>> Announcer: From around the globe it's theCUBE with digital coverage of IBM Think 2021. Brought to you by IBM. >> Welcome back to theCUBE's coverage of IBM Think 2021 Virtual. I'm John Furrier, host of theCUBE. And it's theCUBE Virtual and Uli Homann who's here, Corporate Vice President of Cloud & AI at Microsoft. Thanks for comin' on. I love this session. Obviously, Microsoft one of the big clouds. Awesome. You guys partnering with IBM here, at IBM Think. I remember during the client-server days in the '80s, late '80s to early '90s the open systems interconnect was a big part of opening up the computer industry. That was networking, intra-networking and really created more LANs and more connections for PCs et cetera, and the world just went on from there. Similar now with hybrid cloud, you're seeing that same kind of vibe, right? You're seeing that same kind of alignment with distributed computing architectures for businesses. Where now you have, it's not just networking and plumbing, and connecting, you know, LANs and PCs, and printers, it's connecting everything. It's kind of almost a whole 'nother world, but similar movie, if you will. So this is really going to be good for people who understand that market. IBM does, you guys do. Talk about the alignment between IBM and Microsoft in this new hybrid cloud space. It's really kind of now standardized, but yet it's just now coming. >> Yeah, so again, fantastic question. So the way I think about this is first of all, Microsoft and IBM are philosophically very much aligned. We're both investing in key open source initiatives like the Cloud Native Compute Foundation, CNCF, something that we both believe in. We're both partnering with the Red Hat organization so Red Hat forms a common bond, if you so want to, between Microsoft and IBM. And again, part of this is how can we establish a system of capabilities that every client has access to, and then build on top of that stack. And again, IBM does this very well with their Cloud Paks which are coming out now with data and AI, and others. So open source, open standards are key elements and then you mentioned something critical which I believe is not under, misunderstood, but certainly not appreciated enough is this is about connectivity between businesses and so part of the power of the IBM perspective together with Microsoft is bringing together key business applications for health care, for retail, for manufacturing and really make them work together so that our clients that are-- critical scenarios get the support they need from both IBM as well as Microsoft on top of this common foundation of the CNCF and other open standards. >> You know, it's interesting, I love that point. I'm going to double-down and amplify that and continue to bring it up. Connecting between businesses is one thread but now, people, because you have an edge that's also industrial, business, but also people. People are also participating in open source, people have wearables, people are connected so they can, and also they're connecting with collaboration. So this kind of brings a whole 'nother architecture which I want to get into the solutions with you on on how you see that playing out. But first, I know, you know, you're a veteran with Microsoft for many, many years, for decades. Microsoft's core competency has been ecosystems, developer ecosystems, customer ecosystems. Today, that the services motion is build around ecosystems. You guys have that playbook, IBM's well versed in it, as well. How does that impact your partnerships, your solutions, and how you deal with down this open marketplace? >> Well, let's start with the obvious. Obviously, Microsoft and IBM will work together in common ecosystems. Again, I'm going to reference the CNCF again as the foundation for a lot of these initiatives. But then we are also working together in the Red Hat ecosystem because Red Hat has built an ecosystem that Microsoft and IBM are players in that ecosystem. However, we also are looking higher level 'cause a lot of times when people think ecosystems, it's fairly low-level technology. But Microsoft and IBM are talking about partnerships that are focused on industry scenarios. Again, retail for example, or health care and others where we're building on top of these lower-level ecosystem capabilities and then bringing together the solution scenarios where the strength of IBM capabilities is coupled with Microsoft capabilities to drive this very famous one plus one equals three. And then the other piece that I think we both agree on is the open source ecosystem for software development and software development collaboration. And GitHub is a common anchor that we both believe can feed the world's economy with respect to the software solutions that are needed to really, yeah, bring the capabilities forward, help improve the world's economy and so forth by effectively bringing together brilliant minds across the ecosystem and again, just Microsoft and IBM bringing some people, but the rest of the world obviously participating in that, as well. So thinking again, open source, open standards, and then industry-specific collaboration and capabilities being a key part. You mentioned people. We certainly believe that people play a key role, software developers and the GitHub notion being a key one. But there are others where again, Microsoft with Microsoft 365 has a lot of capabilities in connecting people within the organization and across organizations. And while we're using Zoom, here, a lot of people are utilizing Teams 'cause Teams is on the one side of collaboration platform, but on the other side is also an application host. And so bringing together people collaboration supported and powered by applications from IBM, from Microsoft and others, is going to be, I think, a huge differentiation in terms of how people interact with software in the future. >> Yeah, and I think that whole joint development is a big part of this new people equation where it's not just partnering in market, it's also at the tech, and you've got open source, and it's a just phenomenal innovation formula, there. So let's ask what solutions, here. I want to get into some of the top solutions you're doing that Microsoft that maybe with IBM. But your title as the Corporate Vice President Cloud & AI, c'mon, could you get a better department? I mean, more relevant than that? I mean, it's exciting. You know, cloud scale is driving tons of innovation, AI is eating software or changing the software paradigm. We're going to see that playing out. I've done dozens of interviews just in this past month on how AI's a more, certainly with machine learning, and having a control plane with data, changing the game. So tell us, what are the hot solutions for hybrid cloud and why is this a different ballgame than say, public cloud? >> Well, so first of all, let's talk a little bit about the AI capabilities and data because I think they're two categories. You are seeing an evolution of AI capabilities that are coming out. And again, I just read IBM's announcement about integrating the Cloud Pak with IBM Satellite. I think that's a key capability that IBM is putting out there and we are partnering with IBM in two directions, there. IBM has done a fantastic job to build AI capabilities that are relevant for industries, health care being a very good example, again, retail being another one. And I believe Microsoft and IBM will work on both partnership on the technology side as well as the AI usage in specific verticals. Microsoft is doing similar things. Within our Dynamics product line, we're using AI for business applications, for planning, scheduling, optimizations, risk assessments, those kind of scenarios. And of course, we're using those in the Microsoft 365 environment, as well. I always joke that despite my 30 years at Microsoft, I still don't know how to really use PowerPoint and I can't do a PowerPoint slide for the life of me, but with a new designer, I can actually get help from the system to make beautiful PowerPoint happen. So bringing AI into real life usage I think is the key part. The hybrid scenario is critical here, as well, especially when you start to think about real life scenarios like safety, worker safety in a critical environment, freshness of product. We're seeing retailers deploying cameras and AI inside the retail stores to effectively make sure that the shelves are stocked, that the quality of the vegetables, for example, continues to be high and monitored. And previously, people would do this on an occasional basis running around in the store. Now the store is monitored 24/7 and people get notified when things need fixing. Another really cool scenario set is quality. We are working with a Finnish steel producer that effectively is looking at the stainless steel as it's being produced and they have cameras on this steel that look at specific marks. And if these marks show up then they know that the stainless steel will be bad. And I don't know if you have looked at a manufacturing process, but the earlier they can get failures detected, the better it is because they can most likely, or more often than not, return the product back into the beginning of the funnel and start over. And that's what they're using. So you can see molten steel, logically speaking, with a camera and AI. And previously, humans did this which is obviously A, less reliable and B, dangerous because this is very, very hot, this is very glowing steel. And so increasing safety while at the same time improving the quality is something that we see in hybrid scenarios. Again, autonomous driving, another great scenario where perception AI is going to be utilized. So there's a bunch of capabilities out there that really are hybrid in nature and will help us move forward with key scenarios, safety, quality, and autonomous behaviors like driving and so forth. >> Uli, great, great insight. Great product vision. Great alignment with IBM's hybrid cloud space what all customers are lookin' for, now. And certainly multicloud around the horizon. So great to have you on. Great agility, and congratulations for your continued success. You've got a great area, cloud and AI, and we'll be keeping in touch. I'd love to do a deep dive, sometime. Thanks for coming on. >> John, thank you very much for the invitation and great questions, great interview. Love it, appreciate it. >> Thank you very much. Okay, theCUBE coverage here, at IBM Think 2021 Virtual. I'm John Furrier, your host. Thanks for watching. (soft electronic music) ♪ Dah-De-Da ♪ ♪ Dah-De ♪

>>and welcome to this cube conversation. I'm john for a host of the queue here in Palo alto California. We've got two great remote guests to talk about, some big news hitting with scalability and Hewlett Packard enterprise drill, MCAT ceo of sexuality and chris Tinker, distinguished technologist from H P E. Hewlett Packard enterprise U room chris, Great to see you both. Cube alumni's from an original gangster days. As we say Back then when we started almost 11 years ago. Great to see you both. >>It's great to be back. >>So let's see. So >>really compelling news around kind of this next generation storage, cloud native solution. Okay. It's a, it's really kind of an impact on the next gen. I call, next gen devops meets application, modern application world and some, we've been covering heavily, there's some big news here around sexuality and HP offering a pretty amazing product. You guys introduced essentially the next gen piece of it are pesca, we'll get into in a second. But this is a game changing announcement you guys announces an evolution continuing I think it's more of a revolution but I think you know storage is kind of abstraction layer of evolution to this app centric world. So talk about this environment we're in and we'll get to the announcement which is object store for modern workloads but this whole shift is happening jerome, this is a game changer to storage, customers are gonna be deploying workloads. >>Yeah skeleton. Really I mean I personally really started working on Skele T more than 10 years ago 15 now And if we think about it I mean cloud has really revolutionized IT. and within the cloud we really see layers and layers of technology. I mean we all started around 2006 with Amazon and Google and finding ways to do initially we was consumer it at very large scale, very low incredible reliability and then slowly it creeped into the enterprise and at the very beginning I would say that everyone was kind of wizards trying things and and really coupling technologies together uh and to some degree we were some of the first wizard doing this But we're now close to 15 years later and there's a lot of knowledge and a lot of experience, a lot of schools and this is really a new generation, I'll call it cloud native, you can call it next year and whatever, but there is now enough experience in the world, both at the development level and at the infrastructure level to deliver truly distributed automate systems that run on industry standard service. Obviously good quality server deliver a better service than the service. But there is now enough knowledge for this to truly go at scale and call this cloud or call this cloud native. Really the core concept here is to deliver scalable I. T at very low cost, very high level of reliability. All based on software. We've we've been participated in this solution but we feel that now the draft of what's coming is at the new level and it was time for us to think, develop and launch a new product that specifically adapted to that. And chris I will let you comment on this because customers or some of them you can add a custom of you to that. >>Well, you know, you're right. You know, I've been in there have been like you have been in this industry for uh, well a long time, a little longer to 20, years. This HPV and engineering and look at the actual landscape has changed with how we're doing scale out, suffered to find storage for particular workloads and were a catalyst has evolved. Here is an analytic normally what was only done in the three letter acronyms and massively scale out politics name, space, file systems, parallel file systems. The application space has encroached into the enterprise world where the enterprise world needed a way to actually take a look at how to help simplify the operations. How do I actually be able to bring about an application that can run in the public cloud or on premise or hybrid. Be able to actually look at a workload off my stat that aligns the actual cost to the actual analytics that I'm going to be doing the work load that I'm going to be doing and be able to bridge those gaps and be able to spin this up and simplify operations. And you know, and if you if you are familiar with these parallel fossils, which by the way we we actually have on our truck. I do engineer those. But they are they are they are they have their own unique challenges. But in the world of enterprise where customers are looking to simplify operations, then take advantage of new application, analytic workloads, whether it be sparred may so whatever it might be right. If I want to spend the Mongol BB or maybe maybe a last a search capability, how do I actually take those technologies embrace a modern scale out storage stack that without without breaking the bank but also provide a simple operations. And that's that's why we look for object storage capabilities because it brings us this massive parallelization. Thank you. >>Well, before we get into the product, I want to just touch on one thing from you mentioned and chris you, you brought up the devoPS piece, next gen, next level, whatever term you use it is cloud Native. Cloud Native has proven that deVOPS infrastructure as code is not only legit being operationalized in all enterprises, add security in there. You have def sec ops this is the reality and hybrid cloud in particular has been pretty much the consensus. Is that standard. So or de facto saying whatever you want to call it, that's happening. Multi cloud on the horizon. So these new workloads have these new architectural changes, cloud on premises and edge, this is the number one story and the number one challenge, all enterprises are now working on how do I build the architecture for the cloud on premises and edge. This is forcing the deVOPS team to flex and build new apps. Can you guys talk about that particular trend and is and is that relevant here? >>Yeah, I, I not talk about uh really storage anywhere and cloud anywhere. And and really the key concept is edged to go to cloud. I mean we all understand now that the Edge will host a lot of data and the edges many different things. I mean it's obviously a smartphone, whatever that is, but it's also factories, it's also production, it's also, you know, moving uh moving machinery, trains, playing satellites, um that that's all the Edge cars obviously uh and a lot of that, I will be both produced and processed there. But from the Edge you will want to be able to send that uh for analysis for backup for logging to a court. And that core could be regional maybe not, you know, one call for the whole planet, but maybe one corporate region uh state in the US. Uh and then from there, you will also want to push some of the data to probably cloud. Uh One of the things that we see more and more is that the the our data center, the disaster recovery is not another physical data center, it's actually the cloud and that's a very efficient infrastructure, very cost efficient. Especially so really it's changing the padding on how you think about storage because you really need to integrate these three layers in a consistent approach, especially around the topic of security because you want the data to be secure all along the way and the data is not just data data and who can access the data, can modify the data. What are the conditions that allow modification or automatically ratios that are in some cases it's super important that data be automatically raised 10 years and all this needs to be transported fromage Co two cloud. So that that's one of the aspects, another aspect that resonates for me with what you said is a word you didn't say but it's actually crucial this whole revolution. It's kubernetes mean Cuban it isn't now a mature technology and it's just, you know, the next level of automaticity operation for distributed system Which we didn't have five or 10 years ago and that is so powerful that it's going to allow application developers to develop much faster system that can be distributed again edge to go to crowd because it's going to be an underlying technology that spans the three layers >>chris your thoughts. Hybrid cloud, I've been, I've been having conscious with the HP folks for got years and years on hybrid clouds now here. >>Well, you know, and it's exciting in a layout, right? So if you look at like a whether it be enterprise virtualization that is a scale out gender purpose fertilization workload. Whether the analytic workloads, whether we know data protection is a paramount to all of this orchestration is paramount. Uh if you look at that depth laptops absolutely you mean securing the actual data. The digital last set is absolutely paramount. And if you look at how we do this, look at the investments we're making we're making. And if you look at the collaborative platform development which goes to our partnership with reality it is we're providing them an integral aspect of everything we do. Whether we're bringing as moral which is our suffer be used orchestration. Look at the veneer of its control plane controlling kubernetes being able to actually control the african area clusters in the actual backing store for all the analytics. And we just talked about whether it be a web scale out That is traditionally using politics. Name space has now been modernized to take advantage of newer technologies running an envy me burst buffers or 100 gig networks with slingshot network at 200 and 400 gigabit. Looking at how do we actually get the actual analytics the workload to the CPU and have it attached to the data at rest? Where is the data? How do we land the data and how do we actually align essentially locality, locality of the actual asset to the compute. This is where, you know, we can leverage whether it be a juror or google or name your favorite hyper scaler, leverage those technologies leveraging the actual persistent store and this is where scale it is with this object store capability has been an industry trend setter, uh setting the actual landscape of how to provide an object store on premise and hybrid cloud running into public cloud but be able to facilitate data mobility and tie it back to and tie it back to an application. And this is where a lot of things have changed in the world of the, of analytics because the applications, the newer technologies that are coming on the market have taken advantage of this particular protocol as three so they can do web scale massively parallel concurrent workloads, >>you know what, let's get into the announcement, I love cool and relevant products and I think this hits the Mark Scaletta you guys have are Tesco which is um, just announced and I think, you know, we obviously we reported on it. You guys have a lightweight, true enterprise grade object store software for kubernetes. This is the announcement, Jerome. Tell us about it. >>What's the big >>deal? Cool and >>relevant? Come on, >>this is cool. All right, tell us >>I'm super excited. I'm not sure that it did. That's where on screen, but I'm super, super excited. You know, we, we introduced the ring 11 years ago and this is our biggest announcements for the past 11 years. So yes, do pay attention. Uh, you know, after after looking at all these trends and understanding where we see the future going, uh, we decided that it was time to embark block. So there's not one line of code that's the same as the previous generation product. They will both could exist. They both have space in the market, uh, and artist that was specifically this design for this cloud native era. And what we see is that people want something that's lightweight, especially because it had to go to the edge. They still want the enterprise grade, the security is known for and it has to be modern. What we really mean by modern is uh, we see object storage now being the primary storage for many application more and more applications and so we have to be able to deliver the performance that primary storage expects. Um this idea of skeletons serving primary storage is actually not completely new When we launched guilty 10 years ago, the first application that we were supporting West consumer email for which we were and we are still today the primary story. So we have we know what it is to be the primary store, we know what's the level of reliability you need to hit. We know what, what latest thinking and latency is different from fruit, but you really need to optimize both. Um, and I think that's still today. We're the only object storage company that protects that after both replication and the red recording because we understand that replication is factor the recording is better and more larger file were fast in terms of latency doesn't matter so much. So we, we've been bringing all that experience but really rethinking a product for that new generation that really is here now. And so we're truly excited against a little bit more about the product. It's a software was guilty is a software company and that's why we love to partner with HP who's producing amazing service. Um, you know, for the record and history, the very first deployment of skeleton in 2000 and 10 was on the HP service. So this is a, a long love story here. Um, and so to come back to artistic, uh, is lightweight in the sense that it's easy to use. We can start small, we can start from just one server or 11 VM instance. I mean start really small. Can grow infinitely. The fact that we start small, we didn't, you know, limit the technology because of that. Uh, so you can start from one too many. Um, and uh, it's contaminated in the sense that it's completely Cuban, it is compatible. It's communities orchestrated. It will deploy on many Cuban distributions. We're talking obviously with Admiral, we're also talking with Ponzu and with the other in terms of uh, communities distribution will also be able to be run in the cloud. I'm not sure that there will be many uh, true production deployment of artists in the club because you already have really good object storage by the cloud providers. But when you are developing something and you want to test their, um, you know, just doing it in the cloud is very practical. So you'll be able to deploy our discount communities cloud distribution and it's modern object storage in the sense that its application century. A lot of our work is actually validating that our storage is fit for a single purpose application and making sure that we understand the requirement of this application that we can guide our customers on how to deploy. And it's really designed to be the primary storage for these new workloads. >>The big part of the news is your relationship with Hewlett Packard Enterprises? Some exclusivity here as part of this announced, you mentioned, the relationship goes back many, many years. We've covered your relationship in the past chris also, you know, we cover HP like a blanket. Um, this is big news for h P E as >>well. >>What is the relationship talk about this? Exclusivity could you share about the partnership and the exclusivity piece? >>Well, the partnership expands into the pan HPV portfolio. We look we made a massive investment in edge IOT devices. Uh, so we actually have, how do we align the cost to the demand for our customers come to us wanting to looking at? Uh think about what we're doing with green, like a consumption based modeling, they want to be able to be able to consume the asset without having to do a capital outlay out of the gate uh, number to look at, you know, how do you deploy? Technology really demand? It depends on the scale. Right? So in a lot of your web skill, you know, scale out technologies, uh, putting them on a diet is challenging, meaning how skinny can you get it getting it down into the 50 terabyte range and then the complexities of those technologies at as you take a day one implementation and scale it out over, you know, you know, multiple iterations of recorders. The growth becomes a challenge. So, working with scalability, we we believe we've actually cracked this nut. We figured out how to a number one, how to start small but not limited customers ability to scale it out incrementally or grotesquely grotesque. A you can depending on the quarters the month, whatever whatever the workload is, how do you actually align and be able to consume it? Uh So now, whether it be on our edge line products are D. L. Products go back there. Now what the journalist talking about earlier, you know, we ship a server every few seconds. That won't be a problem. But then of course into our density optimized compute with the Apollo product. Uh This where uh our two companies have worked in an exclusivity where the, the scaly software bonds on the HP ecosystem. Uh and then we can of course provide you our customers the ability to consume that through our Green link financial models or through a complex parts of >>awesome. So jerome and chris who's the customer here? Obviously there's an exclusive period talk about the target customer. And how do customers get the product? How do we get the software? And how does this exclusivity with HP fit into it? >>Yeah. So there's really three types of customers and we really, we've worked a lot with a company called use design to optimize the user interface for each of the three types of customers. So we really thought about each uh customer role and providing with each of them the best product. Uh So the first type of customer application owners who are deploying application that requires an object storage in the back end. They typically want a simple objects to of one application. They wanted to be temple and work. I mean yesterday they want no freedom to just want an object store that works and they want to be able to start as small as they start with their application. Often it's, you know, the first department, maybe a small deployment. Um, you know, applications like backup like female rubric or uh, analytics like Stone Carver, tikka or false system now available as a software. Uh, you know, like Ceta does a really great department or nass that works very well. That means an object store in the back end of high performance computing. Wake up file system is an amazing file system. Um, we also have vertical application like broad peak, for example, who provides origin and view the software, the broadcasters. So all these applications, they request an object store in the back end and you just need a simple, high performance, working well object store and I'll discuss perfect. The second type of people that we think will be interested by artists. Uh essentially developers who are currently developing some communities of collaborative application your next year. Um and as part of their development stack, um it's getting better and better when you're developing a cloud native application to really target an object storage rather than NFS as you're persistently just, you know, think about generations of technologies and um, NFS and file system were great 25 years ago. I mean, it's an amazing technology. But now when you want to develop a distributed scalable application, objects toys a better fit because it's the same generation and so same thing. I mean, you know, developing something, they need uh an object so that they can develop on so they wanted very lightweight, but they also want the product that they're enterprise or their customers will be able to rely on for years and years on and this guy is really great for today. Um, the third type of customer are more architecture with security architects that are designing, uh, System where they're going to have 50 factories, 1000 planes, a million cars are going to have some local storage, which will they want to replicate to the core and possibly also to the club. And uh, as the design is really new generation workloads that are incredibly distributed. But with local storage, uh, these guys are really grateful for that >>and talk about the HP exclusive chris what's the, how does that fit into? They buy through sexuality. Can they get it for the HP? Are you guys working together on how customers can procure >>place? Yeah. Both ways they can procure it through security. They can secure it through HP. Uh, and it is the software stack running on our density, optimized compute platforms which you would choose online does. And to provide an enterprise quality because if it comes back to it in all of these use cases it's how do we align up into a true enterprise step? Um bringing about multi Tennessee, bringing about the fact that, you know, if you look at like a local racial coding, uh one of the things that they're bringing to it so that we can get down into the deal 3 25. So with the exclusivity, uh you actually get choice and that choice comes into our entire portfolio, whether it be the edge line platform, the D. L 3:25 a.m. B. Processing stack or the intel deal three eighties or whether whether it be the Apollo's or Alexa, there's there's so many ample choices there that facilitates this and it just allows us to align those two strategies >>awesome. And I think the kubernetes pieces really relevant because, you know, I've been interviewing folks practitioners um and kubernetes is very much maturing fast. It's definitely the centerpiece of the cloud native, both below the line, if you will under the hood for the, for the infrastructure and then for apps, um they want to program on top of it. That's critical. I mean, jeremy, this is like this is the future. >>Yeah. And if you don't mind, like to come back for a minute on the exclusive with HP. So we did a six month exclusive and the very reason we could do this is because HP has suffered such wrath of server portfolio and so we can go from, you know, really simple, very cheap, you know, HDD on the L 3 80 means a machine that retails for a few $4. I mean it's really like Temple System 50 terabyte. Uh we can have the dl 3 25. That uh piece mentioned there is really a powerhouse. All envy any uh slash uh all the storage is envy any uh very fast processors or uh you know, dance large large system like the Apollo 4500. So it's a very large breath of portfolio. We support the whole portfolio and we work together on this. So I want to say that you know, one of the reasons I want to send kudos to HP for for the breath of the silver lining rio as mentioned, um Jessica can be ordered from either company, hand in hand together. So anyway you'll see both of us uh and our field is working incredibly well together. >>We'll just on that point, I think just for clarification, uh was this co design by scalability and H P E. Because chris you mentioned, you know, the configuration of your systems. Can you guys quickly talk about the design, co design >>from from from the code base? The software entirely designed and developed by security from a testing and performance. So this really was a joint work with HP providing both hardware and manpower so that we could accelerate the testing phase. >>You know, chris H P E has just been doing such a great job of really focused on this. And you know, I've been Governor for years before it was fashionable the idea of apps working no matter where it lives. Public Cloud data center Edge, you mentioned. Edge line has been around for a while. You know, apps centric, developer friendly cloud first has been an H P E. Kind of guiding first principle for many, many years. >>But it has and you know, you know as our our ceo internal areas cited by 2022 everything will be able to be consumed as a service in our portfolio. Uh And then this stack allows us the simplicity and the consume ability of the technology and degranulation of it allows us to simplify the installation, simplify the actual deployment bringing into a cloud ecosystem. But more importantly for the end customer, they simply get an enterprise quality product running on identity optimized stack that they can consume through a orchestrated simplistic interface. That's that's cos that's what they're warning for today is where they come to me and asked hey how do I need a, I've got this new app new project and you know it goes back to who's actually coming, it's no longer the I. T. People who are actually coming to us, it's the lines of business. It's it's that entire dimension of business owners coming to us going this is my challenge and how can you HP help us And we rely on our breath of technology but also a breath of partners to come together and are of course reality is hand in hand and are collaborative business unit are collaborative storage product engineering group that actually brought this market. So we're very excited about this solution >>chris thanks for that input. Great insight, Jerome, congratulations on a great partnership with H. P. E. Obviously um great joint customer base congratulations on the product release here. Big moving the ball down the field as they say new functionality, clouds cloud native object store, phenomenal um So wrap wrap wrap up the interview. Tell us your vision for scalability in the future of storage. >>Yeah. Yeah I start I mean skeleton is going to be an amazing leader is already um but yeah so you know I have three themes that I think will govern how storage is going and obviously um Mark Andrews had said it software is everywhere and software is eating the world so definitely that's going to be true in the data center in storage in particular. Uh But the free trends that are more specific. First of all I think that security performance and agility is now basic expectation. It's not you know, it's not like an additional feature. It's just the best table, stakes, security performance and a job. Um The second thing is and we've talked about it during this conversation is edged to go you need to think your platform with Edge Co and cloud. You know you don't want to have separate systems separate design interface point for edge and then think about corn and think about clouds and then think about the divers. All this needs to be integrated in the design. And the third thing that I see as a major trend for the next 10 years is that a sovereignty uh more and more. You need to think about where is the data residing? What are the legal challenges? What is the level of protection against who are you protected? What what is your independence uh strategy? How do you keep as a company being independent from the people? You need to be independent. And I mean I say companies, but this is also true for public services. So these these for me are the three big trends. I do believe that uh software find distributed architecture are necessary for these tracks. But you also need to think about being truly enterprise grade. And there has been one of our focus with the design of a fresca. How do we combine a lot with product With all of the security requirements and that our sovereignty requirements that we expect to have in the next 10 years? >>That's awesome. Congratulations on the news scale. D Artois ca the big release with HP exclusive um, for six months, chris tucker, distinguished engineer at H P E. Great to ceo, jeremy, katz, ceo sexuality. Great to see you as well. Congratulations on the big news. I'm john for the cube. Thanks for watching. >>Mhm. >>Yeah.

(uplifting music) >> Hello and welcome to this Cube Conversation. I'm John Furrier, host of theCube here in Palo Alto, California. We've got two great remote guests to talk about some big news hitting with Scality and Hewlett Packard Enterprise. Jerome Lecat CEO of Scality and Chris Tinker, Distinguished Technologist from HPE, Hewlett Packard Enterprise, Jerome, Chris, great to see you both Cube alumnis from an original gangster days as we'd say back then when we started almost 11 years ago. Great to see you both. >> It's great to be back. >> Good to see you John. >> So, really compelling news around kind of this next generation storage cloud native solution. Okay, it's really kind of an impact on the next gen, I call next gen, dev ops meets application, modern application world and something we've been covering heavily. There's some big news here around Scality and HPE offering a pretty amazing product. You guys introduced essentially the next gen piece of it, Artesca, we'll get into in a second, but this is a game-changing announcement you guys announced, this is an evolution continuing I think is more of a revolution, but I think, you know storage is kind of abstractionally of evolution to this app centric world. So talk about this environment we're in and we'll get to the announcement, which is object store for modern workloads, but this whole shift is happening Jerome. This is a game changer to storage and customers are going to be deploying workloads. >> Yeah, Scality really, I mean, I personally really started working on Scality more than 10 years ago, close to 15 now. And if we think about it I mean the cloud has really revolutionized IT. And within the cloud, we really see layers and layers of technology. I mean, it all start at around 2006 with Amazon and Google and Facebook finding ways to do initially what was consumer IT at very large scale, very low credible reliability and then slowly creeped into the enterprise. And at the very beginning, I would say that everyone was kind of wizards trying things and really coupling technologies together. And to some degree we were some of the first wizard doing this, but we, we're now close to 15 years later and there's a lot of knowledge and a lot of experience, a lot of tools. And this is really a new generation. I'll call it cloud native, or you can call it next gen whatever, but there is now enough experience in the world, both at the development level and at the infrastructure level to deliver truly distributed automated systems that run on industry standard servers. Obviously good quality server deliver a better service than others, but there is now enough knowledge for this to truly go at scale. And call this cloud or call this cloud native. Really the core concept here is to deliver scalable IT at very low cost, very high level of reliability, all based on software. And we've, we've been participated in this motion, but we feel that now the breadth of what's coming is at the new level, and it was time for us to think, develop and launch a new product that's specifically adapted to that. And Chris, I will let you comment on this because the customers or some of them, you can add a customer, you do that. >> Well, you know, you're right. You know, I've been in the, I've been like you I've been in this industry for a, well, along time. Give a long, 20 to 21 years in HPE in engineering. And look at the actual landscape has changed with how we're doing scale-out software-defined storage for particular workloads. And we're a catalyst has evolved here is an analytics normally what was only done in the three letter acronyms and massively scale-out parallel namespace file systems, parallel file systems. The application space has encroached into the enterprise world where the enterprise world needed a way to actually take a look at how to, how do I simplify the operations? How do I actually be able to bring about an application that can run in the public cloud or on premise or hybrid, be able to actually look at a workload optimized step that aligns the actual cost to the actual analytics that I'm going to be doing the workload that I'm going to be doing and be able to bridge those gaps and be able to spin this up and simplify operations. And you know, and if you, if you are familiar with these parallel processes which by the way we actually have on our truck, I, I do engineer those, but they are, they are, they are they have their own unique challenges, but in the world of enterprise where customers are looking to simplify operations, then take advantage of new application, analytic workloads whether it be smart, Mesa, whatever it might be, right. I mean, if I want to spin up a Mongo DB or maybe maybe a, you know, last a search capability how do I actually take those technologies, embrace a modern scale-out storage stack that without without breaking the bank, but also provide a simple operations. And that's, that's why we look for object storage capabilities because it brings us this massive parallelization. Back to you John. >> Well before we get into the product. I want to just touch on one thing Jerome you mentioned, and Chris, you, you brought up the DevOps piece next gen, next level, whatever term you use. It is cloud native, cloud native has proven that DevOps infrastructure is code is not only legit. It's being operationalized in all enterprises and add security in there, you have DevSecOps, this is the reality and hybrid cloud in particular has been pretty much the consensus is that standard. So our defacto center whatever you want to call it, that's happening. Multicloud are on the horizon. So these new workloads are have these new architectural changes, cloud on premises and edge. This is the number one story. And the number one challenge all enterprises are now working on. How do I build the architecture for the cloud on premises and edge? This is forcing the DevOps team to flex and build new apps. Can you guys talk about that particular trend? And is it, and is that relevant here? >> Yeah, I, I now talk about really storage anywhere and cloud anywhere and and really the key concept is edge to go to cloud. I mean, we all understand now that the edge will host a lot of that time and the edge is many different things. I mean, it's obviously a smartphone, whatever that is, but it's also factories, it's also production. It's also, you know, moving moving machinery, trains, planes, satellites that that's all the edge, cars obviously. And a lot of that I will be both produced and process there, but from the edge who will want to be able to send the data for analysis, for backup, for logging to a call, and that call could be regional, maybe not, you know, one call for the whole planet, but maybe one corporate region the state in the U.S. And then from there you will also want to push some of the data to public cloud. One of the thing that we see more and more is that the D.R that has centered the disaster recovery is not another physical data center. It's actually the cloud, and that's a very efficient infrastructure very cost efficient, especially. So really it, it, it's changing the paradigm on how you think about storage because you really need to integrate these three layers in a consistent approach especially around the topic of security because you want the data to be secure all along the way. And data is not just data, its data, and who can access the data, who can modify the data what are the conditions that allow modification all automatically erasure of the data? In some cases, it's super important that the data automatically erased after 10 years and all this needs to be transported from edge to core to cloud. So that that's one of the aspects. Another aspects that resonates for me with what you said is a word you didn't say, but it's actually crucial this whole revolution. It's Kubernetes I mean, Kubernetes is in now a mature technology, and it's, it's just, you know the next level of automatized operation for distributed system, which we didn't have 5 or 10 years ago. And that is so powerful that it's going to allow application developers to develop much faster system that can be distributed again edge to go to cloud, because it's going to be an underlying technology that spans the three layers. >> Chris, your thoughts hybrid cloud. I've been, I've been having questions with the HPE folks for God years and years on hybrid clouds, now here. >> Right (chuckles) >> Well, you know, and, and it's exciting in a layout right, so you look at like a, whether it be enterprise virtualization, that is a scale-out general purpose virtualization workloads whether it be analytic workloads, whether it be no data protection is a paramount to all of this, orchestration is paramount. If you look at that DevSecOps, absolutely. I mean, securing the actual data the digital last set is, is absolutely paramount. And if you look at how we do this look at the investments we're making, we're making enough and look at the collaborative platform development which goes to our partnership with Scality. It is, we're providing them an integral aspect of everything we do, whether we're bringing in Ezmeral which is our software we use for orchestration look at the veneer of its control plane, controlling Kubernetes. Being able to actually control the active clusters and the actual backing store for all the analytics that we just talked about. Whether it be a web-scale app that is traditionally using a politics namespace and now been modernized and take advantage of newer technologies running an NBME burst buffers or a hundred gig networks with Slingshot network of 200 and 400 gigabit looking at how do we actually get the actual analytics, the workload to the CPU and have it attached to the data at risk. Where's the data, how do we land the data? How do we actually align, essentially locality, locality of the actual asset to the computer. And this is where, you know, we can look leverage whether it be a Zair or Google or name your favorite hybrid, hyperscaler, leverage those technologies leveraging the actual persistent store. And this is where Scality is, with this object store capability has it been an industry trendsetter, setting the actual landscape of how provide an object store on premise and hybrid cloud run it in a public cloud, but being able to facilitate data mobility and tie it back to, and tie it back to an application. And this is where a lot of things have changed in the world of analytics, because the applications that you, the newer technologies that are coming on the market have taken advantage of this particular protocol as threes. So they can do web scale massively parallel concurrent workloads. >> You know what let's get into the announcement. I love cool and relevant products. And I think this hits the mark. Scality you guys have Artesca, which is just announced. And I think it, you know, we obviously we reported on it. You guys have a lightweight true enterprise grade object store software for Kubernetes. This is the announcement, Jerome, tell us about it. What's the big deal? Cool and relevant, come on, this is cool. Right, tell us. >> I'm super excited. I'm not sure, if you can see it as well on the screen, but I'm super, super excited. You know, we, we introduced the ring 11 years ago and they says our biggest announcements for the past 11 years. So yes, do pay attention. And, you know, after, after looking at, at all these trends and understanding where we see the future going. We decided that it was time to embark (indistinct) So there's not one line of code that's the same as our previous generation product. They will both exist, they both have a space in the market. And Artesca was specifically designed for this cloud native era. And what we see is that people want something that's lightweight especially because it had to go to the edge. They still want the enterprise grid that Scality is known for. And it has to be modern. What we really mean by modern is, we see object storage now being the primary storage for many application more and more applications. And so we have to be able to deliver the performance, that primary storage expects. This idea of a Scality of serving primary storage is actually not completely new. When we launched Scality 10 years ago, the first application that we were supporting was consumer email for which we were, and we are still today, the primary storage. So we have, we know what it is to be the primary store. We know what's the level of reliability you need to hit. We know what, what latency means and latency is different from throughput, you really need to optimize both. And I think that still today we're the only object storage company that protects data from both replication and original encoding Because we understand that replication is faster, but the original encoding is more better, and more, of file where fast internet latency doesn't matter so much. So we we've been being all that experience, but really rethinking of product for that new generation that really is here now. And so where we're truly excited, I guess people a bit more about the product. It's a software, Scality is a software company and that's why we love to partner with HPE who's producing amazing servers, you know for the record and the history. The very first deployment of Scality in 2010 was on the HP servers. So this is a long love story here. And so to come back to our desk is lightweight in the sense that it's easy to use. We can start small, we can start from just one server or one VM I mean, you would start really small, but he can grow infinitely. The fact that we start small, we didn't, you know limit the technology because of that. So you can start from one to many and it's cloud native in the sense that it's completely Kubernetes compatible it's Kubernetes office traded. It will deploy on many Kubernetes distributions. We're talking obviously with Ezmeral we're also talking with zoo and with the other all those of communities distribution it will also be able to be run in the cloud. Now, I'm not sure that there will be many true production deployment of Artesca going the cloud, because you already have really good object storage by the cloud providers but when you are developing something and you want to test that, you know just doing it in the cloud is very practical. So you'll be able to deploy our Kubernetes cloud distribution, and it's more than object storage in the sense that it's application centric. A lot of our work is actually validating that our storage is fit for this single purpose application. And making sure that we understand the requirement of these application, that we can guide our customers on how to deploy. And it's really designed to be the primary storage for these new workloads. >> The big part of the news is your relationship with Hewlett Packard Enterprise is some exclusivity here as part of this and as you mentioned the relationship goes back many, many years. We've covered the, your relationship in the past. Chris also, you know, we cover HP like a blanket. This is big news for HPE as well. >> This is very big news. >> What is the relationship, talk about this exclusivity Could you share about the partnership and the exclusivity piece? >> Well, there's the partnership expands into the pan HPE portfolio. we look, we made a massive investment in edge IOT device. So we actually have how did we align the cost to the demand. Our customers come to us, wanting to looking at think about what we're doing with Greenlake, like in consumption based modeling. They want to be able to be able to consume the asset without having to do a capital outlay out of the gate. Number two, look at, you know how do you deploy technology, really demand. It depends on the scale, right? So in a lot of your web skill, you know, scale out technologies, it putting them on a diet is challenging. Meaning how skinny can you get it. Getting it down into the 50 terabyte range and then the complexities of those technologies at as you take a day one implementation and scale it out over you know, you know, multiple iterations over quarters, the growth becomes a challenge so working with Scality we, we believe we've actually cracked this nut. We figured out how to a number one, how to start small, but not limit a customer's ability to scale it out incrementally or grotesquely. You can eat depending on the quarters, the month, whatever whatever the workload is, how do you actually align and be able to consume it? So now whether it be on our Edgeline products our DL products go right there, now what that Jerome was talking about earlier you know, we, we, we ship a server every few seconds. That won't be a problem. But then of course, into our density optimized compute with the Apollo products. And this where our two companies have worked in an exclusivity where they scale the software bonds on the HP ecosystem. And then we can, of course provide you, our customers the ability to consume that through our GreenLake financial models or through a CapEx partners. >> Awesome, so Jerome and, and Chris, who's the customer here obviously, there's an exclusive period. Talk about the target customer and how the customers get the product and how they get the software. And how does this exclusivity with HP fit into it? >> Yeah, so there there's really a three types of customers and we've really, we've worked a lot with a company called UseDesign to optimize the user interface for each the types of customers. So we really thought about each customer role and providing with each of them the best product. So the, the first type of customer are application owners who are deploying an application that requires an object storage in the backend, you typically want a simple object store for one application, they want it to be simple and work. Honestly they want no thrill, just want an object store that works. And they want to be able to start as small as they start with their application. Often it's, you know, the first deployment maybe a small deployment, you know applications like a backup like VML, Rubrik, or analytics like (indistinct), file system that now, now available as a software, you know like CGI does a really great departmental NAS that works very well that needs an object store in the backend. Or for high performance computing a wake-up house system is an amazing file system. We will also have vertical application like road peak, for example, who provides origin and the view of the software broadcasters. So all these are application, they request an object store in the backend and you just need a simple high-performance working well object store and I'll discuss perfect for that. Now, the second type of people that we think will be interested by Artesca are essentially developer who are currently developing some capabilities or cloud native application, your next gen. And as part of their development stack, it's getting better and better when you're developing a cloud native application to really target an object storage rather than NFS, as you're persistent. It just, you know, think about generations of technologies and NFS and filesystem were great 25 years ago. I mean, it's an amazing technology. Now, when you want to develop a distributed scalable application object storage is a better fit because it's the same generation. And so same thing, I mean, you know, they're developing something they need an object store that they can develop on. So they want it very lightweight, but they also want the product that their enterprise or their customers will be able to rely on for years and years on. And this guy's really great fit to do that. The third type of customer are more architects, I would say are the architects that are designing a system where they are going to have 50 factories, a thousand planes, a million cars, they are going to have some local storage which will they want to replicate to the core and possibly also to the cloud. And as the design is really new generation workloads that are incredibly distributed but with local storage Artesca are really great for that. >> And tell about the HPE exclusive Chris. What's the, how does that fit in? Do they buy through Scality? Can they get it for the HP? Are you guys working together on how customers can procure it? >> Both ways, yeah both ways they can procure it through Scality. They can secure it through HPE and it's, it's it's the software stack running on our density optimized compute platforms which you would choose and align those and to provide an enterprise quality. Cause if it comes back to it in all of these use cases is how do we align up into a true enterprise stack, bringing about multitenancy bringing about the, the, the fact that you know, if you look at like a local coding one of the things that they're bringing to it, so that we can get down into the DL325. So with the exclusivity, you actually get choice. And that choice comes into our entire portfolio whether it be the Edgeline platform the DL325 AMD processing stack or the Intel 380, or whether it be the Apollos or like I said, there's, there's, there's so many ample choices there that facilitate this, and it's this allows us to align those two strategies. >> Awesome, and I think the Kubernetes piece is really relevant because, you know, I've been interviewing folks practitioners and Kubernetes is very much maturing fast. It's definitely the centerpiece of the cloud native both below the, the line, if you will below under the hood for the, for the infrastructure and then for apps, they want a program on top of it that's critical. I mean, Jerome, this is like, this is the future. >> Yeah, and if you don't mind like to come back to the myth on the exclusivity with HP. So we did a six month exclusive and the very reason we could do this is because HP has such breadth of server portfolio. And so we can go from, you know, really simple, very cheap you know, DL380, machine that we tell us for a few dollars. I mean, it's really like simple system, 50 terabyte. We can have the DL325 that Chris mentioned that is really a powerhouse all NVME, clash over storage is NVME, very fast processors you know, dense, large, large system, like the APOE 4,500. So it's a very large graph of portfolio. We support the whole portfolio and we work together on this. So I want to say that you know, one of the reason I want to send kudos to HP for the breadth of their server line really. As mentioned, Artesca can be ordered from either company. In hand-in-hand together, so anyway, you'll see both of us and our field working incredibly well together. >> Well, just on that point, I think just for clarification was this co-design by Scality and HPE, because Chris you mentioned, you know, the, the configuration of your systems. Can you guys, Chris quickly talk about the design. >> From, from, from the code base the software is entirely designed and developed by Scality, from testing and performance, so this really was a joint work with HP providing both a hardware and manpower so that we could accelerate the testing phase. >> You know, Chris HPE has just been doing such a great job of really focused on this. I know I've been covering it for years before it was fashionable. The idea of apps working no matter where it lives, public cloud, data center, edge. And you mentioned edge line's been around for awhile, you know, app centric, developer friendly, cloud first, has been an HPE kind of guiding first principle for many, many years. >> Well, it has. And, you know, as our CEO here intended, by 2022 everything will be able to be consumed as a service in our portfolio. And then this stack allows us the simplicity and the consumability of the technology and the granulation of it allows us to simplify the installation. Simplify the actual deployment bringing into a cloud ecosystem, but more importantly for the end customer. They simply get an enterprise quality product running on an optimized stack that they can consume through a orchestrated simplistic interface. That customers that's what they're wanting for today's but they come to me and ask, hey how do I need a, I've got this new app, new project. And, you know, it goes back to who's actually coming. It's no longer the IT people who are actually coming to us. It's the lines of business. It's that entire dimension of business owners coming to us, going this is my challenge. And how can you, HPE help us? And we rely on our breadth of technology, but also our breadth of partners to come together in our, of course Scality is hand in hand and our collaborative business unit our collaborative storage product engineering group that actually brought, brought this to market. So we're very excited about this solution. >> Chris, thanks for that input and great insight. Jerome, congratulations on a great partnership with HPE obviously great joint customer base. Congratulations on the product release here. Big moving the ball down the field, as they say. New functionality, clouds, cloud native object store. Phenomenal, so wrap, wrap, wrap up the interview. Tell us your vision for Scality and the future of storage. >> Yeah, I think I started in, Scality is going to be an amazing leader, it is already. But yeah, so, you know I have three things that I think will govern how storage is going. And obviously Marc Andreessen said it software is everywhere and software is eating the world. So definitely that's going to be true in the data center in storage in particular, but the three trends that are more specific are first of all, I think that security performance and agility is now basic expectation. It's, it's not, you know it's not like an additional feature. It's just the basic tables, security performance and our job. The second thing is, and we've talked about it during this conversation is edge to go. You need to think your platform with edge, core and cloud. You know, you, you don't want to have separate systems separate design interface point for edge and then think about the core and then think about cloud, and then think about the diverse power. All this needs to be integrated in a design. And the third thing that I see as a major trend for the next 10 years is data sovereignty. More and more, you need to think about where is the data residing? What are the legal challenges? What is the level of protection, against who are you protected? What is your independence strategy? How do you keep as a company being independent from the people you need to be in the band? And I mean, I say companies, but this is also true for public services. So these, these for me are the three big trends. And I do believe that software defined distributed architecture are necessary for these trends but you also need to think about being truly enterprise grade. and that has been one of our focus with design of Artesca. How do we combine a lightweight product with all of the security requirements and data sovereignty requirements that we expect to have in the next thing? >> That's awesome. Congratulations on the news Scality, Artesca. The big release with HPE exclusive for six months, Chris Tinker, Distinguished Engineer at HPE. Great to see you Jerome Lecat CEO of Scality, great to see you as well. Congratulations on the big news. I'm John Furrier from theCube. Thanks for watching. (uplifting music)

(upbeat music) >> Narrator: From around the globe. It's theCUBE with digital coverage of IBM Think 2021. Brought to you by IBM. >> Welcome back to theCUBE coverage of IBM. Think 2021 virtual. I'm John Furrier, host of theCUBE. And this is theCUBE virtual and Uli Homann who's here Corporate Vice President, of cloud and AI at Microsoft. Thanks for coming on. I love this session, obviously, Microsoft one of the big clouds. Awesome. You guys partnering with IBM here at IBM Think. First of all, congratulations on all the success with Azure and just the transformation of IBM. I mean, Microsoft's Cloud has been phenomenal and hybrid is spinning perfectly into the vision of what enterprises want. And this has certainly been a great tailwind for everybody. So congratulations. So for first question, thanks for coming on and tell us the vision for hybrid cloud for Microsoft. It's almost like a perfect storm. >> Yeah. Thank you, John. I really appreciate you hosting me here and asking some great questions. We certainly appreciate it being part of IBM Think 2021 virtual. Although I do wish to see some people again, at some point. From our perspective, hybrid computing has always been part of the strategy that Microsoft as policed. We didn't think that public cloud was the answer to all questions. We always believed that there is multiple scenarios where either safety latency or other key capabilities impeded the usage of public cloud. Although we will see more public cloud scenarios with 5G and other capabilities coming along. Hybrid computing will still be something that is important. And Microsoft has been building capabilities on our own as a first party solution like Azure Stack and other capabilities. But we also partnering with VMware and others to effectively enable investment usage of capabilities that our clients have invested in to bring them forward into a cloud native application and compute model. So Microsoft is continuing investing in hybrid computing and we're taking more and more Azure capabilities and making them available in a hybrid scenario. For example, we took our entire database Stack SQL Server PostgreSQL and recently our Azure machine learning capabilities and make them available on a platform so that clients can run them where they need them in a factory in on-premise environment or in another cloud for example, because they trust the Microsoft investments in relational technology or machine learning. And we're also extending our management capabilities that Azure provides and make them available for Kubernetes virtual machine and other environments wherever they might run. So we believe that bringing Azure capabilities into our clients is important and taking also the capabilities that our clients are using into Azure and make it available so that they can manage them end to end is a key element of our strategy. >> Yeah. Thanks Uli for sharing that, I really appreciate that. You and I have been in this industry for a while. And you guys have a good view on this how Microsoft's got perspective riding the wave from the original computer industry. I remember during the client server days in the 80s, late 80s to early 90s the open systems interconnect was a big part of opening up the computer industry that was networking, internetworking and really created more lans and more connections for PCs, et cetera. And the world just went on from there. Similar now with hybrid cloud you're seeing that same kind of vibe. You seeing the same kind of alignment with distributed computing architectures for businesses where now you have, it's not just networking and plumbing and connecting lans and PCs and printers. It's connecting everything. It's almost kind of a whole another world but similar movie, if you will. So this is really going to be good for people who understand that market. IBM does, you guys do. Talk about the alignment between IBM and Microsoft in this new hybrid cloud space? It's really kind of now standardized but yet it's just now coming. >> Yeah. So again, fantastic question. So the way I think about this is first of all, Microsoft and IBM are philosophically very much aligned. We're both investing in key open source initiatives like the Cloud Native Computing Foundation, CNCF something that we both believe in. We are both partnering with the Red Hat organizations. So Red Hat forms a common bond if you still want to between Microsoft and IBM. And again, part of this is how can we establish a system of capabilities that every client has access to and then build on top of that stack. And again, IBM does this very well with their cloud packs which are coming out now with data and AI and others. And again, as I mentioned before we're investing in similar capabilities to make sure that core Azure functions are available on that CNCF cloud environment. So open source, open standards are key elements. And then you mentioned something critical which I believe is misunderstood but certainly not appreciated enough is, this is about connectivity between businesses. And so part of the power of the IBM perspective together with Microsoft is bringing together key business applications for healthcare, for retail, for manufacturing and really make them work together so that our clients that are critical scenarios get the support they need from both IBM as well as Microsoft on top of this common foundation of the CNCF and other open standards. >> It's interesting. I love that point. I'm going to double down and amplify that late and continue to bring it up. Connecting between businesses is one thread. But now people, because you have an edge, that's also industrial business but also people. People are participating in open source. People have wearables, people are connected. And also they're connecting with collaboration. So this kind of brings a whole 'nother architecture which I want to get into the solutions with you on on how you see that playing out. But first I know, you're a veteran with Microsoft for many, many years of decades. Microsoft's core competency has been ecosystems developer ecosystems, customer ecosystems. Today, that the services motion is built around ecosystems. You guys have that playbook IBM's well versed in it as well. How does that impact your partnerships, your solutions and how you deal with down this open marketplace? >> Well, let's start with the obvious. Obviously Microsoft and IBM will work together in common ecosystem. Again, I'm going to reference the CNCF again as the foundation for a lot of these initiatives. But then we're also working together in the ed hat ecosystem because Red Hat has built an ecosystem and Microsoft and IBM are players in that ecosystem. However, we also are looking a higher level there's a lot of times when people think ecosystems it's fairly low level technology. But Microsoft and IBM are talking about partnerships that are focused on industry scenarios. Again retail, for example, or healthcare and others where we're building on top of these lower level ecosystem capabilities and then bringing together the solution scenarios where the strength of IBM capabilities is coupled with Microsoft capabilities to drive this very famous one plus one equals three. And then the other piece that I think we both agree on is the open source ecosystem for software development and software development collaboration and GitHub is a common anchor that we both believe can feed the world's economy with respect to the software solutions that are needed to really bring the capabilities forward, help improve the wealth economy and so forth by effectively bringing together brilliant minds across the ecosystem. And again, just Microsoft and IBM bringing some people but the rest of the world obviously participating in that as well. So thinking again, open source, open standards and then industry specific collaboration and capabilities being a key part. You mentioned people. We certainly believe that people play a key role in software developers and the get hub notion being a key one. But there are others where, again, Microsoft with Microsoft 365 has a lot of capabilities in connecting people within the organization and across organizations. And while we're using zoom here, a lot of people are utilizing teams because teams is on the one side of collaboration platform. But on the other side is also an application host. And so bringing together people collaboration supported and powered by applications from IBM from Microsoft and others is going to be, I think a huge differentiation in terms of how people interact with software in the future. >> Yeah, and I think that whole joint development is a big part of this new people equation where it's not just partnering in market, it's also at the tech and you got open source and just phenomenal innovation, a formula there. So let's ask what solutions here. I want to get into some of the top solutions you're doing with Microsoft and maybe with IBM, but your title is corporate vice president of cloud and AI come on, cause you get a better department. I mean, more relevant than that. I mean, it's exciting. Your cloud-scale is driving tons of innovation. AI is eating software, changing the software paradigm. We can see that playing out. I've done dozens of interviews just in this past month on how AI is more certainly with machine learning and having a control plane with data, changing the game. So tell us what are the hot solutions for hybrid cloud? And why is this a different ball game than say public cloud? >> Well, so first of all let's talk a little bit about the AI capabilities and data because I think there are two categories. You're seeing an evolution of AI capabilities that are coming out. And again, I just read IBM's announcement about integrating the cloud pack with IBM Satellite. I think that's a key capability that IBM is putting out there and we're partnering with IBM in two directions there. Making it run very well on Azure with our Red Hat partners. But on the other side, also thinking through how we can optimize the experience for clients that choose Azure as their platform and IBM cloud Pak for data and AI as their technology, but that's a technology play. And then the next layer up is again, IBM has done a fantastic job to build AI capabilities that are relevant for industries. Healthcare being a very good example. Again, retail being another one. And I believe Microsoft and IBM will work on both partnerships on the technology side as well as the AI usage in specific verticals. Microsoft is doing similar things within our dynamics product line. We're using AI for business applications for planning, scheduling, optimizations, risk assessments those kinds of scenarios. And of course we're using those in the Microsoft 365 environment as well. I always joke that despite my 30 years at Microsoft, I still don't know how to read or use PowerPoint. And I can't do a PowerPoint slide for the life of me but with a new designer, I can actually get help from the system to make beautiful PowerPoint happen. So bringing AI into real life usage I think is the key part. The hybrid scenario is critical here as well. And especially when you start to think about real life scenarios, like safety, worker safety in a critical environment, freshness of product we're seeing retailers deploying cameras and AI inside the retail stores to effectively make sure that the shelves are stocked. That the quality of the vegetables for example, continues to be high and monitored. And previously people would do this on a occasional basis running around in the store. Now the store is monitored 24/7 and people get notified when things need fixing. Another really cool scenario set, is quality. We're working with a finished steel producer that effectively is looking at the stainless steel as it's being produced. And they have cameras on this steel that look at specific marks. And if these marks show up, then they know that the stainless steel will be bad. And I don't know if you've looked at a manufacturing process, but the earlier they can get a failure detected the better it is because they can most likely or more often than not return the product back into the beginning of the funnel and start over. And that's what they're using. So you can see molten steel, logically speaking with a camera and AI. And previously humans did this which is obviously a less reliable and be dangerous because this is very, very hot. This is very blowing steel. And so increasing safety while at the same time, improving the quality is something that we see hybrid scenarios. Again, autonomous driving, another great scenario where perception AI is going to be utilized. So there's a bunch of capabilities out there that really are hybrid in nature and will help us move forward with key scenarios, safety, quality and autonomous behaviors like driving and so forth. >> Uli, great insight, great product vision great alignment with IBM's hybrid cloud space with all customers are looking for now and certainly multi-cloud around the horizon. So great to have you on, great agility and congratulations for your continued success. You got great area cloud and AI and we'll be keeping in touch. I'd love to do a deep dive sometime. Thanks for coming on. >> John, thank you very much for the invitation and great questions. Great interview. Love it. Appreciate it. >> Okay, CUBE coverage here at IBM Think 2021 virtual. I'm John Furrier, your host. Thanks for watching. (upbeat music)

>>okay. >>Just about a year ago, governments around the world forced shutdowns of their respective economies. We've never seen anything like it. Central banks took immediate action and effective monetary policy like none we've ever seen before. They dropped interest rates to near zero, injected a huge amount of cash into the system, and they fueled this liquidity boom to support those individuals and businesses that were in greatest need. Banks were overwhelmed with the volume of paperwork, for instance, small business P, P P loans and other things. Home buying boomed as mortgage rates hit all time lows for several weeks in the spring, it was complete chaos, but the tech industry stepped up and accommodated work from home. Cloud infrastructure was spun up instantly as access to data centers was really restricted, and Saas companies became a fundamental staple of not only keeping the lights on but helping customers thrive in the face of a pandemic. Automation became a >>mandate >>as humans, they couldn't possibly keep up with the tidal wave of demand, a document overload that was hitting the system. Now, one of the companies that was there to help financial firms in particular, get through the knothole was Oculus, a company that focuses on intelligent automation to deploy the power of machines to allow humans to focus on what they do best. Hello, everyone. And welcome to this cube conversation. My name is Dave Volonte, and we're profiling the most interesting SAS startups that are reimagining how we work. And with me is Sam Bobbly, the co founder and CEO of Oculus. Sam, welcome to the Cube. First time. >>Hey, Dave. Thanks so much for having me excited to have the conversation. >>Yeah, me too. So, listen, I know you've told the story of a zillion times, but I want a community here. How and why did you start the company >>for sure. So when I was in college, I was having a conversation with my dad. Uh, he was telling me about a meeting he just had with his elder law attorney. And the other law attorney was complaining about having to review hundreds or thousands of pages of financial documents for every long term care Medicaid application. When you apply for Medicaid coverage to enter a nursing home, you're required to submit 60 months of financials along with your application. And traditionally the elder law attorney or a nursing home would review those documents literally page by page, line by line to find high value transactions, transfers and other financial trends. And when I heard about this, it just it didn't make sense to me. I said, You know why? In this day and age isn't there? Why isn't there a technology solution that can ingest the documents and spit out a digital report replacing the cumbersome manual page by page review? So it really just started as a research project, trying to learn more about optical character recognition, which is the technology of transforming images into text. And, you know, as we kind of kicked around different products in the market, we we realized that there was an opportunity to build a unique platform that could ingest documents of any format quality and produce perfectly accurate results. And that was the genesis behind what ultimately became Oculus. >>You were a young man at this time. How old were you at that time? >>I was 22 when we started >>so fearless. And, uh, now my friend Eddie Mitchell started a company about 20 years ago. We hacked together a >>Dell >>system and this camera. It was all about the modern operating room in the future, and he showed it to a doctor and and it was just a prototype, she said. How much? He said 10 grand. She wrote a check right there. You have a similar story? How did you see the company? >>So we we we do have a pretty similar experience. You know, Our our concept was we want to get perfect results the customer every time. So if a customer sends us a clean bank statement from Chase or a blurry cell phone image with someone's thumb in the picture from a community bank in Maine, and it's rotated sideways or upside down like we want to give consistent, perfectly active results every single time. And you know, our our view was to completely solve the business problem. So the very first version of the software that we built, we had a rudimentary machine process to extract 60 or 70% of the data, and then we had a little tool built on the back end, where literally, me, myself and some of our early employees would clean up the data output, make sure it's perfect and then return When we couldn't submit, we'd returned to the customer accurate data that could be used at the time for for a Medicaid decision. And what happened is, while we were in our beta period, customers fell in love with the product. They felt it was magical and really just superior from an accuracy standpoint to anything they had ever tested before. And And one of our beta testers said to us, uh, where do I submit credit card information? So at that time, I turned to my colleagues and I said, I think we're ready to I think we're ready. Start charging for this thing and and roll it out for prime time. >>When I was researching the company, I learned that you leveraged. At least some of the idea came from the capture, and I never knew this, But the capture that we all hate came from Google where they write, they had at one point you could maybe you still can. You can go online. You can read books and have to It's just scanned. You can't even read the stuff half the time. So they were putting the capture in front of us, quite brilliant to try to solve for those those those white spaces that they didn't know. So So how did you learn from that? Was there an A P I that you could plug into Google's data set, or did you do your own? What was that? How did that all work? >>The the concept of humans in the loop is super powerful, right? So when we first started, we recognize that OCR and machine data capture couldn't do the job completely. OCR, generally speaking, can process financial documents with roughly 80 to 85% accuracy plus or minus machines, particularly struggled with semi structured and unstructured documents where the format is unpredictable as well as lower quality images. So pretty early on, we recognized that we needed human intervention in the process in order to achieve perfect accuracy every single time, and also to create training data to constantly teach our machine learning models to get smarter and drive additional automation. So, as I mentioned, the very first version was myself and other employees verifying the data on our own. But as we started thinking about how to scale this up and, you know, take on millions and millions of documents, we needed to, uh, you know, learn how to better parallelized task and really build the system for for efficiency and for scanning. So we we we learned about the Google Books Initiative and their ability to leverage capture technology and a distributed workforce to verify pieces of information that their systems couldn't automatically read from books. And we took a lot of those learnings into building our human in the loop infrastructure. And, you know, a way to think about our our product is it's the marriage of machines and humans that makes us unique. As much of the heavy lifting as we can do with machines we do. But whatever we can't do automatically, we slice into smaller tasks and intelligently route those tasks to humans to perform verification. We then layer in algorithmic checks to make sure our humans did the review correctly. The customer gets perfect results, and that same perfect output is used in a feedback loop to train our machine learning models to get smarter and smarter, which dynamically improves the product on an ongoing basis. And, you know, the folks at Google were we're onto this pretty early with the capture technology, and we were following in their footsteps with our own unique take on it, but specifically applying it to financial documents. >>I mean on the Cube. We know a lot about this because we were looking at transcriptions of video all the time, and it just keeps getting better and better and better in our systems. Get smarter and smarter, smarter. So we're sort of closing that gap between what humans can can do and machines can't. And I would expect that you're seeing the same thing. I mean, you think there's always going to be kind of humans in the loop in terms of the quality or is that gap going to be, you know, six nines in the, you know, near near term. >>I think it's gonna take a while to get rid of all the edge cases. You know, you mentioned the PPB program like we've been on the back end processing P p P loans for some of the leading players, like Cross River Bank, blue Vine, Square Capital and others. And you know, what we've seen during the ppb process is just a a wide variety of different documents and inputs, Uh, and a lot of difficult to read documents that are, you know, very challenging to automate. So I think we will, you know, incrementally continue to automate more and more of the process. But the value of having humans plus machines is much more powerful than just having machines alone or just having humans alone. And as it relates to the end customer, our our goal is to do as much of the mundane work as possible to free our customer up to do the more cerebral analysis. So in a lending context and and for the record, you know, our our biggest market opportunity is in the limbic space. Despite the fact that we started with medicating attorneys, we quickly pivoted and realized that our technology was super valuable to to lenders to help them automate the underwriting process. And our our thesis is, if we can take out all of the necessary evils like document review and allow underwriters to focus on the actual analysis of financial health, it's a win win win and creates a really fantastic, complementary relationship between us and our customers. >>Yes, I want to ask you about the pivot to financial services. You said you started well, you have the inspiration from elder law because Jimmy McGill. Okay. Saul Goodman breaking bad. You got started. An elder law. But then you made the pivot to financial services. Really pretty early on. You had really good, great product market fit, but you kind of went for it. I get early twenties. You know, you didn't have a big family at the time. I didn't have a lot of a lot of risks. So you went for it, right? But talk about that pivot because a lot of companies wouldn't do that. They get comfortable and just, you know, stay where they're at. But you made that >>call. It was a big risk, for sure. I mean, look, the product was working. We launched the paid version of our product in 2016. Pretty quickly were onboarding dozens of accountants and attorneys, you know, doing Medicaid work. Um, in mid to late 2016, we got introduced to a large small business lender in New York City called strategic funding Source. They've since renamed them their company Capital as the current name, but we met with the CEO and the head of product and showed them a demo of the technology. And they said, You know, quote unquote, we've been looking for this for years. We've been looking for something exactly like this for years, and we said back to them about how many pages of financial documents to review every single month. They pointed out to a bullpen of dozens of people sitting there tearing through bank statements, page by page, line by line. And they said, You know, it's hundreds of thousands. My eyes almost fell out of my head. I couldn't believe the volume, and it was much bigger than what the, you know, single accountants or attorneys were doing. Uh, so we made the strategic decision to pivot at that time and focus on FINTECH. Lenders continue to tailor the product and build additional features for the fintech lending space. And and, you know, lending in general had the perfect mix of short sale cycle and high average customer value that allowed a company like ours to scale and ramp our revenue quite quite quickly. Um, and then the other thing that happened is kind of as we were getting deeper and deeper into the space, the fintech space as a whole started growing massive. So we we kind of had the perfect storm of product market fit, plus the market growing that allowed us to really ramp significantly grow revenue. And, uh, you know, despite the fact that it was the risk it was, it was totally right. Decision to to focus the business on financial services >>much bigger Tam. And you could subjectively measure it by the size of the stack of papers. Um, how how does this relate to our p A. As you know, the R p. A hot space. You probably get this question a lot, and it sounds like there are some similarities with software bots. What's the similarity? What's the difference? >>Good question. It's It's totally a synergistic offering, right? So rrp a companies like UI path and automation anywhere they typically provide a horizontal toolkit to allow you know, banks and lenders to automate much of the mundane work like, for example, collecting information from emails or doing onboarding for a new employee. Or, you know, different types of tasks that a manual worker would have done but could be automated with relatively simple code. Um, what happens in our p a. Workflows is they get hung up on tasks that can't be completely automated. So, for example, a robot might be, uh, trying to complete an intend lending flow. But when a bank statement is submitted as part of that flow, the robot can't parse it. So what they do instead, is they routed to an underwriter who performs a manual analysis, keys information into a back office system that the bank is using and that information then gets handed back to a robot and continues the automation flow. What we do is we plug the gaps that used to be manual so a robot can pass US documents like bank statements or pay stubs or tax stops. We run our unique human in the loop process. We return structure Jason output directly to a robot, and it continues into the, you know, to the next step of the flow. And, you know, in in summary, the combination of robotic process automation and human in the loop, which is what we're doing, creates true and and automated flows rather than R P. A mite by itself might get you 80% of the way there. >>So do you have, like, software integrations or partnerships with those companies. How are you integrating with them? >>We do. We have software integrations with both UI path and automation anywhere in our core fintech lending business. R P A isn't as prevalent, but we are now expanding beyond fintech lenders into mortgage lending and traditional banks. And we're also expanding use cases, right? Like historically small business lending was the core of our business. More recently, we've moved into consumer auto mortgage, additional asset classes. And as we've gotten deeper with financial institutions, we've seen even more opportunity to partner and coexist with broader r p a player's >>Yeah, great. I mean, I was just staring at their s one. I guess it was came up Monday. Half over half a billion dollars in a are are they're actually cash flow positive as you iPad. So we're going to see we're going to see them hit the public market shortly. Um, hang on, folks. Uh, now it's okay. So this is you sell a sas, right? A SAS service. Even though there's that human in the loop, that's all part of the service. How do you How do you price? >>So usage based model. So we we kind of try to model are themselves nerve. A massive company is super powerful. We apply that same concept document processing, so it's a usage based model. Customers will pay us either per application per document or per page, and if they want to subscribe for, you know, one document per month or millions of documents per month, it's up to them. And we're able to flex up and flex down to meet the supply and demand. Um and that that concept that scalability and flexibility was particularly powerful in the P P P program, right? P P. P. Was kind of a very unique situation in the sense that lenders weren't able to predict the amount of loans they needed to process in normal lending. A small business lender can tell you Hey, we expect to get roughly 10,000 applications in the month of April with P P p. They could tell us, Hey, we're going to send out 200,000 marketing emails and we expect 30% of people might reply, but we really don't have any idea, right? So what happened is the big banks ended up hiring without exaggeration. Thousands of temporary employees to come in and review documents and kind of scrambled to do this in a work from home setting during the pandemic. Whereas Cross River, they took a technology first approach. They implemented our A P I in the back end, and it enabled them to instantly scale up their resources. And the result of that is Cross River ended up becoming a top three pp, a top three p p. P lender nationally, outperforming many of the big banks with a super efficient and fast document review process. Because we were able to help them on the back end with the automation. >>That's awesome. I love the pricing model you mentioned. You mentioned Amazon. Is that the cloud you use or >>we do Our Our product is hosted in AWS and we, you know, take a lot of learnings from them from a business model and and positioning point of view. >>Yeah, and and I'm thrilled to hear you say I mean, I think a lot of forward thinking startups are doing the consumption model. I mean, you certainly see that with companies like snowflake and data dog and stripe. I mean, I think that that SAS model of okay, we're gonna lock you into a one year, two year, three year term. Sorry if if you get acquired, you're stuck with some, you know, stranded licenses. That's your problem. I think that, you know, you really thought that out. Well, um, you mentioned you're sort of expanding your your your total available market now, looking at at new markets, what are some of the big trends that you want to ride over the coming decade as you scale your company? >>The biggest one for us is mortgage automation. You know, the kind of the one of fintech small business and consumer loans were optimized, and we went from a place where, uh, you know, you would deal with a loan officer and have an in person transaction to modern day. You can get a loan from small business. If you're a small business, you can get a loan from PayPal online effectively instantly. If you're a consumer, you can get a loan from Sofia or lending club super smooth digital experience and really revolutionized the way that you know, the market thinks about financial products. I think the next wave of that is mortgage, and that's what we're focused on. Uh, you know, mortgage is a massive market in the sense of thousands of lenders. The average application contains a couple 100 pages worth of financial documents, and the pain points of the back end of the mortgage process were really accentuated. During covid, right refi Valium went way up and mortgage lenders were forced to process that volume in a work from home setting. So what happened is mortgage lenders were struggling with the concept of sending personally identifiable financial information to underwriters who aren't working in an office there, working at home and, you know, kids running around a million things going on. And it's just more difficult to manage than ever before. Um, and you know, as as the the volume kind of normalized debate and mortgage lenders thought about their own future of automation, I think there was just clear recognition across the board that these these mortgage lenders needed to learn from some of the fintech and really focus on automating the back office peace and you know, to your point earlier about business model, what we think about is translating cost that used to be a fixed cost and turning them into a variable costs So now, instead of worrying about having to match supply and demand and hire or fire people, depending on the volume that's coming in on any given month, a mortgage lender can instantly flex up, reflects down and have a super fast, accurate process to handle the darks. Um, and you know, we're seeing just awesome traction in the market with that with the mortgage space and we're excited to push >>forward there. That's great. Thank you. I mean you, Sam. You describe the chaos that work from home. The financial industry is very overly officious. If you know it's very security conscious. How do you handle security? Maybe you could comment on that. How you think about that? >>Sure. I mean, we we take a compliance first approach. We built the product from the ground up with compliance in mind, knowing that we were selling into financial institutions. We have a sock to type one and type two certification, which is, you know, an industry standard. All of our our verification happens with the Oculus employees. So there's no third parties involved in our process whatsoever. Um and then lastly, But perhaps most importantly, our product in and of itself is innately, um, you know, innately drives compliance. So every data point that we process from a financial document, we not only return the data, we return an exact bounding box coordinates of where that data field appeared on the original source so that that audit trail lives with the loan throughout its life cycle. What we saw prior to Oculus is a mortgage would go through an underwriting process. They make a decision, and then that loan might be sold downstream and a diligence firm as to come in. And they don't have the resources to review all the loans. So they review 15% of the loan tape and then they say, you know, they give a rating and what we do is we proactively tackle that by creating a a perfect audit trail upon origination that can live with the loan throughout its life cycle and that that process and that traceability has been super valuable to our mortgage and banking partners. >>So you can ensure the providence there. So let me end just by talking about the company a little bit. So you incubated you nailed the product market fit the and you pivoted and re nailed the product market fit. And like a lot of companies in your position, I would imagine you saw your growth come from just having a great product. You know, initially, word gets around, but then you got a scale. Uh, maybe you could talk a little bit about how how you did that. How you're doing that. You know where your hiring how you're hiring, what your philosophy is on on scaling. >>Sure. Look, I think the key for us is just surrounding ourselves with the right people. You know, the right mentors, advisors and investors to help us really take the business to the next level. Uh, you know, we had no pride of authorship. We're building this and recognize that there are a lot of people out there who have been there, done that and can really guide us and show us the way. I know you had interviewed Marc Roberge on on the show previously. Formerly the C r. O of hubspot. Mark was someone that we you know, we we read his book and had taken sales advice from him from an early age. And over the over time, we got him a little bit more familiar with the company. And and ultimately, Mark and his partner, J Po at Stage two Capital ended up investing in Oculus and really helping us understand how to build the right go to market engine. Um, as the company got bigger, we took on investments from really reputable firms in the financial services space. So our largest investors are okay, H C F T fintech collective and and QED investors. Uh, you know, QED was was founded by Nigel Morris, who is the co founder of Capital One. They backed Sophia and Prosper and a lot of big fintech lenders and, you know, bringing the collective expertise from the fintech sector as well as you know, from a sales and go to market strategy. Point of view created the right mix of ingredients for us to to really ramp up significantly. Uh, we had an awesome run over the years. We were pretty recently recognized by magazine as the number one fastest growing fintech company. And, you know, as the momentum is increased and the market conditions have been very favorable to us, we we just want to double down and expand. Mortgage is the biggest area of opportunity for us. And what we're seeking from a hiring perspective is, you know, go to market sales account executive type resources on the mortgage side as well as you know, deeper products expertise both on the mortgage side as well as with machine learning our product. Because we have the human in the loop piece, we create massive amounts of training data on a daily basis. So it's a, I think, a really exciting place for cutting edge machine learning developers to come and and innovate. >>What can you share with our audience about, you know, your company, any metrics and whatever you're comfortable with, how much money you've raised on my head count? If you want to get some companies comfortable giving a r r others on. But what what do you What can you share with us? >>Sure. Um, you know, we we've raised about 50 million in venture capital. We have grown from one to north of 20 million in revenue in the in the last three years. So particularly since you know, 2017, 2018 is what we really started to see. The growth take off, uh, company size. We have about 800 to 900 employees globally. Now we have about 200 corporate employees who perform the, you know, the the day to day functions of Oculus. And then we have a long tail of about 600 or so verifiers who perform data verification and quality control work again, Speaking to the human in the loop piece of the bottle. Uh, we're, you know, we're focused on expanding beyond the fintech customer base, where we serve customers like plaid PayPal lending club so fi square, etcetera into the mortgage space and ultimately into the traditional banking space where you know, the problems, frankly, are extremely similar. Just on a much larger scale. >>San Bobbly. Congratulations on all the success. You You've got a great road ahead. I really appreciate you coming on the Cube, >>Dave. Thanks so much. It's been a great chat. Look forward to keeping in touch. >>Alright, Did our pleasure. Thank you for watching everybody. This is Dave Volonte for the Cube. We'll see you next time

>> Woman: From theCUBE studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is a CUBE conversation. >> Okay welcome back already Jeff Frick here with theCUBE. We're in our Palo Alto Studios here. Can't believe we just turned the calendar on September the 1st of 2020. What a year, it's cruising by. And one of the big topics obviously is working from home, we're seeing more and more companies telling everybody to expect to work from home through the end of the year or into next year, some are even saying indefinitely. And we've got an expert coming on the show that we're excited to have back. It's Dr. Karen Sobel Lojeski. She is the founder and CEO and author of "Virtual Distance and the Virtual Distance Company". Karen, great to see you. >> Great to see you too Jeff, thanks for having me. >> Absolutely, so I wanted to get you back on for a couple reasons. One is we first met at the ACGSV, Association for Corporate Growth Silicon Valley 2018 Awards, about two years ago was summer of 2018. And at that point, you introduced me to the concept and our audience, to the concept of virtual distance, which if I can summarize is basically communicating through devices versus face-to-face, like we're doing here. And the bad things that come from that and challenges and this and the other. Who knew that two years from then we would all be forced and not asked, but forced to basically go to a work-from-home environment and increase the frequency and use of using electronic devices to communicate not only for work, but also for social stuff, for school, for everything, so, oh my goodness, you happen to be in the right place at the right time for not necessarily the greatest of reasons, but wow, I mean, how amazing this transformation that we've all been forced to since the middle of March. First off, get your thoughts on that and then we'll dive into what people should be thinking about, what people should be doing about it and how they can, I want to say make the most, but it does kind of make the most of, not necessarily the greatest situation. >> Yeah, well, I could have never imagined when we were sitting out at that round table outside the room where we had dinner that we'd be here two years later, right, talking about virtual distances, you said in the context of everyone having to be isolated from each other and working from home. Obviously, like everyone on the planet, I think I would never have wanted to see this happen. But I feel fortunate in a way to have put this out there many years ago because today it's serving a lot of different organizations, corporations, schools, even government organizations to have a very steady framework that's based on 15 years of data, to understand how to make the best, as you said, of this situation and to reduce some of the negative consequences of virtual distance and actually use the framework as a way to get to know people better and really see them more as human beings in a way that helps them through not just their work life, but also through the family challenges that they're having with every kid now, sort of going back to school, many of them online, there's a lot of virtual distance that can crop up even in the house. But I guess I just, I'm glad that I discovered virtual distance, and that it's useful in this time. >> Right, right. So let's jump into it. And actually I want to skip to the end of the book before we get into the beginning of the book because you talked about leadership and when this thing first hit, we had a number of leaders from the community, talking about leading through trying times. And most great leaders know that their primary job is really communication, right? Communication to their teams, communication to their constituents, communication to their customers. COVID has really changed the communication challenges and increase them dramatically and most of the stuff we're hearing is that leaders need to communicate more frequently and in more variety, both in terms of topics as well as communication forms. How does that kind of jive with your studies on virtual distance and leadership, given the fact that there aren't a lot of other options in terms of face-to-face or a little bit more intimate things? They have to use these electronic means. So what tips do you have for leaders, as they suddenly were told everybody's working from home starting like tomorrow? >> Yeah, well, it's funny that you asked me that because we learned early on when I started looking at this phenomenon in the early 2000s. We learned early on that it actually takes a lot more work and time to lead virtually than it does in more traditional environments. And the reason is because a leader really has to bring forward a lot of context that tends to go underground or become invisible about other people when we're working virtually. So the leader already was under a lot of pressure if you will, to communicate much more than they had been in more traditional settings because a lot of the information and knowledge and intelligence if you will, about the company was available in the context of the environment and other people. So leaders were already on track to having to communicate much more in order to make make remote work and virtual work work. Well, which of course it can. >> Right. >> But what happened was, we found that when suddenly a light switch is turned off, leaders needed to communicate even more. And that is kind of standard crisis management leadership. We talked a little bit about that in the past, right? So we can look at the situation we're in as not just an acute crisis that came to bear in early January and then sort of everything locking down in March. But we can kind of look at this as a long-term leadership crisis management strategy on top of just over communicating to do better in virtual space. And in a crisis management situation you definitely want to have even more communication, but it's also an opportunity actually to develop other leaders behind you on teams that can also communicate as well, to share that responsibility, to share that leadership commitment to a lot of communication during times like this, that actually works really well. >> Right, 'cause one of the things you talked about that's super, super important, more important actually than physical distance or the virtual distance is what you called the affinity distance, and I think it ties back to another point in the book in terms of clarity of communication from the leadership. What are the goals, what is the vision? And reinforcing that at a rate and frequency much higher than they've ever done before to build that affinity so people can continue to feel like they're part of something beyond more just the tasks and the roles and the assignments that I have to do every day. >> Yeah, that's exactly right, Jeff. So again, we found early on. And it was a surprise to us at first, but then became kind of obvious that people tend to think that the real challenge with virtual work is physical distance, right, sort of the space between us in terms of a geography or a geographic separation. And what we learned early on through the statistics, as well as sort of common sense was that actually physical distance had the least impact on corporate outcomes than any of the other three factors. So the affinity distance piece is really all about, how do I gain an affinity for someone when I really don't know that much about them. And I don't know much about their context in the moment that we're talking, and I also just know less about them in general when we're virtual. >> Right. >> So affinity distance is much more important than the physical separation because it's what holds us together and allows us to build very, very deep relationships which we can count on and trust no matter what the situation is. And yeah, doing that in these times is very important. >> So it's funny, right? 'Cause so much of the problems that we have with communications are in the subtle feedback mechanisms that aren't necessarily in the overt communication and as you said, those can be lost in a lot of channels. What's kind of (chuckles) interesting that's going on with COVID is we're actually seeing a side of people that we never did see in the physical space, right. Now we're literally being invited into everyone's home. I mean, I'm in your home office, I can see your books on your bookshelf and people are bringing people into their home which they may not have done before or been comfortable. Not only that, but the spouse is there, he or she is working from home. The kids are there, they're doing their school from home, the occasional dog or pet or other thing kind of jumping through the screen. So it's this weird kind of juxtaposition. On one hand you've lost a whole lot of kind of subtle communication reinforcers. On the other hand, you're getting kind of a whole new kind of the human side aspect in terms of who these people are and what they're all about, that you never necessarily had before. So I think the blending of the whole self is probably been elevated, even though the communication challenges without having kind of all these subtle feedback loops that we really rely on, are gone. So when you think about communication and communication methods based on communication messages and what you're trying to do, how do you tell people to think about that? What types of communications should be done in which ways to make them the most effective and avoid some of the real problems that come from the wrong type of communication on the wrong type of channel? >> Yeah, so first of all, you make some great points. Because it really is when we invite people into our home via these kind of video links, people see a different side of us, a contextualized side to us that they normally wouldn't see. And that opens the door, as you said, to having other communications. I think before I get directly to your question, one thing that strikes me about what you say is that this is truly a shared experience, right? So all of us are being impacted by COVID-19, the economics of the situation, the childcare issues that are raised by the situation, the community issues that we all have in our towns or cities. And we're sharing that experience, which is a great jumping off point in terms of communications because we actually have a very similar context from which were working. In terms of which communications to use when. This is a really important question, I had a person from a very, very large tech company that people use every day to go look for things on the Internet, call me and tell me at one point early, sort of early on in the pandemic that some of his people were starting to beg him to turn off the video screens. (chuckles) And just use audio because sometimes when we're overwhelmed with a crisis the video can be helpful, but it can also sort of be overwhelming. So it's important to understand sort of when to discern, when to use audio and when to use visual, when to use email and when to use tax. And the basic tips here is that email has really never been good to explain ourselves to other people. It's been great to set up lunch dates or an appointment and things like that. So email should be used pretty sparingly. Audio is really great if we don't have video, but we also just kind of need a rest from video. And we also need to really focus on a person's voice very, very intensely. So if we're trying to solve a really critical problem that's a little bit conceptual, sometimes audio can can be more helpful. Video is obviously great because it gives us all this context and it allows people to see into our home and hear our cats kind of screaming at each other which is happening right now in my house. But it also lets us see each other's expressions and a little bit of the facial communication that we need in order to know if people are okay with what we're saying, if they're quizzical and looking like they kind of don't understand et cetera, The overarching goal of communications in a situation like this, that I talk a lot about in the book, is to mix up modes of communication as much as you can think about that, right? Because we get context as I've just explained in different ways through different modes. And so if we mix it up, if I say well, I've talked to Jeff a lot over video maybe I'll just give him a call today. Or I've been using a lot of email to talk to one of my colleagues in Norway, maybe I should really try to set up a video call that is very helpful because it gives us dimensionality to someone's personality as well as their context. >> Yeah, that's a really interesting point. I think most people are always saying turn on the video, turn on the video, we want to see everybody's face but as this thing continues to go and go and go and it's going to go for the foreseeable future, and people are going to get fatigue, right, people are getting Zoom fatigue. That's a really interesting and simple way to I think, kind of lessen the stress a little bit by telling people, let's just turn the video off. We don't necessarily need to see each other, we know what we look like. And if you feel some reason to turn it on, you can turn it on, but having that as an option, I think that's a really insightful. And the other thing I want to focus on is it's not all negative, right? I mean, there's a lot of studies about the open office plan, which didn't necessarily work so well, and we've had conversations with a lot of people that say, just because you throw everybody in a room together doesn't mean that they're necessarily going to communicate more and there aren't necessarily the water cooler chatter that you're kind of hoping for. And in fact, you have a bunch of stats in the book here about remote workers having actually a lot of success. They have less trouble with technology, they can cope best with multiple projects. There's so many less interruptions, (chuckles) assuming the rest of the family has a place to work. But you don't get kind of the work interruptions that you would in terms of actually getting projects done. So, it's not all bad. And I think there's a lot of things that we can help people think about to really take advantage or make the most of the opportunity, to take advantage is probably the wrong word. So, vary communications, frequency in communications is certainly a good one. What are other ways that people kind of build trust? 'Cause you talk a lot about trust and feeling part of something bigger and not letting the individual tasks and the little day-to-day things that we do get in the way of still feeling like you belong to something that's important, that you care about, with your teammates that you want to move forward. >> Yeah, so the it's a great question, and again I think, obviously, amongst sort of the darkness there's always sort of opportunities to see some light. And I think one of the ways that we can see light through working this way at this time is to expand our understanding of the people that we're working with, right? And we can do that in a framework, it doesn't have to be haphazard. So when we look at affinity, what we really want to do is to bring forward the way people feel about their value systems, what's important to them about work in sort of pre-COVID or BC, right before COVID, but also what's important to them about their family life or about the situation that's happening, that's interacting with and integrating with their work life. So asking those questions in ways that are not guised, but sort of directly asking them things about what they value? How they feel that they're interdependent on other people? Why other people are important to them in their work, as well as just in their day-to-day lives? Those are the kinds of opportunities for questions around things that are not work related, are not party Friday, which are also kind of fun things right? But that get more to the core of who a person is, that whole person that you were talking about. And that allows us to see so much more deeply, ironically, into that human being. And when you talk about purpose, and really wanting to feel like we're part of something bigger than ourselves, those kinds of insights that build affinity help us help other people. So, we tend to focus on task orientation and goals and deliverables and all that which is absolutely critical for business continuity, and to get through the day and focus our attention. But actually what makes people feel really good about their day as a person is often how they can help other people. And so if we draw this closer affinity, we can actually figure out ways to help other people. And that just lifts everybody up and makes the work product actually even better. >> Right, right, I've always ascribed to the theory that right, if you spend your work helping other people do their work better, easier, get roadblocks out of the way, whatever, be an enabler, then you're getting this multiplier effect because I'm doing my work and I'm helping somebody else be more efficient. And it's a very different way to kind of think about work in terms of helping everybody be more effective, more efficient, and as you said, you get this great multiplier effect, but I want to shift gears a little bit. And this sentence, just jumped out of your book. I'm actually going to read from it, that despite the fact that many leadership challenges are new, we continue to over rely on management thinking and solutions that are fundamentally designed around outdated assumptions. I mean, to me this is such a huge thing. We had Martin Mikason at the beginning of this process and his great line, and he's managed remote companies for years and multiple companies. And he said, it's so easy to fake it in the office, right? It's so easy to look busy. (Karen chuckles) Whereas when you're working from home, the only thing you have to show is your output. And that's what you're graded on, your output. And yet when this thing first hit, we saw all types of new products coming out that are basically spyware for the employees, how often are you sitting in front of your computer? How often are you on a Zoom call? How often are you, doing these things? And it's striking to me that it's such an outdated way to measure activity, versus a way to measure outcome and output and what are you trying to do? I mean, it just drives me crazy to hear those things, I just love to get your take that people still are mixed up about what they're supposed to be measuring and what the purpose of the whole task is, which is to get output done not just to be busy and sit in Zoom calls all day. >> It's so true. So there's sort of two prongs to that question. And two very important things to look at. So one is how do we measure productivity, right among knowledge workers, which has been the topic of a lot of conversation. And the other thing is, what have leadership models been built off of in the past, right? If you just take the first thing first. Productivity today, if you go to the Bureau of Labor Statistics website, you will still see productivity defined as how many widgets can I produce in an hour. That's still today, how we measure productivity, even though (chuckles) all of our output or most of our output, right, is coming from our knowledge, our thinking, our problem solving. (clears throat) So the notion of productivity feels very heavy handed to a lot of people, because it's still rooted literally economics wise in this notion of x widgets per hour, which just doesn't fit. And that comes through the second point, which is our leadership models, right? So I talked in the book and I've been talking about this for many years, because it just jumped out at me when I started to do this research, is that if you look at most leadership models today, any one of them, pick whatever one you like, transformational leadership, transactional leadership, situational leadership or whatever it might be. Those leadership models were built mainly in the 1950s. And some of them came later in the 80s. We have a few new ones, (clears throat) excuse me that have come after the internet, but not too many. And fundamentally, if you look at the communication mode of leaders in the 50s, and the 80s, it was face-to-face or phone. I mean, just by definition, was in person or via phone. But that assumption doesn't hold true anymore and hasn't held true for a good 15 years. And yet, in every business school today, we still use those leadership models as sort of our first run at how to lead. It's not that they're not useful and helpful and don't have extremely good words of advice for leaders. But the main thing leaders do is communicate. So if the fundamental channel over which leaders are communicating has completely changed, it seems natural that we should be looking for new leadership models (chuckles) that fit our times a little bit better. Taking pieces of the best of those leadership models, but really turning them on their head and saying, what's really a better approach when fundamentally our communication mode itself, it has completely changed. >> Right right. >> And that's what we do as leaders. >> And I do just want to say a word. We're talking about working from home and knowledge workers and unfortunately, there's a whole lot of people going through COVID right now that don't have that option, right. If you're in the travel industry, if you're in the hospitality industry, if you're in a lot of services industries, if you are a plumber, you can't go virtual as a plumber, unfortunately. So just to acknowledge that, what we're talking about applies to a lot of people, but certainly not everyone and everyone doesn't have these options. So I just wanted to mention that but before we wrap, Karen, the thing that struck me, as you're talking about kind of the 50s and the organizational structure, was it was really command and control and just top down hierarchies that dictated what people did. And then you as you said, your job was to put so many widgets on the widget receiver per hour, and that's what you were graded on. Where in knowledge workers, it's a very different thing. And in fact, you shouldn't tell people how to do things, you should tell people what the objectives are, and then see what they come up with. And hopefully, they'll come up with lots of different ways to achieve the objective, most of which that management has never thought of, they're not down in the weeds, and you get all kinds of interesting and diversity of opinion and different approaches. And kind of a DevOps mentality where you try lots of things and you'll find new ways to get it done. So I want to close out on this final kind of communication piece for leadership. And this is the why. I think back in the 50s, I don't know that the why we was that important. Or maybe it was and I'm not giving it enough credit. But today the why is so important. That is such a big piece of why do I come to work every day? And why am I important to work with my colleagues and move this mission forward. And so whenever you can just share, how important the why is today, and then how important the why is in trying to build a culture and hold people together when they are now by rule distributed all over the place. Talk a little bit about the why. >> Yeah, I love that question, Jeff. Because in the book, I talk a lot about Taylorism. And Taylor was the founder of like bureaucratic management and leadership and he actually despised the worker. (chuckles) There's actually a little piece in the book where he's testifying to Congress and saying that the man who handles pig iron, a type of steel, wasn't intelligent enough to understand what pig iron really was, he got a lot of flak for that. (chuckles) So as we've evolved, right, and as we've grown as organizations into knowledge workers, and I think your point about not everyone is a quote unquote, knowledge worker, is really, really important. The bottom line is, we're trying to measure our output and the value of our work by these older standards. And so people are struggling a little bit with that sort of disconnect, and looking for why, what purpose do they have? What is their bigger purpose? How are they connected to the organization in new ways? And there's actually an excellent analogy in the Navy. Is has its traditions in the Navy, called Commander's Intent which I talk about. So if you think of ships that used to sail, right out to sea, and they had lots of goals about either taking over a certain country or whatever it was they were doing, they couldn't be together, right. So we've been working remotely for a very long time. So the commander would gather all of his lieutenants, and basically tell them what his or, there were no hers at that time, but what his intentions were. And the lieutenants, the captains of the other ships, would go out to each ship, and they wouldn't follow a blueprint tactical plan they would just have the Commander's Intent as their guide. And then they were free actually, to use whatever strategies and tactics that they thought of and that worked in their context in order to fulfill the Commander's Intent, but they weren't given a blueprint. Their goal was really to use their own smarts, their own critical thinking in order to carry forward that intent. And I think that idea is very powerful today because I think if leaders can focus on helping their workers, their employees, their ecosystem partners, supply chain partners, whatever it may be, understand what the intent of the company is, and show that they trust the employees or the partner to deliver on that intent, with whatever means and creativity and imagination, guided by the intent, can be used and selected from on their day-to-day lives, people will feel so much more empowered and still get to the same outcome or actually better, than if they're told do A, B, C and D. So this idea of leader intent, I think would serve companies really well during this time, and if I could just add one other quick thing. There's another idea that comes out of sort of the military that I used and doing some work with leadership crisis management after 9-11. Around this notion of net-centricity. Net-centricity is sort of allowing people on the ground to sort of form their own networks and push information up to leadership so that they can make certain decisions and then push those decisions down with an intention back to the ground, so that this network can operate with some freedom and flexibility. And I think corporations can put net-centricity actually into place in a structured way and they'll find themselves with a lot more flexibility, higher levels of business continuity and effectiveness, and perhaps, most importantly, giving a sense of more meaningfulness and purpose and powerfulness, or self actualization back to the worker. >> Right, right, as you're speaking the word I just can't get out of my head is trust, right? It's so much about trust. And then giving people the power, enabling people the power that you trust to go do the jobs that you've hired them to do. And then to the other point that we talked about, then as a leader, help them remove roadblocks. Give them the tools, do the things that you can do to help them do their job better, versus to your point, being super prescriptive on the road actions that you wish that they would do, and then managing to the completion of the road, actions versus the accomplishment of the bigger task. It seems so simple, it's so hard for so many people to grok. It just, it still just amazes me that so many folks are unfortunately still stuck in that old paradigm. But you can't anymore 'cause everybody's (chuckles) working from home, so you better get with the program. >> (clears throat) Yeah, I'm sorry, I have a little frog in my throat. But you can. And just to add to what you're saying. I think the best thing that leaders can do is also expand their understanding of the worker as no longer just coming to work in some kind of bubble. They're coming to work with all kinds of personal situations. And I've had clients who have sort of tried to get away from that and keep the worker in a bubble. And I think, to be successful as we get through this sort of long-term leadership crisis, I think it's important to lean in to the chaos. Lean into the complexities that COVID, the pandemic, the economic situation bring and see the corporation and their role as leaders as trying to help that whole person with the complexities of their life, as opposed to trying to divorce them from their life, because that has not worked. And what works best, and I've seen this over and over again, is that companies that lean into the crisis, embrace it, and really try to help that whole employee who's coming to work in their house, really, really works very well. >> Yeah, it's going to be interesting as we come out of the summer and go back into the fall, which is the traditional season of kids going back to school and everybody kind of going back to work, and in our world conferences, and it's kind of the ramp up of a busy activity until we get kind of to the Christmas season again coming off of summer, now knowing that isn't a temporary situation, this isn't going away anytime soon. I mean, we used to talk about the new normal in March or April and May. Well now talking about the new normal in September, October, November and into 2021 is a whole different deal. So to your point, I think that's a great tip, lean in, do the best you can, learn from the experts. You don't need to do it by yourself. There's lots of documentation out there. Darren Murph has stuff up from GitHub. Or excuse me GitLab. There's lot of good information. So you do have to kind of buy into it and embrace it, 'cause it's not it's not going away. So these are great tips Karen and I give you this, the last word before we sign off. Of all the work you've done, all the clients you've worked with, a couple of two or three really good nuggets that are really simple things that everybody should be thinking about and doing today. >> I think, there's the Waldorf Schools out by you on the west coast, right, have a motto that they use for education. And it it says in through the heart out through the mind. And I think more than ever, leadership and business can borrow that idea. I think we have to sort of look at things in through the heart. And then, distribute our directions and our leadership out through the mind. At the end of the day (chuckles) we're all human beings that are all struggling in this shared experience, something that has literally never happened on planet earth with 8 billion people, connected through technology with a global pandemic. And so if we kind of can make a shift and think about taking things in through the heart and then delivering out through the mind. I think that a lot of people will feel that compassion. And that will translate into the kind of trust that we're trying to build between all of us to get through it together. And I think when we do that, I have a lot of confidence in the human spirit that we will get through it. People will be able to look back and say, yes, this was very difficult and horrific on many levels, but at the end of the day, maybe there's a little bit of a renaissance in how we sort of look at each other and treat each other with compassion and some love and joy, even in the worst of times. I think that translates over any communication medium (chuckles) including the one we're using today. >> Well, Karen, thank you for the time and thank you for closing this with a little bit of light. Congrats again on the book, "The Power of Virtual Distance", I'm sure it's available everywhere. And again, great to see you. >> Thank you so much Jeff, you too. >> All right. >> Take care. >> She's Karen, I'm Jeff, you're watching theCUBE. Thanks for watching. We'll see you next time. (soothing music)

>> Announcer: From theCUBE studios in Palo Alto and Boston. It's theCUBE. Covering IBM Think. Brought to you by IBM. >> Hi everybody, we're back this is Dave Vellante from theCUBE and you're watching our wall-to-wall coverage of IBM's Digital Think 2020 event and we are really pleased to have Guillermo Miranda here. He's the Vice President of Corporate and Social Responsibility. Guillermo thanks for coming on theCUBE. >> Absolutely, good afternoon to you. Good evening, wherever you are. >> So, you know this notion of corporate responsibility, it really has gained steam lately and of course with COVID-19, companies like IBM really have to take the lead on this. The tech industry actually has been one of those industries that has been less hard hit and IBM as a leader along with some other companies are really being looked at to step up. So talk a little bit about social responsibility in the context of the current COVID climate. >> Absolutely. Now thank you for the question. Look, first our responsibility is with the safety of our employees and the continuity of business for our clients. In this frame what we have done is see what is the most adequate areas to respond to the emergency of the pandemic and using what we know in terms of expertise and the talent that we have is why we decided to work first with high performance computing. IBM design and produce the fastest computers in the world. So Summit and a consortium of providers of high performance computing is helping on the discovery of vaccinations and drugs for the pandemic. The second thing that we are doing is related with data and insights. We own The Weather Company which is at 80 million people connected to check the weather every morning, every afternoon. So through The Weather Company, we are providing insights and data about county level information on COVID-19. Another thing that we are doing is we are offering some of our products for free. Watson, it is a chatbot to inform about what is adequate, what is needed in the middle of a pandemic if you are a consumer. We are also helping with our volunteers. IBM volunteers are helping teachers and school districts to rapidly flip into remote learning and get used to the tools of working on a remote environment. And finally we have a micro volunteering opportunity for anybody that has a computer or an android phone. So with the world community grid, you can help with the discovery also of drugs and vaccinations for COVID-19. >> Wow that's great, those are four awesome initiatives. They can't get the vaccine fast enough. Getting good quality information in the hands of people in this era of fake news also very very important. Students missing out on some of the key parts of their learning so remote learning is key. I love this idea of kind of micro crowd sourcing solutions. Really kind of opening that up and hopefully we'll have some big wins there Guillermo. Thank you for that. I want to ask you people talk about blue collar jobs, they talk about white collar jobs, you guys talk about new collar jobs. You and others. What are new collar jobs and why are they important? >> Look, in this data, digital, artificial intelligence driven economy, it's important not to have a digital divide between the haves and the have nots on the foundational skills to be operational in a digital economy. So new collar jobs are precisely the intersection of the skills that you need to operate in this digital driven economy with the basic knowledge to be a user of technology. So think about a cyber security analyst. You don't need a masters degree in industrial engineering to be a cyber security analyst. You just need the basic things about operating an environment on a security control center for instance. Or talk about blockchain or talk about software engineering, full stack developer. There are many roles that you can do in this economy where you don't need to have a full four-year degree in a university to have a decent paying job for the digital economy. These are the new collar jobs and what we are attempting to do with the new collar job definition is to get rid of the paradigm that the university degree is the only passport to a successful career in the marketplace. You can start in different, having the opportunity to have a job in a high tech area. Not necessarily with a PhD in engineering as I said, it's something important for us, for our clients and for the community. >> Yeah, so that's a very interesting concept that a lot of us can relate to. To go back to our university days, many of the courses that we took, we shook our heads and said, "okay, why do I have to take this?" Okay, I get it, well rounded liberal arts experience, that's all good but it's almost like you're implying that the notion of specialization that we've known for years like for instance, in vocations, auto-mechanic, woodworking, etc. Planning that have really critical aspect of the economy. Applying that to the technology business. It's genius and very simple. >> Absolutely. Look, this is the reinvention of vocational education for the 21st century where you continue to need the plumber, you continue to need the hairdresser but also you need people that operate the digital platforms and are comfortable with this environment and they don't need to pass at the beginning through full university. And it's also the concept that we have divided the secondary education, high school from college, university etc., like a Chinese wall. Here is high school, here is college. No! There can be a clear integration because you can start to get ready without finishing high school yet. So there are several paradigms that we have evolved in the previous century that now we need to change and be ready for this 21st century digital driven economy. >> Yeah, very refreshing. Really about time that this thinking came into practice. Talk about P-Tech. How does P-Tech fit into acquiring these skills? And maybe you could give us a sense as to the sort of profile of the folks and there backgrounds and give us a sense as to and add some color to how that's all working. >> Absolutely, so look, the P-Tech model started 10 years ago in a high school in New York City, in Brooklyn. And the whole idea is to go to an under-served area and create a ramp onto success that will help you to first finish high school. Finishing high school is very important and has a lot connotations for your future. And then at the same time, they start getting an associate degree in an area of high growth. The third component is the industry partner. An industry partner that works with the school district and the community college in order to bring the knowledge of what is needed in that community in order to create real job opportunities and we will send you the people and then you will use it. No! We need to work together in order to train the talent for the future. And you just go to the middle age and the guilds were the ones that were preparing the workers. So the industry was preparing the workforce. Why in the 20th century we renounced to that? Having real, relevant skills starting in high school, helping the kids to graduate with a dual diploma. High school, college and practice in real life what it is to be in a workplace environment. So we have more than 220 schools. In this school year, we have more than 150,000 kids in 24 countries already working through the P-Tech model. >> Love it and really scaling that up. So let's say I'm an individual. I'm a young person, I'm from a diverse background, maybe my parents came to this country and I'm a first generation American. Of course, it's not just the United States, it's global but let's say I'm from a background that's less advantaged, how do I take advantage? How hard is it for me to tap in to something like P-Tech and get these skills? >> Well, first one of the characteristics of the model is this is free admission. So there is not a barrier fence. If your school district offers P-Tech, you can apply to P-Tech and get into the P-Tech model education without any barrier without any account. And the second thing that you need to have is curiosity. Because it's not going to be the typical high school where you have math, science, gym, whatever. This is more of an integration of how the look of a career will be in the future and how you have to start understanding that there are drivers into the economy that are fast tracks into well paid jobs. So curiosity on top of being ready to join a P-Tech school in the school district where you live in. >> That's great Guillermo, thank you for sharing that. Now of course corporate responsibility, that's a wide net. This is one of your passions. I'll give you the last word to kind of, where do you see this whole corporate responsibility movement going generally and specifically within IBM? >> I think that this whole pandemic will just accelerate some of the clear trends in the marketplace. Corporate responsibility cannot be an afterthought as before in the '80s or '90s. I will put a foundation. I have a little of profits that are left and then I will distribute grants and that's my whole corporate responsibility approach. Corporate responsibility needs to be within the fabric of how do you do business. It has to be embedded into the values of your company and your value proposition and you have to serve those projects with the same kind of skills and technology, in the case of IBM, that you do for your commercial engagements. And this is what we do in IBM. We help IBMers to be helpful to their communities with the same kind of quality and platforms that we offer to our clients. And we help to solve one of the most complicated problems in society through technology, innovation, time. >> Love it. Guillermo thanks so much, you're doing great work. Really appreciate you coming on theCUBE and sharing with our audience. Congratulations. >> Absolutely. Thank you for very much for having me. >> You're very welcome and thank you for watching everybody. This is Dave Vellante from theCUBE. You're watching our continuous coverage of IBM Think 2020, the digital version. Keep it right there, we'll be right back after this short break. (bright music)

from the cube studios in Palo Alto in Boston connecting with thought leaders all around the world this is a cube conversation hi I'm Stu man a man and welcome to this special cube conversation over helping cover the second generation of the VMware cloud on Dell EMC happy to welcome to the program Rick fillers who's the vice president of data center and cloud with IDC not too far from me physically even though of course in today's day and age we're all practicing social distance so Rick great to see you thanks so much we've done it well thanks Stu pleasure to be here looking forward to a great conversation all right so Rick you know usually this time of year you and I see other more than we their families because we are traveling a circuit going to the analyst invent like and one of the topics we spent a lot of time talking about over the years is of course cloud you know VMware's partnership with Amazon is of course one that the entire industry but notice of and the relationship of Amazon VMware and Dell is an interesting one what we're talking about today though is the VMware cloud or in the shorthand VM see on LEM see and it's the second generation of this product help us understand kind of where this fits in the categorization and the research that you and an IDC look at yes - it's an interesting question it's one that we've actually been thinking about for several years now and it had to do with some early conversations we were having back then with companies about their private cloud environment they'd been deploying those for the last four or five years we were seeing them up on a sort of refresh cycle and when he started asking about how satisfied they'd been with those and where they wanted to use them and we got back some very consistent feedback saying that they'd had some problems with their first generation of their private cloud environment and nothing needed to address those and one of them was a consistency problem is that you know every private cloud they built whether they build it themselves or they looked at a hosted private cloud provider even in their own company we're different different technologies different and figure different sets of tools and that was a big problem for them the second big problem they'd run into was basically every time there's a new technology or an upgrade or fix we basically can't adopt it quickly we can't use it till the next refresh cycle so we're always behind we're playing catch-up and and neither one of those things really aligned with what they felt cloud should be and what they've been seeing in their public cloud environment and so when we looked at that and we started looking at the feedback about was combiner we realized that we were about to see a new generation of private cloud environment but we said but this will be different not just because of new technology but it'll be actually different use cases and a different approach and the first thing is we said it's first of all these are it's not so much a private cloud is that they dedicated cloud it's it's I have resources that are dedicated to a business or a service an application I want to get done and and I want to basically operate that just like all those other cloud and then the second thing is is they said and by the way this is less and less about a general-purpose new data center and we just run my data center same way it's I want this to be a platform for creating new services that I want to deliver in a location a factory a hospital you know a city block whatever that is and and so we brought those together and we started looking at those and saying well this is really going to lead to the emergence of a whole new product class which we've started calling local cloud as a service because it reflected both of those things is like it is no longer assembling piece parts but it was consuming these resources and as a service method with all the benefits of agility and responsiveness and and continued enhancement that come with that but it was also about I need to be able to put these in new location not just in my corporate data center but out where I'm trying to do new businesses and services in and that's what led us to start talking about this in this new product category called local cloud as a service and then we started seeing solutions that came out on the market that fit very much with this idea okay yeah Rick really interesting because you're right you know private cloud is a conversation we've been having in the industry for about a dozen years and one of the biggest challenges is you talk to 100 customers and you get a hundred and fifty definitions of what a private cloud is so if I hear you right local cloud is in some ways it's an extension of what we see in the public cloud so you know I think back it used to be hey can I get this same stack in both place we saw companies like you know IBM and Oracle and even VMware dang you know how can I match what you have in your data center there as opposed to you know as your stack AWS outposts we're saying hey we're actually gonna give you the you know the same you know same hardware you know same software and as a service as you said yeah you talked about also some of those new locations so you know without getting into too much depth so it sounds like and I looked a little bit of research there there is the data center piece and then really emerging there's the potential for edge use cases do I see that right is just just like you know we've got kind of the hyper scalars we've the data center edge is pulling on everything so you're saying edge doesn't kill the cloud and everything before it it's gonna just be another op in oh absolutely I mean trust this is it's more of an extension of the cloud environment and by that we also said one of the other critical things in this is it's it changes you if you think about new applications that you're trying to create whether it's in the public cloud or whether one of these local cloud environments they're being built on a cloud native architecture and that's one of the other key elements of this solution is these become the platforms that allow enterprises to bring things like containers and service designs and this sort of you know DevOps driven application development model into both the corporate data centers which absolutely this these solutions like but also again to extend it out to places where in the past you didn't have a lot of IT didn't have a lot of compute and storage but now if you're trying to do things like real-time monitoring for you know in the world we're living in today Oh an airport you know can I use machine vision to track the health of the going through the airport I need to deliver a cloud service essentially at that Airport I have latency issues I have availability issues I can't do it from a data center you know sitting out halfway across the country it has to be at the airport but I need to be able to basically have a reliable consistent cloud environment but now I can put in ten airports or a hundred so it's that combination of location but consistency everywhere I put it that's part of what this this new stories about and and I think that's the other big part of the messenger excellent Rick so one of the things I for we get into the numbers and talk specifically about the VMware solution how do customers get from where they are who these type of solutions you know one of the discussions around private cloud is could I upgrade what I have moved to these environment I think about many of the solutions that are extending public clouds it it doesn't necessarily mesh into what I have today so it did how do we get from you know the environments that I have today you know and how do these local cloud as a services fit in yeah so this is this is actually one of the interesting use cases for this is one way you can use this is to deploy this in your corporate data set where you but yet it's creating that public cloud environment you can do a lift and shift and leverage this as a way to MA I guess you would say now it's shift and lift because now you can bring it into this local fly as a service platform and still run it locally get those kind of things tested and by weight and as you decide which functions you may want to move offload to a public cloud or add dr you can use this platform to do that but I think there's there's more to it than that the the other part of of what we talk about here is is and I think it's something that that needs to be addressed as something that helps people do this faster is these new systems while very modern very consistent there is a great value they like many of the more modern merged systems that are coming on the market have very different power profiles very different network requirements then what's in a lot of corporate data centers and that's one thing we've seen again and again when we've talked to people about deploying these is the technology's great the solutions great but you know I have to make sure I've got the right power and I've opened up the firewalls and all those things one thing that I found interesting is we're starting to see companies say one way to remove that friction is you know there if there's a colocation facility near the customer site that has great power has great network connectivity you know I can use that place to now deliver this service in days instead of weeks because it's concentrated there you know it's a pure environment yeah and I think that's one thing that's also helping with this shift is people can leverage those facilities in that activity to basically make this migration a lot easier for companies when they want to when they want to transform their environment yeah really important points there Rick absolutely we you know we've been telling companies for years you need to understand what you're good at and what you're not and you know pouring concrete and managing power and bullying there's a handful of companies that are excellent at that most of the rest of you companies you suck at it so therefore if you can leverage other people that you can do that so when you say local it does not need to mean a piece of real estate that I own it could be you know that that spectrum of boosting or the environment yeah all right let's get to the numbers Rick so we're gonna pull up a light here with some of your research you know for years we've been talking about you know the private cloud category is huge compared to a public cloud because well public cloud is growing huge numbers compared to traditional IT it is small so let's take a look at the slides and talk us through what we're looking at here yeah so this is the thing part of it when we were talking about this forecast and we again we're looking at product like you know the VMware cloud on Dell you see and the alternative solutions out there is is for part of the use case which we've talked about whereas this is a the next-generation of the corporation private cloud with better connectivity and better consistency in some ways that's the easy activity but what you're doing is as we've said is I'm translate I'm transferring from a upfront capital expenditure to a 3-4 year subscription and so when we look at this and we started thinking about the forecast and what we're saying is what I've done is I've moved from you know an upfront spend in one year to spreading it out over three years and from a forecast standpoint that means in the early years while you may be deploying and lot of companies are gonna be leveraging these in their in their private cloud and their data centers the revenue stream to the provider in this case VMware and WMC or the group we're talking about today streams over three years so the forecasts can look really big or grows very fast but that's because that subscription revenue keeps growing and growing so today when we looked at you know comment some of the solutions that have been out there you brought up earlier you know the Rackspace and others as early versions of this but you know it's still relatively new these types of solutions of only on the market after six months seven month so 2020 even without Cove it wasn't going to be some huge year one thing we see actually is that these types of solutions are even more attractive in the world we're living in because they give you that promise of rapid deployment in scale but absolutely by 2022 you know that accumulated revenue stream that subscription scream both for enterprise and for a growing number of edge use cases we're talking you know revenues up and around the five seven billion dollar range and that only accelerates one thing that's not really showing in here yet but it's also part of this local conversation is is the 5g build-out and the extension and use of these local clouds in connection with the 5g environment and that's part of this edge use case too so so absolutely if you want to see you know total revenue streams here over you know in 2022 as we talked about here just under five billion dollars going from you know a half a billion dollars this year but even the biggest growth and the biggest expansion is after that and why we think this is is the value why why people are willing to pay for this is because of that value of consistency continuous enhancements and a platform for innovation that's what makes this all come together and why we think this is gonna be such a big and important market in the coming years yeah absolutely and you know has an impact on your job rake instead of counting on is in the growth there you're now talking to Wall Street about you know oh well Dell might have shipped X number of boxes but they can't recognize it over this period of time so let's talk about the customers though how it is a solution like this you know what do you see it affecting their adoption of what they're doing with their overall you know I mean this is the case specifically for VMware cloud on Delhi see is you know without a doubt as we all know that VMware and and is is a critical part of most corporations IT environments today many of their applications are there they've invested great amounts of resources and expertise and understanding how to operate and drive those environments and and one thing this does is again it gives them that ability to leverage those investments and the things they've done there for application design and that's the recovery and and and sort of the app mule management of their IT environment but now again use it in this as a service way so it's definitely one of the big benefits we see is it helps people make that transition removing the friction of that modernization for a lot of companies if they want to move to a cloud environment that's step one I think that's value one I would say and point out you know VMware also now is being very you know focused on making sure that it's also a strong platform for these next-generation cloud native development environment and that's been added to these platforms and we'll absolutely expect to see this and all the VMware cloud solution so that's another great part of this is there again preserving that ability for their customers who both do better with their existing environment and also have a platform for going forward with these new systems you know for us the big thing is is a continual focus by VMware and Dell as partners to make sure that it can scale its ability to operate these environment one of the things they're making a commitment to to their customers we are going to make these continuously available available on very good short notice and that they continually improve and that's gonna take a lot of back-end investment because really VMware has to now centrally manage not one hundred or a thousand potentially tens of thousands of system for many customers around the world that's the real next big step here we see is when you can add that fleet management ability so the company has the ability to say I can now deploy some great new service in one place a hundred places a thousand places while still being secure while still offering my end users you know the availability and the latency that they want that's a very powerful thing that companies are gonna be able to offer in the coming years all right well Rick fillers really important items they're really glad you brought up you know about the modern application about their data of course you know the immersed partner Dell has a strong legacy in data you know something shiny sees track you know the explosive growth of that or you know more than a decade now so thanks a lot and I think you capture that perfectly the data control part of this is is critical all right lots more from the VMware cloud on Dell EMC I'm Stu minimun and thank you for watch the queue [Music]

>> From Cambridge Massachusetts, it's The Cube covering MIT Chief Data Officer, and Information Quality Symposium 2019. Brought to you by SiliconANGLE Media. (electronic music) >> Welcome back to MIT in Cambridge, Massachusets everybody. You're watching The Cube, the leader in live tech coverage. My name is Dave Vellante I'm here with Paul Gillin. Day two of the of the MIT Chief Data Officer Information Quality Conference. One of the things we like to do, at these shows, we love to profile Boston area start-ups that are focused on data, and in particular we love to focus on start-ups that are founded by women. Julie Johnson is here, She's the Co-founder and CEO of Armored Things. Julie, great to see you again. Thanks for coming on. >> Great to see you. >> So why did you start Armored Things? >> You know, Armored Things was created around a mission to keep people safe. Early in the time where were looking at starting this company, incidents like Las Vegas happened, Parkland happened, and we realized that the world of security and operations was really stuck in the past right? It's a manual solutions generally driven by a human instinct, anecdotal evidence, and tools like Walkie-Talkies and video cameras. We knew there had to be a better way right? In the world of Data that we live in today, I would ask if either of you got in your car this morning without turning on Google Maps to see where you were going, and the best route with traffic. We want to help universities, ball parks, corporate campuses do that for people. How do we keep our people safe? By understanding how they live. >> Yeah, and stay away from Lambert Street in Cambridge by the way. >> (laughing) >> Okay so, you know in people, when they think about security they think about cyber, they think about virtual security, et cetera et cetera, but there's also the physical security aspect. Can you talk about the balance of those two? >> Yeah, and I think both are very important. We actually tend to mimic some of the revolutions that have happened on the cyber security side over the last 10 years with what we're trying to do in the world of physical security. So, folks watching this who are familiar with cyber security might understand concepts like anomaly detection, SIEM and SOAR for orchestrated response. We very much believe that similar concepts can be applied to the physical world, but the unique thing about the physical world, is that it has defined boundaries, right? People behave in accordance with their environment. So, how do we take the lessons learned in cyber security over 10 to 15 years, and apply them to that physical world? I also believe that physical and cyber security are converging. So, are there things that we know in the physical world because of how we approach the problem? That can be a leading indicator of a threat in either the physical world or the digital world. What many people don't understand is that for some of these cyber security hacks, the first weak link is physical access to your network, to your data, to your systems. How do we actually help you get an eye on that, so you already have some context when you notice it in the digital realm. >> So, go back to the two examples you sited earlier, the two shooting examples. Could those have been prevented or mitigated in some way using the type of technology you're building? >> Yeah, I hate to say that you could ever prevent an incident like that. Everyone wants us to do better. Our goal is to get a better sense predicatively of the leading indicators that tell you you have a problem. So, because we're fundamentally looking at patterns of people and flow, I want to know when a normal random environment starts to disperse in a certain way, or if I have a bottle neck in my environment. Because if then I have that type of incident occur, I already know where my hotspots are, where my pockets of risk are. So, I can address it that much more efficiently from a response perspective. >> So if people are moving quickly away from a venue, it might be and indication that there's something wrong- >> It could be, Yeah. That demands attention. >> Yeah, when you go to a baseball game, or when you go to work I would imagine that you generally have a certain pattern of behavior. People know conceptually what those patterns are. But, we're the first effort to bring them data to prove what those patterns are so that they can actually use that data to consistently re-examine their operations, re-examine their security from a staffing perspective, from a management perspective, to make sure that they're using all the data that's at their disposal. >> Seems like there would be many other applications beyond security of this type of analysis. Are you committed to the security space, or do you have broader ambitions? >> Are we committed to the security space is a hundred percent. I would say the number one reason why people join our team, and the number one reason why people call us to be customers is for security. There's a better way to do things. We fundamentally believe that every ball park, every university, every corporate campus, needs a better way. I think what we've seen though is exactly what you're saying. As we built our software, for security in these venues, and started with an understanding of people and flow, there's a lot that falls out of that right? How do I open gates that are more effective based on patterns of entry and exit. How do I make sure that my staffing's appropriate for the number of people I have in my environment. There's lots of other contextual information that can ultimately drive a bottom line or top line revenue. So, you take a pro sports venue for example. If we know that on a 10 degree colder day people tend to eagres more early in the game, how do we adjust our food and beverage strategy to save money on hourly workers, so that we're not over staffing in a period of time that doesn't need those resources. >> She's talking about the physical and the logical security worlds coming together, and security of course has always been about data, but 10 years ago it was staring at logs increasing the machines are helping us do that, and software is helping us do that. So can you add some color to at least the trends in the market generally, and then maybe specifically what you're doing bringing machine intelligence to the data to make us more secure. >> Sure, and I hate to break it to you, but logs are still a pretty big part of what people are watching on a daily basis, as are video cameras. We've seen a lot of great technology evolve in the video management system realm. Very advanced technology great at object recognition and detecting certain behaviors with a video only solution, right? How do we help pinpoint certain behaviors on a specific frame or specific camera. The only problem with that is, if you have people watching those cameras, you're still relying on humans in the loop to catch a malicious behavior, to respond in the event that they're notified about something unusual. That still becomes a manual process. What we do, is we use data to watch not only cameras, but we are watching your cameras, your Wi-Fi, access control. Contextual data from public transit, or weather. How do we get this greater understanding of your environment that helps us watch everything so that we can surface the things that you want the humans in the loop to pay attention to, right? So, we're not trying to remove the human, we're trying to help them focus their time and make decisions that are backed by data in the most efficient way possible. >> How about the concerns about The Surveillance Society? In some countries, it's just taken for granted now that you're on camera all the time. In the US that's a little bit more controversial. Is what your doing, do you have to be sensitive to that in designing the tools you're building? >> Yeah, and I think to Dave's question, there are solutions like facial recognition which are very much working on identifying the individual. We have a philosophy as a company, that security doesn't necessarily start with the individual, it starts with the aggregate. How do we understand at an aggregate macro level, the patterns in an environment. Which means I don't have to identify Paul, or I don't have to identify Dave. I want to look for what's usual and unusual, and use that as the basis of my response. There's certain instances where you want to know who people are. Do I want to know who my security personnel are so I can dispatch them more efficiently? Absolutely. Let's opt those people in and allow them to share the information they need to share to be better resources for our environment. But, that's the exception not the norm. If we make the norm privacy first, I think we'll be really successful in this emerging GDPR data centric world. >> But I could see somebody down the road saying hey can you help us find this bad guy? And my kids at camp this week, This is his 7th year of camp, and this year was the first year my wife, she was able to sign up for a facial recognition thing. So, we used to have to scroll through hundreds and hundreds of pictures to see oh, there he is! And so Deb signs up for this thing, and then it pings you when your son has a picture taken. >> Yeah. And I was like, That's awesome. Oh. (laughing) >> That's great until you think about it. >> But there aren't really any clear privacy laws today. And so you guys are saying, look it, we're looking at the big picture. >> That's right. >> But that day is coming isn't it? >> There's certain environments that care more than others. If you think about universities, which is where we first started building our technology, they cared greatly about the privacy of their students. Health care is a great example. We want to make sure that we're protecting peoples personal data at a different level. Not only because that's the right thing to do, but also from a regulatory perspective. So, how do we give them the same security without compromising the privacy. >> Talk about Bottom line. You mentioned to us earlier that you just signed a contract with a sports franchise, you're actually going to help them, help save them money by deploying their resources more efficiently. How does your technology help the bottom line? >> Sure, you're average sporting venue, is getting great information at the point a ticket is scanned or a ticket is purchased, they have very little visibility beyond that into the customer journey during an event at their venue. So, if you think about again, patterns of people and flow from a security perspective, at our core we're helping them staff the right gates, or figure out where people need to be based on hot spots in their environment. But, what that also results in is an ability to drive other operational benefits. Do we have a zone that's very low utilization that we could use as maybe even a benefit to our avid fans. Send them to that area, get traffic in that area, and now give them a better concession experience because of it, right? Where they're going to end up spending more money because they're not waiting in line in the different zone. So, how do we give them a dashboard in real time, but also alerts or reports that they can use on an ongoing basis to change their decision making going forward. >> So, give us the company overview. Where are you guys at with funding, head count, all that good stuff. >> So, we raised a seed round with some great Boston and Silicon Valley investors a year ago. So, that was Glasswing is a Boston AI focused fund, has been a great partner for us, and Inovia which is Canada's largest VC fund recently opened a Silicon Valley office. We just started raising a series A about a week ago. I'm excited to say those conversation have been going really well so far. We have some potential strategic partners who we're excited about who know data better then anyone else that we think would help us accelerate our business. We also have a few folks who are very familiar with the large venue space. You know, the distributed campuses, the sporting and entertainment venues. So, we're out looking for the right partner to lead our series A round, and take our business to the next level, but where we are today with five really great branded customers, I think we'll have 20 by the end of next year, and we won't stop fighting 'till we're at every ball park, every football stadium, every convention center, school. >> The big question, at some point will you be able to eliminate security lines? (laughing) >> I don't think that's my core mission. (laughing) But, optimistically I'd love to help you. Right, I think there's some very talented people working on that challenge, so I'll defer that one to them. >> And rough head count today? >> We have 23 people. >> You're 23 people so- >> Yeah, I headquartered in Boston Post Office Square. >> Awesome, great location. So, and you say you've got five customers, so you're generating revenue? >> Yes >> Okay, good. Well, thank you for coming in The Cube >> Yeah, thank you. >> And best of luck with the series A- >> I appreciate it and going forward >> Yeah, great. >> All right, and thank you for watching. Paul Gillin and I will be back right after this short break. This is The Cube from MIT Chief Data Officer Information Quality Conference in Cambridge. We'll be right back. (electronic music)

>> From Mountain View, California, it's theCUBE covering the 15th annual Grow Awards. Brought to you by ACG SV. >> Hey, Lisa Martin, on the ground with theCUBE at the 15th annual ACG SV Grow Awards, Association for Corporate Growth Silicon Valley, is what that stands for. Can you hear the energy and the innovation going on back here? It's amazing tonight. I'm very pleased to welcome to theCUBE, one of tonight's winners from Arista Technologies Kenneth Duda, the CTO, SVP of software engineering, and one of the founders of Arista Technologies. Kenneth, thank you so much and congratulations! >> Thank you so much, we're honored by the award. >> Well, it's been amazing. Outstanding Growth Award winner, congratulations. I was just looking at some of the recent earnings from Arista, nice Q4 earnings from FY-18. >> Thank you. >> Above the guidance, stock price rising this year. Last month Goldman Sachs added Arista to its conviction buy list. You guys are on nice trajectory, tell me about that. >> Well, it's just been a fantastic journey, you just don't get this many chances to participate in something like Arista from the ground up. Our growth has been driven in no small part thanks to the incredible growth of cloud computing. Cloud computing is changing the world and the cloud data centers need a different kind of network infrastructure. They need something that scales, meet their needs, and is customizable to integrate with all of their management systems, automation, and we've been able to provide that and be part of that journey, it's been incredibly gratifying. >> So you specifically talk with customers a lot, I was reading about one of your recent big wins in Canada, CBC Radio Canada facility in Montreal, but talk to me about what's some of the things now that you're hearing from customers especially those customers who are still in the process of transforming and transitioning workloads to the cloud. What are some of the things that surprise you about where customers are in any industry in this journey. >> Right, well, so I spend most of my time talking to the enterprise customers because there are so many of them and what we've learned there is a couple of things. One is they are very impacted by cloud. Cloud's a big deal, they're moving somewhere closer to the cloud, they're also building their own internal environments in a more cloud-like fashion and, as such, benefit from Arista's approach. But the most interesting thing I've learned is that neither of those is the most important thing. The most important thing is the network has got to work and it might sound strange, but networking gear isn't always reliable and what we've been able to achieve through our architectural approach and through our focus on automated testing has enabled us to produce a higher quality product which has been a major attractor of the enterprise customer. So you need to cover all those bases to succeed in this business. >> You're right, that network is absolutely essential. When anything goes down, whether it's a Facebook outage, it's world news. Tell me, what is the Arista advantage? >> The key advantage is the quality of our products. It's the fact that we have built an architecture that is more resilient to software and hardware errors. It's the way we test. We've made a tremendous investment in automated testing, so that our product has gone through hundreds of thousands of tests before it ever sees a customer. But actually the most important element behind quality, is the culture of your company, what do you believe? What's important to you? What gets you up in the morning? What are you thinking about and talking about to your employees? What's the most important thing, is it profitability? Is it making a deal, is it hitting a schedule? Or is it making sure the network works? We are 100% focused on that and it's been really gratifying to see the impact that's had. >> So last question, and thank you for speaking over the drum noise going on behind us, by the way, to get people into the auditorium. In terms of culture and the impact, what do you think this award means to your peers, your teams at Arista? >> Oh, it's just such an affirmation of the journey we've come through so far and the journey we still have ahead of us. We're very grateful for the award. >> So, I see so much momentum coming into 2019. What are some of the exciting things we can expect from Arista this year that you might be able to share with us? >> I think we're seeing a real transition from network designers focusing on the control plane of their network first to focusing on the management of the network first because management is actually the key to smooth operations. Our cloud vision product addresses that need. We're really excited about that transformation. >> Well, Kenneth, again, congratulations to Arista and yourself and your teams on the Outstanding Growth Award from ACG SV. We also thank you for spending some time with us on theCUBE. >> Thank you very much, it was my pleasure. >> I'm Lisa Martin and you're watching theCUBE. (energetic music)

>> (Announcer) From Mountain View, California it's the Cube. Covering the 15th Annual Grow! Awards. Brought to you by ACG SV. >> I'm Lisa Martin with the Cube, on the ground at the Computer History Museum in Mountain View, California for the 15th Annual Grow! Awards for the Association of Corporate Growth Silicon Valley, ACG SV. That's a mouthful. I'm here with one of the ACG SV board members, Zac Mutrux, the District Sales Manager at Insperity. Hey, Zack, it's great to have you on the Cube. >> Thank you so much, Lisa, I'm pleased to be here. >> So before we talk about what you're doing here at the 15th Annual Grow! Awards, tell our audience about Insperity. I was reading, I love taglines. >> Yes. >> And I see on your homepage, Insperity is obsessed with delivery HR mastery. Wow. >> Oh yeah. >> Obsessed and mastery. Those two words just jumped out. Tell us a little bit about what you guys do. >> Impressive, isn't it? Well, we actually just adjusted our tagline to HR that makes a difference. And that's really what it's all about. We feel like companies that are growing, if they're going to make it from good to the best, it has everything to do with the people. Attracting the best people and keeping them, developing them over time, and that's exactly what we do with our clients. >> So Insperity has been in business since 1986, and if I think of today's modern workforce, highly mobile, distributed, there's the whole on-demand industry. You guys have seen a tremendous amount of change that now can be massively influenced, and your customers can, using technology. Give me a little bit of that historical perspective on Insperity's inception and today's workforce, and how you're helping them attract and retain the best talent. >> Oh, absolutely. Well, when the company started it was in a maybe a 200 square foot room with one telephone between the two co-founders. There's no such thing as email. So, absolutely, there's been immense technological changes and there continues to be. I think that's one of the things that has been responsible for Insperity's success is its adoption of technology. Today we are as much a technology company as we are an employee benefits company, or an HR consulting company. It's really about creating a positive experience for the employees. That's part of being a competitive employer. >> Well it has to be a positive experience, right? For your customers. Because acquiring great talent is one thing, retaining them is another. And I want to kind of pivot off the retention there for a second. As the District Sales Manager, I was asking you before we went live, tell me maybe one of your favorite stories, and you said, "Wow". One of the great things, you guys are coming off great growth and FY18 revenue growth. One of the great things that Insperity has been really successful at is customer retention. And that's hard. You're proud of this. Tell us about that statistic that you mentioned, and how it is that Insperity is evolving and innovating over the last few decades to keep that retention number as phenomenal as it is. >> Well, Insperity's been named one of the most admired corporations in the country, actually, five years in a row by Fortune magazine. And that's the kind of press that you can't buy. One of the accolades that I'm most proud of is that in the past year our own employees named us one of the top 100 companies to work for in the United States. Which is, I think, the proof that we really know what we're doing with our clients. Because there are a lot of different companies out there, various competitors, and almost none of them are on that list. So, it's living our values and expressing through our service team, our extraordinary service team, that, I think, keeps our clients coming back to us year after year. About 85% renew. That's been consistent. A high level of client retention for the past three years. Even more extraordinary is that we've been growing both top line and bottom line revenue at the same time. So there's just a testament to our leadership, to our co-founder and CEO, Paul Sarvadi, and to the best of team-- >> But it sounds like it's a lot of symbiotic relationships between the internal retention at Insperity that is maybe leading through to your customers seeing, hey, there's not a high turnover here. These people are doing, they love what they're doing. They're working for a good company. So there's probably a lot of symbiotic behaviors. >> Well, that's exactly right. I think you really hit the nail of the head. It's about culture. It's a culture that starts from the top with leadership, and it filters down throughout the organization. And we're not looking to do business with every single company. We're looking to do business with the companies that believe the things that we believe. That is, companies that have high levels of commitment, trust, communication. They do better financially then companies that don't have those things. >> And along those lines, mentioning just before we wrap here, we are at the 15th Annual ACG SV Awards tonight, where they're honoring two award winners. The Outstanding Growth Award winner is Arista Networks. And the Emerging Growth winner is Adesto Technologies. I'm excited to talk to them later. But I wanted to get a little bit of perspective on you've been involved as a board member of ACSG since last year. Tell me a little bit about what makes ACG SV worthy of your time. >> Oh, absolutely. That's a great question. It's just an extraordinary community, I think, of the top leaders in Silicon Valley come together. The monthly Key Notes add a lot of value. It's an intimate setting and there's real conversations that are taking place on topics that are relevant to today's professionals. So for me to be able to engage and hopefully add some value as a board member is privilege. >> And you can hear probably a lot of those conversations going on right behind Zac and me tonight. Zac, it's been a pleasure to have you on the Cube. Thank you so much for giving us some of your time. >> Oh, right, thank you, Lisa. >> For the Cube, I'm Lisa Martin on the ground. Thanks for watching. (pop electronic 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)

(lively music) >> Live from San Francisco, it's theCUBE covering Micron Insight 2018. Brought to you by Micron. >> Welcome back to San Francisco Bay everybody, we're here covering Micron Insight 2018. You're watching theCUBE, the leader in live tech coverage. My name is Dave Vellante, I'm here with my cohost David Floyer. Sanjay Mehrotra is here, he's the president and CEO of Micron. Sanjay, thanks very much for coming on theCUBE. >> Great to be on the show. >> So quite an event here! First of all beautiful venue. >> Lovely venue. >> Got the Golden Gate that way, we got Nob Hill over there. So tell us about this event. It's not just about hardcore tech and memory. You guys are talking about AI for good, healthcare, changing the world. What's behind that? >> Yeah, our focus is on AI technologies and how AI is really changing the world. In terms of life, in terms of business, in terms of health. This is a showcase of how these technologies are in very very early innings, they've just barely begun. And what's happened is that AI algorithms have been around for a long time but now the compute capability and the memory and storage capability have advanced to the levels that you can really mine through a lot of data real-time, derive lot of insights and translate those insights into intelligence. And Micron plays a pivotal role here because our memory, our storage is where all this data resides, where all this data is processed. So we are very excited to bring together many industry figures, industry luminaries, park leaders, researchers, engineers all here today to engage in a dialogue on where technology is going, where AI is going, how it's shaping the world. And for the realization that hardware is absolutely central to this trend. And memory and storage is key. And we are very excited about what it means for the future. >> So a lot of thought leaders here today. Well first of all you guys have some hard news, which is relevant to what we're talking about. Talk about the hundred million dollar fund and how you've deployed it even just today you've made some sub-announcements. >> So, one of the things we announced today is we are launching a hundred million dollar fund to support, to fund start-ups in AI. Because we really think AI is going to transform the world. We want to be in the front row. With not only the large existing players that are driving this change but also the start-ups that will drive innovation. Having the front row seat with those start-ups, through our investment fund, will really help us accelerate intelligence, accelerate time to market of various AI applications. So a hundred million dollar fund is targeted toward supporting start-ups that are developing AI technologies. And what I'm really excited to talk about here is that 20% of that fund will go to start-ups that have leadership that is represented by women or under-represented groups. Under-represented--those groups that are under-represented in tech today. This demonstrates Micron's commitment to diversity and inclusion in the technologies phase. >> Well that's, well first of all congratulations on that we're big supporters >> Absolutely >> Of women and tech and diversity, it's something that we cover on the theCUBE extensively. And now you've announced two grants just today, a half a million dollars each. One with Stanford, one with Berkeley that we heard. We heard Amazon up on stage talking about Alexa AI, Microsoft was onstage we had NVIDIA on theCUBE earlier. So bringing together an ecosystem that involves academia, your partners, your customers, talk about that a little bit. >> So the two grants that you talked about, those are from Micron Foundation that is again supporting advancement of AI and AI research as well as teaching of AI to kids so that we can build the pipeline of strong engineers and technologists of the future. So the two grants that we have announced today are one to Stanford Precision Health and Integrated Diagnostics Center, 200,000 grant to Stanford, pioneers in AI applications to precision management of your health. Very exciting field that will really truly enrich life and prolong life in the future as well as advance detection of diseases. Second $200,000 grant that we are giving is to Berkeley. Artificial Intelligence Research Center, absolutely cutting-edge that will be applicable to many industries and many walks of life. These are intended to support advancement of AI research. In addition to this advanced curiosity grant to these two institutions later today you'll hear there will be announcing a $100,000 grant to AI4ALL. And this is an institution that is encouraging women and under-represented minorities at high school level, 9th grade to 11th grade to pursue STEM careers. So Micron is really promoting study of advanced research and supporting the pipeline. In addition to this of course our focus today is on bringing together industry luminaries just like you mentioned, NVIDIA, Qualcomm, autonomous driving of the future, automotive partners, BMW, Visteon, really to engage in a dialogue of how AI is advancing in these various applications. We just heard great talk from vice president at Amazon, on Alexa devices really really exciting how those devices are truly making your life so easy and so intelligent. We heard from Microsoft Corporate Vice-President of AI research. So you see we really are as leaders in our industry, we are really bringing together industry experts to engage in a thought-provoking and inspiring dialogue on AI so that when we leave here today we leave with insights into what is coming next but even more importantly what do we all need to do to get there faster, and this is all about technology. >> So Sanjay and David too, Micron is one of the few companies that was here when I started in the business and is still around. At the time you were just a component manufacturer doin' memories and wow to watch the diversification of Micron over the years but also recently, I mean it's incredibly well-run company so congratulations on the recent success. At the analyst event in New York City this year, you talked about not only that diversification in your investments and innovation but you talked about the cyclicality of this business the historical cyclicality of this business you've dampened that down a little bit, for a variety of reasons. The capital requirements in this business are enormous, there's been consolidation. So how is that going, talk about sort of the trends in your business both in terms of diversification and your ability to make this business more predictable. >> So Dave you are very right to know that Micron is 40 year old company, we actually just turned 40, very proud of it. Really a company founded on the principles of innovation and tenacity. In fact the company has contributed to the industry to the world over the course of 40 years, 40,000 patents, just imagine that's a thousand patents a year, three patents a day over the course of 40 years. We are really a prolific inventor and we absolutely through our innovations in memory and storage have shaped the world here. As technology advances it really unleashes more applications and this is what has brought about the change in our industry. Today memory is not just in your PC. Of course it is in this PC but it is also in your data center it is going to be in the autonomous records of the future you going to have as much memory as what you had in the server just a few years ago. It's inside your mobile phone Artificial Intelligence, facial recognition is only possible because of the data and memory that you have in there. You have NAND Flash that is in these devices and with technology advancing that's bringing down the price points of NAND Flash really bringing more SSD's into these notebook computers, making these notebook computers lighter, longer battery life, more powerful. And of course Flash drives are also replacing hard test drives in data centers and cloud computing. So many applications, these diverse applications really have brought greater stability in our industry. And of course technology complexity has over time moderated the supply growth. And that's what we mean that the cyclicality of our industry, yes one or two quarters here or there you can have demand and supply mismatches but overall when you look at the demand trends and combine them with the moderating supply trends the long-term trajectory for our industry is very healthy. In fact we just completed a record year. >> Our fiscal year '18 was a record 30 billion dollar year for us with profitability that puts us at the very top of the most companies with 50% operating margin and with 30 billion in revenue we are actually number two largest semiconductor company in the U.S. And a lot of opportunity ahead given the demand drivers in the industry. >> Massive free cash flow, you've said publicly the stock is undervalued which is ya know, I don't know any CEO that says it's overvalued but nonetheless the performance that you've had suggests that you very well might be right. Go ahead David please. >> Yeah I just wanted to ask your opinion on, you are leading in this area now, very very clearly you're growing faster than the industry, you've had a magnificent year and the whole area is grown both the NAND and the DRAM. How are you judging how much to invest in this for the future? What's the balance between giving money back to the stockholders by buying stock back or versus investing in this what seems to me a very very exciting area. >> Do you have an AI algorithm for that? (laughing) >> We are in a great position where we are extremely disciplined about investing in CapEx to reduce cost of production and to deploy new technologies into production. We are very ROI focused in terms of any CapEx investments we make. We of course invest in R and D. I mentioned earlier 40,000 patents over the course of 40 years that only comes in investment in R and D. Investments in R and D are essential because we are today the most comprehensive technology solutions provider in memory and storage in the world. >> Yeah. >> In the world. With our DRAM, our Flash, our 3D crosspoint technologies, as well as future emerging technologies really position us as the only company in the world that have all of these memory and storage technologies under one company roof. So we do invest very thoughtfully and we manage our expenses very carefully but we do invest in R and D and of course we are committed to driving shareholder value as well. And we had announced earlier in the year ten billion dollar share buy back program with at least 50% of a fee cash flow. Every quarter on an annual basis actually, 50% of our fee cash flow on an annual basis going, at least 50% going toward share buy back. So we are managing the business, all aspects of it, excitedly looking forward to the opportunities. At the same time prudently in an otherwise driven fashion, building shareholder value through investments in R and D and manufacturing. >> Well of course the great Warren Buffett, David, says when asked if stock buy backs are a good investment says if your stock's undervalued it's a good investment, so. Obviously you believe that Sanjay, so. >> Absolutely! >> So thanks, thanks very much for coming on the theCUBE it was great to have you. >> Thank you. >> I hope we can have you back again. >> Thank you. >> We could talk to you for a long long time. >> Thank you very much. >> Alright, keep it right there buddy, >> Thank you. >> We'll be back with our next guest. We're live from San Francisco Bay Micron Insight 2018. You're watching theCUBE. (upbeat music).

>> Live, from New York City, it's theCUBE. Covering Lenovo Transform 2.0. Brought to you by, Lenovo. (electronic music) >> Welcome back to theCUBE's live coverage of Lenovo Transform, here in New York City. I'm your host, Rebecca Knight, along with my cohost Stu Miniman. We have two guests here on this segment, We have Kirk Skaugen, he is the president of Lenovo Data Center Group, and Brad Anderson, the Corporate Vice President of Enterprise Mobility for NetApp. Thanks for coming on the program. >> Thank you for having us. >> So the big news of the day, the NetApp Lenovo partnership, explain to our viewers exactly what this means. These are two global powerhouses joining forces. >> Yeah sure, so I think Lenovo has had an amazing year. Last year in our Transform 1.0 we announced the largest server portfolio in our history. And this year we announced the largest data center, data management storage portfolio in our history. With a partnership with NetApp, so we're creating a multi-billion dollar global alliance, a multi-year alliance and it has a place in a joint venture in China as well as we'll be distributing NetApp products in over 160 countries in the world. >> So tell us about the background to this partnership. How did it come about? >> Well, you know, for NetApp we were looking for expanding our reach, and there was two markets that were kind of underserved in. One being kind of the commercial SMB SME channel, and Lenovo has a high-velocity channel there, a strong position. So Lenovo made complete sense in that space as well as in China, where we have a strong brand but we're underserved there as well, so who is better in China than Lenovo? So for us this is all about global market and then the fact that they're a server vendor is just icing on the cake, because the other two server vendors in the marketplace are also our competitors. And then, Lenovo is so much more compatible and complementary to our entire business. >> Kirk, maybe you could spend a little more, because when you look at storage today, storage is really built on servers. You know, NetApp is, you know, at it's heart a software company, even back in the day NetApp was never, some of the other storage companies spent a lot of time and money on the hardware pieces. And of course had reliable, good, trustable hardware, but maybe explain how much, kind of, I.P. goes into this partnership. >> Yeah, sure. So I think today we have about 15 percent coverage of the overall storage market within Lenovo. We've grown our flash array business over 100 percent over the last four quarters. IDC had us at 30% quarter to quarter growth. So we've done well, but we've only cover 15% of the market. After this announcement, and shipping now today, we'll cover over 90% of the market in more than 160 countries. So we're using our global supply chain which is ranked number five in the world by Garner. Manufacturing in Europe, in China, in Mexico et cetera. Really expand this out through our channel partnership program. And in China we're taking a very unique approach to this joint venture. This isn't about taking global products and just trying to force fit them into China. China has unique software solutions, unique hyper scale requirements. So we're pooling our R and D there. Lenovo will be a 51% owner, NetApp a 49% owner. Brad's going to be on the board and there we're going to be delivering products in China for China. >> Yeah, is it, you've got a lot of experience with that. You talk about coming in the future there's an NFV software and hardware solution in China, so Lenovo has some experience doing this kind of engagement, you know. >> Yeah, I think we have a more than 50% growth now, year on year in China. We retooled a lot of the operations that we had there. We have a really nice, broad portfolio now since we launched Think System and Think Agile so it's a nice place to grow on. But today we talked about the joint venture with NetApp and also the fact that over the next year we'll be building out a telecom NFV company after having China Mobile and China Telecom with us as at Mobile World Congress. As well as new edge gateway and edge server solutions. >> Brad, I know cloud is in your title for what you are doing, when I hear NetApp talking, I see NetApp at all the cloud shows we go to. It's a very different world than when I think about NetApp ten years or twenty years ago as like, you know, the Nas Filer company. So bring us up to speed of kind of the NetApp today the momentum and what this brings. >> Yeah, I mean we are going through our own transformation where we were principally a storage company and now we want to be a data company, and increasingly to be a data company you got to be a cloud company. And so, we continue to develop what we think are the, you know, the best storage products in the world, but they are all cloud connected. 'Cause we want data to be able to flow from prim to cloud and customers be able to, you know. That's what really kind of fuels these digital enterprises is that data is the new oil. And so in doing that we have kind of expanded NetApp's charter significantly to being the data authority in hybrid cloud. Hybrid being both the private and the public. And so part of my business is really focused on providing products and solutions so customers can have the same experience in building their own private clouds that they enjoy in the public. And then on the public side we have partnerships with all the hyper scalers to put NetApp's in there so they can deliver native cloud data services. And so, this is a very different company where we're getting more and more cloudy every day. (Rebecca laughs). And that's part of our transformation intentionally. >> So, the transformation, it's the theme of this conference and you were up on the main stage talking about Lenovo's turning this corner and really accelerating its growth, and also talking about the transformation from within the company. Changing the look of the leadership team in particular. Can you tell our viewers a little bit more about that strategy. >> Sure, so we acquired the IBM system X business in late 2014 and we did some things really well and we did some things that we've learned from. So we spent, you know, basically the last 18 months transforming the whole company. New channel programs, new system integrator partnerships, new training certifying over 11,000 people in the world now. Tripling the number of our solution recipes. And we have transformed The management team as well. We have replaced about 19 executives because we wanted the right balance of external and internal perspectives from our competitors as well as from ex-Lenovo and ex-IBM employees. So we feel like we have a very customer-centric organization now and, again, Gardner now is saying we are growing 49% year on year in units, IDC said we are growing 87% year on year in revenues. So I think customers are responding to the new product line. Over the last year the Think System brand truly meant the highest customer performance, the highest reliability, the highest customer satisfaction. And as a result it does take a while to transform. And I think that over the last 12 months you've seen that and we're exponentially growing now as a company. >> And you see it in your results. I mean, they are outstanding. >> So Brad, bring us inside the products a little bit. So we've got, it's the Think System DE and DM. Of course the storage industry very much, they need to trust it, they need to understand it. Gives little to understand, I believe DE maybe has something to do with the >> The E series >> The E series there and tell us the DM series, what's underneath there and how do people understand what's different and what's the same. >> Yeah, I mean the. We're taking platforms across our E series, our FAS and our all flash arrays. So the DE corresponds to the E series. The DM will have our FAS products as well as our all flash array products in there. So that's kind of the mapping. We're putting initially I think, ten products in there. We have the capacity to expand and I'm sure we're going to learn a lot because these are serving markets that NetApp doesn't typically serve. So I think not only is this going to give Lenovo the tools to compete, it's going to give us a lot of information to even build better products, better solutions for both NetApp and our Lenovo customers. So we're super excited about that. The second thing is, it's OnTab, it's the same core software, and all the value and performance testing and validation you get with NetApp. That all goes into the Lenovo branded products as well. And we have made it one of our hallmarks is our data fabric. All of the data services that are on top of this that you can move data and manage data between platforms, that is really important for the NetApp customer. All those values extend to the Lenovo customer. So if they also have NetApp in their environment, or vice-versa, they can share or move data between both those platforms. So that's, nowhere else in the industry is that possible across vendors let alone within. >> So how does it work when you are in the product development process. Two companies, both relentlessly focused on customers. This is part of your culture, part of your DNA. So how do you work together in terms of innovating and collaborating. >> Well, I think the first thing is you just look at the core business: our server business and NetApp branded storage, or Lenovo branded storage based on NetApp's portfolio. We're going to have a better together solution. So the first thing we're looking at is a set of solution recipes so that when you use NetApp and Lenovo together, you're going to get a better experience as a customer base. So that's why I am excited today. We've launched three times as many engineered solutions as we did a year ago. And trained these 11,000 people because we have a very solution oriented sales force and a very complementary channel. From a development perspective, we're going to be building X Clarity management into our portfolio. So the same systems management software that is mission critical for Lenovo server products will now manage the big system DE and DM products. So it's a very familiar management interface for customers, there's an engineering effort gone with that. And then on service and support, we're going to use over 10,000 people around the world that Lenovo has to go service and support these products. So we can deliver a premium customer experience. Whether you're buying the server or the storage. And back to the customer base: we're going to, especially in China, have deep engineering collaborations. Where we're walking into those customer bases and asking what's unique about the China market. >> And, and. It really helps that the two companies are very complementary. So NetApp has deep storage expertise, Lenovo has tremendous compute expertise. So they are very complementary and as customers want more and more complete solutions, we are learning, our engineers are learning from each other and it doesn't hurt the fact that we have a large engineering. We NetApp, have a large engineering population in the research triangle where Kirk's people are at. >> That's right. We're probably one kilometer away from each other in research triangle park. >> Geography matters, location location location. >> No, and our two support organizations are next door as well. So I think that proximity will only contribute to the collaboration. >> Yeah, exactly. >> Alright, so the storage industry actually has a relatively good track record of some deep, long partnerships. NetApp has had a number of them over the years. Tell us, what does success look like if we look back three years from now, what's this partnership. >> Well, what we said publicly is we plan to have a multi-billion dollar, multi-year alliance. So that's going to be fantastic as we grow in over 160 countries. We're going to use Lenovo's extensive supply chain network. So you know as one of the largest kind of procurers of componentry and things around the world, we get to leverage this global factory network to build even more value into that situation. And in China specifically, we've set a goal of being a top three storage player. So we both have probably single digit share in China but together with this collaboration we are setting sights quite high to be in the top three over the next several years. >> I think that's exactly right and I think those are all achievable goals. But right now, we want to get out the gate fast. I mean this is a partnership with two companies with a lot of momentum and I see this as a huge opportunity for both our companies to kind of amplify that momentum near term. And so while there's a lot of excitement on the future, I think success is going to look like, you know, some very exciting results that Kirk can share at Transform 3.0 next year. >> That's right. And for our customer base, we have already gone into production. Taking orders, as of today and tons of engineering, tons of manufacturing development. So we'll have a whole host of seed units and early access units. Our customers can get their hands on this stuff right away and start testing it in their environment. >> As you said, it is an audacious vision. You announced an audacious vision last year, you did another one again this year. So when you think about what you want to be talking about next year. You said what success looks like. What are some other things that you're working on? You said, this is a process, Lenovo has turned the corner and it's got a lot of momentum. But what else are you, what else do you have on tap that you're... >> Well, if we tell all of you that, (Rebecca laughs) we won't have this here next year. >> Yeah >> But I think today is about entry and midrange. About expanding Lenovo's breadth from 15 to 90% of the market and being very aggressive against our top competitors that have a combined server storage portfolio. And I think as I've gone around the world, I've been in Latin America, in India, our channel partners are incredibly excited about this. So I think while other customers might be taking business more direct, we've traditionally been very channel-centric. So, I've seen a lot of pull for choice in the market and I think that's what we're going to deliver to our channel partners. But we will have a lot more in store, that I can promise you. This is phase one of a multi-phase, multi-year plan. >> I think there's a lot of things, there's a lot of possibilities on the product development side and how we can do better products, but I think a lot of success is going to look, it's going to come in our global market. Already, Kirk, since I've been here, I've had a channel partner come up and said "Hey, this makes me rethink my channel partners all over again", because now that channel partner who's a Lenovo has the full breadth of the storage portfolio. So I think this is going to be really good for both of us. Particularly when, you know, Lenovo and NetApp are both very channel friendly partners and companies and I think this I going to be a catalyst to have more people on our side than ever before. >> Kirk, just last thing, just give you the opportunity to talk about some of the other breadth and choice and other things that Lenovo has going on. We're going to talk to some of your team about, you know, hyper converge and hyper scale and other hyper things, but yeah. (Rebecca laughs) >> Well I think the good news about our growth now is that we're doing it across multiple segments in the industry. There isn't just one part of the market that growing. So last year we set an audacious goal of being the largest supercomputer company in the world by 2020. We've now crossed that actually this year. So we are the largest supercomputer company in the world. About one in every four supercomputers now are there. And we're expanding that into a lot of AI offerings as well with our four artificial intelligence centers, from China, Germany, Taipei, Beijing. All having customers bring their AI workloads into a controlled environment with our partners where there's intel and video or the FGBA vendors. So super-computing is alive and well and we continue to innovate with our warm-water cooling technology that's going to be here on display. We think we're building one of the largest supercomputers in Europe right now using that technology. So not just helping solve global warming but being more energy-efficient while we are computing on that as well. In hyper scale we've grown to about delivering six of the top ten hyper scalers products. And we're doing that through, basically starting with a white sheet of paper with our customers and building more than thirty customized products. In the motherboard, in the system, in putting it through our entire supply chain. Versus just, in the past maybe two years ago, maybe just leveraging ODM products, so. Significant growth in hyper scale where we're bringing on new billion dollar customers on a regular basis now. And then in flash arrays, our traditional business, we were over 100% growth year on year. So we're building off of momentum. We had great products but only covering 15% of the market, now much larger. Last but not least, we did announce since Transform, new divisions in embedded and IoT as well as in telecommunications NFVF software. We think each of those can be billion dollar groups within Lenovo, so that's probably a lot of what we would be talking about next year is announcements and innovations we've had. Would be Transform 3.0 probably. (Rebecca laughs) >> Well, we're already looking forward to the next Transform. >> 3.0 will be CUBEd so we look forward to that. >> Stu, very nice. Very nice. Excellent. Well thank you so much Brad and Kirk for being on the show, I really appreciate it. >> Thank you very much. >> I'm Rebecca Knight for Stu Miniman. We will have more from Lenovo Transform and theCUBE's live coverage, just after this. (intense electronic music)

>> Narrator: From the Computer Museum in Mountain View, California, it's theCUBE, covering ACG Silicon Valley Grow Awards. Brought to you by ACG Silicon Valley. (electronic music) >> Welcome back, everybody, Jeff Frick here with theCUBE. We're at the ACGSV, it's a mouthful. Association of Corporate Growth Silicon Valley Awards, the 14th annual. We've been coming here for about three years. We're really excited to have tonight's keynote speaker on, many time CUBE alum, Pat Gelsinger, CEO of VMware. Pat, great to see you. >> Great to be here, Jeff, thank you so much. It's always great to be on theCUBE, and so many good friends from theCUBE and great interviews. I really enjoy you guys, thank you. >> We're excited for VMworld later this year, we've got Dell Technology World coming up next week, so... >> Just working on my keynote this morning, so almost ready to go, so. >> But you're going to keynote tonight, so what's your keynote tonight on? >> Well, tonight, it's about tech as a force for good. And I'm going to talk about what I call the four superpowers today. You know in the past, we thought of superpower, like, USSR and the USA. >> Jeff: Right, right. >> Today I believe superpowers are far more powerful, and they're technology superpowers. And the four I talk about are mobile, unlimited reach, cloud, unlimited scale, A.I., unlimited intelligence, an IOT bridging from the digital to the physical world, and how those four superpowers are reinforcing each other today, and literally it's our opportunity to improve the quality of lives for every human on the planet as a result of those superpowers. And really how it's our responsibility as a tech community to shape those superpowers for good. >> It's so good to talk about the "for good" because there's so much bad in the news lately about some of the stuff that's going on, and you know, it's two sides of the same coin always. You can use it for good or you can use it for bad. And unfortunately, the bad has been in the news more than the good, but there's so many exciting things going on in medicine, healthcare, agriculture, energy. The opportunities are almost endless. >> Yeah, it really is, and as I say, technology is neutral. It can be used for good or bad. The Gutenberg Press. The Bible or Playboy, it works for both, and it really is our responsibility as a society, and I'll say even more so today as tech leaders, to be that force shaping those technological superpowers for good. You know, one of the statistics offside of my keynote, is in the last fifty years, we've taken the extreme poverty rate from over forty percent, to less than ten percent on the planet. It's stunning that we've lifted two and a half billion people out of extreme poverty. Healthcare reach, we've increased the length of life by almost twenty years on the planet, over the last fifty years. I mean, these are stunning things, and largely the result of the technological breakthroughs that we're doing, and as I say, today is the fastest day of tech evolution of your life. It's also the slowest day of tech evolution of the rest of your life. >> Of the rest of your life, pretty interesting. And with 5G coming just around the corner, kind of thinking of a world of infinite bandwidth, infinite compute, infinite store. How do you start to design applications and distribution when you can have all that power? And as you said, with cloud really at your disposal. You don't have to build it all yourself, you leverage companies like you guys to put it in place and I as an entrepreneur don't have to build all that stuff anymore. >> That's right, this really is impressive that way, 'cause today we've crossed over half the population of the planet has a persistent connection to the internet over some form of mobile or PC device. Half the population, you can now reach over the internet. I mean, it's just stunning that way. >> Jeff: Yeah. >> You can rent the world's largest super computer for a few thousand bucks. The scale that we're able to now conduct business to be able to develop software to reach customers, and truly to change people's lives. >> Right. You do a lot of work. I follow you on Twitter and you're out in the community, you do a lot of stuff with your faith and outside of work to help people. You see the power that you can bring to this technology. What are some of the inspiring stories that get you up everyday, when you do some of this stuff outside of your day job? >> It really is exciting and one of the charities that my wife and I are very involved in is called Missions of Hope International. They work in the slums of Nairobi primarily, and we help to start schools there that literally today have over fifteen thousand kids in the schools that we helped start. Over the summer, I'm climbing Mount Kilimanjaro, in July, as a fundraise to build the next girls high school for those schools. As the girls get younger, they get pulled back into tribalism. For five camels, they get married off at young ages, and keeping them in school so that they can really advance and become proper members of society versus drug into tribalism, so that's one of my summer projects is doing that. Particularly in Kenya, we've been thrilled, things like M-Pesa, and we work with a company called Node Africa, to deliver farming and agricultural services. You know, the most basic things that give people market access, give people cropped information, and literally are lifting people out of poverty in the country of Kenya today. >> That's great work and like I said, follow Pat on Twitter. You're pretty active on there doing good work. >> Thank you. >> We look forward to your keynote tonight and we'll see you next week in Las Vegas. >> Look forward to it. Thank you so much, Jeff. >> Alright, he's Pat Gelsinger, I'm Jeff Frick, you're watching theCUBE from the ACGSV Awards. Thanks for watching. (electronic music)

(electronic music) >> Announcer: From the Computer Museum in Mountain View, California, it's theCUBE covering ACG Silicon Valley GROW! Awards. Brought to you by ACG Silicon Valley. >> Welcome back everybody, Jeff Frick here with theCUBE. We're at the Computer History Museum in Mountain View, California, for the 14th Annual Association of Corporate Growth Silicon Valley GROW! Awards. We've been here for a couple of years now, and it's a big event, 300 people coming in to talk about an ecosystem of helping other companies grow. And we're excited to have the new CEO, Drue Freeman. Drew, great to meet you. >> Thanks Jeff, pleasure to be here. >> So you've been here two months, I think. What attracted you to the opportunity? >> It's kind of an exciting organization, actually. I've been working with ACG Silicon Valley for a little while now doing some programming with them around autonomous driving and the connected car. And I got to know my predecessor, Sally Pera, through that and through the course of discussions-- She's a wonderful salesperson, she kind of sucked me into the role and here I am. >> Jeff Frick: What is the mission, for people that aren't familiar with ACG? >> Essentially what we are is an organization that's dedicated towards providing networking opportunities, education opportunities, programming for C-Level executives, and other senior-level executives at companies to help them develop their career and also grow their businesses. >> Like you said, Sally's been at it for 13 years, she's stepping out of the role, which opened up the opportunity for you. What's your charter now, as you take the baton from Sally? Fresh enthusiasm, fresh energy, fresh face. What are you excited about? >> Of course, it sounds silly, but to take things to the next level, whatever that means, to try to identify a vision for the organization, going forward. Maybe find some new areas to develop content around. Attract some sponsors in the technology domain, and bring content that will maybe continue the Thought Leadership area. We are recognized as a Thought Leadership within the community here in Silicon Valley, and also within the greater ACG community. But we want to really kind of notch that up a little bit. We're bringing in some university sponsorship now and really looking at some of the leading edge areas that Silicon Valley is on the tip of the spear of, essentially, globally, for innovation. We want to make sure that we're putting that content out really to our community. >> Right. And this is the GROW! Awards, this is an awards banquet, a celebration tonight, but you guys do a number of different types of events throughout the year. What are some of the formats of the different ways that people can get involved? >> The one that most people are aware of is our keynote panels because those are open to a larger audience. Typically we get about 100 people there at these events. We bring in a panel of experts and we have a discussion on some topic that's quite current at the moment. But we also have a Public Board Circle, where people who are on public boards of publicly traded companies will have a discussion within that smaller group of people about relevant topics. We have a C-Suite Circle, where C-Level executives come together. We bring in outside experts that will come in and talk about things like economic trends or whatever the current issues are, and then they have a robust discussion around that topic. We have an MNA Circle. We also have an accelerator environment, where we have younger companies, sometimes start-ups, sometimes mid-market companies, where we bring in some experts that kind of help them pop the hood and look at what some of the strategic issues are that they might be facing, et cetera. >> Okay, so that's all great, but let's talk about the stuff I know you're passionate about and is so fun right now, that's autonomous vehicles. It's a really crazy time in the industry. You've got changes in the players. You've got changes in the propulsion. You've got changes in the ownership structure. You've got so many changes happening in the autonomous vehicle space and all the ecosystem around it. I'd just love to get your impressions. You've been playing in that space for a long time, in the automotive space, but to see the changes really accelerate driven in a large part, obviously, by Tesla and Elon Musk. And we're here at the Computer History Museum. They've got that great little display over there with the Google cars. Which they now weigh more and they have to keep changing them out because it went from the little bug-looking thing, now they're driving the vans. I'd love to get your impressions as to the speed, some surprises, not surprises, as we see this autonomous vehicle trend coming down the pipe. >> Technology is evolving at a remarkable speed. That's being driven largely by the availability of increased processing power. You need to address the data bandwidth power, as well. You've got to move a lot of different data around the car to address this technology. And that's really pushing the envelope of what cars can do. The industry itself still needs to make sure they can bring that to the market in a way that the market will accept. That people in Main Street, USA, or Main Street, Europe, or Main Street, Asia are going to be comfortable driving in. Car ownership is going to change a little bit, especially in urban areas. People may not choose to buy a car in the urban areas. They might choose to do carsharing. But in the Midwest, I think car ownership is still going to be a key element, and it's not clear yet how ready people are to have a self-driving car as part of their own ownership. The technology, while we can demonstrate it works, still needs to be demonstrated that it works in a way that makes people feel comfortable. And so, I think there's still a lot of innovation to be done in the software, in the AI, the machine learning, that makes people feel comfortable with that. And there's a lot of great companies working on that. I'm amazed every day at the companies developing not only the sensors and things that enable the perception of the vehicle to improve, but also the AI around that. But honestly, I think the roll-out in-- Making it available to you and I on the street it's going to be a lot slower than I think a lot of us have been thinking about for a while. >> Yeah. The trust issue is so interesting to me. 'Cause on one hand, people do have to have some trust and we've talked to Phantom Auto and some other companies that are trying to kind of insert a person back in at some point in time to help with that trust. On the other hand, you have people driving the Teslas especially, or at least that's the ones we hear the most about, that's a level two assist that people are treating like a level five fully autonomous vehicle. And unfortunately, there's been some fatalities and they're not level five vehicles. So it's really two opposite extremes, that we see people and their interaction with these things. They want it to be fully autonomous today, and it's not but people are treating them that way. It's weird. >> Yeah, and I think that's one of the risks, right? I think level three is one area where I really think you probably will not see a lot of. I think level four, where you can basically have fully autonomous but in a geo-fenced area, will I think be the first area that really takes off. So on campuses, in maybe urban areas that are fenced off from other vehicles. I think you will see that develop first. I don't think mixed-mode traffic where you have a lot of vehicles where they're fully autonomous but you're going to expect the driver to be paying attention all the time and willing to take over the vehicle at any minute. I don't think that works. The human brain doesn't work that way. >> No, it doesn't work. It's funny, we were at a Ford event, and it was a press event so they had the sample driver guy ready to go, and they had a guy sitting in the right seat with a laptop, checking things out. And this poor guy in the left seat, he had his hands half an inch from the wheel on both side, just completely alert and ready to go. You couldn't do this for more than fifteen minutes or twenty minutes. It was the worst of all worlds for this poor guy. It is going to be interesting, that intermediate phase, and it's going to be complicated, but it's clearly coming at an incredible rate of speed. >> Right. Exactly. And then you also have to manage-- How do you manage the traffic when you have mixed mode, when you have human-driven vehicles combined with autonomous vehicles? How do the autonomous vehicles react to the human-driven vehicles and how do the humans react to autonomous-driven vehicles? And we haven't really figured that out yet. >> Right, and then there's all the other law of unintended consequences with, what do you do with the parking structures? I think curb management is an interesting thing that's really been highlighted lately in San Francisco with all the electric scooters that are now littering the sidewalks, which nobody ever really thought about when they rolled out hundreds and hundreds, if not thousands of these scooters all over San Fransisco. Good opportunities and crazy times ahead. >> And that's the beauty of this, right? All of these things actually create opportunities, you just have to stick with it and look at solutions, and there's no shortage of really talented, creative people to go address these opportunities. And it is so fun to be involved in it right now. >> Alright, Drue, well congrats on your new position, and we look forward to watching ACGSV evolve. >> Thank you very much. >> Alright, he's Drue Freeman and I'm Jeff Frick. You're watching theCUBE from the 14th Annual GROW! Awards. Thanks for watching. (upbeat electronic music)