>> Welcome back everybody. Jeff Frick here with theCUBE we're in San Francisco at the Minds and Machines conference.  Three thousand people the fifth year of the show. Really everything about GE all the players from GE are here but are really being driven by the digital and the digitization of what was a bunch of stuff and still a bunch of stuff. But now we're digitizing it all. Yeah I'm really excited to get this bill saw you what nine months ago six months ago Timeflies to the Chief Digital Officer of chief power. Welcome. Great to see you again. >> Thank you. Thanks for being here. >> Absolutely. So just first impressions of this event. Pretty amazing. >> Yes it's gotten really bad. Right and I I remember stories of people telling me that hey this is the fifth one we're doing the first one we almost had like pull people to come here. Now we are like figure out how do we get to a bigger location because this is getting mainstream. Everybody is looking at how does digital help their business. Because in the industrial sector productivity had slowed down right over the last four or five years. It had become only 25 percent of what it used to be. So the biggest lever for productivity efficiency and creating new value is through digital transformation. It's not just automation. It's about creating new value new revenue from digital assets and that's why you see the excitement across all of the industries here. What's interesting you came from the I.T. world. >> Yeah there's already kind of been the digital transformation in the I.T. world that a lot of the I.T. stuff has now been Olek been turned into electronic assets right. You have no paper but that that can't happen in the OT world right. We still got generator just for gadget engines. You still got physical things but it's still a digital transformation. So how are those things kind of meshing together. Yeah so you know having worked in software all my career in Silicon Valley you write like you think about Cambridge with a belief that every business every industry will be reimagined with software. We've seen it in retail and music and entertainment and travel but there the software our aid the world. Yes software is going to aid the world but here software is transforming the world too because the physical assets matter. But all of the machines that we make for example in power we make machines that power the world more than one third of the world's electricity comes from a machine. Right. So all of these machines generate electrons but they also generate a lot of data more than you know two terabytes of data a day from a power plant can be generated. That's more data and more consumers will generate across an entire year old social media. So this data matters we can learn a lot from this data and make these machines efficient more productive and kind of like a 360 sexiest word for some of the industrialist is no unplanned downtime right. Element breakdowns which turns into massive productivity and value for our customers. The thing I think that would surprise most people Jeff talked about it in his keynote yesterday is that there has not been the kind of the long traditional productivity gains in the industrial machines themselves and you think wow they've been around for a long time. I would think they would be pretty pretty efficient. But in fact there's still these huge inefficiency opportunities to take advantage of with software which is why there's this huge kind of value creation opportunity. Absolutely. So now also think where the cycle time of innovation. Right. All of these are mechanical machines right. We know with advances in materials science and engineering and you know brilliant manufacturing we can get more out of the physical asset but that requires a big upgrade cycle. What if we agreed to the machine with software and that's really what we did in our businesses across power right where we called them edge applications where it's about improving the flexibility of a machine or they 50 of them. All of these are modeled and algorithms and the way to think about it is all these machines in fact outside we have a giant machine that powers this entire event. And you can see the digital twin version of that machine right here on the screen. All that is is a virtual representation of that machine from the physical world where we have all the thermal models the Trancy models the heat models the performance models all connected. But now we can run the simulation in real time all of the operation data and apply algorithms to get more performance out. A great example as we just launched one of the world's most efficient most flexible gas turbine a giant turbine called H.A.. >> But with the additional software we were able to improve the efficiency it's now the Guinness World Record holder as the most efficient flexible power plant in the world. That was then a brand new unit that was developed with the benefit of software or was that really applying a Software to our approach that was a brand new unit. But overlaid with software was able to eke out more efficiency as well. But we're doing this an older power plants as well. In fact a great story is we had a customer and Italy called A2A their multi utility company in Italy. They have a power plant and Cuba also in northern Italy. They had shut it down because it was no longer competitive to operate that power plant in the modern world where there was so much renewables. Because you got to compete in a market called ancillary services meaning you need to be able to quickly ramp up power when the wind doesn't blow or the sun doesn't shine bright and shouted down right away. You can't do that with giant power plants. What we did was we completely model that's how plant and software and digital trend we show them that this actually can be competitive. So with the addition of software we were able to reopen a power plant that was mothballed and jobs were reinstated and the Paul plan is actually flexible in the open competitive ancillary services market. So all of this is possible because of software we're able to breathe new life into big giant heavy machines. So just a year in the power space I'm just tired. You know we've seen kind of in the US. No the nukes are being turned turned off. >> I grew up in Portland got trojan on the Columbia River we could take field trips with the smoke come out the cooling tower. We've got the rise of renewables are really really really going crazy. He's got this crazy dynamics and the price of oil. How's that played. How are you guys helping kind of deal with this multimodal. It's interesting here that oil and gas is still its own separate group. I'm like they got it like we want to be part of the renewables and didn't just become energy and not renewables oil and gas nuclear etc.. So you know that's a great question the industry is oil and gas has lots of other things and downstream stream and so on. And but at least across all of the electricity businesses we're coming together. And we call this the electricity Value Network. Think about where we used to think about a value chain where the Greens got generated and they traveled to the consumer. It was a linear model. And we know from Silicon Valley when digital anchors industries they all become network model. Right. Right. So we're calling this the electricity Value Network. And the interesting thing is our customers have different mix of fuel. And every part of the geography in the world in North America is still a good mix. Renewables is on the rise in California. We're going to have 50 percent power from renewables by 2030. But you still have to balance and optimize the mix of power from gas and nuclear and other sources of fuel and hydro and steam and so on. Right. And in Europe it's our abundance of renewables. >> They're struggling to integrate them into the great abundance of renewables or abundant capacity right. Renewables are growing and so they have to integrate them better in China and India for example still coal and steam is the big source of power because that's the fuel they have. They don't have as much gas. So the mix of fuel will change the world. The beauty of software as we can help optimize the mix. In the past we always talked about renewables as a silver bullet or gas silver bullet. Now we're saying software is a silver bullet regardless of what the mix of fuel we can optimize the generation of electrons and we're seeing this entire industry of electricity being transformer and digital and we call that the electricity Value Network. It's crazy interesting times so big show any big announcements happening here at the show yeah we know lots of big announcements one of the biggest ones is we're just dying day big enterprise wide digital transformation and relationship with Exelon Exelon is the largest utility in North America and they so are 10 million customers but they also generate a lot of power over 35000 megawatts of cross nuclear wind solar hydro gas and you know a year and a half ago we started a journey with them on understanding what the value of vigilance. There is such a believer and we learned a lot working with them as well and now they're deploying our Predix platform the industrial platform and APM which is our asset command and software and our food speed of operations optimization business optimization and cyber across the entire enterprise. >> So it's a big strategic agreement with them and where we're allowed to tell people is that you know a year and a half ago we were talking about what would happen if a wind farm went digital or a power plant. When you don't right now we're talking about what happens an entire utility goes digital or an entire industry of electricity goes digital and leaders like Exelon have the opportunity to create that tipping point in the industry. It does feel like this is the moment I think digital transformation of the electricity industry went real and this is it I presume not everything that they own is jii equipment no software is agnostic. Right. Right so this is really a software deal with their existing infrastructure that probably has a blend of G gear and who knows what other year that are generating. This is no different than how we in Silicon Valley would think about a enterprise software deal. It is the Enterprise subscription deal for them except it's to our cloud and our edge solutions and it's every machine right every single asset whether it's a giant gas turbine or a small little pump every machine has some sense or we will sense the rise or does the environment but all that data is being put into Predix. We will build digital twins of their entire power plants and give them more new insight and help them you know eliminate unplanned downtime and reduce operational costs citing times. We've got to get on buses to get those batteries done right till we get stored where we can we can connect them and optimize them as well. Right. Absolutely. >> I look forward to catching up six months from now and see where you guys are going out fast Bill and you and the team have grown you know from from a little bit of these kind of software skunkworks out there. Yeah I know many people are in San Ramon now. Now I think we're about a hundred people I think we're diversifying I think and it's a great challenge. So when we get the Adsit camping on the horizon. Oh and Sarah will be there. You can hit me up on Twitter again as well if you're interested in working in meaningful purposeful things like energy and the coolest things and software super. All right good. Thanks for stopping by. All right. Thank you. You have been asking us belum Jeffrey. You're watching the queue. We'll be back with our next segment after this short break.