a cold, how we can save energy running simulations on different topics. But, of course, the topic of today is not my research, but it's the systems we are building in Barcelona. So this is what we have been building in Barcelona so far. From left to right, you have the preparation of the facility because this is 160 square meters with 1.4 megabytes, so that means we need new piping, we need new electricity, at the same time in the center we have to install the core services of the system, so the management practices, and then on the right-hand side you have installation of the networking, the Omni-Path by Intel. Because all of the new racks have to be fully integrated and they need to come into operation rapidly. So we start deployment of the system May 15, and we've now been ending and coming in production July first. All the systems, all the (mumbles) systems from Lenovo are coming before being open and available. What we've been installing here in Barcelona is general purpose systems for our general workload of the system with 3,456 nodes. Everyone of those having 48 cores, 96 gigabytes main memory for a total capacity of about 400 terabytes memory. The objective of this is that we want to, all the system, all the processors, to work together for a single execution for running altogether, so this is an example of the platinum processors from Intel having 24 cores each. Of course, for doing this together with all the cores in the same application, we need a high-speed network, so this is Omni-Path, and of course all these cables are connecting all the nodes. Noncontention, working together, cooperating. Of course, this is a bunch of cables. They need to be properly aligned in switches. So here you have the complete presentation. Of course, this is general purpose, but we wanted to invest with our partners. We want to understand what the supercomputers we wanted to install in 2020, (mumbles) Exascale. We want to find out, we are installing as well systems with different capacities with KNH, with power, with ARM processors. We want to leverage our obligations for the future. We want to make sure that in 2020 we are ready to move our users rapidly to the new technologies. Of course, this is in total, giving us a total capacity of 13.7 petaflops that it's 12 times the capacity of the former MareNostrum four years ago. We need to provide the services to our scientists because they are helping to solve problems for humanity. That's the place we are going to go. Last is inviting you to come to Barcelona to see our place and our chapel. Thank you very much (audience applauds). >> Thank you. So now you can all go home to your spouses and significant others and say you have a formal invitation to Barcelona, Spain. So last, I want to talk about what we've done to transform Lenovo. I think we all know the history is nice but without execution, none of this is going to be possible going forward, so we have been very very busy over the last six months to a year of transforming Lenovo's data center organization. First, we moved to a dedicated end-to-end sales and marketing organization. In the past, we had people that were shared between PC and data center, now thousands of sales people around the world are 100% dedicated end to end to our data center clients. We've moved to a fully integrated and dedicated supply chain and procurement organization. A fully dedicated quality organization, 100% dedicated to expanding our data center success. We've moved to a customer-centric segment, again, bringing in significant new leaders from outside the company to look end to end at each of these segments, supercomputing being very very different than small business, being very very different than taking care of, for example, a large retailer or bank. So around hyperscale, software-defined infrastructure, HPC, AI, and supercomputing and data center solutions-led infrastructure. We've built out a whole new set of global channel programs. Last year, or a year passed, we have five different channel programs around the world. We've now got one simplified channel program for dealer registration. I think our channel is very very energized to go out to market with Lenovo technology across the board, and a whole new set of system integrator relationships. You're going to hear from one of them in Christian's discussion, but a whole new set of partnerships to build solutions together with our system integrative partners. And, again, as I mentioned, a brand new leadership team. So look forward to talking about the details of this. There's been a significant amount of transformation internal to Lenovo that's led to the success of this new product introduction today. So in conclusion, I want to talk about the news of the day. We are transforming Lenovo to the next phase of our data center growth. Again, in over 160 countries, closing on that first phase of transformation and moving forward with some unique declarations. We're launching the largest portfolio in our history, not just in servers but in storage and networking, as everything becomes kind of a software personality on top of x86 Compute. We think we're very well positioned with our scale on PCs as well as data center. Two new brands for both data center infrastructure and Software-Defined, without the legacy shackles of our competitors, enabling us to move very very quickly into Software-Defined, and, again, foreshadowing some joint ventures in M&A that are going to be coming up that will further accelerate ourselves there. New premiere support offerings, enabling you to get direct access to level two engineers and white glove unboxing services, which are going to be bundled along with ThinkAgile. And then celebrating the milestone of 25 years in x86 server compute, not just ThinkPads that you'll hear about shortly, but also our 20 million server shipping next month. So we're celebrating that legacy and looking forward to the next phase. And then making sure we have the execution engine to maintain our position and grow it, being number one in customer satisfaction and number one in quality. So, with that, thank you very much. I look forward to seeing you in the breakouts today and talking with many of you, and I'll bring Rod back up to transition us to the next section. Thank you. (audience applauds) >> All right, Kirk, thank you, sir. All right, ladies and gentlemen, what did you think of that? How about a big round of applause for ThinkAgile, ThinkSystems new brands? (audience applauds) And, obviously, with that comes a big round of applause, for Kirk Skaugen, my boss, so we've got to give him a big round of applause, please. I need to stay employed, it's very important. All right, now you just heard from Kirk about some of the new systems, the brands. How about we have a quick look at the video, which shows us the brand new DCG images. >> Narrator: Legacy thinking is dead, stuck in the past, selling the same old stuff, over and over. So then why does it seem like a data center, you know, that thing powering all our little devices and more or less everything interaction today is still stuck in legacy thinking because it's rigid, inflexible, slow, but that's not us. We don't do legacy. We do different. Because different is fearless. Different reduces Cloud deployment from days to hours. Different creates agile technology that others follow. Different is fluid. It uses water-cooling technology to save energy. It co-innovates with some of the best minds in the industry today. Different is better, smarter. Maybe that's why different already holds so many world-record benchmarks in everything. From virtualization to database and application performance or why it's number one in reliability and customer satisfaction. Legacy sells you what they want. Different builds the data center you need without locking you in. Introducing the Data Center Group at Lenovo. Different... Is better. >> All right, ladies and gentlemen, a big round of applause, once again (mumbles) DCG, fantastic. And I'm sure all of you would agree, and Kirk mentioned it a couple of times there. No legacy means a real consultative approach to our customers, and that's something that we really feel is differentiated for ourselves. We are effectively now one of the largest startups in the DCG space, and we are very much ready to disrupt. Now, here in New York City, obviously, the heart of the fashion industry, and much like fashion, as I mentioned earlier, we're different, we're disruptive, we're agile, smarter, and faster. I'd like to say that about myself, but, unfortunately, I can't. But those of you who have observed, you may have noticed that I, too, have transformed. I don't know if anyone saw that. I've transformed from the pinstripe blue, white shirt, red tie look of the, shall we say, our predecessors who owned the x86 business to now a very Lenovo look. No tie and consequently a little bit more chic New York sort of fashion look, shall I say. Nothing more than that. So anyway, a bit of a transformation. It takes a lot to get to this look, by the way. It's a lot of effort. Our next speaker, Christian Teismann, is going to talk a lot about the core business of Lenovo, which really has been, as we've mentioned today, our ThinkPad, 25-year anniversary this year. It's going to be a great celebration inside Lenovo, and as we get through the year and we get closer and closer to the day, you'll see a lot more social and digital work that engages our customers, partners, analysts, et cetera, when we get close to that birthday. Customers just generally are a lot tougher on computers. We know they are. Whether you hang onto it between meetings from the corner of the Notebook, and that's why we have magnesium chassis inside the box or whether you're just dropping it or hypothetically doing anything else like that. We do a lot of robust testing on these products, and that's why it's the number one branded Notebook in the world. So Christian talks a lot about this, but I thought instead of having him talk, I might just do a little impromptu jump back stage and I'll show you exactly what I'm talking about. So follow me for a second. I'm going to jaunt this way. I know a lot of you would have seen, obviously, the front of house here, what we call the front of house. Lots of videos, et cetera, but I don't think many of you would have seen the back of house here, so I'm going to jump through the back here. Hang on one second. You'll see us when we get here. Okay, let's see what's going on back stage right now. You can see one of the team here in the back stage is obviously working on their keyboard. Fantastic, let me tell you, this is one of the key value props of this product, obviously still working, lots of coffee all over it, spill-proof keyboard, one of the key value propositions and why this is the number one laptop brand in the world. Congratulations there, well done for that. Obviously, we test these things. Height, distances, Mil-SPEC approved, once again, fantastic product, pick that up, lovely. Absolutely resistant to any height or drops, once again, in line with our Mil-SPEC. This is Charles, our producer and director back stage for the absolute event. You can see, once again, sand, coincidentally, in Manhattan, who would have thought a snow storm was occurring here, but you can throw sand. We test these things for all of the elements. I've obviously been pretty keen on our development solutions, having lived in Japan for 12 years. We had this originally designed in 1992 by (mumbles), he's still our chief development officer still today, fantastic, congratulations, a sand-enhanced notebook, he'd love that. All right, let's get back out front and on with the show. Watch the coffee. All right, how was that? Not too bad (laughs). It wasn't very impromptu at all, was it? Not at all a set up (giggles). How many people have events and have a bag of sand sitting on the floor right next to a Notebook? I don't know. All right, now it's time, obviously, to introduce our next speaker, ladies and gentlemen, and I hope I didn't steal his thunder, obviously, in my conversations just now that you saw back stage. He's one of my best friends in Lenovo and easily is a great representative of our legendary PC products and solutions that we're putting together for all of our customers right now, and having been an ex-Pat with Lenovo in New York really calls this his second home and is continually fighting with me over the fact that he believes New York has better sushi than Tokyo, let's welcome please, Christian Teismann, our SVP, Commercial Business Segment, and PC Smart Office. Christian Teismann, come on up mate. (audience applauds) >> So Rod thank you very much for this wonderful introduction. I'm not sure how much there is to add to what you have seen already back stage, but I think there is a 25-year of history I will touch a little bit on, but also a very big transformation. But first of all, welcome to New York. As Rod said, it's my second home, but it's also a very important place for the ThinkPad, and I will come back to this later. The ThinkPad is thee industry standard of business computing. It's an industry icon. We are celebrating 25 years this year like no other PC brand has done before. But this story today is not looking back only. It's a story looking forward about the future of PC, and we see a transformation from PCs to personalized computing. I am privileged to lead the commercial PC and Smart device business for Lenovo, but much more important beyond product, I also am responsible for customer experience. And this is what really matters on an ongoing basis. But allow me to stay a little bit longer with our iconic ThinkPad and history of the last 25 years. ThinkPad has always stand for two things, and it always will be. Highest quality in the industry and technology innovation leadership that matters. That matters for you and that matters for your end users. So, now let me step back a little bit in time. As Rod was showing you, as only Rod can do, reliability is a very important part of ThinkPad story. ThinkPads have been used everywhere and done everything. They have survived fires and extreme weather, and they keep surviving your end users. For 25 years, they have been built for real business. ThinkPad also has a legacy of first innovation. There are so many firsts over the last 25 years, we could spend an hour talking about them. But I just want to cover a couple of the most important milestones. First of all, the ThinkPad 1992 has been developed and invented in Japan on the base design of a Bento box. It was designed by the famous industrial designer, Richard Sapper. Did you also know that the ThinkPad was the first commercial Notebook flying into space? In '93, we traveled with the space shuttle the first time. For two decades, ThinkPads were on every single mission. Did you know that the ThinkPad Butterfly, the iconic ThinkPad that opens the keyboard to its size, is the first and only computer showcased in the permanent collection of the Museum of Modern Art, right here in New York City? Ten years later, in 2005, IBM passed the torch to Lenovo, and the story got even better. Over the last 12 years, we sold over 100 million ThinkPads, four times the amount IBM sold in the same time. Many customers were concerned at that time, but since then, the ThinkPad has remained the best business Notebook in the industry, with even better quality, but most important, we kept innovating. In 2012, we unveiled the X1 Carbon. It was the thinnest, lightest, and still most robust business PC in the world. Using advanced composited materials like a Formula One car, for super strengths, X1 Carbon has become our ThinkPad flagship since then. We've added an X1 Carbon Yoga, a 360-degree convertible. An X1 Carbon tablet, a detachable, and many new products to come in the future. Over the last few years, many new firsts have been focused on providing the best end-user experience. The first dual-screen mobile workstation. The first Windows business tablet, and the first business PC with OLED screen technology. History is important, but a massive transformation is on the way. Future success requires us to think beyond the box. Think beyond hardware, think beyond notebooks and desktops, and to think about the future of personalized computing. Now, why is this happening? Well, because the business world is rapidly changing. Looking back on history that YY gave, and the acceleration of innovation and how it changes our everyday life in business and in personal is driving a massive change also to our industry. Most important because you are changing faster than ever before. Human capital is your most important asset. In today's generation, they want to have freedom of choice. They want to have a product that is tailored to their specific needs, every single day, every single minute, when they use it. But also IT is changing. The Cloud, constant connectivity, 5G will change everything. Artificial intelligence is adding things to the capability of an infrastructure that we just are starting to imagine. Let me talk about the workforce first because it's the most important part of what drives this. The millennials will comprise more than half of the world's workforce in 2020, three years from now. Already, one out of three millennials is prioritizing mobile work environment over salary, and for nearly 60% of all new hires in the United States, technology is a very important factor for their job search in terms of the way they work and the way they are empowered. This new generation of new employees has grown up with PCs, with Smart phones, with tablets, with touch, for their personal use and for their occupation use. They want freedom. Second, the workplace is transforming. The video you see here in the background. This is our North America headquarters in Raleigh, where we have a brand new Smart workspace. We have transformed this to attract the new generation of workers. It has fewer traditional workspaces, much more meaning and collaborative spaces, and Lenovo, like many companies, is seeing workspaces getting smaller. An average workspace per employee has decreased by 30% over the last five years. Employees are increasingly mobile, but, if they come to the office, they want to collaborate with their colleagues. The way we collaborate and communicate is changing. Investment in new collaboration technology is exploding. The market of collaboration technology is exceeding the market of personal computing today. It will grow in the future. Conference rooms are being re-imagined from a ratio of 50 employees to one large conference room. Today, we are moving into scenarios of four employees to one conference room, and these are huddle rooms, pioneer spaces. Technology is everywhere. Video, mega-screens, audio, electronic whiteboards. Adaptive technologies are popping up and change the way we work. As YY said earlier, the pace of the revolution is astonishing. So personalized computing will transform the PC we all know. There's a couple of key factors that we are integrating in our next generations of PC as we go forward. The most important trends that we see. First of all, choose your own device. We talked about this new generation of workforce. Employees who are used to choosing their own device. We have to respond and offer devices that are tailored to each end user's needs without adding complexity to how we operate them. PC is a service. Corporations increasingly are looking for on-demand computing in data center as well as in personal computing. Customers want flexibility. A tailored management solution and a services portfolio that completes the lifecycle of the device. Agile IT, even more important, corporations want to run an infrastructure that is agile, instant respond to their end-customer needs, that is self provisioning, self diagnostic, and remote software repair. Artificial intelligence. Think about artificial intelligence for you personally as your personal assistant. A personal assistant which does understand you, your schedule, your travel, your next task, an extension of yourself. We believe the PC will be the center of this mobile device universe. Mobile device synergy. Each of you have two devices or more with you. They need to work together across different operating systems, across different platforms. We believe Lenovo is uniquely positioned as the only company who has a Smart phone business, a PC business, and an infrastructure business to really seamlessly integrate all of these devices for simplicity and for efficiency. Augmented reality. We believe augmented reality will drive significantly productivity improvements in commercial business. The core will be to understand industry-specific solutions. New processes, new business challenges, to improve things like customer service and sales. Security will remain the foundation for personalized computing. Without security, without trust in the device integrity, this will not happen. One of the most important trends, I believe, is that the PC will transform, is always connected, and always on, like a Smart phone. Regardless if it's open, if it's closed, if you carry it, or if you work with it, it always is capable to respond to you and to work with you. 5G is becoming a reality, and the data capacity that will be out there is by far exceeding today's traffic imagination. Finally, Smart Office, delivering flexible and collaborative work environments regardless on where the worker sits, fully integrated and leverages all the technologies we just talked before. These are the main challenges you and all of your CIO and CTO colleagues have to face today. A changing workforce and a new set of technologies that are transforming PC into personalized computing. Let me give you a real example of a challenge. DXC was just formed by merging CSE company and HP's Enterprise services for the largest independent services company in the world. DXC is now a 25 billion IT services leader with more than 170,000 employees. The most important capital. 6,000 clients and eight million managed devices. I'd like to welcome their CIO, who has one of the most challenging workforce transformation in front of him. Erich Windmuller, please give him a round of applause. (audience applauds). >> Thank you Christian. >> Thank you. >> It's my pleasure to be here, thank you. >> So first of all, let me congratulation you to this very special time. By forming a new multi-billion-dollar enterprise, this new venture. I think it has been so far fantastically received by analysts, by the press, by customers, and we are delighted to be one of your strategic partners, and clearly we are collaborating around workforce transformation between our two companies. But let me ask you a couple of more personal questions. So by bringing these two companies together with nearly 200,00 employees, what are the first actions you are taking to make this a success, and what are your biggest challenges? >> Well, first, again, let me thank you for inviting me and for DXC Technology to be a part of this very very special event with Lenovo, so thank you. As many of you might expect, it's been a bit of a challenge over the past several months. My goal was really very simple. It was to make sure that we brought two companies together, and they could operate as one. We need to make sure that could continue to support our clients. We certainly need to make sure we could continue to sell, our sellers could sell. That we could pay our employees, that we could hire people, we could do all the basic foundational things that you might expect a company would want to do, but we really focused on three simple areas. I called it the three Cs. Connectivity, communicate, and collaborate. So we wanted to make sure that we connected our legacy data centers so we could transfer information and communicate back and forth. We certainly wanted to be sure that our employees could communicate via WIFI, whatever locations they may or may not go to. We certainly wanted to, when we talk about communicate, we need to be sure that everyone of our employees could send and receive email as a DXC employee. And that we had a single-enterprise directory and people could communicate, gain access to calendars across each of the two legacy companies, and then collaborate was also key. And so we wanted to be sure, again, that people could communicate across each other, that our legacy employees on either side could get access to many of their legacy systems, and, again, we could collaborate together as a single corporation, so it was challenging, but very very, great opportunity for all of us. And, certainly, you might expect cyber and security was a very very important topic. My chairman challenged me that we had to be at least as good as we were before from a cyber perspective, and when you bring two large companies together like that there's clearly an opportunity in this disruptive world so we wanted to be sure that we had a very very strong cyber security posture, of which Lenovo has been very very helpful in our achieving that. >> Thank you, Erich. So what does DXC consider as their critical solutions and technology for workplace transformation, both internally as well as out on the market? >> So workplace transformation, and, again, I've heard a lot of the same kinds of words that I would espouse... It's all about making our employees productive. It's giving the right tools to do their jobs. I, personally, have been focused, and you know this because Lenovo has been a very very big part of this, in working with our, we call it our My Style Workplace, it's an offering team in developing a solution and driving as much functionality as possible down to the workstation. We want to be able, for me, to avoid and eliminate other ancillary costs, audio video costs, telecommunication cost. The platform that we have, the digitized workstation that Lenovo has provided us, has just got a tremendous amount of capability. We want to streamline those solutions, as well, on top of the modern server. The modern platform, as we call it, internally. I'd like to congratulate Kirk and your team that you guys have successfully... Your hardware has been certified on our modern platform, which is a significant accomplishment between our two companies and our partnership. It was really really foundational. Lenovo is a big part of our digital workstation transformation, and you'll continue to be, so it's very very important, and I want you to know that your tools and your products have done a significant job in helping us bring two large corporations together as one. >> Thank you, Erich. Last question, what is your view on device as a service and hardware utility model? >> This is the easy question, right? So who in the room doesn't like PC or device as a service? This is a tremendous opportunity, I think, for all of us. Our corporation, like many of you in the room, we're all driven by the concept of buying devices in an Opex versus a Capex type of a world and be able to pay as you go. I think this is something that all of us would like to procure, product services and products, if you will, personal products, in this type of a mode, so I am very very eager to work with Lenovo to be sure that we bring forth a very dynamic and constructive device as a service approach. So very eager to do that with Lenovo and bring that forward for DXC Technology. >> Erich, thank you very much. It's a great pleasure to work with you, today and going forward on all sides. I think with your new company and our lineup, I think we have great things to come. Thank you very much. >> My pleasure, great pleasure, thank you very much. >> So, what's next for Lenovo PC? We already have the most comprehensive commercial portfolio in the industry. We have put the end user in the core of our portfolio to finish and going forward. Ultra mobile users, like consultants, analysts, sales and service. Heavy compute users like engineers and designers. Industry users, increasingly more understanding. Industry-specific use cases like education, healthcare, or banking. So, there are a few exciting things we have to announce today. Obviously, we don't have that broad of an announcement like our colleagues from the data center side, but there is one thing that I have that actually... Thank you Rod... Looks like a Bento box, but it's not a ThinkPad. It's a first of it's kind. It's the world's smallest professional workstation. It has the power of a tower in the Bento box. It has the newest Intel core architecture, and it's designed for a wide range of heavy duty workload. Innovation continues, not only in the ThinkPad but also in the desktops and workstations. Second, you hear much about Smart Office and workspace transformation today. I'm excited to announce that we have made a strategic decision to expand our Think portfolio into Smart Office, and we will soon have solutions on the table in conference rooms, working with strategic partners like Intel and like Microsoft. We are focused on a set of devices and a software architecture that, as an IoT architecture, unifies the management of Smart Office. We want to move fast, so our target is that we will have our first product already later this year. More to come. And finally, what gets me most excited is the upcoming 25 anniversary in October. Actually, if you go to Japan, there are many ThinkPad lovers. Actually beyond lovers, enthusiasts, who are collectors. We've been consistently asked in blogs and forums about a special anniversary edition, so let me offer you a first glimpse what we will announce in October, of something we are bring to market later this year. For the anniversary, we will introduce a limited edition product. This will include throwback features from ThinkPad's history as well as the best and most powerful features of the ThinkPad today. But we are not just making incremental adjustments to the Think product line. We are rethinking ThinkPad of the future. Well, here is what I would call a concept card. Maybe a ThinkPad without a hinge. Maybe one you can fold. What do you think? (audience applauds) but this is more than just design or look and feel. It's a new set of advanced materials and new screen technologies. It's how you can speak to it or write on it or how it speaks to you. Always connected, always on, and can communicate on multiple inputs and outputs. It will anticipate your next meeting, your next travel, your next task. And when you put it all together, it's just another part of the story, which we call personalized computing. Thank you very much. (audience applauds) Thank you, sir. >> Good on ya, mate. All right, ladies and gentlemen. We are now at the conclusion of the day, for this session anyway. I'm going to talk a little bit more about our breakouts and our demo rooms next door. But how about the power with no tower, from Christian, huh? Big round of applause. (audience applauds) And what about the concept card, the ThinkPad? Pretty good, huh? I love that as well. I tell you, it was almost like Leonardo DiCaprio was up on stage at one stage. He put that big ThinkPad concept up, and everyone's phones went straight up and took a photo, the whole audience, so let's be very selective on how we distribute that. I'm sure it's already on Twitter. I'll check it out in a second. So once again, ThinkPad brand is a core part of the organization, and together both DCG and PCSD, what we call PCSD, which is our client side of the business and Smart device side of the business, are obviously very very linked in transforming Lenovo for the future. We want to also transform the industry, obviously, and transform the way that all of us do business. Lenovo, if you look at basically a summary of the day, we are highly committed to being a top three data center provider. That is really important for us. We are the largest and fastest growing supercomputing company in the world, and Kirk actually mentioned earlier on, committed to being number one by 2020. So Madhu who is in Frankfurt at the International Supercomputing Convention, if you're watching, congratulations, your targets have gone up. There's no doubt he's going to have a lot of work to do. We're obviously very very committed to disrupting the data center. That's obviously really important for us. As we mentioned, with both the brands, the ThinkSystem, and our ThinkAgile brands now, highly focused on disrupting and ensuring that we do things differently because different is better. Thank you to our customers, our partners, media, analysts, and of course, once again, all of our employees who have been on this journey with us over the last two years that's really culminating today in the launch of all of our new products and our profile and our portfolio. It's really thanks to all of you that once again on your feedback we've been able to get to this day. And now really our journey truly begins in ensuring we are disrupting and enduring that we are bringing more value to our customers without that legacy that Kirk mentioned earlier on is really an advantage for us as we really are that large startup from a company perspective. It's an exciting time to be part of Lenovo. It's an exciting time to be associated with Lenovo, and I hope very much all of you feel that way. So a big round of applause for today, thank you very much. (audience applauds) I need to remind all of you. I don't think I'm going to have too much trouble getting you out there, because I was just looking at Christian on the streaming solutions out in the room out the back there, and there's quite a nice bit of lunch out there as well for those of you who are hungry, so at least there's some good food out there, but I think in reality all of you should be getting up into the demo sessions with our segment general managers because that's really where the rubber hits the road. You've heard from YY, you've heard from Kirk, and you've heard from Christian. All of our general managers and our specialists in our product sets are going to be out there to obviously demonstrate our technology. As we said at the very beginning of this session, this is Transform, obviously the fashion change, hopefully you remember that. Transform, we've all gone through the transformation. It's part of our season of events globally, and our next event obviously is going to be in Tech World in Shanghai on the 20th of July. I hope very much for those of you who are going to attend have a great safe travel over there. We look forward to seeing you. Hope you've had a good morning, and get into the sessions next door so you get to understand the technology. Thank you very much, ladies and gentlemen. (upbeat innovative instrumental)

>> Announcer: Live from New York City, it's the Cube. Covering Lenovo Transform 2017. Brought to you by Lenovo. >> We are wrapping up a day of coverage, the Cube's coverage, of Lenovo Transform. I'm your host, Rebecca Kinight, along with Stu Miniman. We have been here, we've interviewed all the great guests, heard a lot of great content, we were there at the keynote. Stu, what have we learned? Yeah, so Rebecca, they talk a lot about, think differently, and we're transforming, and we know that there's so much change happening in the industry. On the one hand, I step back and I say, okay, it's a new generation of Intel Chipset. That's great. Said great a few times already. They've got some people that have been with the company a long time. YY, the CEO's been there for many years, steady at the helm. But there's a lot of new leaders in the group. Kirk Skaugen, who we've now interviewed a couple times, Kim Stevenson, who we've known, a great Cube alum, talked about why she joined a company like Lenovo. Said, they're an underdog, and she feels that they have a great position without that legacy baggage. You know, legacy is one of those terms that gets thrown around. One of our guests today said, you know, oh, in five years from now, we'll be calling software defined legacy because, I was at a conference, they said legacy is what you installed yesterday. (laughs) >> Good point, yeah. >> So, you know, that being said, Lenovo understands, you know, fanatical devotion to that, you know, customer-centricity, is the term they put out there a few times. They want to be reliable, they want to be trusted, and they've got metrics and stats to prove that they are meeting what they're doing. They're not just, you know. John Farrier texted me, he said, "There's meat on the bone at this event, Stu." Absolutely. So, interesting to look at, kind of where they are, where they're going forward. The server industry as a whole is a bit challenged. >> Mm-hmm. >> Storage has been going through radical transformation. Networking is driving more to software defined. And all of that means that there's opportunity for new players to rise through the ranks. And Lenovo feels that they're got the pieces to put together both with themselves, and with their channel and technology partners to be able to drive forward. >> So, one of the things that we're hearing a lot about is that they are number one in customer satisfaction. Because they are so reliable, and because they have great service. In terms of what they were hearing from their customers, we heard this a lot, is that the customers want simple, they are overwhelmed sometimes by too much choice. They want nothing too complicated. And they want things future-proofed. I mean, is that possible? >> Yeah, it's really tough. I did an article a few years ago looking at Amazon. And people would say, oh the hyperscale companies, they use commodity off the shelf hardware. I mean, Intel chips everywhere, what's the difference? Well, I wrote, Amazon actually hyper-optimizes. They have to build for one data center; it's their own. So if they built an application, it's 10,000 or 50,000 servers that they can build for that exact environment. Now, Lenovo leads with data centers around the globe. So, where can they simplify and standardize, and where do they need to fit around the world? So, it's great that they can have a common form factor for a power supply, but you know, we've got different power usage in various places around the world. But they do need to be, customers want help to be a little bit more opinionated, and to simplify what they're doing. I talked to a CIO a couple of years ago, and he said, we were really good at, you know, give us a big chunk of money and 18 months and we could build a temple to our application. Today I need to be faster. I need to be able to build, be more modular, and a lot of that means that I need to have architectures that are more software driven. I still need redundancy, and availability in the hardware, but I'm not going to build, you know, that monolithic infrastructure for a specific application. I just need something that's more flexible. And Lenovo understands that, and they've taken the assets that they had internally, added the pieces that they've gotten from IBM, and are driving these pieces forward, and with a lot of partners, as we've said. Interesting stuff coming from Microsoft. Azure Stack was one of my favorite interviews, talking about that mixture of I need standardization but, I also need some flexibility >> Right. >> in what I'm doing. >> Do you think that the product launches that we heard a lot about today, at the keynote, and also in our interviews today. Do you think that they will, how much do they move the needle forward is what I want to ask? >> Yeah, great question because Kim Stevenson told us, I mean, the last year, if you look revenue and units, Lenovo didn't do great. So, they've got the pieces together, the new generation. They've talked to their customer base. I think they understand what they're going to do when they hyperscale, what they're going to do in the enterprise market, and what they're doing partnering on converged, hyper converged, offering to put those together. Some of these things are really easy for us to track. We come back a year from now and we'll say, okay, the quarterly trackers done by someone like Piers in the analyst industry, you know, the numbers don't lie. You know, customers will vote with their wallets, and we will be able to say whether or not they move the needle. It's great to say, number one in customer support, but if, you know, your competition is growing, and you're shrinking, there's only so far that'll go. >> Well, that's just what I was going to ask you. I mean, is it enough? And what do you predict? I mean, can you look into your crystal ball a little bit, and say, where you think we will be one year, five years from now. Will Lenovo be the underdog? >> Yeah, so Lenovo's in a really interesting place because they do have that global footprint. They, doing, when we talk to Kirk, it's where are they in the hyperscale? It's companies like Baidu and Tencent?. Massive, massive growth. They can ride that wave. When the sky like architecture is available, you know, pretty soon from Intel, they know that they're going to get an influx of business to be able to drive that. They're also getting into some of the west coast hyperscales as they've said. The enterprise is a little bit slower to uptick on that adoption, so, you know, I'm sure Lenovo will be able to give us by segment, how they're doing, and how they're growing. They should be reaching the point that we should see the ship be turning around. We saw this story when Lenovo had purchased the PC business from IBM over a decade ago. And, you know, they sunk for a while before they eventually started to rise, and now they're number one in the world. So, they're trying to repeat history, which is challenging to do, even if they know the playbook. Lenovo, if you look at the margins that they run on, they talk about how they can live on slim margins, they understand that consumer side of the business, they've got a lot of good pieces. And, competing against the ones ahead of them in market share, primarily US based companies, and they're fighting it out. You were at Dell in Sea World. Dell and HP, they are fighting it out, it's going to be a death match. You're going to see them just trying to beat the heck out of each other. Reminds me of, can Lenovo be the Abe Lincoln on the side, saying that, you know, I might not have been the first choice, but at the end I could end up a winner because everybody else kind of beats themselves apart. >> And then all of its partners is a team of rivals. We can do this. We can... >> There you go. We started this morning talking Hamilton, and now we're going in >> We're learning (mumbles) >> New York City used to be our capital here, so, we're bringing it full circle. >> Exactly. So, let's talk also about what we've been hearing from Lenovo employees and executives about the culture here, and we hear time and time again, how it's very flat, and how decisions are made, it's collaborative, there's a lot of teamwork, there's a lot of listening that goes on, not only to colleagues but also to customers. Do you buy it? I mean, what do you think? >> Yeah, so right. So one of the things, you know, I've spent a lot of time on the converged and hyper converged infrastructure solutions. And, one of the things you can spot really easily is if the server and the storage teams aren't working together. That CI solution didn't do well. >> It shows. >> Number of companies that didn't do there. Lenovo, primarily they have some IP, but a lot of what they're driving is really through partnerships. So, at the center of it, it's the server team. Storage is coming to look more and more like, you know, x86 servers, and they're running on top of that. Networking is tied closer to the server. So, they actually don't have, you know, this big structure that they have to overcome, unlike some of their competitors. They have, you know, a sizable team, with a good position in the market share. So, I do buy a lot of it. I've been in analyst meetings with Lenovo for the last couple of years. Their messages are all in sync. It's not, oh wait, I heard one group, and I heard this group, and you know, which way is the future? So, they are making some progress. Of course, I'm really interested to see who they might pick up from an M and A standpoint. There's been rumors for the last couple of years as to some moves they'd make. Their competition has, you know, not been sitting still. We've seen, you know, Dell obviously made a lot of big acquisitions, including the really big EMC piece. HP has bought another number of companies. Cisco actually, their server business, which is the UCS, really seems to have plateaued out. So, they had been the driver of change in the storage, in the server industry for the last, gosh, you know, over five years. So, there's that opportunity for the next horse to try to take the lead. Once again, Lenovo feels they're there. I think they have, you know, they've got the resources, they have a reason to be on the track, and to drive that forward. Whether or not they can execute on, remains to be seen. And, you know, they've got, they're looked at their channel, they've looked at their sales team, and they know what they need to do now they can go do it. >> And they've made the changes. Exactly. >> Yeah, so cultural wise, I mean something you study real closely, you had a lot of businesses. Rebecca, what did you hear today? What did you like? What did you want to hear more about? >> Well, I was really fascinated by what Kim Stevenson was saying, talking about the greater numbers of women in senior leadership roles. And also, the greater numbers of people of color. And how important that is in terms of how Lenovo goes about making its decisions, thinking about the customer, empathizing with the customer, and really understanding where to go from there. And then also, then how it comes back in terms of making decisions to go to market with which products. So, that was really fascinating and I think that she's right. I mean, particularly at a time where all you see are the headlines about this machismo culture that is so pervasive in Silicon Valley and in the technology industry. And so to see, you know, YY on one hand, and Travis Kalanick on another, and you just can see these very different models and, so, I'm hoping Lenovo is the one that really prevails in the end here because this is, I think, the future, the future of work, the future of the workforce. And so, I would like to see this model of leadership and of teamwork prevail. >> Yeah, it's a different type of event here. It's nice. It's very intimate. >> Yeah. Yeah. >> You know, Lenovo obviously knows how to do some cool things. The layout here, it's a beautiful facility here >> It is. Yes. >> In New York City. The keynote had some, you know, funny yet, you know, good videos. >> Yeah. That was (mumbles). >> You know, sometimes they fall a little flat, when you go to some of those keynotes. >> Yeah. >> But, you know, Lenovo needs to continue to build their brand, outside of the consumer space. >> Right, right. >> And be known more in the enterprise, and you know, they have a chance to ride some of those waves. >> Yeah, yeah. Well this has been a great show. It's always so much fun to co-host with you on The Cube. I love it. >> All right. >> It's really fun. Great crew. >> Rebecca, thank you so much, and, yeah, actually Kirk Skaugen's going to be back on The Cube next week. I will be with Dave Vellante at the Nutanix .NEXT event in Washington, DC. We have done so many events with the Cube. Of course, as it says on the sign behind us, theCUBE.net, where all the videos are. I'm sure will be record-breaking for us yet again, as to how many shows, how many interviews we do. >> Exciting stuff. >> Rebecca, it's a pleasure to be with you again, and thanks so much for joining with me, you know, the quick train ride down from Boston. >> Yes, exactly. >> Yeah. >> Well, thank you so much, Stu. That wraps it up for us at the Cube. This has been the Lenovo Transform Conference. I'm Rebecca Knight for Stu Miniman. Thank you so much for tuning in. (funky music)