(soft music) >> Welcome back to Chicago guys and gals. Lisa Martin here with John Furrier. We have been covering Ansible Fest '22 for the last two days. This is our show wrap. We're going to leave you with some great insights into the things that we were able to dissect over the last two days. John, this has been an action packed two days. A lot of excitement, a lot of momentum. Good to be back in person. >> It's great to be back in person. It was the first time for you to do Ansible Fest. >> Yes. >> My first one was 2019 in person. That's the last time they had an event in person. So again, it's a very chill environment here, but it's content packed, great active loyal community and is growing. It's changing. Ansible now owned by Red Hat, and now Red Hat owned by IBM. Kind of see some game changing kind of movements here on the chess board, so to speak, in the industry. Ansible has always been a great product. It started in open source. It evolved configuration management configuring servers, networks. You know, really the nuts and bolts of IT. And became a fan favorite mainly because it was built by the fans and I think that never stopped. And I think you started to see an opportunity for Ansible to be not only just a, I won't say niche product or niche kind of use case to being the overall capabilities for large scale enterprise system architectures, system management. So it's very interesting. I mean I find it fascinating how, how it stays relevant and cool and continues to power through a massive shift >> A massive shift. They've done a great job though since the inception and through the acquisition of being still community first. You know, we talked a lot yesterday and today about helping organizations become automation first that Ansible has really stayed true to its roots in being community first, community driven and really that community flywheel was something that was very obvious the last couple of days. >> Yeah, I mean the community thing is is is their production system. I mean if you look at Red Hat, their open source, Ansible started open source, good that they're together. But what people may or may not know about Ansible is that they build their product from the community. So the community actually makes the suggestions. Ansible's just in listening modes. So when you have a system that's that efficient where you have direct working backwards from the customer like that, it's very efficient. Now, as a product manager you might want to worry about scope creep, but at the end of the day they do a good job of democratizing that process. So again, very strong product production system with open source, very relevant, solves the right problems. But this year the big story to me is the cultural shift of Ansible's relevance. And I think with multicloud on the horizon, operations is the new kind of developer kind of ground. DevOps has been around for a while. That's now shifted up to the developer themselves, the cloud native developer. But at cloud scale and hybrid computing, it's about the operations. It's about the data and the security. All of it's about the data. So to me there's a new ops configuration operating model that you're seeing people use, SRE and DevOps. That's the new culture, and the persona's changing. The operator of a large scale enterprise is going to be a lot different than it was past five, 10 years. So major cultural shift, and I think this community's going to step up to that position and fill that role. >> They seem to be having a lot of success meeting people where they are, meeting the demographics, delivering on how their community wants to work, how they want to collaborate. But yesterday you talked about operations. We talked a lot about Ops as code. Talk about what does that mean from your perspective, and what did you hear from our guests on the program with respect that being viable? >> Well great, that's a great point. Ops as code is the kind of their next layer of progression. Infrastructure is code. Configuration is code. Operations is code. To me that means running the company as software. So software influencing how operators, usually hardware in the past. Now it's infrastructure and software going to run things. So ops as code's, the next progression in how people are going to manage it. And I think most people think of that as enterprises get larger, when they hear words like SRE, which stands for Site Reliable Engineer. That came out of Google, and Google had all these servers that ran the search engine and at scale. And so one person managed boatload of servers and that was efficient. It was like a multiple 10x engineer, they used to call it. So that that was unique to Google but not everyone's Google. So it became language or parlance for someone who's running infrastructure but not everyone's that scale. So scale is a big issue. Ops as code is about scale and having that program ability as an operator. That's what Ops as code is. And that to me is a sign of where the scale meets the automation. Large scale is hard to do. Automating at large scale is even harder. So that's where Ansible fits in with their new automation platform. And you're seeing new things like signing code, making sure it's trusted and verified. So that's the software supply chain issue. So they're getting into the world where software, open source, automation are all happening at scale. So to me that's a huge concept of Ops as code. It's going to be very relevant, kind of the next gen positioning. >> Let's switch gears and talk about the partner ecosystem. We had Stefanie Chiras on yesterday, one of our longtime theCUBE alumni, talking about what they're doing with AWS in the marketplace. What was your take on that, and what's the "what's in it for me" for both Red Hat, Ansible and AWS? >> Yeah, so the big news on the automation platform was one. The other big news I thought was really, I won't say watered down, but it seems small but it's not. It's the Amazon Web Services relationship with Red Hat, now Ansible, where Ansible's now a product in AWS's marketplace. AWS marketplace is kind of hanging around. It's a catalog right now. It's not the most advanced technical system in the world, and it does over 2 billion plus revenue transactions. So even if it's just sitting there as a large marketplace, that's already doing massive amounts of disruption in the procurement, how software is bought. So we interviewed them in the past, and they're innovating on that. They're going to make that a real great platform. But the fact that Ansible's in the marketplace means that their sales are going to go up, number one. Number two, that means customers can consume it simply by clicking a button on their Amazon bill. That means they don't have to do anything. It's like getting a PO for free. It's like, hey, I'm going to buy Ansible, click, click, click. And then by the way, draw that down from their commitment to AWS. So that means Amazon's going into business with Ansible, and that is a huge revenue thing for Ansible, but also an operational efficiency thing that gives them more of an advantage over the competition. >> Talk what's in it for me as a customer. At Red Hat Summit a few months ago they announced similar partnership with Azure. Now we're talking about AWS. Customers are living in this hybrid cloud world, often by default. We're going to see that proliferate. What do you think this means for customers in terms of being able to- >> In the marketplace deal or Ansible? >> Yeah, the marketplace deal, but also what Red Hat and Ansible are doing with the hyperscalers to enable customers to live successfully in the hyper hybrid cloud world. >> It's just in the roots of the company. They give them the choice to consume the product on clouds that they like. So we're seeing a lot of clients that have standardized on AWS with their dev teams but also have productivity software on Azure. So you have the large enterprises, they sit on both clouds. So you know, Ansible, the customer wants to use Ansible anyway, they want that to happen. So it's a natural thing for them to work anywhere. I call that the Switzerland strategy. They'll play with all the clouds. Even though the clouds are fighting against each other, and they have to to differentiate, there's still going to be some common services. I think Ansible fits this shim layer between clouds but also a bolt on. Now that's a really a double win for them. They can bolt on to the cloud, Azure and bolt on to AWS and Google, and also be a shim layer technically in clouds as well. So there's two technical advantages to that strategy >> Can Ansible be a facilitator of hybrid cloud infrastructure for organizations, or a catalyst? >> I think it's going to be a gateway on ramp or gateway to multicloud or supercloud, as we call it, because Ansible's in that configuration layer. So you know, it's interesting to hear the IBM research story, which we're going to get to in a second around how they're doing the AI for Ansible with that wisdom project. But the idea of configuring stuff on the fly is really a concept that's needed for multicloud 'Cause programs don't want to have to configure anything. (he laughs) So standing up an application to run on Azure that's on AWS that spans both clouds, you're going to need to have that automation, and I think this is an opportunity whether they can get it or not, we'll see. I think Red Hat is probably angling on that hard, and I can see them kind of going there and some of the commentary kind of connects the dots for that. >> Let's dig into some of news that came out today. You just alluded to this. IBM research, we had on with Red Hat. Talk about what they call project wisdom, the value in that, what it also means for for Red Hat and IBM working together very synergistically. >> I mean, I think the project wisdom is an interesting dynamic because you got the confluence of the organic community of Ansible partnering with a research institution of IBM research. And I think that combination of practitioners and research groups is going to map itself out to academic and then you're going to see this kind of collaboration going forward. So I think it's a very nuanced story, but the impact to me is very clear that this is the new power brokers in the tech industry, because researchers have a lot of muscle in terms of deep research in the academic area, and the practitioners are the ones who are actually doing it. So when you bring those two forces together, that pretty much trumps any kind of standards bodies or anything else. So I think that's a huge signaling benefit to Ansible and Red Hat. I think that's an influence of Red Hat being bought by IBM. But the project itself is really amazing. It's taking AI and bringing it to Ansible, so you can do automated configurations. So for people who don't know how to code they can actually just automate stuff and know the process. I don't need to be a coder, I can just use the AI to do that. That's a low code, no code dynamic. That kind of helps with skill gaps, because I need to hire someone to do that. Today if I want to automate something, and I don't know how to code, I've got to get someone who codes. Here I can just do it and automate it. So if that continues to progress the way they want it to, that could literally be a game changer, 'cause now you have software configuring machines and that's pretty badass in my opinion. So that thought that was pretty cool. And again it's just an evolution of how AI is becoming more relevant. And I think it's directionally correct, and we'll see how it goes. >> And they also talked about we're nearing an inflection point in AI. You agree? >> Yeah I think AI is at an inflection point because it just falls short on the scale side. You see it with chatbots, NLP. You see what Amazon's doing. They're building these models. I think we're one step away from model scaling. I think the building the models is going to be one of these things where you're going to start to see marketplace and models and you start to composability of AI. That's where it's going to get very interesting to see which cloud is the best AI scale. So I think AI at scale's coming, and that's going to be something to watch really closely. >> Something exciting. Another thing that was big news today was the event driven Ansible. Talk about that, and that's something they've been working on in conjunction with the community for quite a while. They were very proud of that release and what that's going to enable organizations to do. >> Well I think that's more meat on the bone on the AI side 'cause in the big trend right now is MLAI ops. You hear that a lot. Oh, data ops or AI ops. What event driven automation does is allows you to take things that are going on in your world, infrastructure, triggers, alarms, notifications, data pipelining flows, things that go on in the plumbing of infrastructure. are being monitored and observed. So when events happen they trigger events. You want to stream something, you send a trigger and things happen. So these are called events. Events are wide ranging number of events. Kafka streaming for data. You got anything that produces data is an event. So harnessing that data into a pipeline is huge. So doing that at scale, that's where I think that product's a home run, and I think that's going to be a very valuable product, 'cause once you understand what the event triggers are, you then can automate that, and no humans involved. So that will save a lot of time for people in the the higher pay grade of MLAI ops automate some of that low level plumbing. They move their skill set to something more valuable or more impactful. >> And we talked about, speaking of impact, we talked about a lot of the business impact that organizations across industries are going to be able to likely achieve by using that. >> Yeah, I mean I think that you're going to see the community fill the gap on that. I mean the big part about all this is that their community builds the product and they have the the playbooks and they're shareable and they're reusable. So we produce content as a media company. They'd talk about content as is playbooks and documentation for people to use. So reuse and and reusing these playbooks is a huge part of it. So as they build up these catalogs and these playbooks and rules, it gets better by the community. So it's going to be interesting to see the adoption. That's going to be a big tell sign for what's going to happen. >> Yep, we get definitely are going to be watching that space. And the last thing, we got to talk to a couple of customers. We talked to Wells Fargo who says "We are a tech company that does banking," which I loved. We got to talk with Rockwell Automation. What are some of your takeaways from how the customers are leveraging Ansible and the technology to drive their businesses forward to meet demanding customers where they are? >> I think you're seeing the script flipping a little bit here, where the folks that used to use Ansible for configuration are flipping to be on the front edge of the innovation strategy where what process to automate is going to drive the profitability and scale. Cause you're talking about things like skill gaps, workflows. These are business constructs and people These are assets so they have economic value. So before it was just, IT serve the business, configure some servers, do some stuff. When you start getting into automation where you have expertise around what this means, that's economic value. So I think you're going to see the personas change significantly in this community where they're on the front lines, kind of like developers are. That's why ops as code is to me a developer kind of vibe. That's going to completely change how operations runs in IT. And I think that's going to be a very interesting cultural shift. And some will make it, some won't. That's going to be a big thing. Some people say, I'm going to retire. I'm old school storage server person, or no, I'm the new guard. I'm going to be the new team. I'm going be on the right side of history here. So they're clearly going down that right path in my opinion. >> What's your overall summary in the last minute of what this event delivered the last couple of days in terms of really talking about the transformation of enterprises and industries through automation? >> I think the big takeaway from me in listening and reading the tea leaves was the Ansible company and staff and the community together. It was really a call for arms. Like, hey, we've had it right from the beginning. We're on the right wave and the wave's getting bigger. So expand your scope, uplevel your skills. They're on the right side of history. And I think the message was engage more. Bring more people in because it is open source, and if they are on that track, you're going to see more of hey, we got it right, let's continue. So they got platform release. They got the key products coming out after years of work. So you know, they're doing their work. And the message I heard was, it's bigger than we thought. So I think that's interesting. We'll see what that means. We're going to unpack that after the event in series of showcases. But yeah, it was very positive, I thought. Very positive. >> Yeah, I think there was definitely some surprises in there for them. John, thank you so much. It's been a pleasure co-hosting with you the last couple of days, really uncovering what Ansible is doing, what they're enabling customers in every industry to achieve. >> Been fun. >> Yes. All right for my co-host, John Furrier, I'm Lisa Martin. You've been watching theCUBE's coverage of Ansible Fest 2022 live from Chicago. We hope you take good care and we'll see you soon.

>>The transformation of Dell into Dell emc. And now Dell Technologies has been one of the most remarkable stories in the history of the enterprise technology industry. The company has gone from a Wall Street darling rocket ship PC company to a Midling enterprise player, forced to go private to a debt laden powerhouse that controlled one of the most valuable assets in enterprise tech i e VMware, and now is a hundred billion dollar giant with a low margin business. A strong balance sheet in the broadest hardware portfolio in the industry and financial magic that Dell went through would make anyone's head spin. The last lever of Dell EMC of the Dell EMC deal was detailed in Michael Dell's book Play Nice But Win in a captivating chapter called Harry You and the Bolt from the Blue Michael Dell described how he and his colleagues came up with the final straw of how to finance the deal. >>If you haven't read it, you should. And of course, after years of successfully integrating EMC and becoming VMware's number one distribution channel, all of this culminated in the spin out of VMware from Dell and a massive wealth creation milestone pending, of course the Broadcom acquisition of VMware. So where's that leave Dell and what does the future look like for this technology powerhouse? Hello and welcome to the Cube's exclusive coverage of Dell Technology Summit 2022. My name is Dave Ante and I'll be hosting the program. Now today in conjunction with the Dell Tech Summit, we're gonna hear from four of Dell's senior executives, Tom Sweet, who's the CFO of Dell Technologies. He's gonna share his views on the company's position and opportunities going forward. He's gonna answer the question, why is Dell a good long-term investment? Then we'll hear from Jeff Boudreau, who's the president of Dell's ISG business. >>That unit is the largest profit driver of Dell. He's gonna talk about the product angle and specifically how Dell is thinking about solving the multi-cloud challenge. And then Sam Groot, who is the senior vice president of marketing, will come on the program and give us the update on Apex, which is Dell's as a service offering, and then the new Edge platform called Project Frontier. Now it's also cyber security Awareness month that we're gonna see if Sam has, you know, anything to say about that. Then finally, for a company that's nearly 40 years old, Dell actually has some pretty forward thinking philosophies when it comes to its culture and workforce. And we're gonna speak with Jen Vera, who's Dell's chief Human Resource Resource Officer about hybrid work and how Dell is thinking about the future of work. However, before we get into all this, I wanna share our independent perspectives on the company and some research that we'll introduce to frame the program. >>Now, as you know, we love data here at the cube and one of our partners, ETR has what we believe is the best spending intentions data for enterprise tech. So here's a graphic that shows ET R'S proprietary net score methodology in the vertical access. That's a measure of spending velocity. And on the X axis, his overlap of pervasiveness in the data sample, this is a cut for just the server, the storage, and the client sectors within the ETR taxonomy. So you can see Dell CSG products, laptops in particular are dominant on both the X and the Y dimensions. CSG is the client solutions group and accounts for nearly 60% of Dell's revenue and about half of its operating income. And then the arrow signifies that dot, that represents Dell's ISG business that we're gonna talk to Jeff Boudro about. That's the infrastructure solutions group. Now, ISG accounts for the bulk of of the remainder of Dell's business, and it is, it's, as I said, it's most profitable from a margin standpoint. >>It comprises the EMC storage business as well as the Dell server business and Dell's networking portfolio. And as a note, we didn't include networking in that cut had we done. So Cisco would've dominated the graphic. And frankly, Dell's networking business isn't industry leading in the same way that PCs, servers and storage are. And as you can see, the data confirms the leadership position Dell has in its client side, its server and its storage sectors. But the nuance is look at that red dotted line at 40% on the vertical axis that represents a highly elevated net score, and every company in the sector is below that line. Now we should mention that we also filtered the data for those companies with more than a hundred mentions in the survey, but the point remains the same. This is a mature business that generally is lower margin storage is the exception, but cloud has put pressure on margins even in that business in addition to the server space. >>The last point on this graphic is we put a box around VMware and it's prominently present on both the X and Y dimensions. VMware participates with purely software defined high margin offerings in this, in these spaces, and it gives you a sense of what might have been had Dell chosen to hold onto that asset or spin it into the company. But let's face it, the alternatives from Michael Dell were just too attractive and it's unlikely that a spin in would've unlocked the value in the way a spinout did, at least not in the near future. So let's take a look at the snapshot of Dell's financials. To give you a sense of where the company stands today, Dell is a company with over a hundred billion in revenue. Last quarter, it did more than 26 billion in revenue and grew at a quite amazing 9% rate for a company that size. >>But because it's a hardware company, primarily its margins are low with operating income, 10% of revenue, and at 21% gross margin with VMware on Dell's income statement before the spin, its gross margins. Were in the low thirties. Now, Dell only spends about 2% of revenue on r and d because because it's so big, it's still a lot of money. And you can see it is cash flow positive. Dell's free cash flow over the trailing 12 month period is 3.7 billion, but that's only 3.5% of trailing 12 month revenue. Dell's Apex, and of course it's hardware maintenance business is recurring revenue and that is only about 5 billion in revenue and it's growing at 8% annually. Now having said that, it's the equivalent of service now's total revenue. Of course, service now is 23% operating margin and 16% free cash flow margin and more than 5 billion in cash on the balance sheet and an 85 billion market cap. >>That's what software will do for you. Now Dell, like most companies, is staring at a challenging macro environment with FX headwinds, inflation, et cetera. You've heard the story and hence it's conservative and contracting revenue guidance. But the balance sheet transformation has been quite amazing. Thanks to VMware's cash flow, Michael Dell and his partners from Silver Lake at all, they put up around $4 billion of their own cash to buy EMC for 67 billion, and of course got VMware in the process. Most of that financing was debt that Dell put on its balance sheet to do the transaction to the tune of 46 billion. It added to the, to the balance sheet debt. Now Dell's debt, the core debt net of its financing operation is now down to 16 billion and it has 7 billion in cash in the balance sheet. So dramatic delta from just a few years ago. So pretty good picture. >>But Dell a hundred billion company is still only valued at 28 billion or around 26 cents on the revenue dollar H HP's revenue multiple is around 60 cents on the revenue dollar. HP Inc. Dell's, you know, laptop and PC competitor is around 45 cents. IBM's revenue multiple is almost two times. By the way, IBM has more than 50 billion in debt thanks to the Red Hat acquisition. And Cisco has a revenue multiple, it's over three x, about 3.3 x currently. So is Dell undervalued? Well, based on these comparisons with its peers, I'd say yes and no. Dell's performance relative to its peers in the market is very strong. It's winning and has an extremely adept go to market machine, but it's lack of software content and it's margin profile leads. One to believe that if it can continue to pull some valuation levers while entering new markets, it can get its valuation well above where it is today. >>So what are some of those levers and what might that look like going forward? Despite the fact that Dell doesn't have a huge software revenue component since spinning out VMware and it doesn't own a cloud, it plays in virtually every part of the hardware market and it can provide infrastructure for pr pretty much any application in any use case and pretty much any industry and pretty much any geography in the world and it can serve those customers. So its size is an advantage. However, the history for hardware heavy companies that try to get bigger has some notable failures, namely hp, which had to split into two businesses, HP Inc. And hp E and ibm, which has had in abysmal decade from a performance standpoint and has had to shrink to grow again and obviously do a massive 34 billion acquisition of Red Hat. So why will Dell do any better than these two? >>Well, it has a fantastic supply chain. It's a founder led company, which makes a cultural difference in our view, and it's actually comfortable with a low margin software, light business model. Most certainly, IBM wasn't comfortable with that and didn't have these characteristics, and HP was kind of just incomprehensible at the end. So Dell in my opinion, is a much better chance of doing well at a hundred billion or over, but we'll see how it navigates through the current headwinds as it's guiding down. Apex is essentially Dell's version of the cloud. Now remember, Dell got started late. HPE is further along from a model standpoint with GreenLake, but Dell has a larger portfolio, so they're gonna try to play on that advantage. But at the end of the day, these as a service offerings are simply ways to bring a utility model to existing customers and generate recurring revenue. >>And that's a good thing because customers will be loyal to an incumbent if it can deliver as a service and reduce risk for for customers. But the real opportunity lies ahead, specifically Dell is embracing the cloud model. It took a while, but they're on board as Matt Baker Dell's senior vice president of corporate strategy likes to say it's not a zero sum game. What it means by that is just because Dell doesn't own its own cloud, it doesn't mean Dell can't build value on top of hyperscale clouds, what we call super cloud. And that's Dell's strategy to take advantage of public cloud CapEx and connect on-prem to the cloud, create a unified experience across clouds and out to the edge that's ambitious and technically it's non-trivial. But listen to Dell's vice chairman and Coco, Jeff Clark, explain this vision, please play the clip. >>You said also technology and business models are tied together and enabler. That's if, if you believe that, then you have to believe that it's a business operating system that they want, They want to leverage whatever they can, and at the end of the day there's, they have to differentiate what they do. Well that, that's >>Exactly right. If I take that and what, what Dave was saying and and I, and I summarize it the following way, if we can take these cloud assets and capabilities, combine them in an orchestrated way to delivery a distributed platform, game over, >>Eh, pretty interesting, right? John Freer called it a business operating system. Essentially, I think of it sometimes as a cloud operating system or cloud operating environment to drive new business value on top of the hyperscale CapEx. Now, is it really game over? As Jeff Clark said, if Dell can do that, I'd say if it had that today, it might be game over for the competition, but this vision will take years to play out. And of course it's gotta be funded and now it's gonna take time. And in this industry it tends to move. Companies tend to move in lockstep. So as often as the case, it's gonna come down to execution and Dell's ability to enter new markets that are ideally, at least from my perspective, higher margin data management, extending data protection into cyber security as an adjacency and of course edge at telco slash 5G opportunities. >>All there for the taking. I mean, look, even if Dell doesn't go after more higher margin software content, it can thrive with a lower margin model just by penetrating new markets and throwing off cash from those markets. But by keeping close to customers and maybe through Tuck in acquisitions, it might be able to find the next nugget beyond today's cloud and on-prem models. And the last thing I'll call out is ecosystem. I say here ecosystem, ecosystem, ecosystem. Because a defining characteristic of a cloud player is ecosystem, and if Apex is Dell's cloud, it has the opportunity to expand that ecosystem dramatically. This is one of the company's biggest opportunities and challenges. At the same time, in my view, it's just scratching the surface on its partner ecosystem. And it's ecosystem today is is both reseller heavy and tech partner heavy. And that's not a bad thing, but in a, but it's starting to evolve more rapidly. >>The snowflake deal is an example of up to stack evolution, but I'd like to see much more out of that snowflake relationship and more relationships like that. Specifically I'd like to see more momentum with data and database. And if we live at a data heavy world, which we do, where the data and the database and data management offerings, you know, coexist and are super important to customers, like to see that inside of Apex, like to see that data play beyond storage, which is really where it is today and it's early days. The point is with Dell's go to market advantage, which which company wouldn't treat Dell like the on-prem hybrid edge super cloud player that I wanna partner with to drive more business. You'd be crazy not to, but Dell has a lot on its plate and we'd like to see some serious acceleration on the ecosystem front. In other words, Dell as both a selling partner and a business enabler with its platform, its programmable infrastructure as a service. And that is a moving target that will rapidly involve. And of course we'll be here watching and reporting. So thanks for watching this preview of Dell Technology Summit 2022. I'm Dave Vte. We hope you enjoy the rest of the program.

(upbeat music) >> The transformation of Dell into Dell EMC, and now Dell Technologies, has been one of the most remarkable stories in the history of the enterprise technology industry. The company has gone from a Wall Street darling rocketship PC company, to a middling enterprise player, forced to go private, to a debt-laden powerhouse that controlled one of the most valuable assets in enterprise tech, i.e., VMware. And now is a $100 billion dollar giant with a low-margin business, a strong balance sheet, and the broadest hardware portfolio in the industry. The financial magic that Dell went through would make anyone's head spin. The last lever of the Dell EMC deal was detailed in Michael Dell's book "Play Nice But Win," in a captivating chapter called "Harry You and the Bolt from the Blue." Michael Dell described how he and his colleagues came up with the final straw of how to finance the deal. If you haven't read it, you should. And of course, after years of successfully integrating EMC and becoming VMware's number-one distribution channel, all of this culminated in the spin-out of VMware from Dell, and a massive wealth-creation milestone, pending, of course, the Broadcom acquisition of VMware. So where's that leave Dell, and what does the future look like for this technology powerhouse? Hello, and welcome to theCUBE's exclusive coverage of Dell Technologies Summit 2022. My name is Dave Vellante, and I'll be hosting the program. Now, today in conjunction with the Dell Tech Summit, we're going to hear from four of Dell's senior executives. Tom Sweet, who's the CFO of Dell Technologies. He's going to share his views on the company's position and opportunities going forward. He's going to answer the question, why is Dell a good long-term investment? Then we'll hear from Jeff Boudreau, who's the President of Dell's ISG business. That unit is the largest profit driver of Dell. He's going to talk about the product angle, and specifically, how Dell is thinking about solving the multi-cloud challenge. And then Sam Grocott, who's the Senior Vice President of Marketing, will come on the program and give us the update on APEX, which is Dell's as-a-Service offering, and then the new edge platform called Project Frontier. Now, it's also Cybersecurity Awareness Month, that we're going to see if Sam has, you know, anything to say about that. Then finally, for a company that's nearly 40 years old, Dell actually has some pretty forward-thinking philosophies when it comes to its culture and workforce. And we're going to speak with Jenn Saavedra, who's Dell's Chief Human Resource Officer, about hybrid work, and how Dell is thinking about the future of work. However, before we get into all this, I want to share our independent perspectives on the company, and some research that we'll introduce to frame the program. Now, as you know, we love data here at theCUBE, and one of our partners, ETR, has what we believe is the best spending intentions data for enterprise tech. So here's a graphic that shows ETR's proprietary Net Score methodology on the vertical axis, that's a measure of spending velocity, and on the x-axis is overlap or pervasiveness in the data sample. This is a cut for just the server, the storage, and the client sectors within the ETR taxonomy. So you can see Dell's CSG products, laptops in particular, are dominant on both the x and the y dimensions. CSG is the Client Solutions Group, and accounts for nearly 60% of Dell's revenue, and about half of its operating income. And then the arrow signifies that dot that represents Dell's ISG business, that we're going to talk to Jeff Boudreau about. That's the Infrastructure Solutions Group. Now, ISG accounts for the bulk of the remainder of Dell's business, and it is its, as I said, its most profitable from a margin standpoint. It comprises the EMC storage business, as well as the Dell server business, and Dell's networking portfolio. And as a note, we didn't include networking in that cut. Had we done so, Cisco would've dominated the graphic. And frankly, Dell's networking business isn't industry leading in the same way that PCs, servers, and storage are. And as you can see, the data confirms the leadership position Dell has in its client side, its server, and its storage sectors. But the nuance is, look at that red dotted line at 40% on the vertical axis. That represents a highly elevated Net Score, and every company in the sector is below that line. Now, we should mention that we also filtered the data for those companies with more than a hundred mentions in the survey, but the point remains the same. This is a mature business that generally is lower margin. Storage is the exception, but cloud has put pressure on margins even in that business, in addition to the server space. The last point on this graphic is, we put a box around VMware, and it's prominently present on both the x and y dimensions. VMware participates with purely software-defined high-margin offerings in these spaces, and it gives you a sense of what might have been, had Dell chosen to hold onto that asset or spin it into the company. But let's face it, the alternatives for Michael Dell were just too attractive, and it's unlikely that a spin-in would've unlocked the value in the way a spin-out did, at least not in the near future. So let's take a look at the snapshot of Dell's financials, to give you a sense of where the company stands today. Dell is a company with over $100 billion dollars in revenue. Last quarter, it did more than 26 billion in revenue, and grew at a quite amazing 9% rate, for a company that size. But because it's a hardware company, primarily, its margins are low, with operating income 10% of revenue, and at 21% gross margin. With VMware on Dell's income statement before the spin, its gross margins were in the low 30s. Now, Dell only spends about 2% of revenue on R&D, but because it's so big, it's still a lot of money. And you can see it is cash-flow positive. Dell's free cash flow over the trailing 12-month period is 3.7 billion, but that's only 3.5% of trailing 12-month revenue. Dell's APEX, and of course its hardware maintenance business, is recurring revenue, and that is only about 5 billion in revenue, and it's growing at 8% annually. Now, having said that, it's the equivalent of ServiceNow's total revenue. Of course, ServiceNow has 23% operating margin and 16% free cash-flow margin, and more than $5 billion in cash on the balance sheet, and an $85 billion market cap. That's what software will do for you. Now Dell, like most companies, is staring at a challenging macro environment, with FX headwinds, inflation, et cetera. You've heard the story. And hence it's conservative, and contracting revenue guidance. But the balance sheet transformation has been quite amazing, thanks to VMware's cash flow. Michael Dell and his partners from Silver Lake et al., they put up around $4 billion of their own cash to buy EMC for 67 billion, and of course got VMware in the process. Most of that financing was debt that Dell put on its balance sheet to do the transaction, to the tune of $46 billion it added to the balance sheet debt. Now, Dell's debt, the core debt, net of its financing operation, is now down to 16 billion, and it has $7 billion in cash on the balance sheet. So a dramatic delta from just a few years ago. So, pretty good picture. But Dell, a $100 billion company, is still only valued at 28 billion, or around 26 cents on the revenue dollar. HPE's revenue multiple is around 60 cents on the revenue dollar. HP Inc., Dell's laptop and PC competitor, is around 45 cents. IBM's revenue multiple is almost two times. By the way, IBM has more than $50 billion in debt thanks to the Red Hat acquisition. And Cisco has a revenue multiple that's over 3x, about 3.3x currently. So is Dell undervalued? Well, based on these comparisons with its peers, I'd say yes, and no. Dell's performance, relative to its peers in the market, is very strong. It's winning, and has an extremely adept go-to-market machine, but its lack of software content and its margin profile leads one to believe that if it can continue to pull some valuation levers while entering new markets, it can get its valuation well above where it is today. So what are some of those levers, and what might that look like, going forward? Despite the fact that Dell doesn't have a huge software revenue component since spinning out VMware, and it doesn't own a cloud, it plays in virtually every part of the hardware market. And it can provide infrastructure for pretty much any application in any use case, in pretty much any industry, in pretty much any geography in the world. And it can serve those customers. So its size is an advantage. However, the history for hardware-heavy companies that try to get bigger has some notable failures, namely HP, which had to split into two businesses, HP Inc. and HPE, and IBM, which has had an abysmal decade from a performance standpoint, and has had to shrink to grow again, and obviously do a massive $34 billion acquisition of Red Hat. So why will Dell do any better than these two? Well, it has a fantastic supply chain. It's a founder-led company, which makes a cultural difference, in our view. And it's actually comfortable with a low-margin software-light business model. Most certainly, IBM wasn't comfortable with that, and didn't have these characteristics, and HP was kind of just incomprehensible at the end. So Dell in my opinion, has a much better chance of doing well at 100 billion or over, but we'll see how it navigates through the current headwinds as it's guiding down. APEX is essentially Dell's version of the cloud. Now, remember, Dell got started late. HPE is further along from a model standpoint with GreenLake, but Dell has a larger portfolio, so they're going to try to play on that advantage. But at the end of the day, these as-a-Service offerings are simply ways to bring a utility model to existing customers, and generate recurring revenue. And that's a good thing, because customers will be loyal to an incumbent if it can deliver as-a-Service and reduce risk for customers. But the real opportunity lies ahead. Specifically, Dell is embracing the cloud model. It took a while, but they're on board. As Matt Baker, Dell's Senior Vice President of Corporate Strategy, likes to say, it's not a zero-sum game. What he means by that is, just because Dell doesn't own its own cloud, it doesn't mean Dell can't build value on top of hyperscale clouds. What we call supercloud. And that's Dell's strategy, to take advantage of public cloud capex, and connect on-prem to the cloud, create a unified experience across clouds, and out to the edge. That's ambitious, and technically it's nontrivial. But listen to Dell's Vice Chairman and Co-COO, Jeff Clarke, explain this vision. Please play the clip. >> You said also, technology and business models are tied together, and an enabler. >> That's right. >> If you believe that, then you have to believe that it's a business operating system that they want. They want to leverage whatever they can, and at the end of the day, they have to differentiate what they do. >> Well, that's exactly right. If I take that and what Dave was saying, and I summarize it the following way: if we can take these cloud assets and capabilities, combine them in an orchestrated way to deliver a distributed platform, game over. >> Eh, pretty interesting, right? John Furrier called it a "business operating system." Essentially, I think of it sometimes as a cloud operating system, or cloud operating environment, to drive new business value on top of the hyperscale capex. Now, is it really game over, as Jeff Clarke said, if Dell can do that? Uh, (sucks in breath) I'd say if it had that today, it might be game over for the competition, but this vision will take years to play out. And of course, it's got to be funded. And that's going to take time, and in this industry, it tends to move, companies tend to move in lockstep. So, as often is the case, it's going to come down to execution and Dell's ability to enter new markets that are ideally, at least from my perspective, higher margin. Data management, extending data protection into cybersecurity as an adjacency, and of course, edge and telco/5G opportunities. All there for the taking. I mean, look, even if Dell doesn't go after more higher-margin software content, it can thrive with a lower-margin model just by penetrating new markets and throwing off cash from those markets. But by keeping close to customers, and maybe through tuck-in acquisitions, it might be able to find the next nugget beyond today's cloud and on-prem models. And the last thing I'll call out is ecosystem. I say here, "Ecosystem, ecosystem, ecosystem," because a defining characteristic of a cloud player is ecosystem, and if APEX is Dell's cloud, it has the opportunity to expand that ecosystem dramatically. This is one of the company's biggest opportunities and challenges at the same time, in my view. It's just scratching the surface on its partner ecosystem. And its ecosystem today is both reseller heavy and tech partner heavy. And that's not a bad thing, but it's starting to evolve more rapidly. The Snowflake deal is an example of up-the-stack evolution, but I'd like to see much more out of that Snowflake relationship, and more relationships like that. Specifically, I'd like to see more momentum with data and database. And if we live in a data-heavy world, which we do, where the data and the database and data management offerings, you know, coexist and are super important to customers, I'd like to see that inside of APEX. I'd like to see that data play beyond storage, which is really where it is today, in its early days. The point is, with Dell's go-to-market advantage, which company wouldn't treat Dell like the on-prem, hybrid, edge, supercloud player that I want to partner with to drive more business? You'd be crazy not to. But Dell has a lot on its plate, and we'd like to see some serious acceleration on the ecosystem front. In other words, Dell as both a selling partner and a business enabler with its platform, its programmable Infrastructure-as-a-Service. And that is a moving target that will rapidly evolve. And of course, we'll be here watching and reporting. So thanks for watching this preview of Dell Technologies Summit 2022. I'm Dave Vellante, we hope you enjoy the rest of the program. (upbeat music)

(upbeat music) >> The transformation of Dell into Dell EMC and now Dell Technologies has been one of the most remarkable stories in the history of the enterprise technology industry. The company has gone from a Wall Street darling rocket ship PC company, to a middling enterprise player forced to go private, to a debt-laden powerhouse that controlled one of the most valuable assets in enterprise tech i.e VMware. And now is a 100 billion dollar giant with a low margin business, a strong balance sheet, and the broadest hardware portfolio in the industry. Financial magic that Dell went through would make anyone's head spin. The last lever of Dell EMC, of the Dell EMC deal was detailed in Michael Dell's book, "Play Nice But Win." In a captivating chapter called Harry You and the Bolt from the Blue, Michael Dell described how he and his colleagues came up with the final straw of how to finance the deal. If you haven't read it, you should. And, of course, after years of successfully integrating EMC and becoming VMware's number one distribution channel, all of this culminated in the spin out of VMware from Dell in a massive wealth creation milestone. Pending, of course, the Broadcom acquisition of VMware. So where's that leave Dell and what does the future look like for this technology powerhouse? Hello, and welcome to theCUBE's exclusive coverage of Dell Technology Summit 2022. My name is Dave Vellante and I'll be hosting the program. Now, today in conjunction with the Dell Tech Summit, we're going to hear from four of Dell's senior executives Tom Sweet, who's the CFO of Dell Technologies. He's going to share his views on the company's position and opportunities going forward. He's going to answer the question, why is Dell a good long-term investment? Then we'll hear from Jeff Boudreau who's the president of Dell's ISG business. That unit is the largest profit driver of Dell. He's going to talk about the product angle and specifically, how Dell is thinking about solving the multi-cloud challenge. And then Sam Grocott who is the senior vice president of marketing will come on the program and give us the update on Apex, which is Dell's as-a-service offering, and then the new edge platform called Project Frontier. Now, it's also Cyber Security Awareness month that we're going to see if Sam has anything to say about that. Then finally, for a company that's nearly 40 years old, Dell actually has some pretty forward-thinking philosophies when it comes to its culture and workforce. And we're going to speak with Jennifer Saavedra who's Dell's chief human resource officer about hybrid work and how Dell is thinking about the future of work. However, before we get into all this, I want to share our independent perspectives on the company and some research that will introduce to frame the program. Now, as you know, we love data here at theCUBE and one of our partners, ETR has what we believe is the best spending intentions data for enterprise tech. So here's a graphic that shows ETR's proprietary net score methodology in the vertical axis. That's a measure of spending velocity. And on the x-axis is overlap of pervasiveness in the data sample. This is a cut for just the server, the storage, and the client sectors within the ETR taxonomy. So you can see Dell CSG products, laptops in particular are dominant on both the X and the Y dimensions. CSG is the client solutions group and accounts for nearly 60% of Dell's revenue and about half of its operating income. And then the arrow signifies that dot that represents Dell's ISG business that we're going to talk to Jeff Boudreau about. That's the infrastructure solutions group. Now, ISG accounts for the bulk of the remainder of Dell's business and it is, as I said, it's most profitable from a margin standpoint. It comprises the EMC storage business as well as the Dell server business and Dell's networking portfolio. And as a note, we didn't include networking in that cut. Had we done so, SISCO would've dominated the graphic. And frankly, Dell's networking business is an industry-leading in the same way that PCs, servers, and storage are. And as you can see, the data confirms the leadership position Dell has in its client side, its server and its storage sectors. But the nuance is look at that red dotted line at 40% on the vertical axis. That represents a highly elevated net score and every company in the sector is below that line. Now, we should mention that we also filtered the data for those companies with more than a 100 mentions in the survey, but the point remains the same. This is a mature business that generally is lower margin. Storage is the exception but cloud has put pressure on margins even in that business in addition to the server space. The last point on this graphic is we put a box around VMware and it's prominently present on both the X and Y dimensions. VMware participates with purely software-defined high margin offerings in these spaces, and it gives you a sense of what might have been had Dell chosen to hold onto that asset or spin it into the company. But let's face it, the alternatives from Michael Dell were just too attractive and it's unlikely that a spin in would've unlocked the value in the way a spin-out did, at least not in the near future. So let's take a look at the snapshot of Dell's financials to give you a sense of where the company stands today. Dell is a company with over a 100 billion dollars in revenue. Last quarter, it did more than 26 billion in revenue and grew at a quite amazing 9% rate for a company that size. But because it's a hardware company primarily, its margins are low with operating income 10% of revenue and at 21% gross margin. With VMware on Dell's income statement, before the spin its gross margins were in the low 30s. Now, Dell only spends about 2% of revenue on R&D because because it's so big, it's still a lot of money. And you can see it is cash flow positive, Dell's free cash flow over the trailing 12-month period is 3.7 billion but that's only 3.5% of trailing 12-month revenue. Dell's Apex and of course it's hardware maintenance business is recurring revenue and that is only about 5 billion in revenue and it's growing at 8% annually. Now having said that, it's the equivalent of Service now's total revenue. Of course, Service now has 23% operating margin and 16% free cash flow margin and more than $5 billion in cash on the balance sheet and an 85 billion dollar market cap. That's what software will do for you. Now, Dell, like most companies, is staring at a challenging macro environment with FX headwinds, inflation, et cetera. You've heard the story, and hence it's conservative and contracting revenue guidance. But the balance sheet transformation has been quite amazing thanks to VMware's cash flow. Michael Dell and his partners from Silver Lake et al, they put up around $4 billion of their own cash to buy EMC for $67 billion and of course got VMware in the process. Most of that financing was debt that Dell put on its balance sheet to do the transaction to the tune of $46 billion it added to the balance sheet debt. Now, Dell's debt, the core debt, net of its financing operation is now down to 16 billion and it has 7 billion in cash in the balance sheet. So dramatic delta from just a few years ago. So pretty good picture. But Dell, a 100 billion company, is still only valued at 28 billion or around 26 cents on the revenue dollar. HPE's revenue multiple is around 60 cents on the revenue dollar. HP Inc, Dell's laptop and PC competitor, is around 45 cents. IBM's revenue multiple is almost two times. By the way, IBM has more than $50 billion in debt thanks to the Red Hat acquisition. And Cisco has a revenue multiple, it's over 3X, about 3.3X currently. So is Dell undervalued? Well, based on these comparisons with its peers, I'd say yes and no. Dell's performance relative to its peers in the market is very strong. It's winning and has an extremely adept go to market machine. But it's lack of software content and it's margin profile leads one to believe that if it can continue to pull some valuation levers while entering new markets, it can get its valuation well above where it is today. So what are some of those levers and what might that look like going forward? Despite the fact that Dell doesn't have a huge software revenue component, since spinning out VMware, and it doesn't own a cloud, it plays in virtually every part of the hardware market. And it can provide infrastructure for pretty much any application, in any use case, in pretty much any industry, in pretty much any geography in the world and it can serve those customers. So its size is an advantage. However, the history for hardware-heavy companies that try to get bigger has some notable failures. Namely HP which had to split into two businesses, HP Inc and HPE, and IBM which has had in abysmal decade from a performance standpoint and has had to shrink to grow again and obviously do a massive $34 billion acquisition of Red Hat. So why will Dell do any better than these two? Well, it has a fantastic supply chain. It's a founder-led company which makes a cultural difference, in our view, and it's actually comfortable with a low margin software light business model. Most certainly, IBM wasn't comfortable with that and didn't have these characteristics and HP was kind of just incomprehensible at the end. So Dell in my opinion is a much better chance of doing well at a 100 billion or over, but we'll see how it navigates through the current headwinds as it's guiding down. Apex is essentially Dell's version of the cloud. Now remember, Dell got started late. HPE is further along from a model standpoint with GreenLake. But Dell has a larger portfolio so they're going to try to play on that advantage. But at the end of the day, these as-a-service offerings are simply ways to bring a utility model to existing customers and generate recurring revenue. And that's a good thing because customers will be loyal to an incumbent if it can deliver as-a-service and reduce risk for customers. But the real opportunity lies ahead, specifically Dell is embracing the cloud model. It took a while, but they're on board. As Matt Baker, Dell's senior vice president of corporate strategy likes to say, it's not a zero sum game. What he means by that is just because Dell doesn't own its own cloud, it doesn't mean Dell can't build value on top of hyperscale clouds, what we call super cloud. And that's Dell's strategy to take advantage of public cloud CapEx and connect on-prem to the cloud, create a unified experience across clouds and out to the edge. That's ambitious and technically it's non-trivial. But listen to Dell's vice chairman and co-COO Jeff Clarke explain this vision. Please play the clip. >> You said also technology and business models are tied together and enabler. If you believe that, then you have to believe that it's a business operating system that they want. They want to leverage whatever they can and at the end of the day, they have to differentiate what they do. >> No, that's exactly right. If I take that and what Dave was saying and I summarize it the following way. If we can take these cloud assets and capabilities, combine them in an orchestrated way to deliver a distributed platform, game over. >> Yeah, pretty interesting, right? John Freer called it a business operating system. Essentially, I think of it sometimes as a cloud operating system or cloud operating environment to drive new business value on top of the hyperscale CapEx. Now, is it really game over as Jeff Clarke said, if Dell can do that? I'd say if it had that today, it might be game over for the competition but this vision will take years to play out, and of course it's got to be funded. And now it's going to take time and in this industry, it tends to move, companies tend to move in lockstep. So as often as the case, it's going to come down to execution and Dell's ability to enter new markets that are ideally, at least from my perspective, higher margin. Data management, extending data protection into cyber security as an adjacency and, of course, edge at Telco slash 5G opportunities. All there for the taking. I mean, look, even if Dell doesn't go after more higher margin software content, it can thrive with a lower margin model just by penetrating new markets and throwing off cash from those markets. But by keeping close to customers and maybe through tuck in acquisitions, it might be able to find the next nugget beyond today's cloud and on-prem models. And the last thing I'll call out is ecosystem. I say here ecosystem, ecosystem, ecosystem. Because a defining characteristic of a cloud player is ecosystem and if Apex is Dell's cloud, it has the opportunity to expand that ecosystem dramatically. This is one of the company's biggest opportunities and challenges at the same time, in my view. It's just scratching the surface on its partner ecosystem. And it's ecosystem today is is both reseller heavy and tech partner heavy. And that's not a bad thing, but it's starting to evolve more rapidly. The snowflake deal is an example of up to stack evolution. But I'd like to see much more out of that Snowflake relationship and more relationships like that. Specifically, I'd like to see more momentum with data and database. And if we live at a data heavy world, which we do, where the data and the database and data management offerings coexist and are super important to customers, I'd like to see that inside of Apex. I'd like to see that data play beyond storage which is really where it is today and it's early days. The point is, with Dell's go to market advantage, which company wouldn't treat Dell like the on-prem, hybrid, edge, super cloud player, that I want to partner with to drive more business? You'd be crazy not to. But Dell has a lot on its plate and we'd like to see some serious acceleration on the ecosystem front. In other words, Dell as both a selling partner and a business enabler with its platform. Its programmable infrastructure as-a-service. And that is a moving target that will rapidly involve. And, of course, we'll be here watching and reporting. So thanks for watching this preview of Dell Technology Summit 2022. I'm Dave Vellante, we hope you enjoy the rest of the program. (upbeat music)

(intro music) >> Hi, everybody, we're back. Dave Vellante and Dave Nicholson. We're covering Fal.Con 22. This is CrowdStrike's big user conference. CrowdStrike is a very hot company, as you probably know started on endpoint security, expanding into another, a number of other areas trying to build the next great generational company in cybersecurity. Michael Sherwood is here. He's the chief innovation and technology officer for the city of Las Vegas. >> Got to love that. >> Thanks so much for coming to theCUBE. >> Welcome! >> Yeah, we got to love that. I mean, if it weren't for Las Vegas, I'm not sure where we would have our CUBE events, but so thank you for hosting us. >> Thank you for being here. This is awesome. It's a great day and a lot of people, and it's exciting to see everything that's going on here. >> Yeah, the city is booming. Obviously the convention, the conference business is booming. Tech is a big part of that but there's so many other industries that come to Las Vegas. Talk about your role, really interesting, chief innovation, technology officer, CTO. Tell us about what you do day to day. >> Kind of all over the place. But a lot of it has to do with day to day technology within the organization. So managing all the different technology components. When you start looking at any city, it's a lot of different companies inside of it. Think of fire service as a different company. They all have different missions. And so our technology needs are expansive. So while we have operational IT, we also have our innovation unit. Innovation unit works on next generation technology. So Las Vegas was one of the first cities in the United States to have a autonomous vehicle drive in mix-flow traffic, meaning it was out there with, driving along cars. We're also the first city to have an accident in a autonomous vehicle. That happened on day two. (Vellante laughing) So, there's always a lot of firsts in Las Vegas, but. >> Despite the grid. >> Despite the grid, you know. But even today, so that was in 2017, when we first started working with autonomous vehicles. Up until today, where you have the ability, anybody in Las Vegas, including yourselves right after the show can go ahead and use Lyft, go outside and hail an autonomous taxi to come pick you up and drive you up and down the strip. Those vehicles actually communicate with our infrastructure. So the innovation is, how do cities work with private companies to start building next generation amenities, next generation technologies? And so that happens a lot of times. People don't realize. They come to Las Vegas for entertainment, and now we're known for sports but we do have a lot of technology here that permeates through the entire community. >> So I'm from Boston. We're trying to get the smart traffic lights, we're not quite there yet. But I was at a session, Dave you'll appreciate it, it was John Rose, who was the CTO. He was the CTO of, he's a CTO of Dell Technologies now. And the mayor of Boston, we were talking about the vision for a smart city. But Boston and I mean talk about, a challenge for building a smart city. So when I come out here, it's like amazing to me to see the technology that's there. So as a CTO and innovation officer, you've got a playground where... Now, of course you have legacy infrastructure, you've got technical debt, but you also have, in certain cases, an opportunity and more latitude to get creative. So what are some of the cool things that you're working on that you're really excited about? >> There's a lot of things I'm excited about. It's just great being in this city. But a lot of the things that we're excited about here in the next year to two years, we have an innovation district. So not a lot of cities have this but Downtown around the Fremont Street Experience, there's a corridor there that covers government, covers entertainment, medical. And so this innovation district is where we test out new technologies. So some of the things we're testing out, computer vision. So we're, our smart parks program is how do we provide better security and enjoyment of those amenities without providing physical labor to constantly patrol. And so we're using cameras and vision and different types of AI algorithms to kind of manage the park. And while we're doing that, we're also getting data back on how often is the park used? Are the facilities, are the sprinklers going on during the day? Water's a big deal here. And so those type of projects. Again, autonomy is still huge, vehicle autonomy, still working on driving those next generation changes where you'll actually have a driverless vehicle. Right now, there's a safety driver in a lot of the autonomous vehicles. Even the one I talked about earlier, you have the, while the vehicles driving itself, for safety reasons, there's still a human driver in the seat. But as we go forward in the next year to two, that >> That's soon. >> is getting ready to change. I believe that's soon. You can quote it here, you heard it here first. >> Wow. >> But that would be coming up. You got drones as well. We've already started looking at a few types of drone delivery systems. It may not be too far away. Your pizza or maybe some other item that you want is delivered in the general area. Probably not in the hotel corridor but in the outside areas of the city. I just think there's a lot of, again, we're building amenities for the future. We really want people to understand that Las Vegas is not just a place to come visit, but it's a place to live and have fun and be part of a community. >> So from an academic perspective, what you just described is a highly ambidextrous organization, right? >> Yes. >> Because you're not just worried about keeping the lights on, but you're also looking at innovation. How did your organization get to this place? What you're describing is sort of the gold standard that any organization public or private would seek to implement. How did you get there? >> Baby steps, small steps. It all started back when there was the Smart Cities Challenge. So we were not selected as the finalist. We were in the, I think top 15 at the time but we didn't give up on it. And we continued to move forward. The pandemic helped us do things. When you ask, what do I do? Well, my normal job is running the day to day infrastructure. I also see my role as economic development to help bring companies here and bring new ideas. We have a great community, diverse and ready to do things. But when you take, talk about the innovation and the technology and what we're doing. Like I said, during a pandemic, we came up with the idea of, Hey, we don't want to send our building inspectors or our inspectors in the people's homes, one for the inspector's health and one for the citizen's health. So we used normal tools. We took an iPhone and made it a virtual inspector. So now if you get a new water heater, you can actually do your inspection via like a FaceTime. And you hold your phone up around the water heater. We can view it, we record the video, save it, and boom give you an inspection remotely. And so you build on it. So how do you get, I wouldn't quite say we're the gold. I appreciate, we're moving there, that's the bar. You've laid out the bar for us, but we're moving in that direction. But it's building on one win and not all of our things that we've deployed. We can talk about those as well. Some of the things like trash can sensors, we looked at doing, which would monitor when the trash can was full or empty, just didn't pan out. So a lot of the times I talk about the wins a lot not as much about the things that didn't pan out. >> So what're the big challenges, generally of building out a smart city and then specifically around cyber? >> So there's, community acceptance number one. Las Vegas, I'm very lucky cameras are everywhere. So there's not as much resistance to using video technology. But a lot of times it's just getting the constituents, getting people to understand the value of what we're trying to do. Not everybody is interested in autonomous vehicles or believes they're ready for that. But when you start looking at the increments, more than any other city I know, the community here is so robust and so supportive of bringing on these technologies. Look, what other city do you know that builds new buildings and knocks them down five years later to build something new again? Or, who has a volcano in the middle of their downtown? So different things like that. But when you start looking at all the advancements we're making, you brought up one of the biggest concerns. When people ask me, what keeps you up at night? It's not the autonomous vehicle not performing, its the cyber, it's the cyber issues that go along with becoming more advanced. And as you bring innovation in, you start bleeding the lines of what's government, what's private. And then how do you continue to have the data transmission between these multiple entities? How do you keep the endpoint secure? And that is something that you learn as you go, but it's always out there. And endpoint security and security in general is a huge, huge area. >> And how about the data? You were talking before about you can get actually approval for an inspection. That's data, it's video data. How have you changed the way in which you're using data? What are you doing with that data? How do you leverage it? How do you secure it? >> It's all great questions. One of the things we've undertaken is called an open data initiative. So we have an open data portal. It's opendata.lasvegasnevada.gov, where we publish a lot of the data sets that we collect. If it's air quality, if it's ambulance runs, and we make that data available. A lot of that is, one for the public for transparency, two though, it's, we hope enables the private sector to build apps off of the data that we have. A lot of times, you either you have the data but you don't have the app or you have the app, but no data. So in our way, it's trying to help the community build up new ideas. Our push has been moving to the cloud a lot. So we're pushing a lot more data into the cloud where before I think a lot of governments keep a lot of that internal, but obviously look, the cloud's here to stay and it's not going anywhere. And so now it's more about as we migrate, using our partners, our relationship with CrowdStrike, to start securing not only our endpoints but start looking at the cloud space as well. And then we have this new technology. It's not really new, but edge compute. You've heard a lot of, there's different people talking about it. When you start talking about autonomous vehicles, autonomous delivery, drones. We own a large private wireless network. A lot of data now is computed at the edge and we're only taking the metadata and sending it up to the cloud. So it becomes rather complicated with security being at the forefront. >> Yeah, so that very small portion of the actual amount of data that's created goes back but it's such a massive amount of data. It's not to trivialize it, it's still a lot. And some of it is probably ephemeral. Do you persist at all? Or probably not. >> Not always, I mean. A lot of it, what we're learning is, it's a learning process as you go through this smart city or what we call just basically emerging into, 'cause I believe all cities are smart. Not one city smarter than another necessarily. So I'm not really a fan of the term smart city. It's more in line with me as we're building amenities for the future and building amenities for people. And a lot of that is built upon data and then built upon providing things that citizens want. And we all know, we all live somewhere and we live there because it's safe community, it has good education, good infrastructure whatever it might be. And so we're trying to build out that smart community to be as many things as we can to as many people. >> Yeah, that's fair. And there's automation, there's certainly machine intelligence that's heavily involved. Of course, you talking autonomous. Now I understand your work transcends the city of Las Vegas into the broader state of Nevada helping make Nevada a safer state. What's that all about? >> So we have a great partnership. One of the great things, I come from California, so a rather large state. Here in Nevada, it's a very close knit state. So we have a lot of communications with the state. We get to work with them very closely. One of the initiatives we've been working on is how do we, a lot of organizations spend a lot of time doing cybersecurity for just their organization. So it's focused internal on the employees that might work in that organization. We're kind of now looking outwards and saying, how do we not only do that for our internal government employees but how do we involve the entire community? One of the things is, is Las Vegas over 40,000 conventions per year. You're here a lot. What happens in Vegas stays in Vegas and a lot of people bring malware with them and it stays here. We're trying to educate people. We do a lot in government to help people with police and fire and services. What is local government doing to help the community prepare for the next generation of cyber threats and issues? So our initiative is really working with the community, bringing in CrowdStrike and other partners to help us not only work with small business, but work with those entrepreneurs as well as the midsize businesses. >> So what do you do with Crowd? You got the cool little CrowdStrike, not CrowdStrike, but you got the red splash in your lapel. Very cool cuff links, I noticed that you have there. I love the red. >> Little poker chips there. >> They're Very nice, very nice. >> They're very cool. So what do you do with CrowdStrike? >> So CrowdStrike is one of our major components in our security posture. We use them as endpoint protection. I can tell you a quick story. I know my CISO's listening probably was going to cringe now when I tell this story, but our journey with CrowdStrike has been amazing. We deployed the product and when that first week of deployment, we had a malicious actor and CrowdStrike was able to catch it. I would probably would not be here today with you two gentlemen if it wasn't for CrowdStrike. That's not an endorsement it's just a, that's a fact of how things rolled out. But we depend on CrowdStrike and their capabilities to ensure the safety of our digital assets. >> You wouldn't be here 'cause we, it used to be failure means fire. Is that what you mean? >> That's what I mean. I'm not going to, I don't like to use that word in my terminology, but basically failure is not an option in my job. It's just not there. >> Well, it's funny, we had Kevin Mandy on early, he was like, look I started my company in 2004 with the assumption that breaches will happen, you are going to get breached. >> Yes >> So that's why I say, I think there was a day when, if you got breached, oh, you're fired. Well that, then everybody got breached. So I think that that sentiment changing 'cause CrowdStrike saying that the unstoppable breach is a myth. Well, we're not there yet, but. >> I'd say damage control now. At least we have a little bit more control but, again, look, government is about trust. And so when you have that trust level, from my perspective, I keep a high standard and try to prevent any loss of data or any type of malicious activity from happening. I hope the mayor's listening and she doesn't fire me if anything would happen, but you know. >> You got a fun job. How'd you get into this? >> It was a great opportunity. I worked in law enforcement prior to here. I was a Deputy Police Chief in city of Irvine. I oversaw technology as part of that role. I've always loved Las Vegas, always liked the energy of the city and I had a great opportunity to apply and I applied and was lucky enough to be selected. I have a great team that supports me. >> Deputy Police Chief, it sounds like, what you just described, the technology role. You had an operations role essentially, is that right? >> Correct. And so kind of gave me a lot of insights and really helped me, as you progress in government, having different roles in your portfolio makes you a little bit more adaptive and it's kind of, it helps in, especially now with so much video and cameras prevalent in cities, having that law enforcement role, understanding a little of the legal aspects and understanding some of the, what law enforcement wants kind of makes that bridge from technology to the actual end user. >> A really interesting story, Michael. Thanks so much for sharing on theCUBE, appreciate it. >> Thank you for having me here. >> You're very welcome. All right, keep it right there. Dave Nicholson and Dave Vellante will be back from Las Vegas at the Aria from Fal.Con 22. You're watching theCUBE. (outro music)

(upbeat music) >> In 1946, the acerbic manager of the Dodgers, Leo the Lip Durocher famously said of baseball, great Mel Ott who was player manager of the Giants at the time. You know what happens to nice guys. They finished in last place. The phrase nice guys finish last was born. It became popular outside of baseball. Well joining me today is someone who was a consummate gentlemen and a nice guy who proves that idiom absolutely isn't true at all. He's also written a new book "Play nice and Win" Michael Dell chairman and CEO of Dell technologies, welcome back to the CUBE. >> Thank you very much, Dave, always great to be with you. Wonderful to be on the CUBE and thanks for your great coverage of Dell technologies world. >> Yeah. We're very excited to be covering the virtual version this year, next year we're back face to face I'm Sure. And we're going to talk about your book but I want to start by asking you to comment on the past 12 months, how are you going to remember 2020? >> I'm going to remember it by the resiliency of the world and our team, the adaptability the acceleration of digital transformation which is pretty amazing around the world. The vital role that technology played in addressing some of the biggest challenges, whether it was the creation of vaccines or, you know, decoding the virus itself or just addressing all the challenges that the world had. You know, I think it's a game changer in terms of disease identification and how we prevent these kinds of things going forward. You know, there's still a long way to go in terms of how do we get 7.5 billion people vaccinated and safe. I also think it exposed, you know some of the fault lines in our society. And that's a great learning for all of us in terms of access to healthcare and education and, you know, the digital resources that power the world. And so, yeah, those are some of the things that really stand out for me. >> Well, I mean, I think leaders like yourself and position of influence, absolutely passionate about some of those changes that we see coming in society. So hopefully we'll have time to talk about that but I wanted to get into the business. I think a lot of people, myself included felt that 2020 was going to be a down year for big tech companies like yours and that relied heavily on selling products that data centers and central offices but the remote work trend and the laptop, boom offset, some of those on-prem softness and headwinds combined with VMware the financial performance of Dell technologies was actually quite amazing. Why were you able to do so well last year? >> Well, first of all, you're right. We did, we had record pretty much everything record revenues, record operating income, record cashflow and be also paid down a record amount of debt. And so I think the strength and resiliency of our supply chain, as well as the broad diversified nature of what we provide our customers continue to serve us very well as they moved to this sort of do anything from anywhere in the world. And it continues the first part of this year, business is very strong >> You know, a few weeks ago, of course you officially announced the spinoff of Dell technologies. Wasn't a huge surprise but the 81% equity ownership of VMware are you worried about untethering VMware from Dell or maybe you can share more on what this means for the future of, your two companies and your customers. >> Right? So, I think this will drive additional growth opportunities for both Dell Tech and VMware, while it unlocks a lot of value for our stakeholders. What we've done is to formalize the commercial relationship into a series of agreements and those are unique and differentiated and they provide lots of flexibility and we've driven a tremendous amount of innovation together and that's going to continue and it will, one of the things we said back in 2015 you'll remember is our commitment to keep the VMware ecosystem open and independent and working across the whole industry. We've done that. You'll continue to see us innovate together with Edge solutions, certainly all the great work we've done with VxRail SD LAN, you know Tanzu creates this platform to modernize applications and VMware Cloud and Dell technologies are the easy path to a multi-cloud architecture. And, that continues to work super well and is not going to be slowed down at all. So... and of course, I'll continue to be a chairman of both companies and we're not selling VMware we're distributing our ownership to our shareholders. >> Well, of course, Dell is the largest sort channel if you will, for VMware. So that's ... you guys got a tight relationship but I want to ask you about digital transformation and everybody talked about it pre COVID but nobody really knew exactly what it was but COVID sort of brought that into focus very quickly. If you weren't a digital business, you were out of business. So going forward, how do you see that whole digital transformation playing out? >> You know I think the plot of any company is to figure out how it can use its data and turn that into insights and outcomes and better results and ultimately competitive advantage faster. And as you said, you know, if it's not able to do that, it's probably going to go out of business. And that agenda just got massively accelerated because it was kind of digital was sort of the only thing that worked during this, this past period. So every organization has figured out that technology is not the IT department, it's actually the fulcrum of progress in the entire company. And so we're seeing sort of across the board a dramatic acceleration in the investment in digital technologies, you know, Edge is growing very fast. I think 5G just accelerates this and, you know you're seeing it in all the demand trends. It's quite positive and, you know, I think you'll see even a more rapid separation from those companies that are able to take advantage of this and quickly adjust their businesses their organizations, and those that are >> You better hop on board or get left behind, you know, the Edge. You mentioned the Edge it's a little bit like digital transformation, you know kind of pre COVID and even post COVID. It means a lot of things to a lot of different people but the telecoms transformation and 5G they have there certainly real. How do you see the Edge? >> You know, the Edges is ... think of it as actually the real world, right? It's, not a data center sitting in the center of the universe somewhere. And look today, you know only 10% of data is processed outside of the data center, but, you know, it's estimated by 2025 you got 75% of enterprise data will be processed outside of a traditional data center or a Cloud. And so as everything becomes intelligent connected 5G accelerates that it's going to be a huge acceleration of this whole process of digital transformation. And you know, again, think about this. I mean, the cost of making something intelligent used to be really expensive. Now it's asymptotically approaching zero. And of course all those things are connected. They're talking to each other and exactly what does this mean for every industry. Nobody's really quite sure and not everything is going to work, but, you know we're seeing it in manufacturing, in retail, in healthcare and the growth on the Edge is really accelerating in a meaningful way. And it's not so much about, you know people talking people with machines, we know how to do that. Now it's about the thing right And, you know you've got like 200 billion arm processors, you know out there in the last couple of years, all those things talking to the other things, generating data it happens in the real world. That's what the Edge is. >> Yeah as you know, we're a big fans of the arm model. And I think it just presents huge opportunities for companies like Dell. I want to ask you about Cloud. And I have to say, I think, you know companies like Dell have been maybe a little bit defensive over the last several years when it comes to Cloud but I think you starting to see the Cloud as a gift with all that CAPEX that's being built out by these hyperscalers. You know, thank you. It seems to me, you can build on top of that. How are you thinking about the Cloud as an opportunity for you and your customers especially as the definition of Cloud evolves? >> Well, first, you know, what we see is and the Edge is kind of the third place or the third premise, right? You got Clouds in the public form, you've got the Colo which is really growing fast and, you know the private hybrid Clouds, and now you've got the Edge. And so you've got infrastructure all over the place with Edge being the fastest growing. You know, one of the big things we see is that customers want a consistent way to operate and execute across that whole platform. And, you know, one of the other things that we've been focused on at Dell technologies is how can we move our business to more of a service and subscription on demand and provide customers that flexibility to to pay as they consume. And so, to some extent this is an evolution of, you know, products to services to managed services, to everything as a service. And so, you know, looking at our balance sheet you'll see over $40 billion in remaining performance obligations as we moved the business to that kind of model and it's been growing double digits for several quarters in a row. And so, you know, we're embracing Cloud and on-demand, and as a service, and obviously here at Dell technologies world we're talking a lot about Apex and our continuing initiatives to move our whole business in that direction. >> Yeah. Apex is a real accelerator for that model. I want to switch topics a little bit. I got a long list of things I want to talk about ESG, sustainability, inclusion, you know, is another topic that, that I'm interested in. I want it. And I said before, people like yourself in a position of influence to influence public policy and obviously the employees and your ecosystem why is it not just the right thing to do? Why is... why are those things good business, Michael? >> Well, it's good business because people want to be part of something that is important and purposeful. You know, it's not just make a profit and earn a living right? You know, people want to be inspired and feel that they're part of something special. And look, I think if you look at the positive changes that have occurred in the world certainly you could turn on the news and see the horrible things that happened in the last 24 hours or something like that. But if you step back and think about the amazing progress that's happened in the last several decades, you know a lot of it's been driven by technology and by businesses that have stepped up and made a difference and made commitments. And, you know, we're one of those companies that has made a series of commitments you know, 10 years ago, we set out with our 2020 goals. We accomplished significant majority of those retired those. Now we set out our progress made real 2030 goals all around the ESD themes. And it's not only the right thing to do but it is good for business. It inspires our team members, our customers and I think initiatives like progress made real at Dell and thousands of other companies. Ultimately, those are the things that are going to drive progress forward. I believe, you know, more so than government edicts or regulation, those can play a role. But I think, companies voluntarily driving things like the circular economy and how we include everyone in our business and provide opportunities for everyone to succeed no matter where they come from. I think those are the things that are really going to drive the world forward. >> Well, I want to ask you about public policy because as you say, it's not just the government, but of course sometimes the government can get in the way. You're seeing a lot of vitriol around Val break up big tech but the same time, you're seeing the US government and the EU very willing to help out with the semiconductor competitiveness in the like I know you were tapped with the new administration President Biden, tapping, you know, the best minds in tech and you were asked to part sort of participate give feedback. What can you tell us about, you know your advice to the US government? >> Well, you know, lots of great discussion with the new administration and it's a delight to see that they're focused on semiconductors and sort of the industries of the future. This is a big deal. I mean, you know, we've got some big global competitors out there other nations that are with a deterministic strategy very focused on the industries of the future. But US, you know if you think about the atomic age and, you know the Apollo missions that created the whole semiconductor industry ARPANET and ultimately the Internet and that kind of stopped right there, you know, there wasn't as much government investment in some of those big R and D initiatives that really drove an enormous creation of industries and success for the United States and its citizens. And so I think focusing on semiconductors and how you build the infrastructure of the future really important for the United States to continue to be a leader in that you know, we were, you know, producing a one point about 37% of the world's semiconductors. It's now down to 12% and dropping and really important that more investments are made in that area. It's a combination of capital, talent, you know education knowledge, and also, you know, the policies that promote the development of these kinds of businesses. >> Yah well, Pat's got a very big challenge ahead of them. And so that's why but we've said Intel's too strategic to fail in our view but I wanted to plug your book a little bit. My former boss, you and I have talked about this. He was also a gentleman who proved Leo Durocher wrong. He was very nice guy, but also a winner, Play Nice But Win, why did you decide to write another book? >> Well, you know, Dave, a lot has happened in the last 20 years and especially the last nine or so years since we went private and, you know merged with EMC and VMware and went public again. And, you know, I'd say we... first of all, you know when I wrote the first book in 1998 I wasn't comfortable disclosing a lot. And, and I wasn't vulnerable enough and didn't feel, you know, able to do that. Now I do, you know, I'm older, you know hopefully a little wiser. And so I think everybody's going to like hearing some of the fun stories about not only my childhood but you know, the dorm room and beyond, and leading up to, you know the pivotal changes that have occurred the last decade my alligator wrestling with Carl Icahn and other, you know there's lots of fun stories in there. I got arrested one time. It was only for speeding tickets, don't worry but you know, lots of fun. I'm really looking forward to the book coming out and being able to talk about it. >> I can't wait. You know, I've said many times anybody who could beat the great icon is interesting to me. I wanted to ask you, I mentioned my old boss, Pat McGovern. I used to say to them all the time, "Pat how come you don't buy more companies?" And he'd say," Dave, you know the vast majority of acquisitions and mergers they failed to meet their objectives." Did you ever imagine, I mean... I did the EMC acquisition. Did... how could it not have exceeded your expectations? I wonder if you could give us your final thoughts on that. >> You know, and I talk about this a lot in the book. I mean, these are kind of the ultimate considered decisions. And in the case of the EMC combination it was something that we had thought about going back to 2008, 2009. And then, you know, started thinking about it in 2014 worked on it for a full year before it got announced in 2015 and finally closed in 2016. But yeah, I mean, you know, we thought it would be great. It turned out to be even better than We thought the revenue synergies were far greater. The teams were quite energized. Customers liked what we were providing and you know it's ... and, of course the markets were supportive Right? You know, we were paying close attention to interest rates and how we could structure the merger in a attractive way. And, you know, thank goodness, lots of hard work lots of determination, you know, it's worked out quite well. >> Yeah, great commitment from the Dell team as well. Congratulations on that. Go ahead, please. >> And any adventure continues right? It's...( both chuckles) >> I can't wait to see the next chapter and I can't wait to get the book, but congratulations on that, all your tremendous success you're you are a winner and a gentleman and a friend of the CUBE, Michael Dell. Thanks so much. >> Thank you so much Dave. >> And thank you for watching. And this is the CUBE continuous coverage of Dell tech world 2021, the virtual edition. Keep it right there, right back. (upbeat music)

>>from around the >>globe. It's the Cube with digital coverage of AWS reinvent 2020 sponsored by Intel, AWS and our community partners. Welcome back to the Cubes Coverage Cube Virtual coverage of AWS reinvent 2020 which is also virtual. We're not in person this year. We're doing the remote interviews. But of course, getting all the stories, of course, reinvented, full of partnerships full of news. And we've got a great segment here with Salesforce and AWS. Eileen Schneider Win, who is the senior vice president of strategic partnerships, and Maureen Lundergan, director of worldwide training and certification address. Maureen Eileen. Great to see you. Thanks for coming on. And nice keynote. What's up with the partnership? Give us a quick over your lien. What's what's the Salesforce? A day was partnership. Take a minute to explain it. >>Sure, thank you. I think I'll start out by talking about how sales were thinks about strategic partnerships. So for us, it's really it starts with the customer and being where they want us to be. And we've been so fortunate to be in this relationship with AWS for over five years now. It really started out as an infrastructure based partnership as we were seeing customers start their digital transformation journeys and moved to the cloud. But what has been really exciting as we've spent more time working together and working with our customers, we have now started to move into emotion of really bringing some differentiated solutions between the number one CRM and the most broadly adopted cloud platform to market for customers, uh, in areas like productivity, security and training and certification which will talk more about in a bit Onda. Specifically, some of those solutions are service Cloud Voice Product, which we launched this summer, announced last fall, a dream force as well as our private connect product which creates great security between the AWS platform and Salesforce. >>What? Some of the impact area is actually the two clouds you mentioned CRM and Amazon. We're seeing data obviously being a part of the equation ai machine learning. Um, what's been the impact I lean to your customer specifically >>Yeah, so specifically I'd call out to areas what one is really that foundation of security. Specifically, as government regulations and data security has become more critical, we've really been able to partner together there and and that's been crucial for certain customers in certain regions as well a certain industries like government. Uh, in addition, I would call out again that service cloud voice partnership, a zoo. We see the world moving more digital. This really allows customers to go quickly and, uh, turn on. There are solutions from anywhere at any time. >>You know, I love that any time, anywhere kind of philosophy. Now more than ever. With the pandemic collaborations required more than ever, and some people are used to it. You know, I've seen more technical developers have used to working at home, but not everyone else. The workforce still needs to get the job done. So this idea of collaboration, what is the impact in for your customers and how are you guys helping them? Because I think this is a big theme of this year That's gonna not only carry over, even when the pandemics over this idea of anywhere is all about collaboration. >>Yeah, I totally agree. I mean, the exciting thing about the partnership is we've been talking digital transformation with customers for years, but I think what we saw at the beginning of this year, as we were all thrown home and forced Thio, you know, fire up our jobs from our bedrooms or our garages. It really came down to our ability to work quickly and turn on our solutions. It's and these unprecedented times, while we're going through this now, everything we're building really is the future. So it's not just the tools and technology, it's also the processes and how work is getting done that's really come into play. But again, I'll anchor back to that service blood voice solution. So for us, call centers were completely disrupted. You think of call centers and you know, pre 2020 everyone sitting in a room together, agent side by side managers, having the ability to pop over and assist with a call or managing escalation. Now that's been completely disrupted. And it's been very exciting for us to work with our customers, to reimagine what that looks like again both from a technology perspective but also from a process perspective. And along with that, you had to reimagine how employees are learning these solutions and being trained. So we're very grateful for the partnership with AWS, and we're doing some really amazing things together. >>You know this is one of my favorite things about the enablement of Cloud. But in Salesforce has been a pioneer. As you pointed out, this connectedness feature has always been there. Now more than ever, it's highlighted with call centers, not the call center more. It's the connected center. People are connecting. And I think, Maureen, I think last time you're in the Cube. A few years ago, we were talking about virtual training online, and that was pre pet pandemic. Now you're seeing surge of online training not only because people's jobs are changing and being displaced or even shut down. New roles are emerging, right? So the virtual space Virtual world digital world, there's everyone's getting more digital faster now. How has the cove in 19 changed the landscape for training and skills demand? From your perspective, I >>mean at AWS, we've been working on our virtual capabilities for a while, so we had a digital platform out. We had a great partnership, have a great partnership with Salesforce and putting content on trailhead. We had to pivot very rapidly to virtual instructor led training and also our certifications right. We were lucky that our vendors partnered with us rapidly to pivot certification toe proctor environment. And this actually has helped to expand our ability to deliver the both training and certification in locations that we may not have been able to do before. And we have seen while it slowed. Initially, we have seen such an uptake and training over the last, um, 6 to 8 months. It's been incredible. We've been working with our customers. We've been working with our partnerships like Salesforce. We've been pushing more content out. I think customers and partners air really looking for how toe upscale their employees, uh, in a in a way, that is easy for them. And so it's actually been a great surprise to see the adoption of all of our curriculum over the last couple months. >>Well, congratulations knows a lot more work to do. It's gonna get more engaging, more virtual, more rich media. But this idea of connecting lean I wanna get back to the your your thoughts earlier, um, mentioned trailhead. Maury mentioned trailhead. You guys were doing some work with the virtual training there. What? Can you tell us more about that? And how that's going so far? >>Sounds great. So trailhead is our free online learning platform. And it really started because we have a commitment to democratizing anyone's ability to enter our industry s so you could go there and both online or with our trail head go app and experience what we call trails, which our paths for learning again on different areas of knowledge and skills and technology. And late last year, we announced an incredible partnership with AWS, where we're bringing the AWS learning content and certification to trailhead. And this is really again driven by our customers to are asking us to do our part in bringing mawr of these skilled resource is into the ecosystem. But something I also wanna highlight is I feel like this moment that we're in right now has also forced everyone to reimagine how they're doing learning even businesses, how they're training their employees and again having this free platform. And the partnership with AWS has really helped us go very quickly and create a lot of impact with customers. >>I just want to say I love the trailhead metaphor because, you know, learnings nonlinear. It's asynchronous. You've got digital. So you want to take a shortcut? You gotta know the maps And I think that's, you know, people wanna learn versus the linear, you know, tracks on. And I think that's how people have been learning online. And AWS has got a data driven strategy. Marine, I want to get your take on this because as you bring content on the trailhead, can you talk about how that works? And how you working with Railhead? >>Yeah. I mean, we started conversations a couple of years ago, and I think the interesting thing is that Salesforce and AWS have a very similar philosophy about bringing education to anybody who wants it. You'll hear me talk a lot about that in my leadership talk at reinvent, but, um, we really believe that we wanna provide content where learners learn and salesforce and trailhead have this amazing captured audience. And, um, you know, we're really looking at exploring. How do we bring education to people that might not otherwise have access to it? On DSO, we started with really foundational level content, a ws Cloud, Practitioner Essentials and AWS Cloud for technical professionals. And the interesting thing is, both of those courses have been consumed. ITT's not enough to just put it out there you want people to complete the trails and we've seen such an amazing uptake on the courses with, like 85% completion rate on one of the trails and 95% completion rate on the other one. And to keep customers engage is really a credit toe. How trailhead is designed. >>You know, it's interesting. The certification people don't lose sight of the fact that that's kind of the in the end state. Then you start a new trail. I mean, this >>is >>the this is really what it's all about. Can you just share some observations that you've seen for people that are coming into this now to say, Hey, okay, what do I expect? And what are some of the outcomes? >>Yeah, I mean, first, what we're seeing is our customers are being very clear that they need more of these skills. So we're also seeing the need for Salesforce administrators out in our ecosystem. And I think with everything going on this year, it's also an opportunity for people who are looking to pivot. Their careers were moving to tech and again, this free learning platform and the content that we're bringing has been really powerful and again for us. The need for salesforce administrators and cloud practitioners out in our ecosystem are in more demand than ever. >>Maureen. From your perspective on AWS, you see a lot of the new new jobs cybersecurity, Brazilian openings. Where do you see the most needs on for training and certification? Can you highlight some of the areas that are emerging and trending, if you will? >>I would say it's interesting because what we're seeing is is both ends of the spectrum. People that are really trying to just really understand who cloud is, whether it's, ah, business leader within an organization, a finance person, a marketing person. So cloud practitioner, you know, we're seeing huge adoption and consumption on both our platform in on Salesforce. But also some other areas are security and machine learning machine learning. We have five learning paths on our digital platform. We've also extended that content out to other platforms and the consumption rate is significant. And so, you know, I think we're seeing, uh, customers consume that. But the other thing that we're doing is we're really focused on looking at who doesn't have access to education and making sure that's available. So I think the large adoption of Cloud Practitioner in Practitioner is is largely due to the other things that we're doing with programs like Restart our academic programs >>to close it out, Alina want to get your thoughts and final thoughts on the relationship and how people can find more information about this partnership and what it means. Take, take it home. >>Thank you for asking. So just like everything else we've been talking about today, we've had to reimagine how we're showing up at this event together and very exciting thing that my team has created is the AWS Virtual Park. And anyone can access that at salesforce dot com slash aws. So please go check it out. You can experience our products here from our experts and experience its innovation on your own. >>Great insight. Thanks for coming on and participating. Really appreciate Salesforce and AWS two big winning leading clouds working together Trail had great great offering. Thanks for coming on sharing the news. Appreciate >>it. Thank you. >>It's the Cube virtual covering. It was reinvent virtual. Of course. Check out all the information here All three weeks. Walter Wall coverage. I'm John Fury with the Cube. Thanks for watching

>>from the Cube Studios in Palo Alto and Boston connecting with thought leaders all >>around the world. This is a cube conversation, Everyone. Welcome to this week's Cube insights, powered by ET are My name is Dave Volante, and we've been reporting every week really on the code. 19. Impact on Budgets Docker Korakia is back in with me soccer. It's great to see you really >>again for having >>your very welcome. Soccer is, of course, the director of research, that we are our data partner and man. I mean, you guys have just been digging into the data or a court reiterate We're down, you know, roughly around minus 5% for the year. The thing about what we're doing here and where they want to stress in the audience that that's going to change. The key point is we don't just do ah, placeholder and update you in December. Every time we get new information, we're going to convey it to you. So let's get right into it. What we want to do today is you kind of part two from the takeaways that we did last week. So let's start with the macro guys. If you bring up the first chart, take us through kind of the top three takeaways. And just to reiterate where we're at >>Yeah, no problem. And look, as you mentioned, uh, what we're doing right now is we're collecting the pulse of CIOs. And so things change on and we continue to expect them to change, you know, in the next few weeks, in the next few months, as things change with it. So just kind of give a recap of the survey and then kind of going through some of our top macro takeaways. So in March mid March, we launched our Technology Spending Intention Survey. We had 1250 CIOs approximately. Take that survey. They provided their updated 2020 verse 2019 spending intentions, right? So effectively, they first Davis, those 20 21st 19 spending intentions in January. And then they went ahead and up state of those based on what happened with move it and then in tandem with that, we did this kind of over 19 drill down survey where we asked CEOs to estimate the budget impact off overnight in versus what they originally forecast in the year. And so that leads us to our first take away here, where we essentially aggregated the data from all these CIOs in that Logan 19 drill down survey. And we saw a revision of 900 basis points so down to a decline of 5%. And so coming into the year, the consensus was about 4% growth. Ah, and now you can see we're down about 5% for the year. And again, that's subject to change. And we're going again re measure that a Z kind of get into June July and we have a couple of months under our belt with the folks at night. The second big take away here is, you know, the industries that are really indicating those declines and spend retail, consumer airlines, financials, telco I key services in consulting. Those are the verticals, as we mentioned last week, that we're really seeing some of the largest Pullbacks and spend from consumers and businesses. So it makes sense that they are revising their budgets downwards the most. And then finally, the last thing we captured that we spoke about last week as well as a few weeks before that, and I think that's really been playing out the last kind of week in 1/2 earnings is CIOs are continuing to press the pedal on digital transformation. Right? We saw that with Microsoft, with service now last night, right, those companies continued the post good numbers and you see good demand, what we're seeing and where those declines that we just mentioned earlier are coming from. It's it's the legacy that's the on premise that your place there's such a concentration of loss and deceleration within some of those companies. And we'll kind of get into that more a Z go through more slides. But that's really what kind of here, you know, that's really what we need to focus on is the declines are coming from very select vendors. >>Yeah, and of course you know where we were in earning season now, and we're paying close attention to that. A lot of people say I just ignore the earnings here, you know, you got the over 19 Mulligan, but But that's really not right. I mean, obviously you want to look at balance sheets, you want to look at cash flows, but also we're squinting through some of the data your point about I t services and insulting is interesting. I saw another research firm put out that you know, services and consulting was going to be OK. Our data does, you know, different. Uh, and we're watching. For instance, Jim Kavanaugh on IBM's earnings call was very specific about the metrics that they're watching. They're obviously very concerned about pricing and their ability. The book business. There we saw the cloud guys announced Google was up in the strong fifties. The estimate is DCP was even higher up in the 80% range. Azure, you know, we'll talk about this killing it. I mean, you guys have been all over of Microsoft and its presence, you know, high fifties aws solid at around 34% growth from a larger base. But as we've been reporting, you know, downturns. They've been they've been good to cloud. >>That's right. And I think, you know, based on the data that we've captured, um, you know, it's people are really pressing the pedal on cloud and SAS with this much remote work, you need to have you know, that structure in place to maintain productivity. >>Okay, let's bring up the next slide. Now. We've been reporting a lot on this sort of next generation work loads Bob one Dato all about storage and infrastructures of service. Compute. There's an obviously some database, but there's a new analytics workload emerging. Uh, and it's kind of replacing, or at least disinter mediating or disrupting the traditional e d ws. I've said for years. CDW is failed to live up to its expectations of 360 degree insights and real time data, and that's really what we're showing here is some of the traditional CDW guys are getting hit on Some of the emerging guys, um, are looking pretty good. So take us through what we're looking at here. Soccer. >>Yeah, no problem. So we're looking at the database data warehousing sector. What you're looking at here is replacement rates. Um And so, as example, if you see up in with roughly 20% replacement, what that means is one out of five people who took the survey for that particular sector for that vendor indicated that they were replacing, and so you can see here for their data. Cloudera, IBM, Oracle. They have very elevated and accelerating replacement rates. And so when we kind of think about this space. You can really see the bifurcation, right? Look how well positioned the Microsoft AWS is. Google Mongo, Snowflake, low replacements, right low, consistent replacements. And then, of course, on the left hand side of the screen, you're really seeing elevated, accelerating. And so this space is It kind of goes with that theme that we've been talking about that we covered last week by application, right when you think about the declines that you're seeing and spend again, it's very targeted for a lot of these kind of legacy legacy vendors. And we're again. We're seeing a lot of the next gen players that Microsoft AWS in your post very strong data. And so here, looking within database, it's very clear as to which vendors are well positioned for 2020 and which ones look like they're being ripped out and swapped out in the next few months. >>So this to me, is really interesting. So you know, you you've certainly reported on the impact that snowflake is having on Terra data. And in some of IBM's business, the old man, he's a business. You can see that here. You know, it's interesting. During the Hadoop days, Cloudera Horton works when they realize that it didn't really make money on Hadoop. They sort of getting the data management and data database and you're seeing that is under pressure. It's kind of interesting to me. Oracle, you know, is still not what we're seeing with terror data, right, Because they've got a stranglehold on the marketplace That's right, hanging in there. Right? But that snowflake would no replacements is very impressive. Mongo consistent performer. And in Google aws, Microsoft AWS supports with Red Shift. They did a one time license with Park Cell, which was an MPP database. They totally retooled a thing. And now they're sort of interestingly copycatting snowflake separating compute from storage and doing some other moves. And yet they're really strong partners. So interesting >>is going on and even, you know, red shift dynamodb all. They all look good. All these all these AWS products continue screen Very well. Ah, in the data warehousing space, So yeah, to your point, there's a clear divergence of which products CIOs want to use and which ones they no longer want in their stack. >>Yeah, the database market is very much now fragment that it used to be in an Oracle db two sequel server. As you mentioned, you got a lot of choices. The Amazon. I think I counted, you know, 10 data stores, maybe more. Dynamodb Aurora, Red shift on and on and on. So a really interesting space, a lot of activity in that new workload that I'm talking about taking, Ah, analytic databases, bringing data science, pooling into that space and really driving these real time insights that we've been reporting on. So that's that's quite an exciting space. Let's talk about this whole workflow. I t s m a service now. Just just announced, uh, we've been consistently crushing it. The Cube has been following them for many, many years, whether, you know, from the early days of Fred Luddy, Bruce Lukman, the short time John Donahoe. And now Bill McDermott is the CEO, but consistent performance since the AIPO. But what are we actually showing here? Saga? Yeah, You bring up that slot. Thank you. >>So our key take away on kind of the i t m m i t s m i t workflow spaces. Look, it's best in breed, which is service now, or some of the lower cost providers. Right There's really no room for middle of the pack, so >>this is an >>interesting charts. And so what you're looking at here, there's a few directives, so kind of walk you through it and then I'll walk through. The actual results is we're looking within service now accounts. And so we're seeing how these companies are doing within or among customers that are using service. Now, today, where you're looking at on the ex, access is essentially shared market share our shared customers, and then on the Y axis you're seeing essentially the spend velocity off those vendors within service. Now's outs, right? So if the vendor was doing well, you would see them moving up into the right, right? That means they're having more customer overlap with service now, and they're also accelerating Spend, but you can see if you will get zendesk. If you look at BMC, it's a managed right. You can see there either losing market share and spend within service now accounts or they're losing spend right and zendesk is another example Here, Um, and what's actually interesting is, and we've had a lot of anecdotal evidence from CIOs is that look they start with service. Now it's best in breed, but a few of them have said, Look, it's got expensive, Um, and so they would move over Rezendes. And then they would look at it versus a conference that last year, and we had a few CEO say, Look at last quarter of the price of zendesk. Andi moved away from Zendesk and subsequently well, with last year. And so it's just it's interesting that, you know, during these times where you know CIOs are reducing their budgets on that look, it's either best of breed or low cost. There's really no room in the middle, and so it's actually kind of interesting. In this space, it's It's an interesting dynamic and being usually it's best of breed or low cost. Rarely do you kind of see both win, and I think that's what kind of makes the space interesting. >>I've been following service now for a number of years. I just make a few comments there. First of all, you know, workday was the gold standard in enterprise software for the longest time and, you know, company and and and I I always considered service now to be kind of part of that you know Silicon Valley Mafia with Frank's Loop. But what's happened is, you know, Sluman did a masterful job of identifying the total available market and executing with demand, and now you know, his successors have picking it beyond there. You know, service now has a market cap that's not quite double, but I mean, I think workday last I checked was in the mid thirties. Service now is market valuation is up in the 60 billion range. I mean, they announced, um uh, just recently, very interestingly, they be expectations. They lowered their guidance relative to consensus guide, but I think the street hose, first of all, they beat their numbers and they've got that SAS model, that very predictable model. And I think people are saying, Look there, just leaving meat on the bone so they can continue to be because that's been their sort of m o these last several years. So you got to like their positioning and you get to talk to customers. They are pricey. You do hear complaints about that, and they've got a strong lock spec. But generally I got my experiences. If people can identify business value and clear productivity, they work through the lock in, you know, they'll just fight it out in the negotiations with procurement. >>That's right, and two things on that. So with service now and and even Salesforce, right, they are a platform like approach type of vendors right where you build on them. And that's what makes them such break companies, right? Even if they have, you know, little nicks and knacks here and there. When they report people see past that right, they understand their best of breed. You build your companies on the service now's and the sales forces of the world. And to the second point, you're exactly right. Businesses want to maintain consistent productivity on, and I think that, you know, is it kind of resonates with the theme, right, doubling down on Cloud and sas. Um, as as you have all this remote work, as you have kind of, you know, questionable are curating marquee a macro environment organizations want to make sure that their employees continue to execute that they're generating consistent productivity. And using these kind of best of breed tools is the way to go. >>It's interesting you mentioned, uh, salesforce and service now for years I've been saying they're on a collision course we haven't seen yet because they're both platforms. I still, uh I'm waiting for that to happen. Let's bring up the next card and let's get into networking way talk. Um Ah. Couple of weeks ago, about the whole shift from traditional Mpls moving to SD win. And this sort of really lays it out. Take us through the data here, please. >>Yeah, no problem. So we're just looking at a handful of vendors here. Really? We're looking at networking vendors that have the highest adoption rates within cloud accounts. And so what we did was we looked inside of aws azure GCC, right. We essentially isolated just those customers. And then we said which networking vendors are seeing the best spend data and the most adoptions within those cloud accounts. And so you get you can kind of see some, uh, some themes here, right? SD lan. Right. You can see Iraqi their VM. Where nsx. You see some next gen load balance saying are they're on the cdn side right then. And so you're seeing a theme here of more next gen players on You're not really seeing a lot of the mpls vendors here, right? They're the ones that have more flattening, decreasing and replacing data. And so the reason just kind of going on this slide is you know, when you kind of think about the networking space as a whole, this is where adoptions are going. This is this is where spends billing and expanded, arise it. And what we just talked about >>your networking such a fascinating space to me because you got you got the leader and Cisco That has helped 2/3 of the market for the longest time, despite competitors like Arista, Juniper and others trying to get in the Air Force and NSX. And the big Neisseria acquisition, you know, kind of potentially disrupted that. But you can see, you know, Cisco, they don't go down without a fight. And ah, there, let's take a look at the next card on Cdn. You know, this is interesting. Uh, you know, you think with all this activity around work from home and remote offices, there's a hot area, But what are we looking at here? >>Yeah, no problem. And that's right, right? You would think. And so we're looking at Cdn players here you would think with the uptake in traffic, you would see fantastic. That scores right for all the cdn vendor. So what you're looking at here and again there's a few lenses on here, so I kind of walk. You kind of walk the audience through here is first we isolated only those individuals that were accelerating their budgets due to work from home. Right. So we've had this conversation now for a few weeks where support employees working from home. You did see a decent number of organizations. I think it was 20 or 30% of organizations at the per server that indicated they're actually accelerate instead. So we're looking at those individuals. And then what we're doing is we're seeing how are how's Cloudflare and aka my performing within those accounts, right? And so we're looking at those specific customers and you could just see within Cloudflare and we practice and security and networking which by more the Cdn piece, How consistent elevated the date is right? This is spend in density, right? Not overall market share is obviously aka my you know, their brand father CD ends. They have the most market share and if you look at optimized to the right. Now you can see the spend velocity is not very good. It's actually negative across boats sector. So you know it's not. We're not saying that. Look, there's a changing of the guard that's occurring right now. We're still relatively small compared talk my But there's just such a start on trust here and again, it kind of goes to what we're talking about. Our macro themes, right? CIOs are continuing to invest in next gen Technologies, and better technologies on that is having an impact on some of these legacy. And, you know, grandfather providers. >>Well, I mean, I think as we enter this again, I've said a number of times. It's ironic overhead coming into a new decade. And you're seeing this throughout the I T. Stack, where you've got a lot of disruptors and you've got companies with large install bases, lot of on Prem or a lot of historical legacy. Yeah, and it's very hard for them to show growth. They often times squeeze R and D because they gotta serve Wall Street. And this is the kind of dilemma they're in, and the only good news with a comma here is there is less bad security go from negative 20% to a negative 8% net score. Um, but wow, what a what a contrast, but to your point, much, much smaller base, but still very relevant. We've seen this movie before. Let's let's wrap with another area that we've talked about. What is virtualization? Desktop virtualization? Beady eye again. A beneficiary of the work from home pivot. Um, And we're focused here, right on Fortune 500 net scores. But give us the low down on this start. >>Yeah, So this is something that look, I think it's it's pretty obvious to into the market you're seeing an uptake and spend across the board versus three months ago in a year ago and spending, etc. Among your desktop virtualization players, there's FBI, right? So that's gonna be your VPN right now. Obviously, they reported pretty good numbers there, so this is an obvious slide, but we wanted to kind of throw it in there. Just say, look, you know, these organizations are seeing nice upticks incent, you know, within the virtualization sectors, specifically within Fortune 500 again, that's kind of, you know, work from home spend that we're seeing here, >>right? So, I mean, this is really a 100% net score in the Fortune 500 for workspaces is pretty amazing. And I think the shared in on this that the end was actually quite large. It wasn't like single digits, Many dozens. I remember when Workspaces first came out, it maybe wasn't ready for prime time. But clearly there's momentum there, and we're seeing this across the board saga. Thanks so much for coming in this week. Really appreciate it. We're gonna be in touch with with you with the TR. We're gonna continue to report on this, but start Dr stay safe. And thanks again. >>Thanks again. Appreciate it. Looking for to do another one. >>All right. Thank you. Everybody for watching this Cube insights Powered by ET are this is Dave Volante for Dr Sadaaki. Remember, all these episodes are available as podcasts. I published weekly on wiki bond dot com Uh, and also on silicon angle dot com Don't forget tr dot Plus, Check out all the action there. Thanks for watching everybody. We'll see you next time. Yeah, yeah, yeah, yeah, yeah

>>Live from Barcelona, Spain. It's the Cube covering Cisco Live 2020 right to you by Cisco and its ecosystem partners. >>Welcome to the Cube's live coverage here in Barcelona, Spain, for Cisco Live 2020. I'm John Furrier, host of the Cube Dave Volante Ecosystem Minimum here all week in Barcelona, kicking off 2020 With the keynote analysis, Cisco just unveiled their looks like their plan for the year and what looks like a future direction of Cisco again. We were here past two years covering Cisco Live. We'll be at the US show this year as well. David Stew Keynote analysis. Let's get into it right away. Mostly you start to still see the messaging Positioning unfolding in front of us is clearly not there yet. A lot of people have their check boxes that rotation David get kicked it off. I mean, when we kicked it off David gentler key executive, really leading the charge here. But this is about Cisco setting the table. Let's get into it. What do you guys think? I thought it was a good keynote. I thought was a little bit lacking in the story, telling what was the thread was no common thread. Heard a lot of little cloud. I heard a lot of sis card, a lot of speeds and feeds. Everyone kind of has their turn, and all the top people were on there. What's your thoughts? >>Well, who is? Cisco was my first thought. Is your kid coming out of college? You hear that keynote, which I agree was good keynote. But I still wouldn't be sure exactly what Cisco does on. And so I think that you're right, that messaging needs to be tightened up. There needs to be a threat. At the same time, we saw some innovation. They sort of double down on the December announcements and talked about that. I really liked the collaboration that that's been a sleepy market zoom change that woke everybody up. And so we saw some interesting features. Their stuff on app d. They made a lot of claims, which I don't know if they're true or not. It seemed like VM Ware could do some of that stuff and new relic and some of the others dynatrace. But Cisco is coming at it from a networking area of strength, and, um so I guess my bottom line is, I still wanna understand what that threat is, and they talked about multi cloud. I really do think that Cisco is in the best position to connect those clouds to on Prem and Hybrid. They've got the data from the network, and they're in the best position to leverage that for value for their customers. Kind of came through, but I think it's my inference, not their claim. I was >>a little surprised. A This third year we've done this show, and usually there's, you know, the new tag line, and they were reusing the bridge to possible and feels still where things are coming together. Francisco, as you and John were saying, some of the products moving together. So it's awesome chatter on Twitter said, Oh, great Inter site and Empty, actually going to integrate and work well together on that integration messages, one that Cisco's highlighting Cisco's always had a really broad ecosystem. They put up the video about like, you know, if you know the Internet and everything you've done, we've been there, and we're going to drive that for the next generation in the collaboration space. It's not the same WebEx that you've known forever heck, you know, we're gonna have Microsoft with teams and WebEx trying to squint through that a little bit and say, Okay, well, Cisco's got a bunch of devices. Is that all it is? Is, you know, being saying great. You know, I've got Cisco Devices and therefore, if I'm you know, teams customer for Microsoft, I can plug into that. It seems like there's a lot of inter networking pieces underneath the covers there because Microsoft driving hard in that space. Zoom as you said Dave, for the quick, easy experience that that came out of Cisco. So a lot of things moving in the collaboration space. But in the hardcore data, says center space workload Optimizer is something that they were focused on. Talk about the new router Jonathan Davidson, who we'll have on the Cube tomorrow, talking about that space. So Cisco's got a very broad portfolio, and John, I think you nailed it. I did not come out of it. A consistent You know who Cisco is. The message for how we're going to partner with in the future. >>The day bring up a good point college kid looks at This is a good way to kind of zoom out of the technical world. Remember, David Gettler is a technical person. He ran engineering. He sees his big marketing word is multi domain. Come on, Multi domain is not a marketing word. It's just it's a technical feature, but >>this is a >>technical show and a lot of their audience here at the show. We are techies, and so it's clear to me that Cisco's brick by brick building the sass ification, the cloud ification of Cisco and this is something. I think they're not yet ready to pull the switch on Dave as to use a sailing analogy as they attack into the marketplace. They got to do a full turn on the boat. I think this is just the progression. I think it's natural to see Cisco spending millions of billions of dollars as we heard cloud defying and creating this subscription business model. The other notable things is you start to see some tell signs from the keynote, a few little things and I picked up out of this that shows that they're kind of going in the right direction. Still a lot more work to do, and the story needs to be up leveled a bit. I totally agree, rather than just speeds and feeds the classic enterprise. But Wendy hit it clearly. Business model is the new killer app, and I think all the things that we've discussed over the past 10 years to past five, in particular with Cloud Native is the business outcomes is what the APS are focused on. And so they're headlining the event with APP application dynamics, which makes sense. But it's not clear enough that the business model is the key to everything, and you're gonna connect businesses what Cisco does. I mean, what a Cisco Date. They connect business that's been their their mission. From day one, they >>got to take that message, bring it >>up with the applications, are driving business model changes and results. And I think that's the thread they're trying to get through and trying to thread the needle. They're they're just not ready. >>See, from an umbrella messaging standpoint, I think that would have been a lot more effective. But some of the things that I liked in the keynote, you know, Wendy Mars did talk about the importance of privacy, how Europe is leading in diversity. So so that is really important. And they also talked about how last decade was all about enabling APS. And this decade is going to be all about enabling APs and to your point, about enabling business. John. They talked a lot about bringing I t an OT together lists, and Tony really made a big point of that. When we walked into The DEV. Net zone, there was all these network engineers looking at an I O T presentation, these air I t guys trying to learn about the edge in OT. And so I think that's a really important message to the collaboration front. You know, some neat, neat features I just wanted to mention. But my understanding is that Microsoft Teams is all about taking its the old Skype business, which has, like, fallen off a cliff because everybody hates Skype and migrating at the team so they can compete more effectively with WebEx and the rest of them. So again, a lot of different parts of Cisco, but I think there was some definite innovation there, and then when I talked about they're December announcements the optics, the silicon one and the software bringing that together, you know, that is going to power service providers for the next 5 10 years, >>we'll do. I want to get your thoughts here because one of the things that we're observing and they've got hit with teams is that they're kind of groping a little bit on areas. Everyone's gonna get their time on stage. I get that. You know, the comment I made yesterday in our pre game day zero analysis was that there needs to be a Tesla of this industry and to completely change the game. So I think Cisco, if they take the business, we're connecting businesses and looking for a business model. Change is we're gonna look for the engine of the of the car of the application of the company and then what it ISS. So Cisco as a company, is the car, the engines were there, the weaknesses. So if you look at Cisco, all they do is talk about the engine and the features of the Pistons and all the technical speeds and feeds. That's great, but at the end of the day it's a new environment on the business front and I think they got to get that kind of conversion and bring that together Because, of course, they have to check the boxes on. Look, we've got a new engine. We've got new clouds modification. This is where it's at, but it's the destination that you're driving to, which is a business model Outcomes. So, you know, under the hood, are they there? So it seems to be they're still trying to get the engine fixed, and then they could roll out >>one of the things when we always look at all of these keynotes is Are they effectively letting customers tell their story? And does that resonate with what they're talking about? For the piece I saw, I only saw two customers. There was a video with Michael Bay, Great special effects. And actually, you know, I thought it kind of resonated because it's like, Okay, you know, I've got 10 locations shooting around the world and you know, there's terror, bits of information. He's like, I don't even know what a terabyte. It sounds like a dinosaur. And of course, all the networking like Ha ha. You know, you do cool exploding stuff, but you don't know what a terabyte is. And then they had Airbus and Dave, you talked about. Listen, Tony got up on stage and look at it and ot they don't play well together and that's we've done research, looking at the challenge of really delivering on I ot it is that schism between I T and OT and I would have loved to hear a little bit more because she said, Oh well, our tools just enable ot to work on anything. It's not that easy. Just >>well, I throw >>those two worlds >>together, key their security, and we're talking about securing critical infrastructure and really, that's a whole new opportunity in realm. I mean, it kind of came through, but But that's the linchpin is really securing that critical infrastructure, whether it's power plants, it roads, all kinds of logistics and a >>lot of one on Dave. I mean, this is the whole point about Cisco's challenges. One from a story standpoint is complex from a technology integration standpoint complex because you got application awareness, which is going down to the network. And then they showed a lot of that, and I thought that was a key highlight that didn't actually come through, but they did present it. They got the clarification story And then they got network automation all those things, as well as five g around the corner. Silicon One is a lot coming >>together. Nailed that, I mean, no doubt, >>a lot coming together. And I think the key is Is that Scott? Harold nailed it. I think we get clearer and the team are right on the money. On terms of the engine is intent based networking. Multi domain. Is that to me means multi cloud and hybrid. Nail that, and you can get those kinds of innovations. And I think Scott Harrell said it. Simplification is key security and inclusive of the cloud that one word to use, he said. We're talking about something that's inclusive of cloud. He really slam Cloud, he said. You know, it's a fancy place. It's Nirvana. But don't forget the intent of having the on premise basically. So I thought that was a nice thread, the three layers of insight security business in I T. But to me it's simple. I think Cisco needs to think differently around how they position themselves, because if they're going to throw WebEx out there and throw out all these analytics and data, they're a data company. They're a data first company, and they have to be a video first company of its five G. And they got to be a virtual first company because the new future workplace is about having those kinds of workloads running those kinds of app set, you know, feed the modern enterprise. And to me, my premise is, if you can automate it, it's not a feature for the modern modern enterprise has. Automation will be critical of everything, and you can't have bloated software running virtual first environment. >>But to your point, Cisco's advantage is that the data is running through the network, so they have visibility on that data. So they are in a very good position to leverage that data for automation and to connect businesses. Networks of data video is killer feature for that. I mean, they really are the only company right now in the business that can do that. >>Yeah, actually, I like the analogy. They said you should think of the network as a sensor. This is what's going to be able to drive your insight and outcomes. It's not just the plumbing anymore, but you know, that's one of the earliest areas where we drove analytics and data out of everything that's going on and set them up for that machine learning and AI world that people are driving toe extract data >>and to your point on cloud. I mean, look it. They know that you sort of reference that the cloud is slowly eating away at their opportunity because I T practitioners will tell you what the more we do in the cloud, the less we're gonna have to spend on our own network year. >>Yeah, but here's the thing that's coming out. And during the SD win section, I was making some comments >>on >>YouTube channel. SD Win is really, to me, a bellwether of how this goes because latency matters. If you're in the Cisco ecosystem, it's late in the late latency. And if the win is the new land, which is my premise than the interactions with security between the routes becomes critical, right? So you have to have that kind of insight. So we look at something like Web experiences on the collaboration side is that product truly defined for that environment? And I think you mentioned Zoom earlier as kind of waking everyone up is they've built a product around latency and around the environment around land, not the land. So WebEx and desktop is not the state of the art. So unless you got an NVIDIA graphics card designed into it and gaming rig, it's gotta be mobile. It's gonna be over a land link for virtual. And I think if the software to bloated, it's not gonna work. And I think that's gonna be an area that Cisco is going to look at and say, Does these products fit this new use case? >>Okay, so let's say three days of coverage, right? We did. Day Zero is actually four days of coverage for us. We got a lot of good guests coming on. A lot of Cisco execs. What >>are you guys looking for? This. Let's go look at the week we had a lot of guests coming on. Dave's do. What are you guys looking for? In terms of analysis? What are you looking to tease out of the show? >>Well, like any of these shows, I'm really trying to look at the substance, trying to understand the announcements that they're making, how real they are and how they map into the customer's view of what it is that they need. I say the collaboration thing is interesting to me. I was really concerned about Cisco. I thought they were just sort of sitting on their laurels. I think they're WebEx install Base is gonna really look hard at these features. If they're in fact, they're available. I want to understand from practitioners and particularly service providers, You know what they think of all this new stuff that's coming out cause it's expensive. But that's a big, big cap ex investment for these guys. And I want understanding the core Cisco business, their their data center business, their networks. They're hyper converged where they stand competitively. And the last thing is the partner ecosystem. You know, we've talked about how they have to walk a fine line between, you know, servicing guys like IBM and Netapp and then also competing with their former great partner in EMC now Dell, EMC, and how they're gonna go forward in the next 10 years. >>Yeah, you touched on the partner ecosystem and service riders. Edge is the next big opportunity for Cisco, and how will they leverage what they're doing to support all of those partners? going forward. Big thing I'm looking for this week as well as a Z you said Dave. Maturation of a lot of the pieces that they add. Where's the substance behind the announcements that they've made? How much of them are table stakes that we see some of the other environs? Collaboration Space John. As you said, Oh, here's these things on the desktop I could do all these things on my phone was so trying to understand what is differentiated >>awesome for me I'm looking for actually, we're in the Dev Net Zone Cube. I'm looking for the developer equations that came up clear, kind of last with Susie Wee. But she put the new world of developers that's going to change the whole CC certification area and on the ecosystem. And for the developers, it's a C I O T. D and a center Inter site an umbrella. Outside of that, I'm gonna be looking for how Cisco is looking at cloud ification of networking network as a service way into Cloud versus internal SD win simplification of the edge security and networking common policy to name a few know talk a WiFi. I mean, WiFi is the preferred connectivity point inside the enterprise. And how does that relate to the whole edge thing? Application awareness. I really jazzed up by app D and I think where they're going with that is really gonna be the front end of that network policy. And that application awareness is critical on finally network automation from See I CD pipeline into analytics and how that relates to Fixed Wireless the five G, which is going to be I o. T. In the subscription based model. So yeah, to me, that's the That's the big picture. I want to dig into those areas >>that you are the things if I May 1 is this gestalt of, um, I'm gonna buy best of breed or am I going to buy from, you know, one throat to choke? And I think Cisco is obviously trying to be the ladder, and I think the last for me. Security, security, security. And how is Cisco going to help practitioners implement the best security possible? >>Yeah. And John John mentioned in the DEV. Net zone. It is that modernization of the workforce, one of the last things in the keynote they want, accelerate the 1st 500 certified definite engineers out there. So what Sisi Iea's had been doing for many decades, many of them in the future are going to be part of that dev net with security being one of the key areas that we focus >>on. And, of course, we're the top story that so far out of the keynote to me, the top story so far is that Cisco is not gonna yield to the big cloud guys, They're brick by brick moving the needle on their rebooting of their products to be cloud enabled for hybrid. And then ultimately, in multi cloud. And I still think the big switches coming. They haven't pull that lever. They haven't yet made a big move, I think a lot more to come. So we're gonna be digging in to the guys. Thanks for the analysis. Keynote analysis here. Day one of Cisco live in Barcelona kicking off in setting the agenda for 2020. It's the cube coverage. I'm John for Stu Minima Dave Volante. We'll be right back with more live coverage after this short break. >>Yeah, yeah, yeah

>>long from Las Vegas. It's the Q covering a ws re invent 2019. Brought to you by Amazon Web service is and in along with its ecosystem partners. >>Welcome back to the Cube. Here live in Las Vegas for aws reinvent I'm John for a devil on the ads, always extracting the signal from the noise. We're here for 1/7 reinvent of the eight years that they've had at what a wave. One of the biggest waves is the modernization of procurement, the modernization of business, commercial business and the rapid acceleration of public sector. We're here with the chief of public sector for AWS. Teresa Carlson, vice president publics that globally great to have you >>so great to have the Q begin this year. We appreciate you being here, >>so we're just seeing so much acceleration of modernization. Even in the commercial side, 80 talks about transformation. It's just a hard core on the public sector side. You have so many different areas transforming faster because they haven't transformed before. That's correct. This is a lot of change. What's changed the most for you in your business? >>Well, again, I'll be here 10 years this mad that A B s and my eighth reinvent, and what really changed, which was very exciting this year, is on Monday. We had 550 international government executives here from 40 countries who were talking about their modernization efforts at every level. Now again, think about that. 40 different governments, 550 executives. We had a fantastic day for them planned. It was really phenomenal because the way that these international governments or think about their budget, how much are they going to use that for maintaining? And they want to get that lesson last. Beckett for Modernization The Thin John It's a Beckett for innovation so that they continue not only modernized, but they're really looking at innovation cycles. So that's a big one. And then you heard from somewhere customers at the breakfast this morning morning from from a T. F. As part of the Department of Justice. What they're doing out. I'll call to back on firearms. They completely made you the cloud. They got rid of 20 years of technical debt thio the Veterans Administration on what they're digging for V A benefits to educational institutions like our mighty >>nose, and he had on stages Kino, Cerner, which the health care companies and what struck me about that? I think it relates to your because I want to get your reaction is that the health care is such an acute example that everyone can relate to rising costs. So cloud helping reduce costs increase the efficiencies and patient care is a triple win. The same thing happens in public sector. There's no place to hide anymore. You have a bona fide efficiencies that could come right out of the gate with cloud plus innovation. And it's happening in all the sectors within the public sector. >>So true. Well, Cerner is a great example because they won the award at V a Veteran's administration to do the whole entire medical records modernization. So you have a company on stage that's commercial as I met, commercial as they are public sector that are going into these large modernization efforts. And as you sit on these air, not easy. This takes focus and leadership and a real culture change to make these things happen. >>You know, the international expansion is impressive. We saw each other in London. We did the health care drill down at your office is, of course, a national health. And then you guys were in Bahrain, and what I deserve is it's not like these organizations. They're way behind. I mean, especially the ones that it moved to. The clouds are moving really fast. So well, >>they don't have as much technical debt internationally. It's what we see here in the U. S. So, like I was just in Africa and you know what we talked about digitizing paper. Well, there's no technology on that >>end >>there. It's kind of exciting because they can literally start from square one and get going. And there's a really hunger and the need to make that happen. So it's different for every country in terms of where they are in their cloud journey. >>So I want to ask you about some of the big deals. I'll see Jet eyes in the news, and you can't talk about it because it's in protest and little legal issues. But you have a lot of big deals that you've done. You share some color commentary on from the big deals and what it really means. >>Yeah, well, first of all, let me just say with Department of Defense, Jet are no jet. I We have a very significant business, you know, doing work at every part of different defense. Army, Navy, Air Force in the intelligence community who has a mission for d o d terminus a t o N g eight in a row on And we are not slowing down in D. O d. We had, like, 250 people at a breakfast. Are Lantian yesterday giving ideas on what they're doing and sharing best practices around the fence. So we're not slowing down in D. O d. We're really excited. We have amazing partners. They're doing mission work with us. But in terms of some really kind of fend, things have happened. We did a press announcement today with Finn Rat, the financial regulatory authority here in the U. S. That regulates markets at this is the largest financial transactions you'll ever see being processed and run on the cloud. And the program is called Cat Consolidated Audit Trail. And if you remember the flash crash and the markets kind of going crazy from 2000 day in 2008 when it started, Finneran's started on a journey to try to understand why these market events were happening, and now they have once have been called CAT, which will do more than 100 billion market points a day that will be processed on the cloud. And this is what we know of right now, and they'll be looking for indicators of nefarious behavior within the markets. And we'll look for indicators on a continuous basis. Now what? We've talked about it. We don't even know what we don't know yet because we're getting so much data, we're going to start processing and crunching coming out of all kinds of groups that they're working with, that this is an important point even for Finn rep. They're gonna be retiring technical debt that they have. So they roll out Cat. They'll be retiring other systems, like oats and other programs that they >>just say so that flash crash is really important. Consolidated, honest, because the flash crash, we'll chalk it up to a glitch in the system. Translation. We don't really know what happened. Soto have a consolidated auto trail and having the data and the capabilities, I understand it is really, really important for transparency and confidence in the >>huge and by the way, thinner has been working with us since 2014. They're one of our best partners and are prolific users of the cloud. And I will tell you it's important that we have industries like thin red regulatory authorities, that air going in and saying, Look, we couldn't possibly do what we're doing without cloud computing. >>Tell me about the technical debt because I like this conversation is that we talk about in the commercial side and developer kind of thinking. Most businesses start ups, Whatever. What is technical debt meet in public sector? Can you be specific? >>Well, it's years and years of legacy applications that never had any modernization associated with them in public sector. You know now, because you've talked about these procurement, your very best of your very savvy now public sector >>like 1995 >>not for the faint of heart, for sure that when you do procurement over the years when they would do something they wouldn't build in at new innovations or modernizations. So if you think about if you build a data center today a traditional data center, it's outdated. Tomorrow, the same thing with the procurement. By the time that they delivered on those requirements. They were outdated. So technical debt then has been built up years of on years of not modernizing, just kind of maintaining a status quo with no new insides or analytics. You couldn't add any new tooling. So that is where you see agencies like a T F. That has said, Wow, if I'm gonna if I'm gonna have a modern agency that tracks things like forensics understands the machine learning of what's happening in justice and public safety, I need to have the most modern tools. And I can't do that on an outdated system. So that's what we kind of call technical death that just maintains that system without having anything new that you're adding to >>their capabilities lag. Everything's products bad. Okay, great. Thanks for definite. I gotta ask you about something that's near and dear to our heart collaboration. If you look at the big successes in the world and within Amazon Quantum Caltex partnering on the quantum side, you've done a lot of collaboration with Cal Cal Poly for ground station Amazon Educate. You've been very collaborative in your business, and that's a continuing to be a best practice you have now new things like the cloud innovation centers. Talk about that dynamic and how collaboration has become an important part of your business model. >>What we use their own principles from Amazon. We got building things in our plan. Innovation centers. We start out piloting those two to see, Could they work? And it's really a public private partnership between eight MPs and universities, but its universities that really want to do something. And Cal Poly's a great example. Arizona State University A great example. The number one most innovative university in the US for like, four years in a row. And what we do is we go in and we do these public sector challenges. So the collaboration happens. John, between the public sector Entity, university with students and us, and what we bring to the table is technical talent, air technology and our mechanisms and processes, like they're working backwards processes, and they were like, We want you to bring your best and brightest students. Let's bring public sector in the bowl. They bring challenges there, riel that we can take on, and then they can go back and absorb, and they're pretty exciting. I today I talked about we have over 44 today that we've documented were working at Cal Poly. The one in Arizona State University is about smart cities. And then you heard We're announcing new ones. We've got two in France, one in Germany now, one that we're doing on cybersecurity with our mighty in Australia to be sitting bata rain. So you're going to see us Add a lot more of these and we're getting the results out of them. So you know we won't do if we don't like him. But right now we really like these partnerships. >>Results are looking good. What's going on with >>you? All right. And I'll tell you why. That why they're different, where we are taking on riel public sector issues and challenges that are happening, they're not kind of pie in the sky. We might get there because those are good things to do. But what we want to do is let's tackle things that are really homelessness, opioid crisis, human sex trafficking, that we're seeing things that are really in these communities and those air kind of grand. But then we're taking on areas like farming where we talked about Can we get strawberries rotting on the vine out of the field into the market before you lose billions of dollars in California. So it's things like that that were so its challenges that are quick and riel. And the thing about Cloud is you can create an application and solution and test it out very rapidly without high cost of doing that. No technical Dan, >>you mentioned Smart Cities. I just attended a session. Marty Walsh, the mayor of Boston's, got this 50 50 years smart city plan, and it's pretty impressive, but it's a heavy lift. So what do you see going on in smart cities? And you really can't do it without the cloud, which was kind of my big input cloud. Where's the data? What do you say, >>cloud? I O. T is a big part at these. All the centers that Andy talked about yesterday in his keynote and why the five G partnerships are so important. These centers, they're gonna be everywhere, and you don't even know they really exist because they could be everywhere. And if you have the five G capabilities to move those communications really fast and crypt them so you have all the security you need. This is game changing, but I'll give you an example. I'll go back to the kids for a minute at at Arizona State University, they put Io TI centers everywhere. They no traffic patterns. Have any parking slots? Airfield What Utilities of water, if they're trash bins are being filled at number of seats that are being taken up in stadiums. So it's things like that that they're really working to understand. What are the dynamics of their city and traffic flow around that smart city? And then they're adding things on for the students like Alexis skills. Where's all the activity? So you're adding all things like Alexa Abs, which go into a smart city kind of dynamic. We're not shop. Where's the best activities for about books, for about clothes? What's the pizza on sale tonight? So on and then two things like you saw today on Singapore, where they're taking data from all different elements of agencies and presenting that bad to citizen from their child as example Day one of a birth even before, where's all the service is what I do? How do I track these things? How do I navigate my city? to get all those service is the same. One can find this guy things they're not. They're really and they're actually happening. >>Seems like they're instrumented a lot of the components of the city learning from that and then deciding. Okay, where do we double down on where do we place? >>You're making it Every resilient government, a resilient town. I mean, these were the things that citizens can really help take intro Web and have a voice in doing >>threes. I want to say congratulations to your success. I know it's not for the faint of heart in the public sector of these days, a lot of blockers, a lot of politics, a lot of government lockers and the old procurement system technical debt. I mean, Windows 95 is probably still in a bunch of PCs and 50 45 fighters. 15 fighters. Oh, you've got a great job. You've been doing a great job and riding that wave. So congratulations. >>Well, I'll just say it's worth it. It is worth it. We are committed to public sector, and we really want to see everyone from our war fighters. Are citizens have the capabilities they need. So >>you know, you know that we're very passionate this year about going in the 2020 for the Cube and our audience to do a lot more tech for good programming. This'll is something that's near and dear to your heart as well. You have a chance to shape technology. >>Yes, well, today you saw we had a really amazing not for profit on stage with It's called Game Changer. And what we found with not for profits is that technology can be a game changer if they use it because it makes their mission dollars damage further. And they're an amazing father. And send a team that started game changer at. Taylor was in the hospital five years with terminal cancer, and he and his father, through these five years, kind of looked around. Look at all these Children what they need and they started. He is actually still here with us today, and now he's a young adult taking care of other young Children with cancer, using gaming technologies with their partner, twitch and eight MPs and helping analyze and understand what these young affected Children with cancer need, both that personally and academically and the tools he has He's helping really permit office and get back and it's really hard, Warren says. I was happy. My partner, Mike Level, who is my Gran's commercial sales in business, and I ran public Sector Day. We're honored to give them at a small token of our gift from A to B s to help support their efforts. >>Congratulates, We appreciate you coming on the Cube sharing the update on good luck into 2020. Great to see you 10 years at AWS day one. Still, >>it's day one. I feel like I started >>it like still, like 10 o'clock in the morning or like still a day it wasn't like >>I still wake up every day with the jump in my staff and excited about what I'm gonna do. And so I am. You know, I am really excited that we're doing and like Andy and I say we're just scratching the surface. >>You're a fighter. You are charging We love you, Great executive. You're the chief of public. Get a great job. Great, too. Follow you and ride the wave with Amazon and cover. You guys were documenting history. >>Yeah, exactly. We're in happy holidays to you all and help seeing our seventh and 20 >>so much. Okay, Cube coverage here live in Las Vegas. This is the cube coverage. Extracting the signals. Wanna shout out to eight of us? An intel for putting on the two sets without sponsorship, we wouldn't be able to support the mission of the Cube. I want to thank them. And thank you for watching with more after this short break.

>>live from Miami, Florida. It's the Q covering. IBM is data in a I forum brought to you by IBM. >>Welcome back to the port of Miami, Everybody. You're watching the Cube, the leader in live tech coverage. We're here covering the IBM data and a I form. Rob Thomas is here. He's the general manager for data in A I and I'd be great to see again. >>Right. Great to see you here in Miami. Beautiful week here on the beach area. It's >>nice. Yeah. This is quite an event. I mean, I had thought it was gonna be, like, roughly 1000 people. It's over. Sold or 17. More than 1700 people here. This is a learning event, right? I mean, people here, they're here to absorb best practice, you know, learn technical hands on presentations. Tell us a little bit more about how this event has evolved. >>It started as a really small training event, like you said, which goes back five years. And what we saw those people, they weren't looking for the normal kind of conference. They wanted to be hands on. They want to build something. They want to come here and leave with something they didn't have when they arrived. So started as a little small builder conference and now somehow continues to grow every year, which were very thankful for. And we continue to kind of expand at sessions. We've had to add hotels this year, so it's really taken off >>you and your title has two of the three superpowers data. And of course, Cloud is the third superpower, which is part of IBMs portfolio. But people want to apply those superpowers, and you use that metaphor in your your keynote today to really transform their business. But you pointed out that only about a eyes only 4 to 10% penetrated within organizations, and you talked about some of the barriers that, but this is a real appetite toe. Learn isn't there. >>There is. Let's go talk about the superpower for a bit. A. I does give employees superpowers because they can do things now. They couldn't do before, but you think about superheroes. They all have an origin story. They always have somewhere where they started and applying a I an organization. It's actually not about doing something completely different. It's about extenuating. What you already d'oh doing something massively better. That's kind of in your DNA already. So we're encouraging all of our clients this week like use the time to understand what you're great at, what your value proposition is. And then how do you use a I to accentuate that? Because your superpower is only gonna last if it's starts with who you are as a company or as a >>person who was your favorite superhero is a kid. Let's see. I was >>kind of into the whole Hall of Justice. Super Superman, that kind of thing. That was probably my cartoon. >>I was a Batman guy. And the reason I love that movie because all the combination of tech, it's kind of reminds me, is what's happening here today. In the marketplace, people are taking data. They're taking a I. They're applying machine intelligence to that data to create new insights, which they couldn't have before. But to your point, there's a There's an issue with the quality of data and and there's a there's a skills gap as well. So let's let's start with the data quality problem described that problem and how are you guys attacking it? >>You're a I is only as good as your data. I'd say that's the fundamental problem and organization we worked with. 80% of the projects get slowed down or they get stopped because the company has a date. A problem. That's why we introduce this idea of the A i ladder, which is all of the steps that a company has to think about for how they get to a level of data maturity that supports a I. So how they collect their data, organize their data, analyze their data and ultimately begin to infuse a I into business processes soap. Every organization needs to climb that ladder, and they're all different spots. So for someone might be, we gotta focus on organization a data catalogue. For others, it might be we got do a better job of data collection data management. That's for every organization to figure out. But you need a methodical approach to how you attack the data problem. >>So I wanna ask you about the Aye aye ladder so you could have these verbs, the verbs overlay on building blocks. I went back to some of my notes in the original Ai ai ladder conversation that you introduced a while back. It was data and information architecture at the at the base and then building on that analytics machine learning. Aye, aye, aye. And then now you've added the verbs, collect, organized, analyze and infused. Should we think of this as a maturity model or building blocks and verbs that you can apply depending on where you are in that maturity model, >>I would think of it as building blocks and the methodology, which is you got to decide. Do wish we focus on our data collection and doing that right? Is that our weakness or is a data organization or is it the sexy stuff? The Aye. Aye. The data science stuff. We just This is just a tool to help organizations organize themselves on what's important. I asked every company I visit. Do you have a date? A strategy? You wouldn't believe the looks you get when you ask that question, you get either. Well, she's got one. He's got one. So we got seven or you get No, we've never had one. Or Hey, we just hired a CDO. So we hope to have one. But we use the eye ladder just as a tool to encourage companies to think about your data strategy >>should do you think in the context I want follow up on that data strategy because you see a lot of tactical data strategies? Well, we use Data Thio for this initiative of that initiative. Maybe in sales or marketing, or maybe in R and D. Increasingly, our organization's developing. And should they develop a holistic data strategy, or should they trying to just get kind of quick wins? What are you seeing in the marketplace? >>It depends on where you are in your maturity cycle. I do think it behooves every company to say We understand where we are and we understand where we want to go. That could be the high level data strategy. What are our focus and priorities gonna be? Once you understand focus and priorities, the best way to get things into production is through a bunch of small experiments to your point. So I don't think it's an either or, but I think it's really valuable tohave an overarching data strategy, and I recommended companies think about a hub and spokes model for this. Have a centralized chief date officer, but your business units also need a cheap date officer. So strategy and one place execution in another. There's a best practice to going about this >>the next you ask the question. What is a I? You get that question a lot, and you said it's about predicting, automating and optimizing. Can we unpack that a little bit? What's behind those three items? >>People? People overreact a hype on topics like II. And they think, Well, I'm not ready for robots or I'm not ready for self driving Vehicles like those Mayor may not happen. Don't know. But a eyes. Let's think more basic it's about can we make better predictions of the business? Every company wants to see a future. They want the proverbial crystal ball. A. I helped you make better predictions. If you have the data to do that, it helps you automate tasks, automate the things that you don't want to do. There's a lot of work that has to happen every day that nobody really wants to do you software to automate that there's about optimization. How do you optimize processes to drive greater productivity? So this is not black magic. This is not some far off thing. We're talking about basics better predictions, better automation, better optimization. >>Now interestingly, use the term black magic because because a lot of a I is black box and IBM is always made a point of we're trying to make a I transparent. You talk a lot about taking the bias out, or at least understanding when bias makes sense. When it doesn't make sense, Talk about the black box problem and how you're addressing. >>That starts with one simple idea. A eyes, not magic. I say that over and over again. This is just computer science. Then you have to look at what are the components inside the proverbial black box. With Watson, we have a few things. We've got tools for clients that want to build their own. Aye, aye, to think of it as a tool box you can choose. Do you want a hammer and you want a screwdriver? You wanna nail you go build your own, aye, aye. Using Watson. We also have applications, so it's basically an end user application that puts a I into practice things like Watson assistant to virtually no create a virtual agent for customer service or Watson Discovery or things like open pages with Watson for governance, risk and compliance. So, aye, aye, for Watson is about tools. You want to build your own applications if you want to consume an application, but we've also got in bed today. I capability so you can pick up Watson and put it inside of any software product in the >>world. He also mentioned that Watson was built with a lot of of of, of open source components, which a lot of people might not know. What's behind Watson. >>85% of the work that happens and Watson today is open source. Most people don't know that it's Python. It's our it's deploying into tensorflow. What we've done, where we focused our efforts, is how do you make a I easier to use? So we've introduced Auto Way. I had to watch the studio, So if you're building models and python, you can use auto. I tow automate things like feature engineering algorithm, selection, the kind of thing that's hard for a lot of data scientists. So we're not trying to create our own language. We're using open source, but then we make that better so that a data scientist could do their job better >>so again come back to a adoption. We talked about three things. Quality, trust and skills. We talked about the data quality piece we talked about the black box, you know, challenge. It's not about skills you mention. There's a 250,000 person Gap data science skills. How is IBM approaching how our customers and IBM approaching closing that gap? >>So think of that. But this in basic economic terms. So we have a supply demand mismatch. Massive demand for data scientists, not enough supply. The way that we address that is twofold. One is we've created a team called Data Science Elite. They've done a lot of work for the clients that were on stage with me, who helped a client get to their first big win with a I. It's that simple. We go in for 4 to 6 weeks. It's an elite team. It's not a long project we're gonna get you do for your success. Second piece is the other way to solve demand and supply mismatch is through automation. So I talked about auto. Aye, aye. But we also do things like using a eye for building data catalogs, metadata creation data matching so making that data prep process automated through A. I can also help that supply demand. Miss Max. The way that you solve this is we put skills on the field, help clients, and we do a lot of automation in software. That's how we can help clients navigate this. So the >>data science elite team. I love that concept because way first picked up on a couple of years ago. At least it's one of the best freebies in the business. But of course you're doing it with the customers that you want to have deeper relationships with, and I'm sure it leads toe follow on business. What are some of the things that you're most proud of from the data science elite team that you might be able to share with us? >>The clients stories are amazing. I talked in the keynote about origin stories, Roll Bank of Scotland, automating 40% of their customer service. Now customer SATs going up 20% because they put their customer service reps on those hardest problems. That's data science, a lead helping them get to a first success. Now they scale it out at Wonderman Thompson on stage, part of big W P p big advertising agency. They're using a I to comb through customer records they're using auto Way I. That's the data science elite team that went in for literally four weeks and gave them the confidence that they could then do this on their own. Once we left, we got countless examples where this team has gone in for very short periods of time. And clients don't talk about this because they have to talk about it cause they're like, we can't believe what this team did. So we're really excited by the >>interesting thing about the RVs example to me, Rob was that you basically applied a I to remove a lot of these mundane tasks that weren't really driving value for the organization. And an R B s was able to shift the skill sets. It's a more strategic areas. We always talk about that, but But I love the example C. Can you talk a little bit more about really, where, where that ship was, What what did they will go from and what did they apply to and how it impacted their businesses? A improvement? I think it was 20% improvement in NPS but >>realizes the inquiry's they had coming in were two categories. There were ones that were really easy. There were when they were really hard and they were spreading those equally among their employees. So what you get is a lot of unhappy customers. And then once they said, we can automate all the easy stuff, we can put all of our people in the hardest things customer sat shot through the roof. Now what is a virtual agent do? Let's decompose that a bit. We have a thing called intent classifications as part of Watson assistant, which is, it's a model that understands customer a tent, and it's trained based on the data from Royal Bank of Scotland. So this model, after 30 days is not very good. After 90 days, it's really good. After 180 days, it's excellent, because at the core of this is we understand the intent of customers engaging with them. We use natural language processing. It really becomes a virtual agent that's done all in software, and you can only do that with things like a I. >>And what is the role of the human element in that? How does it interact with that virtual agent. Is it a Is it sort of unattended agent or is it unattended? What is that like? >>So it's two pieces. So for the easiest stuff no humans needed, we just go do that in software for the harder stuff. We've now given the RVs, customer service agents, superpowers because they've got Watson assistant at their fingertips. The hardest thing for a customer service agent is only finding the right data to solve a problem. Watson Discovery is embedded and Watson assistant so they can basically comb through all the data in the bank to answer a question. So we're giving their employees superpowers. So on one hand, it's augmenting the humans. In another case, we're just automating the stuff the humans don't want to do in the first place. >>I'm gonna shift gears a little bit. Talk about, uh, red hat in open shift. Obviously huge acquisition last year. $34 billion Next chapter, kind of in IBM strategy. A couple of things you're doing with open shift. Watson is now available on open shifts. So that means you're bringing Watson to the data. I want to talk about that and then cloudpack for data also on open shifts. So what has that Red had acquisition done for? You obviously know a lot about M and A but now you're in the position of you've got to take advantage of that. And you are taking advantage of this. So give us an update on what you're doing there. >>So look at the cloud market for a moment. You've got around $600 million of opportunity of traditional I t. On premise, you got another 600 billion. That's public clouds, dedicated clouds. And you got about 400 billion. That's private cloud. So the cloud market is fragmented between public, private and traditional. I t. The opportunity we saw was, if we can help clients integrate across all of those clouds, that's a great opportunity for us. What red at open shift is It's a liberator. It says right. Your application once deployed them anywhere because you build them on red hot, open shift. Now we've brought cloudpack for data. Our data platform on the red hot open shift certified on that Watson now runs on red had open shift. What that means is you could have the best data platform. The best Aye, Aye. And you can run it on Google. Eight of us, Azure, Your own private cloud. You get the best, Aye. Aye. With Watson from IBM and run it in any of those places. So the >>reason why that's so powerful because you're able to bring those capabilities to the data without having to move the date around It was Jennifer showed an example or no, maybe was tail >>whenever he was showing Burt analyzing the data. >>And so the beauty of that is I don't have to move any any data, talk about the importance of not having Thio move that data. And I want I want to understand what the client prerequisite is. They really take advantage of that. This one >>of the greatest inventions out of IBM research in the last 10 years, that hasn't gotten a lot attention, which is data virtualization. Data federation. Traditional federation's been around forever. The issue is it doesn't perform our data virtualization performance 500% faster than anything else in the market. So what Jennifer showed that demo was I'm training a model, and I'm gonna virtualized a data set from Red shift on AWS and on premise repositories a my sequel database. We don't have to move the data. We just virtualized those data sets into cloudpack for data and then we can train the model in one place like this is actually breaking down data silos that exist in every organization. And it's really unique. >>It was a very cool demo because what she did is she was pulling data from different data stores doing joins. It was a health care application, really trying to understand where the bias was peeling the onion, right? You know, it is it is bias, sometimes biases. Okay, you just got to know whether or not it's actionable. And so that was that was very cool without having to move any of the data. What is the prerequisite for clients? What do they have to do to take advantage of this? >>Start using cloudpack for data. We've got something on the Web called cloudpack experiences. Anybody can go try this in less than two minutes. I just say go try it. Because cloudpack for data will just insert right onto any public cloud you're running or in your private cloud environment. You just point to the sources and it will instantly begin to start to create what we call scheme a folding. So a skiing version of the schema from your source writing compact for data. This is like instant access to your data. >>It sounds like magic. OK, last question. One of the big takeaways You want people to leave this event with? >>We are trying to inspire clients to give a I shot. Adoption is 4 to 10% for what is the largest economic opportunity we will ever see in our lives. That's not an acceptable rate of adoption. So we're encouraging everybody Go try things. Don't do one, eh? I experiment. Do Ah, 100. Aye, aye. Experiments in the next year. If you do, 150 of them probably won't work. This is where you have to change the cultural idea. Ask that comes into it, be prepared that half of them are gonna work. But then for the 52 that do work, then you double down. Then you triple down. Everybody will be successful. They I if they had this iterative mindset >>and with cloud it's very inexpensive to actually do those experiments. Rob Thomas. Thanks so much for coming on. The Cuban great to see you. Great to see you. All right, Keep right, everybody. We'll be back with our next guest. Right after this short break, we'll hear from Miami at the IBM A I A data form right back.

>>Live from Las Vegas. It's the cube covering UI path forward Americas 2019. Brought to you by UI path. Hello everyone and welcome >>do the cubes live coverage of UI path forward. I'm your host, Rebecca Knight, co-hosting alongside of Dave Volante. We are joined by Layla Delage. She is the chief information and digital officer at Coca-Cola. ECEK thanks so much for coming on the show. Thank you. Great to be here. Very exciting. And also Christina Perala, she is the group RPA lead at Generali. Thank you so much for coming into, for inviting me. Thank you. So I want to hear from you both about what, what your industry is and what your role is. Level. Let's start with you. Okay, great. Um, so we are, um, one of the Rogers bottlers within the Coca-Cola system. Uh, we produce, distribute and sell Coca Cola company products. The operating around 10 countries are middle East and central Asia and parts of middle East, Pakistan, Syria and Turkey. They are actually born out of Turkey and that's where our central offices, um, we've operate with 26 plants, around 8,500 employees. >>Uh, we serve a consumer base of 400 million and we have around close to 1 billion, uh, customers. Uh, and we continue to invest in the countries where we operate. And my role is to film and my role is all things digital within this community. So leading technologists, leading technology, all things digital. Yes. So Christina, tell us about Generali. Generalia. Sikora Zuni is a leading insurance company as the presidency. Enough 50 countries worldwide and more than a 70,000 employees that were wider. So it's a bigger company, not only for insurance. And my role with the internet rally group is to leader the LPA program. So I'm inside of the group that I in digital. So am I inside this group, I'm very focused on smart process automation. So RPA plus AI, because a has a, we already know all I loudly, LPA without a AI is announcer nowadays. So we have to keep on talking about AI, machine learning algorithms to enrich, uh, uh, the capabilities of basic robotic sell, hand reach, also the Antwerp and automation of processes. You're the CIO and the CDO. Yes. Yes. That's unique. First of all, there's one that's unique too. It's even more unique than a woman has both roles. So what's the reason behind it? So, um, there's definitely a reason behind it. I joined the Coca Cola >>system about a year ago, so I'm just a over a year in the company. The reason actually I wanted to make sure that we highlight the CIO and CTO CDO role together is, um, I want to advocate for all the it organizations to transform and really get into the digital world and get into the world of advanced technologies, become strategic business partners. Get out of the kitchen, I call it kitchen kitchen, it, you know, get out of the managing of data centers or cloud and um, just the core foundational systems and applications. Get into the advanced technology, understand the business, gain business acumen and deliver solutions based on business needs. So to highlight that, I want to make sure that I hold the role of both and I'm able to be advocate of both worlds. Cause digital without it support is not able to accomplish what they need to accomplish and it needs to get into more of the digital space. And Christina, as the RPA, you write bots, you evangelize the organization. >>Um, mostly the second. So in generally we have a, a very, uh, so, uh, sort of ivory the organization. So for something we are very decentralized, for example, for the developing of robots or the deploying for the action, the operational stuff and so on. Uh, but uh, for some stuff like a guidelines, uh, uh, risk framework to ensure that robots can do their work in the right way with notice to all for the business processes, uh, for this stuff before guidelines, framework, best practice sharing. We are a central centralized, we, we try to be centralized. So, uh, my role is to try to collect is to collect and not try and super lat, uh, best practices and share with you in the companies chair, uh, um, the best use cases. And, uh, also tried to gather what are the main concerns, what are the difficulties in order to a facilitator and to boost smarter process automation of the option. So >>Laila, you are up on the main stage this morning. You, I Pat highlighted Coca Cola itchy as a, as a customer that is embraced automation, embrace the UI pass solution. So tell us a little bit about the challenges you are facing and then why you chose I a UI path. So as I joined the company, uh, I introduced a very strong digital strategy that required a lot of change and it's within a company that has been very successfully operating all these years and doing pretty much know what to do very well. And all of a sudden with digital we are starting to disrupt the, are trying to say, Hey, we've got to change the way, do some of the things. Um, so belief in digital and belief that it can really bring efficiency and outcomes was very important. And I needed a quick win. I needed to have a technology or a solution or an outcome that I would generate very quickly and show to the whole organization that this can be done and we can do this as Coca-Cola. TJ. >>So that was, that was RPA, that was our PA for this fascinates me because you're an incumbent business, been around for a long time. you're a bottler and distributor, right? So yeah, processes are around the bottling plants and the distribution system. Yes. And now you're transforming into a digital business. Yes. I'll put data at your core. Totally not start his daytime customer. Okay. So describe the difference between the traditional business and what it looks like when you've transformed, particularly from a data perspective. And then I want to understand what role RPA plays. So we are definitely a very data rich company, however, to call ourselves data rich and to call it a strategic asset, I first need to capture and control my data and I have to treat it like a strategic asset. So that is a huge transformation. The second, once you treat it as an asset, how do you generate more insights? >>And I call this augmenting the gut feeling. I have an amazing gut feeling in the company. How do I augment that with data and provide our, this is partners and then our customers and our suppliers and some of the information. And then obviously future maturity level is, you know, shared economy and data monetization, et cetera. So that's how I describe within the company. And then assets, other assets like our plants and coolers cooler, we call it cooler, you know, where do you actually see all our products? They are called, they are visible and they are available, but they are also in that set where I can turn them into a digital cooler and I can do so much more with the cooler that standing. And I recently, in one of our leadership meetings I said we have as many coolers as the um, population on the fishy Island, which is close to 1 million. >>So just imagine in this new world, in this digital era, everything that you can do by just having a cooler, 1 million coolers present out there on the street, I can serve the consumers, I can serve customers with very different information. So that's kind of what I mean by turning the business into a digital business. So that's an awesome story. By the way, how does RPA fit into that vision? RPA is everywhere in division. So I said when I started the journey, uh, any digital journey has some Muslim battles for me. There are four must win battles. I need to get certain things right in it, in the, and that was one, one of the Mustin battles was alteration. So we have to create efficiency, we have to optimize, we have to streamline. And we said automation first. Um, and we started with, I call it robotics and automation. >>And I agree with what you said, Christina. It's more than just robots. It's actually a strategic application. It could be a good old ERP. It's the RPA, it's AI, it's all the other technologies that are out there that they bring the two of them brings. So how do you create this end to end solution using all the trends, technologies to create optimization? Uh, our goal was how do we get back to our customer much faster. We had so many customer facing processes and they're going to be there forever. They are a very customer centric customer into company obviously. So how do I get back to my customer faster? How do I make my employees just happy? They were working on so many things would be until midnight over time during weekends. How do I take that away from them? So we called it lifting the weight of the shoulders and giving you a new capabilities. So again, augmentation and then giving them that space. So we had uh, three of my employees upskilled and reskilled themselves. They became a developers in the robotics space, a couple of fire functional, um, colleagues are now reskilling themselves because now they have the time to reskill. More importantly, they have the time to actually leverage their expertise and they are so much more motivated. The engagement, the employee engagement is increasing. So that's how we are positioning RPA. Pristina ICU >>nodding a lot, your head too. A lot of what Layla is saying. I'm wondering if you can talk to about any best practices that have emerged as you've implemented RPA at Generali to what you've learned. Yes, for sure. Um, we have a lot of processes automated, uh, all around the group. Uh, but we are not, we have not reached our maximum or, uh, benefits, uh, gaining. So what we need to do right now is to try to boost the smart process automation, uh, via analyzing the issue around value, Cena. So each business area of the value chain because currently we have countries that has, that have a different level of maturity. So, so some countries are at the very beginning and we have to help them with best practice sharings with a huge case, successful use cases. And we are, uh, we have a lot of help from parts into, in this because locally and who I Potter as a, a very strong presence and is very powerful in doing that. >>And, uh, now, uh, our next mouth are very focused on try to, um, uh, deep dive, the vertical, our area of the issue around value chain and identify which are the processes inside them are best to automated. Uh, uh, Basinger. Uh, these activities are not so you, I part, we'd, his experience has created a heat mapper, value chain Heath mapper. And so it's given up as some advice where to focus our strengths, our hand energy in automating. And I think that this is a very huge, uh, uh, support that you are UI parties given us. So it's not just a matter of, okay, let's start, uh, uh, do some, uh, process assessment in order to identify which processes are the best candidates to be automated. But, uh, we have, uh, how our back, uh, us. So we, we are, uh, we have the backing of UI pass saying it's better to do that and automate in depth, uh, processes of that, but Oh, the value chain. So we are starting a program to do that with all the countries or the vertical area of the country. So, and I think that this could really bring a, uh, high benefits and can, uh, uh, drive us to, uh, really having a scaling up in using a smart process, automation and UI. But you a bot ecosystem not only are, so >>one of the nice things about RPA is you can take the software robots and apply them to an existing process. A lot of times changing processes and a lot of times almost always changing processes is painful. However, we've talked to some customers that have said by applying RPA to our business, it's exposed some really bad processes. Have you experienced that and can you maybe share that experience with it? Absolutely. So for us, one of the initial, um, robots, we applied to a customer facing process. It was our field team trying to get back to our customer with a, with some information. And we realize that the, um, the cycle time was very long. And the reason is there are four functions involved in answering the question and seven different applications are being touched all the way from XL to ERP to CRM. So what we did obviously bringing a strategic solution to fix the cycle time and reduce that to streamline the process was going to take us long. So RPA was great help. We reduced the cycle time by putting a robot and we were able to get back to ours, priests, sales team in the field in matter of minutes. What used to take hours was now being responded to in minutes. Now that doesn't mean that process is perfect, but that's our next step. So we created value for our customer and our sales team within the field, um, before, you know, streamlining and going into a bigger initiatives. So then you could share Christina. >>Yes. Uh, so, um, it is necessary to automate something that could be automated. So, uh, it is necessarily to out optimize the process before automating it, but sometimes it's better to automate it as Caesar because, uh, also the not optimize the process can bring value if ultimated. So let me share an example. If you, for example, have to migrate some data obviously is a one shot, uh, uh, activity. But with the robot you can do it in a very short, well sharp timer. Maybe it's not the best, uh, process to be automated, but that could be useful as well. So it's always a matter of understanding the costs and the benefits. Uh, and sometimes, uh, FBA is very quickly, is very quick to be implemented and can be, can have a, also a lot of savings instead of integrating instead of doing more complex things. >>And then other things, uh, that it's important to take into account is that, uh, uh, after having a automating goal, all the low hanging fruits and so the processes with a low cost, uh, uh, low complexity and high benefits, uh, then it starts to facer when it's necessary to understand how to the end to end processes. Because, uh, it happens, uh, in, uh, some of our countries that, uh, the second phase is very difficult because, uh, the situation is that you have very, um, a lot of very fermented processes. And so before automating it is necessary to apply operational efficiency methodology, lean six Sigma, rare business process for engineering and then automate it. So it's a longer trip. And our Amer as group head office in general is to give these kinds of methodologies and best practices for all kinds of level of maturity in our countries. So finally, w what is the customer is the employee response then in terms of how you're talking a lot about streamlining, getting rid of these tedious tasks that took forever, how, how our employees reacting to the implementation. >>So we, um, we actually launched the, uh, announce announced RPA robotics and automation with a Hekaton in our company. And we invited 40 colleagues from various functions and two and everybody from the business was there and they participated actually in gathering ideas and prioritizing what matters most to the company. And we looked at customer, we looked at compliance, we look to the employee and we actually with during the hackathon you iPad team helped us to go live with one of the robots. They were mesmerized. They couldn't believe that this could happen. I think that's where we kind of engaged them and now going forward everyone who generate the idea was part of the building of the robots so they continue to be engaged to me allowed them to name the robots so they start naming and once the robots were alive yet literally had some of our teams who are dancing from happiness and I think that said it all. That was the strongest voice of our business partner and we published that video. So our business partners became our advocates and that's really our how we born the robotic and automation within CCI. We have so many advocates right now they are coming to us. Our business partners are coming to us with more use cases and they are actually, they are sharing with rest of the system within Coca-Cola and with the group that we are part of locally in Turkey, they are sharing their stories. So now we have a hype going on in the system. >>Yes. And in generally, um, at the beginning, uh, we face some fears in our employees fears of losing their job, but fear is not be able to use this kind of technology. Uh, but, uh, also with the help of HR because I, Charlie is, uh, driving a huge program of upskilling and reskilling of people. Uh, nowadays, uh, also hand user are very happy to use robotics, uh, because, uh, uh, when they realize that they can really help in their activities, in their very boring and not useful activities, they are very happy to enjoy this, this program. But it is so, uh, it, it was a trip, a journey with the employees to make them understand that it's not something that, uh, is affecting their job. So, at least in generally group, we are, we are programming, uh, these, uh, uh, or employees, uh, journey in order to make them, uh, uh, to have more, uh, uh, awareness about robotics and not be scared about it. Layla and Christina, thank you both so much for coming on the cube. It was wonderful. Thank you very much for you. I'm Rebecca Knight for Dave Volante. Please stay tuned for more of the cubes live coverage of UI path forward.

>> from our studios in the heart of Silicon Valley, Palo Alto, California. It is a cute conversation. >> Everyone. Welcome to this Special Cube conversation here at the Palo Alto Cube Studios. I'm John for a host of Cuba here. Moritz man is the head of the product management team at Open Systems A G. Great to see you again. Thanks for coming in. >> Hey, John. Thanks for having me. >> So last time we spoke, you had your event in Las Vegas. You guys are launching. You have a new headquarters here in Silicon Valley. Opened up this past spring. Congratulations. Thank you. >> Yeah, it's a great, great venue to start, and we set foot on the Silicon Valley ground. So to make our way to >> I know you've been super busy with the new building and rolling out, expanding heavily here in the Valley. But you guys were in the hottest area that we're covering Security Cloud security on premise, security. The combination of both has been the number one conversation pretty much in the cloud world right now. Honestly, besides a normal cloud, native cloud I t hybrid versus multi cloud out. See, that continues to be the discussion I think there's no more debate around multi cloud in hybrid public clouds. Great people gonna still keep their enterprises. But the security equation still is changing this new requirements. What's the latest that you guys are seeing with respect to security? >> Yeah. So, John, what we see is actually that cloud adoption had happens at different speeds. So you have usually the infrastructure of the service. Adoption would happens in a quite controlled way because there's a lift in shift. Do you have your old data center? You you take it and you transferred into azure I W S O G C P. But then there's also uncontrolled at option, which is in the SAS space. And I think this is where a lot off data risk occur, especially the wake off GDP are on where we see that this adoption happens. Maurin a sometimes control, but sometimes in a very uncontrolled way, >> explain that the uncontrolled and controlled expansion of of how security and multi cloud and cloud is going because this interesting control means this this plan's to do stuff uncontrolled means it's just by other forces explain uncontrolled versus controls >> eso controlled specifically means the IittIe team takes as a project plan and aches servers and workloads and moves them in a controlled fashion or in a dedicated project to the cloud. But what happened in the business world of business I t is actually did use those share content at any time with any device at any at any time and in all locations. So this is called the Mobile Enterprise on the Cloud First Enterprise. So it means that the classical security perimeter and the controls in that are my past, actually, by the path of least resistance or the shortest path >> available. And this is the classic case. People use Dropbox with some, you know, personal things. They're at home, they're at work, a p I based software. That's what you're getting at the >> and the issue of this is that that the data that has bean, like contained an pera meters where, you know, as it Caesar, where your data is. This has bean deployed too many edge devices, too many mobile devices, and it's get it gets shared, a nun controlled way. >> We'll get a couple talk tracks would like to drill down on that, because I think this is the trend. We're seeing a pea eye's dominant. The perimeter on the infrastructure has gone away. It's only getting bigger and larger. You got I, O. T and T Edge just and the networks are controlled and also owned by different people. So the packets of moving on it that's crazy so that that's the reality. First, talk track is the security challenge. What is the security challenge? How does a customer figure out what to do from an architectural standpoint when they're dealing with hybrid and multi cloud? So first of >> all, um, customers or BC enterprises try need to re think their infrastructure infrastructure centric view off the architecture's. So the architecture that had been built around data send us needs to become hybrid and multi cloud aware. So that means they need to define a new way off a perimeter, which is in cloud but also in the covering. Still the old, so to say, legacy hyper data center set up, which has the data still in the old data center and at the same time, they need to open up and become the cloud themselves, so to say, and but still draw a perimeter around their data and they users and not and their applications and not so much anymore around the physical infrastructure. >> So taking, changing their view of what a security product is, Is that really what you're getting at? >> Yeah, So the issues with the product point solution was that they fixed a certain part off off a tactile issue. So if you take a firewall in itself, firewall back then it was like a entry door to a big building, and you could could decide who comes out goes in. Now. If the the kind of the walls of the building are vanishing or arm or more FIC, you need to come over the more integrated concept. So having these stacked appliance and stacked security solutions trying to work together and chain them doesn't work anymore. So we think and we see that, >> Why is that? Why doesn't it work? Because in >> the end, it's it's it's hardly two to operate them. Each of those points solutions have their own end off life. They have their own life cycle. They have their own AP eyes. They have their own TCO, as all that needs to be covered. And then there's the human aspect where you have the knowledge pools around >> those technologies. So as an enterprise you have to content to continuously keep the very scar security experts to maintain content continues the depreciating assets running right, >> and they're also in it. We weren't built for tying into a holistic kind of platform. >> Yeah, What we see is that that enterprises now realize we have data centers and it's not accepted reality that you can abstracted with the cloud. So you have You don't own your own servers and buildings anymore. So you have a PAX model to subscribe to Cloud Service is and we think that this has to happen to security to so shift from cap ex to our pecs and the same way also for operational matters >> securities. The service is a crepe is a small I want to ask you on that front you mentioned mobile users. How do you secure the mobile uses when they use cloud collaboration? Because this is really what uses expect, and they want How do you secure it? >> So be secured by by actually monitoring the data where it actually gravitates, and this is usually in the cloud. So we enforce the data that is in transit through, ah, proxies and gators towards the cloud from the endpoint devices, but also then looking by AP eyes in the cloud themselves to look for threats, data leakage and also sandbox. Certain activities that happened. There >> are the next talk talk I want to get into is the expansion to hybrid and multi cloud so that you guys do from a product standpoint, solution for your customers. But in general, this is in the industry conversation as well. How how do you look at this from a software standpoint? Because, you know, we've heard Pat Gelsinger of'em were talking about somewhere to find Data Center S d n. Everything's now software based. You talk about the premiere goes away. You guys were kind of bring up a different approaches. A software perimeter? Yeah, what is the challenge for expanding to multi cloud and hybrid cloud? >> So So the challenge for enterprise and customers we talked to is that they have to run their old business. Gardner once called it by motile business, and it's still adopting not one cloud, but we see in our surveys. And this is also what market research confirms is that customers end up with 2 to 3 loud vendors. So there were will be one or two platforms that will be the primary to their major majority of applications and data gravity. But they will end up and become much more flexible with have running AWS, the old Davis Center. But it was the G, C, P and Azure, or Ali Baba glowed even side by side, right tow cover the different speeds at what their own and the price runs. And >> so I gotta ask you about Cloud Needed was one of the things that you're bringing up that just jumps in my head. And when I got to ask, because this is what I see is a potential challenge. It might be a current challenges when you have kubernetes growing such a rapid rate. You see the level of service is coming online much higher rate. So okay, people, mobile users, they're using the drop boxes, the boxes and using all these FBI service's. But that's just those wraps. As a hundreds and thousands of micro service is being stood up and Tauron down in there, you guys are taking, I think, an approach of putting a perimeter software premieres around these kinds of things, but they get turned on enough. How do you know what's clean? It's all done automatically, so this is becoming a challenge. So is this what you guys mean when you say software perimeter that you guys could just put security around things at any time? Is that explain this? >> Yeah, So? So if you talk about the service match so really mashing cloudy but native functions, I think it's still in the face where it's, I would say, chaos chaotic when you have specific projects that are being ramped up them down. So we draw a perimeter in that specific contact. So let's say you have You're ramping up a lot off cloud a function AWS. We can build a pyramid around this kind off containment and look especially for threats in the activity locks off. The different component is containers, but from from a design perspective, this needs to be, uh, we need to think off the future because if you look at Mike soft on AWS strategy, those containers will eventually move Also back to the edge. Eso were in preparing that to support those models also cover. Bring these functions closer back again to the edge on We call that not any longer the when, ej but it will become a cloud at at actually. So it's not an extension of the land that comes to the data. It's actually the data and the applications coming back to the user and much closer. >> Yeah. I mean, in that case, you could define the on premises environment has an edge, big edge, because this is all about moving, were close and data around. This is what the new normal is. Yeah, So okay, I gotta ask the next question, which is okay, If that's true, that means that kubernetes becomes a critical part of all this. And containers. How do you guys play with that at all? >> So we play with us by by actually looking at data coming from that at the moment. We're looking at this from a from a data transit perspective. We But we will further Maur integrate into their eighties AP eyes and actually become part off the C I C D. Process that building then actually big become a security function in approval and rolling out a cannery to certain service mesh. And we can say, Well, this is safe for this is unsafe This is, I think, the eventual goal to get there. But But for now, it's It's really about tracking the locks of each of those containers and actually having a parent her and segmentation around this service mash cloud. So to say, >> I think you guys got a good thing going on when you talk about this new concept that's of softer to find perimeter. You can almost map that to anything you get. Really think everything has its own little perimeter workload. Could be moving around still in these three secure. So I gotta ask on the next talk Trek is this leads into hybrid cloud. This is the hottest topic. Hybrid cloud to me is the same as multi cloud. Just kind of get together a little bit different. But hybrid cloud means you're operating both on premises and in the cloud. This is becoming a channel most si si SOS Chief admission Security officers. I don't want to fork their teams and have multiple people coding different stacks. They don't want the vendor lock in, and so you're seeing a lot of people pulling back on premises building their own stacks, deploying in the cloud and having a seamless operation. What is your definition of hybrid? Where do you see hybrid going? And how important is it? Have a hybrid strategy. >> So I think the key successfactors of a hybrid strategy is that standards standardization is a big topic. So we think that a service platform that to secure that like the SD when secure service platform rebuilt, needs to be standardized on operational level, but also from a baseline security and detection level. And this means that if you run and create your own work, those on Prem you need to have the same security and standard security and deployment standard for the clout and have the seamless security primary perimeter and level off security no matter where these these deployments are. And the second factor of this is actually how do you ensure a secure data transfer between those different workloads? And this is where S T win comes into play, which acts as a fabric together with when backbone, where we connect all those pieces together in a secure fashion >> where it's great to have you on the Q and sharing your insight on the industry. Let's get into your company. Open systems. You guys provide an integrated solution for Dev Ops and Secure Service and Security Platform. Take a minute to talk about the innovations that you guys were doing because you guys talk a lot about Casby. Talk a lot about integrated esti when but first define what Casby is for. The audience doesn't know what Casby is. C. A S B. It's kicked around all of the security conscious of your new to security. It's an acronym that you should pay attention to so defined casby and talk about your solution. >> Eso casby isn't theory. Aviation means cloud access security we broker. So it's actually becoming this centralized orchestrator that that allows and defines access based on a trust level. So saying, um, first of all, it's between networks saying I have a mobile workforce accessing SAS or I s applications. Can't be it in the middle to provide security and visibility about Where's my data moving? Where's married? Where do I have exposure off off GDP, our compliance or P C. I or he power risks And where is it exposed to, Which is a big deal on it's kind of the lowest level to start with, But then it goes further by. You can use the Casby to actually pull in data that that is about I s were close to toe identified data that's being addressed and stored. So are there any incidentally, a shared data artifacts that are actually critical to the business? And are they shared with extra resource is and then going one step further, where we then have a complete zero trust access model where we say we know exactly who can talkto which application at any time on give access to. But as everything this needs to be is in embedded in an evolution >> and the benefit ultimately goes to the SAS applications toe, have security built in. >> That's the first thing that you need to tackle. Nowadays, it's get your sass, cloud security or policy enforced on, but without disrupting service on business on to actually empower business and not to block and keep out the business >> can make us the classic application developer challenge, which is? They love to co they love the build applications, and what cloud did with Dev Ops was abstracted away the infrastructure so that they didn't have to do all this configuration. Sister. Right? APs You guys air enabling that for security? >> Exactly. Yeah. So coming back to this multi protein product cloud would, which is not keeping up anymore with the current reality and needs of a business. So we took the approach and compared death ops with a great service platform. So we have engineers building the platform. That's Integrated Security Service Platform, which promotes Esti Wen managed Detection response and Caspi Service is in one on the one platform which is tightly integrated. But in the in the customer focus that we provide them on or Pecs model, which is pretty, very predictable, very transparent in their security posture. Make that a scalable platform to operate and expand their business on. >> And that's great. Congratulations. I wanna go back for the final point here to round up the interview for the I T. Folks watching or, um, folks who have to implement multi cloud and hybrid cloud they're sitting there could be a cloud architect that could be an I T. Operations or 90 pro. They think multi cloud this in hybrid club. This is the environment. They have to get their arms around. How? What >> should they >> be thinking about? Around multi cloud and hybrid cloud. What is it, really? What's the reality now? What >> should they be considering for evaluation? What are some of the key things that that should be on their mind when they're dealing with hybrid cloud and all the opportunity around it? >> So I think they're they're like, four key pieces. Oneness. Um, they think they still have to start to think strategic. So what? It's a platform and a partner That helps them to plan ahead for the next 3 to 5 years in a way that they can really focus on what their business needs are. This is the scalability aspect. Secondly, it's a do. We have a network on security, our architecture that allows me to grow confidently and go down different venues to to actually adopt multi clouds without worrying about the security implication behind it. Too much, uh, and to implement it. And third is have this baseline and have this standardized security posture around wherever the data is moving, being at Mobil's being it SAS or being on Prem and in clouds workloads, the fourth pieces again, reading, thinking off where did you spend most of my time? Where do I create? Create value by by defining this framework so it really can create a benefit and value for the enterprise? Because if you do it not right your not right. You will have a way. You will end up with a an architecture that will break the business and not accelerated. >> Or it's made head of product that open systems here inside the Cube studios. Um, great job. Must love your job. You got the keys. A lot of pressure. Security being a product. Head of product for security companies. A lot of pressure before we wrap up. Just give a quick plug for the company. You guys hiring you have a new office space here in Redwood City. Looks beautiful. Give a quick shared play for the company. >> Yeah. So open systems the great company to work with. We're expanding in the U. S. On also, Amy, uh, with all the work force. So we're hiring. So go on our website. We have a lot off open positions, exciting challenges in a growth or into workspace. Andi. Yeah. As you said, security at the moment, it's one of the hottest areas to be in, especially with all the fundamental changes happening in the enterprise and architecture. I d landscape. So yeah, >> and clouds securing specifically. Not just in point. The normal stuff that people used to classify as hot as hot as Hades could be right now. But thanks for coming on. Strong insights. I'm jumping with Cuba here in Palo Alto with more Morris Man is the head of product management for open systems. Thanks for watching.

Sand Hill Road to the heart of Silicon Valley it's the cute presenting the people first Network insights from entrepreneurs and tech leaders when I'm John Ferrari with the cube I'm the co-host also the founder of Silicon angle me we are here on Sand Hill Road at Mayfield for the people first conversations I'm John furry with the cube weird Allen being global CTO and IT of innovation at Procter & Gamble formerly the same position at coca-cola has done a lot of innovations over the years also a reference account back in the day for web methods when they call on the financing of that one of the most famous IPOs which set the groundwork for web services and has a lot of history going back to the 80s we were just talking about it welcome this conversation on people first network thank you for inviting me so the people first network is all about people and it's great to have these conversations you're old school you were doing some stuff back on the 80s talking about doing RPA 3270 you've been old school here yeah I go back to APL as my first programming language went through the the third generation languages and of course the old 30 to 70 emulation which is what we know today is our PA one of the cool things I was excited to hear some of your background around your history web methods you were a reference call for venture financing of web methods which was financed on the credit card for the two founders husband and wife probably one of the most successful I appeals but more importantly at the beginning of the massive wave that we now see with web services this is early days this was very early days when I was at DHL we were looking at what we're gonna do for the future and in fact we built one of the first object-oriented frameworks in C++ at the time because that was all that was available to us or the best was available we rejected Corbis and we said look if we're gonna go this direction and one of my developers found web methods found philip merrick it was literally at the time working out of his garage and had this technology that was going to allow us to start moving into this object-oriented approach and I remember the day Robin Vasan form a field called and said hey I'm thinking about investing in web methods what do you think about it and not only was it one of the first startups that I ever worked with but it's actually the first time I met anybody in the venture community way back in nineteen I think 1997 is what had happened and that was a computing time in computer science and then the rest is history and then XML became what it became lingua franca for the web web services now Amazon Web Services you see in cloud computing micro services kubernetes service meshes this is a new stack that's being developed in the cloud and this is the new generation you've seen many waves and at Procter & Gamble formerly coca-cola you're the same role you have to navigate this so what's different now what's different say 15 20 years ago how are you looking at this market how you implementing some of the IT and infrastructure and software development environments I think what's change is you know when we got into the the early 2000s Nicolas car came out and said IT doesn't matter and I think anybody that was an IT had this very objectionable response initially but when you step back and you looked at it what she realised was in many cases IT didn't matter and those were those areas that were non-competitive those things that could be commoditized and it was completely right the reality is IT has always mattered that technology does give you a competitive advantage in certain markets and certain capabilities for a company but back then we had to go out and we had to purchase equipment we had to configure the equipment there was a lot of heavy lifting in corporations just did not want to invest the capital so they outsource the stuff wholesale I think General Motors was the first one that just out sourced everything and was followed by other companies including Procter & Gamble the decision at that time was probably right but as we go forward and we see what's happened with corporations we see the valuations of corporations the amount of return on equity based on the on the capital that's being invested we can see that data is important we can see that agility flexibility is key to competing in the future and therefore what's changing is we are now moving into an age of away from ERP so we're moving into an age away from these outsource providers on a wholesale basis and using it selectively to drive down costs and allowing us to free up money in order to invest in those things that are most important to the company so you're saying is that the folks naturally the server consolidation they've bought all this gear all this software over you know 18-month rollouts before they even see the first implementation those are the glory days of gravy trains for the vendor's yeah not good for the practitioners but you're saying that the folks who reinvested are investing in IT as a core competency are seeing a competitive advantage they certainly are you know I think I made the statement front of a number of the vendors and a few years ago and people were not comfortable with it but what I said was like you gone are the ears of these 10 20 million dollar deals gone are the ears of the million two million dollar deals we're in the ear of throwaway technology I need to be able to use and invest in technology for a specific purpose for a specific period of time and be able to move on to the next one it's the perfect time for startups but startups shouldn't be looking at the big picture they should be looking at the tail on these investments let me try things let me get out in the market let me have a competitive advantage in marketing which is most important to me or in supply chain those are the areas that I can make a difference with my consumers and my customers and that's where the investments have to go so just in constant of throwaway technology and you know you'd also be said of you know being more agile though interesting to look at the cloud SAS business model if Amazon for us I think that's the gold standard where they actually lower prices on a per unit basis and increase more services and value but in the aggregate you're still paying more but you have more flexibility and that's kind of a good tell sign so that you're seeing that ability to reuse either the infrastructure that's commoditized to shift the value this is are people having a hard time understanding this so I want to get your reaction to how should I tea leaders understand that the wave of cloud the wave of machine learning what a I can bring to the table these new trends how how should leaders figure this out is there a playbook as there are things that you've learned that you could share you know that there's really a playbook it's still early on everyone's looking for one cloud fits all the reality is whether it's Google whether it's Amazon whether it's Microsoft whether it's IBM all clouds are different all clouds have our special are purpose-built for different solutions and I think as an IT leader you have to understand you're not going to take everything and lift and shift that's what we used to do we're now in the position where we have to deconstruct our business we have to understand the services the capabilities that we want to bring to market and not lock ourselves in its building blocks its Legos we're in the period of Legos putting these things together in different manners in order to create new solutions if we try to lock ourselves in the past of how we've always financed things how we've always built things then we're not going to be any better off in the new world than we were in the old alan i want to get your reaction to to two words our PA and containers well as i said earlier our PA is 3270 emulation from the 1980s and for those of us that are old enough to remember that i I still remember scraping the the old green screens and and putting a little process around it it what's nice though is that we have moved forward machine learning and AI and other other capabilities are now present so that we can do this I actually played around with neural nets probably back in 1985 with an Apollo computer so that tells you how far back I go but technologies change processing speeds change everything the technology trends are allowing us to now to do these things the question that we have is also a moral dilemma is are we trying to replace people or are we trying to make improvements and I think that you don't look at our PA as a way simply to replace work it's a way to enhance what we're doing in order to create new value for the customer or for the consumer in our case I think in the in the area of containers you know again been around for a while been around for a while it's just another another approach that we're not we don't want lock in we don't want to be dependent on specific vendors we want the portability we want the flexibility and I think as we start moving containers out to the edge that's where we're gonna start seeing more value as the business processes and the capabilities are spread out again the idea of centralized cloud computing is very good however it doesn't need to be distributed what's interesting I find about the conversation here is that you mentioned a couple things earlier you mentioned the vendors locking you in and saying here's the ERP buy this and with this you have to have a certain process because this is our technology you got to use it this way and you were slave to their their tech on your process serve their tech with containers and say orchestration you now the ability to manage workloads differently and so an interesting time there's that does that change the notion of rip and replace lift and shift because if I a container I could just put a container around it and not have to worry about killing the old to bring in the new this is on the fundamental kind of debate going on do you have to kill the old to bring in the new well you need to kill the old sometimes just because it's old it's time to go other times you do need to repackage it and other times I hate to say it you do need to lift and shift if you're a legacy organization they have a long history such as most of the manufacturing companies in the world today we can't get rid of old things that quickly we can't afford to a lot of the processes are still valid as we're looking to the future we certainly are breaking these things down into services we're looking to containerize these things we're looking to move them into areas where we can compute where we want to when we want to at the right price we're just at the beginning of that journey in the industry I still think there's about five to seven years to go to get there now I'll talk about the role of the edge role of cloud computing as it increases the surface area of IT potentially combined with the fact that IT is a competitive advantage bring those two notions together what's the role of the people because you used to have people that would just manage the rack and stack I'm provisioning some storage I'm doing this as those stovepipes start to be broken down when the service area of IT is bigger how does that change the relationship of the people involved you know you win with people at the end of the day you don't win with technology you know a company of such as Proctor and Gamble and I think what's happened if you look at historically the ERP vendors came out probably 99 2000 and it used to be and remember these I'm old to be honest with you but I remember that we used to have to worry about the amount of memory we were managing we had to be able to tune databases in all of this and the vendors went ahead and they started automating all those processes with the idea that we can do it better than a human and a lot of people a lot of the technology talent then started leaving the organizations and organizations were left with people that we're focusing on process and people a process excuse me process and the the the business which is very good because you need the subject matter experts going forward we have to reinvest in people our people have the subject matter expertise they have some technology skills that they've developed over the years and they've enhanced it on their own but we're in this huge change right now where we have to think different we have to act different and we have to behave differently so doubling down on people is the best thing that you can do and the old outsource model of outsourcing everything kind of reduces the core competency of the people yeah now you got to build it back up again exactly I mean we when we left at P&G 15 years ago about 5,000 people left the organization when we outsource them when we outsource the technology to our partner at that time now it's time we're starting to bring it back in we've brought the network team back in and stood up our own sock in our own NOC for the first time in years just this past year we're doing the same thing by moving things out to the cloud more and more is moving to the cloud we're setting up our own cloud operations and DevOps capabilities I can tell you having been on both sides of it it's a lot harder to be able to bring it back in than it is to take it out and you know interesting proctoring games well known as being a very intimate with the data very data-driven company the data is valuable and having that infrastructure NIT to support the data that's important what's your vision on the data future of the data in the world well I think data is has a value to itself but when you tie it to products you tie it to your customers and consumers it's even more valuable and we're in the process now of things that we used to do completely internally with our own technology or technology partners we're now moving all of that out into the cloud now and I must say cloud its clouds plural again going back to certain clouds are better for certain things so you're seeing a dramatic shift we have a number of projects underway that are in the cloud space but for customers and consumers number of cloud projects in the way for our own internal employees it's all about collecting the data processing the data protecting that data because we take that very seriously and being able to use it to make better decisions I want to get your reaction on two points and two quite lines of questioning here because I think it's very relevant on the enterprise side you're a big account for the big whales the old ERP so the big cloud providers so people want to sell you stuff at the same time you're also running IT innovation so you want to play with the new shiny new toys and experiments start up so if startups want to get your attention and big vendors want to sell to you the tables have kind of turned it's been good this is a good it's a good buyers market right now in my opinion so what's your thoughts on that so you know start with the big companies what do they got to do to win you over well they got to look like how they got to engage and for startups how do they get your attention I think the biggest thing for either startup or large companies understanding the company you're dealing with whether it's Procter & Gamble whether it's coca-cola whether it was DHL if you understand how I operate if you understand how decisions are made if you understand how I'm organized that's gonna give you an a competitive advantage now the large corporations understand this because they've been around through the entire journey of computing with these large corporations the startups need to step back and take a look and see where do I add that competitive advantage many times when you're selling to a large corporate you're not selling to a large corporate you're selling two divisions you're selling two functions and that's how you get in I've been working with startups as I said back since web methods and it was just a two-person company but we brought them in for a very specific capability I then took web methods with me when I left DHL I took them to GE when I left GE I took them to ing because I trusted them and they matured along the way I think finding that right individual that has the right need is the key and working it slowly don't think you're gonna close the deal fast if you're start-up know it's gonna take some time and decide if that's in your best interest or not slow things down focus don't try to boil the ocean over too many of them try to boy you're right Jimmy people try to boil the ocean get that win one win will get you another one which will get you another win and that's the best way to succeed get that beachhead Ellen so if you could go back and knowing what you know now and you're breaking into the IT leadership's position looking forward what would you do differently can do a mulligan hey what would you do differently well you know I think one of the one of the dangers of being an innovator in IT is that you really are risk taker and taking risks is counterculture to corporations so I think I would probably try to get by in a little bit more I mean someone once told me that you know you see the force through the trees before anybody else does your problem is you don't bring people along with you so I think I would probably slow down a little bit not in the adoption of technology but I'd probably take more time to build the case to bring people along a lot faster so that they can see it and they can take credit for it and they can move that needle as well yeah always sometimes early adopters and pioneers had the arrows on the back as they say I've had my share now thanks for sharing your experience what's next for you what's the next mountain you're going to climb well I think that as we're looking forward latency is still an issue you know we have to find a way to defeat latency we're not going to do it through basic physics so we're gonna have to change our business models change our technology distribution change everything that we're doing consumers and customers are demanding instant access to enhanced information through AI and m/l right at the point where they want it and that means we're now dealing with milliseconds and nanoseconds of having to make decisions so I'm very interested in looking at how are we going to change consumer behavior and customer behavior by combining a lot of the new technology trends that are underway and we have to do it also with the security in mind now before we security was secondary now as we're seeing with all of the hacks and the malware and everything that's going on in the world we have to go in and think a little bit different about how we're gonna do that so I'm very much engaged in working with a lot of startups I live here in the Silicon Valley I commute to Cincinnati for Procter & Gamble I'm spending time and just flew in from tel-aviv literally an hour ago I'm in the middle of all the technology hotspots trying to find that next big thing and it's a global it's global innovation happens everywhere and anywhere the venture community if you look at the amount of funds it used to be invested out of the Silicon Valley versus the rest of the world it continues to be on a downward trend not because the funding isn't here in the Silicon Valley but because everyone is recognizing that innovation and technology is developed everywhere in the world Alan Bain was the CTO global CTO and IT innovator there at the cube conversation here in San Hill Road I'm John for a year thanks for watching you