>>The Cube Presents UI Path Forward five. Brought to you by UI Path, >>Everybody. We're back in Las Vegas. The cube's coverage we're day one at UI Path forward. Five. Pascal Borne is here. He's an expert and bestselling author in the topic of AI and automation and the book Intelligent Automation. Welcome to the world of Hyper Automation, the first book on the topic. And of course, Ray Wong is back on the cube. He's the founder, chairman and principal analyst, Constellation Reese, also bestselling author of Everybody Wants To Rule the World. Guys, thanks so much for coming on The Cubes. Always a pleasure. Ray Pascal, First time on the Cube, I believe. >>Yes, thank you. Thanks for the invitation. Thank you. >>So what is artificial about artificial intelligence, >>For sure, not people. >>So, okay, so you guys are both speaking at the conference, Ray today. I think you're interviewing the co CEOs. What do you make of that? What's, what are you gonna, what are you gonna probe with these guys? Like, how they're gonna divide their divide and conquer, and why do you think the, the company Danielle in particular, decided to bring in Rob Sland? >>Well, you know what I mean, Like, you know, these companies are now at a different stage of growth, right? There's that early battle between RPA vendors. Now we're actually talking something different, right? We're talking about where does automation go? How do we get the decisioning? What's the next best action? That's gonna be the next step. And to take where UI path is today to somewhere else, You really want someone with that enterprise cred and experience the sales motions, the packages, the partnership capabilities, and who else better than Roblin? He, that's, he's done, he can do that in his sleep, but now he's gotta do that in a new space, taking whole category to another level. Now, Daniel on the other hand, right, I mean, he's the visionary founder. He put this thing from nothing to where he is today, right? I mean, at that point you want your founder thinking about the next set of ideas, right? So you get this interesting dynamic that we've seen for a while with co CEOs, those that are doing the operations, getting the stuff out the door, and then letting the founders get a chance to go back and rethink, take a look at the perspective, and hopefully get a chance to build the next idea or take the next idea back into the organization. >>Right? Very well said. Pascal, why did you write your book on intelligent automation and, and hyper automation, and what's changed since you've written that book? >>So, I, I wrote this book, An Intelligent Automation, two years ago. At that time, it was really a new topic. It was really about the key, the, the key, the key content of the, of the book is really about combining different technologies to automate the most complex end to end business processes in companies. And when I say capabilities, it's, we, we hear a lot about up here, especially here, robotic process automation. But up here alone, if you just trying to transform a company with only up here, you just fall short. Okay? A lot of those processes need more than execution. They need language, they need the capacity to view, to see, they need the capacity to understand and to, and to create insights. So by combining process automation with ai, natural language processing, computer vision, you give this capability to create impact by automating end to end processes in companies. >>I, I like the test, what I hear in the keynote with independent experts like yourself. So we're hearing that that intelligent automation or automation is a fundamental component of digital transformation. Is it? Or is it more sort of a back office sort of hidden in inside plumbing Ray? What do you think? >>Well, you start by understanding what's going on in the process phase. And that's where you see discover become very important in that keynote, right? And that's where process mining's playing a role. Then you gotta automate stuff. But when you get to operations, that's really where the change is going to happen, right? We actually think that, you know, when you're doing the digital transformation pieces, right? Analytics, automation and AI are coming together to create a concept we call decision velocity. You and I make a quick decision, boom, how long does it take to get out? Management committee could free forever, right? A week, two months, never. But if you're thinking about competing with the automation, right? These decisions are actually being done a hundred times per second by machine, even a thousand times per second. That asymmetry is really what people are facing at the moment. >>And the companies that are gonna be able to do that and start automating decisions are gonna be operating at another level. Back to what Pascal's book talking about, right? And there are four questions everyone has to ask you, like, when do you fully intelligently automate? And that happens right in the background when you augment the machine with a human. So we can find why did you make an exception? Why did you break a roll? Why didn't you follow this protocol so we can get it down to a higher level confidence? When do you augment the human with the machine so we can give you the information so you can act quickly. And the last one is, when do you wanna insert a human in the process? That's gonna be the biggest question. Order to cash, incident or resolution, Hire to retire, procure to pay. It doesn't matter. When do you want to put a human in the process? When do you want a man in the middle, person in the middle? And more importantly, when do you want insert friction? >>So Pascal, you wrote your book in the middle of the, the pandemic. Yes. And, and so, you know, pre pandemic digital transformation was kind of a buzzword. A lot of people gave it lip service, eh, not on my watch, I don't have to worry about that. But then it became sort of, you're not a digital business, you're out of business. So, so what have you seen as the catalyst for adoption of automation? Was it the, the pandemic? Was it sort of good runway before that? What's changed? You know, pre isolation, post isolation economy. >>You, you make me think about a joke. Who, who did your best digital transformation over the last years? The ceo, C H R O, the Covid. >>It's a big record ball, right? Yeah. >>Right. And that's exactly true. You know, before pandemic digital transformation was a competitive advantage. >>Companies that went into it had an opportunity to get a bit better than their, their competitors during the pandemic. Things have changed completely. Companies that were not digitalized and automated could not survive. And we've seen so many companies just burning out and, and, and those companies that have been able to capitalize on intelligent automation, digital transformations during the pandemic have been able not only to survive, but to, to thrive, to really create their place on the market. So that's, that has been a catalyst, definitely a catalyst for that. That explains the success of the book, basically. Yeah. >>Okay. Okay. >>So you're familiar with the concept of Stew the food, right? So Stew by definition is something that's delicious to eat. Stew isn't simply taking one of every ingredient from the pantry and throwing it in the pot and stirring it around. When we start talking about intelligent automation, artificial intelligence, augmented intelligence, it starts getting a bit overwhelming. My spy sense goes off and I start thinking, this sounds like mush. It doesn't sound like Stew. So I wanna hear from each of you, what is the methodical process that, that people need to go through when they're going through digital trans transmission, digital transformation, so that you get delicious stew instead of a mush that's just confused everything in your business. So you, Ray, you want, you want to, you wanna answer that first? >>Yeah. You know, I mean, we've been talking about digital transformation since 2010, right? And part of it was really getting the business model, right? What are you trying to achieve? Is that a new type of offering? Are you changing the way you monetize something? Are you taking existing process and applying it to a new set of technologies? And what do you wanna accomplish, right? Once you start there, then it becomes a whole lot of operational stuff. And it's more than st right? I mean, it, it could be like, well, I can't use those words there. But the point being is it could be a complete like, operational exercise. It could be a complete revenue exercise, it could be a regulatory exercise, it could be something about where you want to take growth into the next level. And each one of those processes, some of it is automation, right? There's a big component of it today. But most of it is really rethinking about what you want things to do, right? How do you actually make things to be successful, right? Do I reorganize a process? Do I insert a place to do monetization? Where do I put engagement in place? How do I collect data along the way so I can build better feedback loop? What can I do to build the business graph so that I have that knowledge for the future so I can go forward doing that so I can be successful. >>The Pascal should, should, should the directive be first ia, then ai? Or are these, are these things going to happen in parallel naturally? What's your position on that? Is it first, >>So it, so, >>So AI is part of IA because that's, it's, it's part of the big umbrella. And very often I got the question. So how do you differentiate AI in, I a, I like to say that AI is only the brain. So think of ai cuz I'm consider, I consider AI as machine learning, Okay? Think of AI in a, like a brain near jar that only can think, create, insight, learn, but doesn't do anything, doesn't have any arms, doesn't have any eyes, doesn't not have any mouth and ears can't talk, can't understand with ia, you, you give those capabilities to ai. You, you basically, you create a cap, the capability, technological capability that is able to do more than just thinking, learning and, and create insight, but also acting, speaking, understanding the environment, viewing it, interacting with it. So basically performing these, those end to end processes that are performed currently by people in companies. >>Yeah, we're gonna get to a point where we get to what we call a dynamic scenario generation. You're talking to me, you get excited, well, I changed the story because something else shows up, or you're talking to me and you're really upset. We're gonna have to actually ch, you know, address that issue right away. Well, we want the ability to have that sense and respond capability so that the next best action is served. So your data, your process, the journey, all the analytics on the top end, that's all gonna be served up and changed along the way. As we go from 2D journeys to 3D scenarios in the metaverse, if we think about what happens from a decentralized world to decentralized, and we think about what's happening from web two to web three, we're gonna make those types of shifts so that things are moving along. Everything's a choose your end venture journey. >>So I hope I remember this correctly from your book. You talked about disruption scenarios within industries and within companies. And I go back to the early days of, of our industry and East coast Prime, Wang, dg, they're all gone. And then, but, but you look at companies like Microsoft, you know, they were, they were able to, you know, get through that novel. Yeah. Ibm, you know, I call it survived. Intel is now going through their, you know, their challenge. So, so maybe it's inevitable, but how do you see the future in terms of disruption with an industry, Forget our industry for a second, all industry across, whether it's healthcare, financial services, manufacturing, automobiles, et cetera. How do you see the disruption scenario? I'm pretty sure you talked about this in your book, it's been a while since I read it, but I wonder if you could talk about that disruption scenario and, and the role that automation is going to play, either as the disruptor or as the protector of the incumbents. >>Let's take healthcare and auto as an example. Healthcare is a great example. If we think about what's going on, not enough nurses, massive shortage, right? What are we doing at the moment? We're setting five foot nine robots to do non-patient care. We're trying to capture enough information off, you know, patient analytics like this watch is gonna capture vitals from a going forward. We're doing a lot what we can do in the ambient level so that information and data is automatically captured and decisions are being rendered against that. Maybe you're gonna change your diet along the way, maybe you're gonna walk an extra 10 minutes. All those things are gonna be provided in that level of automation. Take the car business. It's not about selling cars. Tesla's a great example. We talk about this all the time. What Tesla's doing, they're basically gonna be an insurance company with all the data they have. They have better data than the insurance companies. They can do better underwriting, they've got better mapping information and insights they can actually suggest next best action do collision avoidance, right? Those are all the things that are actually happening today. And automation plays a big role, not just in the collection of that, that information insight, but also in the ability to make recommendations, to do predictions and to help you prevent things from going wrong. >>So, you know, it's interesting. It's like you talk about Tesla as the, the disrupting the insurance companies. It's almost like the over the top vendors have all the data relative to the telcos and mopped them up for lunch. Pascal, I wanna ask you, you know, the topic of future of work kind of was a bromide before, but, but now I feel like, you know, post pandemic, it, it actually has substance. How do you see the future of work? Can you even summarize what it's gonna look like? It's, it's, Or are we here? >>It's, yeah, it's, and definitely it's, it's more and more important topic currently. And you, you all heard about the great resignation and how employee experience is more and more important for companies according to have a business review. The companies that take care of their employee experience are four times more profitable that those that don't. So it's a, it's a, it's an issue for CEOs and, and shareholders. Now, how do we get there? How, how do we, how do we improve the, the quality of the employee experience, understanding the people, getting information from them, educating them. I'm talking about educating them on those new technologies and how they can benefit from those empowering them. And, and I think we've talked a lot about this, about the democratization local type of, of technologies that democratize the access to those technologies. Everyone can be empowered today to change their work, improve their work, and finally, incentivization. I think it's a very important point where companies that, yeah, I >>Give that. What's gonna be the key message of your talk tomorrow. Give us the bumper sticker, >>If you will. Oh, I'm gonna talk, It's a little bit different. I'm gonna talk for the IT community in this, in the context of the IT summit. And I'm gonna talk about the future of intelligent automation. So basically how new technologies will impact beyond what we see today, The future of work. >>Well, I always love having you on the cube, so articulate and, and and crisp. What's, what's exciting you these days, you know, in your world, I know you're traveling around a lot, but what's, what's hot? >>Yeah, I think one of the coolest thing that's going on right now is the fact that we're trying to figure out do we go to work or do we not go to work? Back to your other point, I mean, I don't know, work, work is, I mean, for me, work has been everywhere, right? And we're starting to figure out what that means. I think the second thing though is this notion around mission and purpose. And everyone's trying to figure out what does that mean for themselves? And that's really, I don't know if it's a great, great resignation. We call it great refactoring, right? Where you work, when you work, how we work, why you work, that's changing. But more importantly, the business models are changing. The monetization models are changing macro dynamics that are happening. Us versus China, G seven versus bricks, right? War on the dollar. All these things are happening around us at this moment and, and I think it's gonna really reshape us the way that we came out of the seventies into the eighties. >>Guys, always a pleasure having folks like yourself on, Thank you, Pascal. Been great to see you again. All right, Dave Nicholson, Dave Ante, keep it right there. Forward five from Las Vegas. You're watching the cue.

(upbeat music) >> We're back. This is Dave Vellante of theCUBE, and we're here with Ray Wang, who just wrote a book reminiscent of the famous Tears for Fears song, Everybody Wants to Rule the World: Surviving and Thriving in a World of Digital Giants. Ray, great to see again, man. >> What's going on, man, how are you? >> Oh great, thanks for coming on. You know, it was crazy, been crazy, but it's good to see you face-to-face. >> Ray: This is, we're in the flesh, it's live, we're having conversations, and the information that we're getting is cut right. >> Dave: Yeah, so why did you write this book and how did you find the time? >> Hey, we're in the middle of pandemic. No, I wrote the book because what was happening was digital transformation efforts, they're starting to pop up, but companies weren't always succeeding. And something was happening with digital giants that was very different. They were winning in the marketplace. And never in the form of, if you think about extreme capitalism, if we think about capitalism in general, never in the history of capitalism have we seen growth of large companies. They get large, they fall apart, they don't have anything to build, they can't scale. Their organizations are in shambles. But what happened? If you look at 2017, the combined market cap of the FAANGs and Microsoft was 2 trillion. Today, it is almost 10.2 trillion. It's quintupled. That's never happened. And there's something behind that business model that they put into place that others have copied, from the Airbnbs to the Robloxes to what's going to happen with like a Starlink, and of course, the Robinhoods and you know, Robinhoods and Coinbases of the world. >> And the fundamental premise is all around data, right? Putting data at the core, if you don't do that, you're going to fly blind. >> It is and the secret behind that is the long-term platforms called data-driven digital networks. These platforms take the ability, large memberships, our large devices, they look at that effect. Then they look at figuring out how to actually win on data supremacy. And then of course, they monetize off that data. And that's really the secret behind that is you've got to build that capability and what they do really well is they dis-intermediate customer account control. They take the relationships, aggregate them together. So food delivery app companies are great example of that. You know, small businesses are out there that hundreds and thousands of customers. Today, what happens? Well, they've been aggregated. Millions of customers together into food delivery app. >> Well, I think, you know, this is really interesting what you're saying, because if you think about how we deal with Netflix, we don't call the Netflix sales department or the marketing department of the service, just one interface, the Netflix. So they've been able to put data at their core. Can incumbents do that? How can they do that? >> Incumbents can definitely do that. And it's really about figuring out how to automate that capture. What you really want to do is you start in the cloud, you bring the data together, and you start putting the three A's, analytics, automation, and AI are what you have to be able to put into place. And when you do do that, you now have the ability to go out and figure out how to create that flywheel effect inside those data-driven digital networks. These DDDNS are important. So in Netflix, what are they capturing? They're looking at sentiment, they're looking at context. Like why did you interact with, you know, one title versus another? Did you watch Ted Lasso? Did you switch out of Apple TV to Netflix? Well, I want to know why, right? Did you actually jump into another category? You switched into genres. After 10:00 p.m., what are you watching? Maybe something very different than what you're watching at 2:00 p.m.. How many members are in the home, right? All these questions are being answered and that's the business graph behind all this. >> How much of this is kind of related to the way organizations or companies are organized? In other words, you think about, historically, they would maybe put the process at the core or the, in a bottling plant, the manufacturing facility at the core and the data's all dispersed. Everybody talks about silos. So will AI be the answer to that? Will some new database, Snowflake? Is that the answer? What's the answer to sort of bringing that data together and how do you deal with the organizational inertia? >> Well, the trick to it is really to have a single plane to be able to access that data. I don't care where the data sits, whether it's on premise, whether it's in the cloud, whether it's in the edge, it makes no difference. That's really what you want to be able to do is bring that information together. But the glue is the context. What time was it? What's the weather outside? What location are you in? What's your heart rate? Are you smiling, right? All of those factors come into play. And what we're trying to do is take a user, right? So it could be a customer, a supplier, a partner, or an employee. And how do they interact with an order doc, an invoice, an incident, and then apply the context. And what we're doing is mining that context and information. Now, the more, back to your other point on self service and automation, the more you can actually collect those data points, the more you can capture that context, the more you're able to get to refine that information. >> Context, that's interesting, because if you think about our operational systems, we've contextualized most of them, whether it's sales, marketing, logistics, but we haven't really contextualized our data systems, our data architecture. It's generally run by a technical group. They don't necessarily have the line of business context. You see what HPE is doing today is trying to be inclusive of data on prem. I mentioned Snowflake, they're saying no way. Frank Slootman says we're not going on prem. So that's kind of interesting. So how do you see sort of context evolving with the actually the business line? Not only who has the context actually can, I hate to use the word, but I'm going to, own the data. >> You have to have a data to decisions pathway. That data decisions pathway is you start with all types of data, structured, unstructured, semi-structured, you align it to a business process as an issue, issue to resolution, order to cash, procure to pay, hire to retire. You bring that together, and then you start mining and figuring out what patterns exist. Once you have the patterns, you can then figure out the next best action. And when you get the next best action, you can compete on decisions. And that becomes a very important part. That decision piece, that's going to be automated. And when we think about that, you and I make a decision one per second, how long does it get out of management committee? Could be a week, two weeks, a quarter, a year. It takes forever to get anything out of management committee. But these new systems, if you think about machines, can make decisions a hundred times per second, a thousand times per second. And that's what we're competing against. That asymmetry is the decision velocity. How quickly you can make decisions will be a competitive weapon. >> Is there a dissonance between the fact that you just mentioned, speed, compressing, that sort of time to decision, and the flip side of that coin, quality, security, governance. How do you see squaring that circle? >> Well, that's really why we're going to have to make that, that's the automated, that's the AI piece. Just like we have all types of data, we got to spew up automated ontologies, we got to spit them up, we got to be using, we've got to put them back into play, and then we got to be able to take back into action. And so you want enterprise class capabilities. That's your data quality. That's your security. That's the data governance. That's the ability to actually take that data and understand time series, and actually make sure that the integrity of that data is there. >> What do you think about this sort of notion that increasingly, people are going to be building data products and services that can be monetized? And that's kind of goes back to context, the business lines kind of being responsible for their own data, not having to get permission to add another data source. Do you see that trend? Do you see that decentralization trend? Two-part question. And where do you see HPE fitting into that? >> I see, one, that that trend is definitely going to exist. I'll give you an example. I can actually destroy the top two television manufacturers in the world in less than five years. I could take them out of the business and I'll show you how to do it. So I'm going to make you an offer. $15 per month for the next five years. I'm going to give you a 72 inch, is it 74? 75 inch, 75 inch smart TV, 4k, big TV, right? And it comes with a warranty. And if anything breaks, I'm going to return it to you in 48 hours or less with a brand new one. I don't want your personal information. I'm only going to monitor performance data. I want to know the operations. I want to know which supplier lied to me, which components are working, what features you use. I don't need to know your personal viewing habits, okay? Would you take that deal? >> TV is a service, sure, of course I would. >> 15 bucks and I'm going to make you a better deal. For $25 a month, you get to make an upgrade anytime during that five-year period. What would happen to the two largest TV manufacturers if I did that? >> Yeah, they'd be disrupted. Now, you obviously have a pile of VC money that you're going to do that. Will you ever make money at that model? >> Well, here's why I'll get there and I'll explain. What's going to happen is I lock them out of the market for four to five years. I'm going to take 50 to 60% of the market. Yes, I got to raise $10 billion to figure out how to do that. But that's not really what happens at the end. I become a data company because I have warranty data. I'm going to buy a company that does, you know, insurance like in Asurion. I'm going to get break/fix data from like a Best Buy or a company like that. I'm going to get at safety data from an underwriter's lab. It's a competition for data. And suddenly, I know those habits better than anyone else. I'm going to go do other things more than the TV. I'm not done with the TV. I'm going to do your entire kitchen. For $100 a month, I'll do a mid range. For like $500 a month, I'm going to take your dish washer, your washer, your dryer, your refrigerator, your range. And I'll do like Miele, Gaggenau, right? If you want to go down Viking, Wolf, I'll do it for $450 a month for the next 10 years. By year five, I have better insurance information than the insurance companies from warranty. And I can even make that deal portable. You see where we're going? >> Yeah so each of those are, I see them as data products. So you've got your TV service products, you've got your kitchen products, you've got your maintenance, you know, data products. All those can be monetized. >> And I went from TV manufacturer to underwriter overnight. I'm competing on data, on insurance, and underwriting. And more importantly, here's the green initiative. Here's why someone would give me $10 billion to do it. I now control 50% of all power consumption in North America because I'm also going to do HVAC units, right? And I can actually engineer the green capabilities in there to actually do better power purchase consumption, better monitoring, and of course, smart capabilities in those, in those appliances. And that's how you actually build a model like that. And that's how you can win on a data model. Now, where does HPE fit into that? Their job is to bring that data together at the edge. They bring that together in the middle. Then they have the ability to manage that on a remote basis and actually deliver those services in the cloud so that someone else can consume it. >> All right, so if you, you're hitting on something that some people have have talked about, but it's, I don't think it's widely sort of discussed. And that is, historically, if you're in an industry, you're in that industry's vertical stack, the sales, the marketing, the manufacturing, the R&D. You become an expert in insurance or financial services or whatever, you know, automobile manufacturing or radio and television, et cetera. Obviously, you're seeing the big internet giants, those 10 trillion, you know, some of the market caps, they're using data to traverse industries. We've never seen this before. Amazon in content, you're seeing Apple in finance, others going into the healthcare. So they're technology companies that are able to traverse industries. Never seen this before, and it's because of data. >> And it's the collapsing value chains. Their data value chains are collapsing. Comms, media, entertainment, tech, same business. Whether you sell me a live stream TV, a book, a video game, or some enterprise software, it's the same data value stream on multi-sided networks. And once you understand that, you can see retail, right? Distribution, manufacturing collapsed in the same kind of way. >> So Silicon Valley broadly defined, if I can include, you know, Microsoft and Amazon in there, they seem to have a dual disruption agenda, right? One is on the technology front, disrupting, you know, the traditional enterprise business. The other is they're disrupting industries. How do you see that playing out? >> Well the problem is, they're never going to be able to get into new industries going forward because of the monopoly power that people believe they have, and that's what's going on, but they're going to invest in creating joint venture startups in other industries, as they power the tools to enable other industries to jump and leap frog from where they are. So healthcare, for example, we're going to have AI in monitoring in ways that we never seen before. You can see devices enter healthcare, but you see joint venture partnerships between a big hyperscaler and some of the healthcare providers. >> So HPE transforming into a cloud company as a service, do you see them getting into insurance as you just described in your little digital example? >> No, but I see them powering the folks that are in insurance, right? >> They're not going to compete with their customers maybe the way that Amazon did. >> No, that's actually why you would go to them as opposed to a hyperscale that might compete with you, right? So is Google going to get into the insurance business? Probably not. Would Amazon? Maybe. Is Tesla in the business? Yeah, they're definitely in insurance. >> Yeah, big time, right. So, okay. So tell me more about your book. How's it being received? What's the reaction? What's your next book? >> So the book is doing well. We're really excited. We did a 20 city book tour. We had chances to meet everybody across the board. Clients we couldn't see in a while, partners we didn't see in a while. And that was fun. The reaction is, if you read the book carefully, there are $3 trillion market cap opportunities, $1000 billion unicorns that can be built right there. >> Is, do you have a copy for me that's signed? (audience laughing) >> Ray: Sorry (coughs) I'm choking on my makeup. I can get one actually, do you want one? >> Dave: I do, I want, I want one. >> Can someone bring my book bag? I actually have one, I can sign it right here. >> Dave: Yeah, you know what? If we have a book, I'd love to hold it. >> Ray: Do you have any here as well? >> So it's obviously you know, Everybody Wants to Rule the World: Surviving and Thriving in a world of Digital Giants, available, you know, wherever you buy books. >> Yeah, so, oh, are we still going? >> Dave: Yeah, yeah, we're going. >> Okay. >> Dave: What's the next book? >> Next book? Well, it's about disrupting those digital giants and it's going to happen in the metaverse economy. If we think about where the metaverse is, not just the hardware platforms, not just the engines, not just what's going on with the platforms around defy decentralization and the content producers, we see those as four different parts today. What we're going to actually see is a whole comp, it's a confluence of events that's going to happen where we actually bring in the metaverse economy and the stuff that Neal Stephenson was writing about ages ago in Snow Crash is going to come out real. >> So, okay. So you're laying out a scenario that the big guys, the disruptors, could get disrupted. It sounds like crypto is possibly a force in that disruption. >> Ray: Decentralized currencies, crypto plays a role, but it's the value exchange mechanisms in an Algorand, in an Ether, right, in a Cardano, that actually enables that to happen because the value exchange in the smart contracts power that capability, and what we're actually seeing is the reinvention of the internet. So you think, see things like SIOM pop-up, which actually is creating the new set of the internet standards, and when those things come together, what we're actually going to move from is the seller is completely transparent, the buyer's completely anonymous and it's in a trust framework that actually allows you to do that. >> Well, you think about those protocols, the internet protocols that were invented whenever, 30 years ago, maybe more, TCP/IP, wow. I mean, okay. And they've been co-opted by the internet giants. It's the crypto guys, some of the guys you've mentioned that are actually innovating and putting, putting down new innovation really and have been well-funded to do so. >> I mean, I'll give you another example of how this could happen. About four years ago, five years ago, I wanted to buy Air Canada's mileage program, $400 million, 10 million users, 40 bucks a user. What do I want them in a mileage program? Well think about it. It's funded, a penny per mile. It's redeemed at 1.6 cents a mile. It's 2 cents if you buy magazines, 2 1/2 cents if you want, you know, electronics, jewelry, or sporting equipment. You don't lose money on these. CFOs hate them, they're just like (groans) liability on the books, but they mortgage the crap out of them in the middle of an ish problem and banks pay millions of dollars a year pour those mileage points. But I don't want it for the 10 million flyers in Canada. What I really want is the access to 762 million people in Star Alliance. What would happen if I turned that airline mileage program into cryptocurrency? One, I would be the world's largest cryptocurrency on day one. What would happen on day two? I'd be the world's largest ad network. Cookie apocalypse, go away. We don't need that anymore. And more importantly, on day three, what would I do? My ESG here? 2.2 billion people are unbanked in the world. All you need is a mobile device and a connection, now you have a currency without any government regulation around, you know, crayon banking, intermediaries, a whole bunch of people like taking cuts, loansharking, that all goes away. You suddenly have people that are now banked and you've unbanked, you've banked the unbanked. And that creates a whole very different environment. >> Not a lot of people thinking about how the big giants get disintermediated. Get the book, look into it, big ideas. Ray Wang, great to see you, man. >> Ray: Hey man, thanks a lot. >> Hey, thank you. All right and thank you for watching. Keep it right there for more great content from HPE's big GreenLake announcements. Be right back. (bright music)

(upbeat electronic music) >> Narrator: From theCUBE studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE conversation. >> Okay, hello everyone. I'm John Furrier with theCUBE. We're here with Meet the Analysts segment Sunday morning. We've got everyone around the world here to discuss a bit of the news around the EU killing the privacy deal, striking it down, among other topics around, you know, data privacy and global commerce. We got great guests here, Ray Wang, CEO of Constellation Research. Bill Mew, founder and CEO of Cyber Crisis Management from the Firm Crisis Team. And JD, CEO of Spearhead Management. JD, I can let you say your name because I really can't pronounce it. How do I (laughs) pronounce it, doctor? >> I wouldn't even try it unless you are Dutch, otherwise it will seriously hurt your throat. (Ray laughing) So, JD works perfect for me. >> Doctor Drooghaag. >> And Sarbjeet Johal, who's obviously an influencer, a cloud awesome native expert. Great, guys. Great to have you on, appreciate it, thanks for comin' on. And Bill, thank you for initiating this, I appreciate all your tweets. >> Happy Sunday. (Bill laughing) >> You guys have been really tweeting up a storm, I want to get everyone together, kind of as an analyst, Meet the Analyst segment. Let's go through with it. The news is the EU and U.S. Privacy Shield for data struck down by the court, that's the BBC headline. Variety of news, different perspectives, you've got an American perspective and you've got an international perspective. Bill, we'll start with you. What does this news mean? I mean, basically half the people in the world probably don't know what the Privacy Shield means, so why is this ruling so important, and why should it be discussed? >> Well, thanks to sharing between Europe and America, it's based on a two-way promise that when data goes from Europe to America, the Americans promise to respect our privacy, and when data goes form America to Europe, the Europeans promise to respect the American privacy. Unfortunately, there are big cultural differences between the two blocks. The Europeans have a massive orientation around privacy as a human right. And in the U.S., there's somewhat more of a prioritization on national security, and therefore for some time there's been a mismatch here, and it could be argued that the Americans haven't been living up to their promise because they've had various different laws, and look how much talk about FISA and the Cloud Act that actually contravene European privacy and are incompatible with the promise Americans have given. That promise, first of all, was in the form of a treaty called Safe Harbor. This went to court and was struck down. It was replaced by Privacy Shield, which was pretty much the same thing really, and that has recently been to the court as well, and that has been struck down. There now is no other means of legally sharing data between Europe and America other than what are being called standard contractual clauses. This isn't a broad treaty between two nations, these are drawn by each individual country. But also in the ruling, they said that standard contractual clauses could not be used by any companies that were subject to mass surveillance. And actually in the U.S., the FISA courts enforce a level of mass surveillance through all of the major IT firms, of all major U.S. telcos, cloud firms, or indeed, social media firms. So, this means that for all of the companies out there and their clients, business should be carrying on as usual apart from if you're one of those major U.S. IT firms, or one of their clients. >> So, why did this come about? Was there like a major incident? Why now, was it in the court, stuck in the courts? Were people bitchin' and moanin' about it? Why did this go down, what's the real issue? >> For those of us who have been following this attentively, things have been getting more and more precarious for a number of years now. We've had a situation where there are different measures being taken in the U.S., that have continued to erode the different protections that there were for Europeans. FISA is an example that I've given, and that is the sort of secret courts and secret warrants that are issued to seize data without anyone's knowledge. There's the Cloud Act, which is a sort of extrajudicial law that means that warrants can be served in America to U.S. organizations, and they have to hand over data wherever that data resides, anywhere in the world. So, data could exist on a European server, if it was under the control of an American company, they'd have to hand that over. So, whilst FISA is in direct conflict with the promises that the Americans made, things like the Cloud Act are not only in controversion with the promise they've made, there's conflicting law here, because if you're a U.S. subsidiary of a big U.S. firm, and you're based in Europe, who do you obey, the European law that says you can't hand it over because of GDPR, or the American laws that says they've got extrajudicial control, and that you've got to hand it over. So, it's made things a complete mess. And to say has this stuff, hasn't really happened? No, there's been a gradual erosion, and this has been going through the courts for a number of years. And many of us have seen it coming, and now it just hit us. >> So, if I get you right in what you're saying, it's basically all this mishmash of different laws, and there's no coherency, and consistency, is that the core issue? >> On the European side you could argue there's quite a lot of consistency, because we uphold people's privacy, in theory. But there have been incidents which we could talk about with that, but in theory, we hold your rights dear, and also the rights of Europeans, so everyone's data should be safe here from the sort of mass surveillance we're seeing. In the U.S., there's more of a direct conflict between everything, including there's been a, in his first week in the White House, Donald Trump signed an executive order saying that the Privacy Act in the U.S., which had been the main protection for people in the U.S., no longer applied to non-U.S. citizens. Which was, if you wanted try and cause a storm, and if you wanted to try and undermine the treaty, there's no better way of doing it than that. >> A lot of ways, Ray, I mean simplify this for me, because I'm a startup, I'm hustlin', or I'm a big company, I don't even know who runs the servers anymore, and I've got data stored in multiple clouds, I got in regions, and Oracle just announced more regions, you got Amazon, a gazillion regions, I could be on-premise. I mean bottom line, what is this about? I mean, and -- >> Bill's right, I mean when Max Schrems, the Austrian. Bill's right, when Max Schrems the Austrian activist actually filed his case against Facebook for where data was being stored, data residency wasn't as popular. And you know, what it means for companies that are in the cloud is that you have to make sure your data's being stored in the region, and following those specific region rules, you can't skirt those rules anymore. And I think the cloud companies know that this has been coming for some time, and that's why there's been announced in a lot of regions, a lot of areas that are actually happening, so I think that's the important part. But going back to Bill's earlier point, which is important, is America is basically the Canary Islands of privacy, right? Privacy is there, but it isn't there in a very, very explicit sense, and I think we've been skirting the rules for quite some time, because a lot of our economy depends on that data, and the marketing of the data. And so we often confuse privacy with consent, and also with value exchange, and I think that's part of the problem of what's going on here. Companies that have been building their business models on free data, free private data, free personally identifiable data information are the ones that are at risk! And I think that's what's going on here. >> It's the classic Facebook issue, you're the product, and the data is your product. Well, I want to get into what this means, 'cause my personal take away, not knowing the specifics, and just following say, cyber security for instance, one of the tenets there is that data sharing is an invaluable, important ethos in the community. Now, everyone has their own privacy, or security data, they don't want to let everyone know about their exploits but, but it's well known in the security world that sharing data with each other, different companies and countries is actually a good thing. So, the question that comes in my mind, is this really about data sharing or data privacy, or both? >> I think it's about both. And actually what the ruling is saying here is, all we're asking from the European side is please stop spying on us and please give us a level of equal protection that you give to your own citizens. Because data comes from America to Europe, whatever that data belongs to, a U.S. citizen or a European citizen, it's given equal protection. It is only if data goes in the other direction, where you have secret courts, secret warrants, seizure of data on this massive scale, and also a level of lack of equivalence that has been imposed. And we're just asking that once you've sorted out a few of those things, we'd say everything's back on the table, away we go again! >> Why don't we merge the EU with the United States? Wouldn't that solve the problem? (Bill laughing) >> We just left Europe! (laughs heartily) >> Actually I always -- >> A hostile takeover of the UK maybe, the 52nd state. (Bill laughing loudly) >> I always pick on Bill, like Bill, you got all screaming loud and clear about all these concerns, but UKs trying to get out of that economic union. It is a union at the end of the day, and I think the problem is the institutional mismatch between the EU and U.S., U.S. is old democracy, bigger country, population wise, bigger economy. Whereas Europe is several countries trying to put together, band together as one entity, and the institutions are new, like you know, they're 15 years old, right? They're maturing. I think that's where the big mismatch is and -- >> Well, Ray, I want to get your thoughts on this, Ray wrote a book, I forget what year it was, this digital disruption, basically it was digital transformation before it was actually a trend. I mean to me it's like, do you do the process first and then figure out where the value extraction is, and this may be a Silicon Valley or an American thing, but go create value, then figure out how to create process or understand regulations. So, if data and entrepreneurship is going to be a new modern era of value, why wouldn't we want to create a rule based system that's open and enabling, and not restrictive? >> So, that's a great point, right? And the innovation culture means you go do it first, and you figure out the rules later, and that's been a very American way of getting things done, and very Silicon Valley in our perspective, not everyone, but I think in general that's kind of the trend. I think the challenge here is that we are trading privacy for security, privacy for convenience, privacy for personalization, right? And on the security level, it's a very different conversation than what it is on the consumer end, you know, personalization side. On the security side I think most Americans are okay with a little bit of "spying," at least on your own side, you know, to keep the country safe. We're not okay with a China level type of spying, which we're not sure exactly what that means or what's enforceable in the courts. We look like China to the Europeans in the way we treat privacy, and I think that's the perspective we need to understand because Europeans are very explicit about how privacy is being protected. And so this really comes back to a point where we actually have to get to a consent model on privacy, as to knowing what data is being shared, you have the right to say no, and when you have the right to say no. And then if you have a value exchange on that data, then it's really like sometimes it's monetary, sometimes it's non-monetary, sometimes there's other areas around consensus where you can actually put that into place. And I think that's what's missing at this point, saying, you know, "Do we pay for your data? Do we explicitly get your consent first before we use it?" And we haven't had that in place, and I think that's where we're headed towards. And you know sometimes we actually say privacy should be a human right, it is in the UN Charter, but we haven't figured out how to enforce it or talk about it in the digital age. And so I think that's the challenge. >> Okay, people, until they lose it, they don't really understand what it means. I mean, look at Americans. I have to say that we're idiots on this front, (Bill chuckling) but you know, the thing is most people don't even understand how much value's getting sucked out of their digital exhaust. Like, our kids, TikTok and whatnot. So I mean, I get that, I think there's some, there's going to be blow back for America for sure. I just worry it's going to increase the cost of doing business, and take away from the innovation for citizen value, the people, because at the end of the day, it's for the people right? I mean, at the end of the day it's like, what's my privacy mean if I lose value? >> Even before we start talking about the value of the data and the innovation that we can do through data use, you have to understand the European perspective here. For the European there's a level of double standards and an erosion of trust. There's double standards in the fact that in California you have new privacy regulations that are slightly different to GDPR, but they're very much GDPR like. And if the boot was on the other foot, to say if we were spying on Californians and looking at their personal data, and contravening CCPA, the Californians would be up in arms! Likewise if we having promised to have a level of equality, had enacted a local rule in Europe that said that when data from America's over here, actually the privacy of Americans counts for nothing, we're only going to prioritize the privacy of Europeans. Again, the Americans would be up in arms! And therefore you can see that there are real double standards here that are a massive issue, and until those addressed, we're not going to trust the Americans. And likewise, the very fact that on a number of occasions Americans have signed up to treaties and promised to protect our data as they did with Safe Harbor, as they did with Privacy Shield, and then have blatantly, blatantly failed to do so means that actually to get back to even a level playing field, where we were, you have a great deal of trust to overcome! And the thing from the perspective of the big IT firms, they've seen this coming for a long time, as Ray was saying, and they sought to try and have a presence in Europe and other things. But the way this ruling has gone is that, I'm sorry, that isn't going to be sufficient! These big IT firms based in the U.S. that have been happy to hand over data, well some of them maybe more happy than others, but they all need to hand over data to the NSA or the CIA. They've been doing this for some time now without actually respecting this data privacy agreement that has existed between the two trading blocks. And now they've been called out, and the position now is that the U.S. is no longer trusted, and neither are any of these large American technology firms. And until the snooping stops and equality is introduced, they can now no longer, even from their European operations, they can no longer use standard contractual clauses to transfer data, which is going to be a massive restriction on their business. And if they had any sense, they'd be lobbying very, very hard right now to the Senate, to the House, to try and persuade U.S. lawmakers actually to stick to some these treaties! To stop introducing really mad laws that ride roughshod over other people's privacy, and have a certain amount of respect. >> Let's let JD weigh in, 'cause he just got in, sorry on the video, I made him back on a host 'cause he dropped off. Just, Bill, real quick, I mean I think it's like when, you know, I go to Europe there's the line for Americans, there's the line for EU. Or EU and everybody else. I mean we might be there, but ultimately this has to be solved. So, JD, I want to let you weigh in, Germany has been at the beginning forefront of privacy, and they've been hardcore, and how's this all playing out in your perspective? >> Well, the first thing that we have to understand is that in Germany, there is a very strong law for regulation. Germans panic as soon as they know regulation, so they need to understand what am I allowed to do, and what am I not allowed to do. And they expect the same from the others. For the record I'm not German, but I live in Germany for some 20 years, so I got a bit of a feeling for them. And that sense of need for regulation has spread very fast throughout the European Union, because most of the European member states of the European Union consider this, that it makes sense, and then we found that Britain had already a very good framework for privacy, so GDPR itself is very largely based on what the United Kingdom already had in place with their privacy act. Moving forward, we try to find agreement and consensus with other countries, especially the United States because that's where most of the tech providers are, only to find out, and that is where it started to go really, really bad, 2014, when the mass production by Edward Snowden came out, to find out it's not data from citizens, it's surveillance programs which include companies. I joined a purchasing conference a few weeks ago where the purchase of a large European multinational, where the purchasing director explicitly stated that usage of U.S. based tech providers for sensitive data is prohibited as a result of them finding out that they have been under surveillance. So, it's not just the citizens, there's mass -- >> There you have it, guys! We did trust you! We did have agreements there that you could have abided by, but you chose not to, you chose to abuse our trust! And you're now in a position where you are no longer trusted, and unless you can lobby your own elected representatives to actually recreate a level playing field, we're not going to continue trusting you. >> So, I think really I -- >> Well I mean that, you know, innovation has to come from somewhere, and you know, has to come from America if that's the case, you guys have to get on board, right? Is that what it -- >> Innovation without trust? >> Is that the perspective? >> I don't think it's a country thing, I mean like, it's not you or them, I think everybody -- >> I'm just bustin' Bill's chops there. >> No, but I think everybody, everybody is looking for what the privacy rules are, and that's important. And you can have that innovation with consent, and I think that's really where we're going to get to. And this is why I keep pushing that issue. I mean, privacy should be a fundamental right, and how you get paid for that privacy is interesting, or how you get compensated for that privacy if you know what the explicit value exchange is. What you're talking about here is the surveillance that's going on by companies, which shouldn't be happening, right? That shouldn't be happening at the company level. At the government level I can understand that that is happening, and I think those are treaties that the governments have to agree upon as to how much they're going to impinge on our personal privacy for the trade off for security, and I don't think they've had those discussions either. Or they decided and didn't tell any of their citizens, and I think that's probably more likely the case. >> I mean, I think what's happening here, Bill, you guys were pointing out, and Ray, you articulated there on the other side, and my kind of colorful joke aside, is that we're living a first generation modern sociology problem. I mean, this is a policy challenge that extends across multiple industries, cyber security, citizen's rights, geopolitical. I mean when would look, and even when we were doing CUBE events overseas in Europe, in North American companies we'd call it abroad, we'd just recycle the American program, and we found there's so much localization value. So, Ray, this is the digital disruption, it's the virtualization of physical for digital worlds, and it's a lot of network theory, which is computer science, a lot of sociology. This is a modern challenge, and I don't think it so much has a silver bullet, it's just that we need smart people working on this. That's my take away! >> I think we can describe the ideal endpoint being somewhere we have meaningful protection alongside the maximization of economic and social value through innovation. So, that should be what we would all agree would be the ideal endpoint. But we need both, we need meaningful protection, and we need the maximization of economic and social value through innovation! >> Can I add another axis? Another axis, security as well. >> Well, I could -- >> I put meaningful protection as becoming both security and privacy. >> Well, I'll speak for the American perspective here, and I won't speak, 'cause I'm not the President of the United States, but I will say as someone who's been from Silicon Valley and the east coast as a technical person, not a political person, our lawmakers are idiots when it comes to tech, just generally. (Ray laughing) They're not really -- (Bill laughing loudly) >> They really don't understand. They really don't understand the tech at all! >> So, the problem is -- >> I'm not claiming ours are a great deal better. (laughs) >> Well, this is why I think this is a modern problem. Like, the young people I talk to are like, "Why do we have this rules?" They're all lawyers that got into these positions of Congress on the American side, and so with the American JEDI Contract you guys have been following very closely is, it's been like the old school Oracle, IBM, and then Amazon is leading with an innovative solution, and Microsoft has come in and re-pivoted. And so what you have is a fight for the digital future of citizenship! And I think what's happening is that we're in a massive societal transition, where the people in charge don't know what the hell they're talkin' about, technically. And they don't know who to tap to solve the problems, or even shape or frame the problems. Now, there's pockets of people that are workin' on it, but to me as someone who looks at this saying, it's a pretty simple solution, no one's ever seen this before. So, there's a metaphor you can draw, but it's a completely different problem space because it's, this is all digital, data's involved. >> We've got a lobbyists out there, and we've got some tech firms spending an enormous amount of lobbying. If those lobbyists aren't trying to steer their representatives in the right direction to come up with law that aren't going to massively undermine trade and data sharing between Europe and America, then they're making a big mistake, because we got here through some really dumb lawmaking in the U.S., I mean, there are none of the laws in Europe that are a problem here. 'Cause GDPR isn't a great difference, a great deal different from some of the laws that we have already in California and elsewhere. >> Bill, Bill. >> The laws that are at issue here -- >> Bill, Bill! You have to like, back up a little bit from that rhetoric that EU is perfect and U.S. is not, that's not true actually. >> I'm not saying we're perfect! >> No, no, you say that all the time. >> But I'm saying there's a massive lack of innovation. Yeah, yeah. >> I don't, I've never said it! >> Arm wrestle! >> Yes, yes. >> When I'm being critical of some of the dumb laws in the U.S, (Sarbjeet laughing) I'm not saying Europe is perfect. What we're trying to say is that in this particular instance, I said there was an equal balance here between meaningful protection and the maximization of economic and social value. On the meaningful protection side, America's got it very wrong in terms of the meaningful protection it provides to civil European data. On the maximization of economic and social value, I think Europe's got it wrong. I think there are a lot of things we could do in Europe to actually have far more innovation. >> Yeah. >> It's a cultural issue. The Germans want rules, that's what they crave for. America's the other way, we don't want rules, I mean, pretty much is a rebel society. And that's kind of the ethos of most tech companies. But I think you know, to me the media, there's two things that go on with this tech business. The company's themselves have to be checked by say, government, and I believe in not a lot of regulation, but enough to check the power of bad actors. Media so called "checking power", both of these major roles, they don't really know what they're talking about, and this is back to the education piece. The people who are in the media so called "checking power" and the government checking power assume that the companies are bad. Right, so yeah, because eight out of ten companies like Amazon, actually try to do good things. If you don't know what good is, you don't really, (laughs) you know, you're in the wrong game. So, I think media and government have a huge education opportunity to look at this because they don't even know what they're measuring. >> I support the level of innovation -- >> I think we're unreeling from the globalization. Like, we are undoing the globalization, and that these are the side effects, these conflicts are a side effect of that. >> Yeah, so all I'm saying is I support the focus on innovation in America, and that has driven an enormous amount of wealth and value. What I'm questioning here is do you really need to spy on us, your allies, in order to help that innovation? And I'm starting to, I mean, do you need mass surveillance of your allies? I mean, I can see you may want to have some surveillance of people who are a threat to you, but wait, guys, we're meant to be on your side, and you haven't been treating our privacy with a great deal of respect! >> You know, Saudi Arabia was our ally. You know, 9/11 happened because of them, their people, right? There is no ally here, and there is no enemy, in a way. We don't know where the rogue actors are sitting, like they don't know, they can be within the walls -- >> It's well understood I think, I agree, sorry. it's well understood that nation states are enabling terrorist groups to take out cyber attacks. That's well known, the source enables it. So, I think there's the privacy versus -- >> I'm not sure it's true in your case that it's Europeans that's doing this though. >> No, no, well you know, they share -- >> I'm a former officer in the Royal Navy, I've stood shoulder to shoulder with my U.S. counterparts. I put my life on the line on NATO exercises in real war zones, and I'm now a disabled ex-serviceman as a result of that. I mean, if I put my line on the line shoulder to shoulder with Americans, why is my privacy not respected? >> Hold on -- >> I feel it's, I was going to say actually that it's not that, like even the U.S., right? Part of the spying internally is we have internal actors that are behaving poorly. >> Yeah. >> Right, we have Marxist organizations posing as, you know, whatever it is, I'll leave it at that. But my point being is we've got a lot of that, every country has that, every country has actors and citizens and people in the system that are destined to try to overthrow the system. And I think that's what that surveillance is about. The question is, we don't have treaties, or we didn't have your explicit agreements. And that's why I'm pushing really hard here, like, they're separating privacy versus security, which is the national security, and privacy versus us as citizens in terms of our data being basically taken over for free, being used for free. >> John: I agree with that. >> That I think we have some agreement on. I just think that our governments haven't really had that conversation about what surveillance means. Maybe someone agreed and said, "Okay, that's fine. You guys can go do that, we won't tell anybody." And that's what it feels like. And I don't think we deliberately are saying, "Hey, we wanted to spy on your citizens." I think someone said, "Hey, there's a benefit here too." Otherwise I don't think the EU would have let this happen for that long unless Max had made that case and started this ball rolling, so, and Edward Snowden and other folks. >> Yeah, and I totally support the need for security. >> I want to enter the -- >> I mean we need to, where there are domestic terrorists, we need to stop them, and we need to have local action in UK to stop it happening here, and in America to stop it happening there. But if we're doing that, there is absolutely no need for the Americans to be spying on us. And there's absolutely no need for the Americans to say that privacy applies to U.S. citizens only, and not to Europeans, these are daft, it's just daft! >> That's a fair point. I'm sure GCHQ and everyone else has this covered, I mean I'm sure they do. (laughs) >> Oh, Bill, I know, I've been involved, I've been involved, and I know for a fact the U.S. and the UK are discussing I know a company called IronNet, which is run by General Keith Alexander, funded by C5 Capital. There's a lot of collaboration, because again, they're tryin' to get their arms around how to frame it. And they all agree that sharing data for the security side is super important, right? And I think IronNet has this thing called Iron Dome, which is essentially like they're saying, hey, we'll just consistency around the rules of shared data, and we can both, everyone can have their own little data. So, I think there's recognition at the highest levels of some smart people on both countries. (laughs) "Hey, let's work together!" The issue I have is just policy, and I think there's a lot of clustering going on. Clustered here around just getting out of their own way. That's my take on that. >> Are we a PG show? Wait, are we a PG show? I just got to remember that. (laughs) (Bill laughing) >> It's the internet, there's no regulation, there's no rules! >> There's no regulation! >> The European rules or is it the American rules? (Ray laughing) >> I would like to jump back quickly to the purpose of the surveillance, and especially when mass surveillance is done under the cover of national security and terror prevention. I worked with five clients in the past decade who all have been targeted under mass surveillance, which was revealed by Edward Snowden, and when they did their own investigation, and partially was confirmed by Edward Snowden in person, they found out that their purchasing department, their engineering department, big parts of their pricing data was targeted in mass surveillance. There's no way that anyone can explain me that that has anything to do with preventing terror attacks, or finding the bad guys. That is economical espionage, you cannot call it in any other way. And that was authorized by the same legislation that authorizes the surveillance for the right purposes. I'm all for fighting terror, and anything that can help us prevent terror from happening, I would be the first person to welcome it. But I do not welcome when that regulation is abused for a lot of other things under the cover of national interest. I understand -- >> Back to the lawmakers again. And again, America's been victim to the Chinese some of the individual properties, well documented, well known in tech circles. >> Yeah, but just 'cause the Chinese have targeted you doesn't give you free right to target us. >> I'm not saying that, but its abuse of power -- >> If the U.S. can sort out a little bit of reform, in the Senate and the House, I think that would go a long way to solving the issues that Europeans have right now, and a long way to sort of reaching a far better place from which we can all innovate and cooperate. >> Here's the challenge that I see. If you want to be instrumenting everything, you need a closed society, because if you have a free country like America and the UK, a democracy, you're open. If you're open, you can't stop everything, right? So, there has to be a trust, to your point, Bill. As to me that I'm just, I just can't get my arms around that idea of complete lockdown and data surveillance because I don't think it's gettable in the United States, like it's a free world, it's like, open. It should be open. But here we've got the grids, and we've got the critical infrastructure that should be protected. So, that's one hand. I just can't get around that, 'cause once you start getting to locking down stuff and measuring everything, that's just a series of walled gardens. >> So, to JD's point on the procurement data and pricing data, I have been involved in some of those kind of operations, and I think it's financial espionage that they're looking at, financial security, trying to figure out a way to track down capital flows and what was purchased. I hope that was it in your client's case, but I think it's trying to figure out where the money flow is going, more so than trying to understand the pricing data from competitive purposes. If it is the latter, where they're stealing the competitive information on pricing, and data's getting back to a competitor, that is definitely a no-no! But if it's really to figure out where the money trail went, which is what I think most of those financial analysts are doing, especially in the CIA, or in the FBI, that's really what that probably would have been. >> Yeah, I don't think that the CIA is selling the data to your competitors, as a company, to Microsoft or to Google, they're not selling it to each other, right? They're not giving it to each other, right? So, I think the one big problem I studied with FISA is that they get the data, but how long they can keep the data and how long they can mine the data. So, they should use that data as exhaust. Means like, they use it and just throw it away. But they don't, they keep mining that data at a later date, and FISA is only good for five years. Like, I learned that every five years we revisit that, and that's what happened this time, that we renewed it for six years this time, not five, for some reason one extra year. So, I think we revisit all these laws -- >> Could be an election cycle. >> Huh? >> Could be an election cycle maybe. (laughs) >> Yes, exactly! So, we revisit all these laws with Congress and Senate here periodically just to make sure that they are up to date, and that they're not infringing on human rights, or citizen's rights, or stuff like that. >> When you say you update to check they're not conflicting with anything, did you not support that it was conflicting with Privacy Shield and some of the promises you made to Europeans? At what point did that fail to become obvious? >> It does, because there's heightened urgency. Every big incident happens, 9/11 caused a lot of new sort of like regulations and laws coming into the picture. And then the last time, that the Russian interference in our election, that created some sort of heightened urgency. Like, "We need to do something guys here, like if some country can topple our elections, right, that's not acceptable." So, yeah -- >> And what was it that your allies did that caused you to spy on us and to downgrade our privacy? >> I'm not expert on the political systems here. I think our allies are, okay, loose on their, okay, I call it village politics. Like, world is like a village. Like it's so only few countries, it's not millions of countries, right? That's how I see it, a city versus a village, and that's how I see the countries, like village politics. Like there are two camps, like there's Russia and China camp, and then there's U.S. camp on the other side. Like, we used to have Russia and U.S., two forces, big guys, and they managed the whole world balance somehow, right? Like some people with one camp, the other with the other, right? That's how they used to work. Now that Russia has gone, hold on, let me finish, let me finish. >> Yeah. >> Russia's gone, there's this void, right? And China's trying to fill the void. Chinese are not like, acting diplomatic enough to fill that void, and there's, it's all like we're on this imbalance, I believe. And then Russia becomes a rogue actor kind of in a way, that's how I see it, and then they are funding all these bad people. You see that all along, like what happened in the Middle East and all that stuff. >> You said there are different camps. We thought we were in your camp! We didn't expect to be spied on by you, or to have our rights downgraded by you. >> No, I understand but -- >> We thought we were on your side! >> But, but you have to guys to trust us also, like in a village. Let me tell you, I come from a village, that's why I use the villager as a hashtag in my twitter also. Like in village, there are usually one or two families which keep the village intact, that's our roles. >> Right. >> Like, I don't know if you have lived in a village or not -- >> Well, Bill, you're making some great statements. Where's the evidence on the surveillance, where can people find more information on this? Can you share? >> I think there's plenty of evidence, and I can send some stuff on, and I'm a little bit shocked given the awareness of the FISA Act, the Cloud Act, the fact that these things are in existence and they're not exactly unknown. And many people have been complaining about them for years. I mean, we've had Safe Harbor overturned, we've had Privacy Shield overturned, and these weren't just on a whim! >> Yeah, what does JD have in his hand? I want to know. >> The Edward Snowden book! (laughs) >> By Edward Snowden, which gives you plenty. But it wasn't enough, and it's something that we have to keep in mind, because we can always claim that whatever Edward Snowden wrote, that he made it up. Every publication by Edward Snowden is an avalanche of technical confirmation. One of the things that he described about the Cisco switches, which Bill prefers to quote every time, which is a proven case, there were bundles of researchers saying, "I told you guys!" Nobody paid attention to those researchers, and Edward Snowden was smart enough to get the mass media representation in there. But there's one thing, a question I have for Sabjeet, because in the two parties strategy, it is interesting that you always take out the European Union as part. And the European Union is a big player, and it will continue to grow. It has a growing amount of trade agreements with a growing amount of countries, and I still hope, and I think think Bill -- >> Well, I think the number of countries is reducing, you've just lost one! >> Only one. (Bill laughing loudly) Actually though, those are four countries under one kingdom, but that's another point. (Bill chortling heartily) >> Guys, final topic, 5G impact, 'cause you mentioned Cisco, couldn't help think about -- >> Let me finish please my question, John. >> Okay, go ahead. How would you the United States respond if the European Union would now legalize to spy on everybody and every company, and every governmental institution within the United States and say, "No, no, it's our privilege, we need that." How would the United States respond? >> You can try that and see economically what happens to you, that's how the village politics work, you have to listen to the mightier than you, and we are economically mightier, that's the fact. Actually it's hard to swallow fact for, even for anybody else. >> If you guys built a great app, I would use it, and surveil all you want. >> Yeah, but so this is going to be driven by the economics. (John laughing) But the -- >> That's exactly what John said. >> This is going to be driven by the economics here. The big U.S. cloud firms are got to find this ruling enormously difficult for them, and they are inevitably going to lobby for a level of reform. And I think a level of a reform is needed. Nobody on your side is actually arguing very vociferously that the Cloud Act and the discrimination against Europeans is actually a particularly good idea. The problem is that once you've done the reform, are we going to believe you when you say, "Oh, it's all good now, we've stopped it!" Because with Crypto AG scandal in Switzerland you weren't exactly honest about what you were doing. With the FISA courts, so I mean FISA secret courts, the secret warrants, how do we know and what proof can we have that you've stopped doing all these bad things? And I think one of the challenges, A, going to be the reform, and then B, got to be able to show that you actually got your act together and you're now clean. And until you can solve those two, many of your big tech companies are going to be at a competitive disadvantage, and they're going to be screaming for this reform. >> Well, I think that, you know, General Mattis said in his book about Trump and the United states, is that you need alliances, and I think your point about trust and executing together, without alliances, it really doesn't work. So, unless there's some sort of real alliance, (laughs) like understanding that there's going to be some teamwork here, (Bill laughing) I don't think it's going to go anywhere. So, otherwise it'll continue to be siloed and network based, right? So to the village point, if TikTok can become a massively successful app, and they're surveilling, so and then we have to decide that we're going to put up with that, I mean, that's not my decision, but that's what's goin' on here. It's like, what is TikTok, is it good or bad? Amazon sent out an email, and they've retracted it, that's because it went public. I guarantee you that they're talkin' about that at Amazon, like, "Why would we want infiltration by the Chinese?" And I'm speculating, I have no data, I'm just saying, you know. They email those out, then they pull it back, "Oh, we didn't mean to send that." Really, hmm? (laughs) You know, so this kind of -- >> But the TRA Balin's good, you always want to get TRA Balin out there. >> Yeah, exactly. There's some spying going on! So, this is the reality. >> So, John, you were talking about 5G, and I think you know, the role of 5G, you know, the battle between Cisco and Huawei, you just have to look at it this way, would you rather have the U.S. spy on you, or would you rather have China? And that's really your binary choice at this moment. And you know both is happening, and so the question is which one is better. Like, the one that you're in alliance with? The one that you're not in alliance with, the one that wants to bury you, and decimate your country, and steal all your secrets and then commercialize 'em? Or the one kind of does it, but doesn't really do it explicitly? So, you've got to choose. (laughs) >> It's supposed to be -- >> Or you can say no, we're going to create our own standard for 5G and kick both out, that's an option. >> It's probably not as straightforward a question as, or an answer to that question as you say, because if we were to fast-forward 50 years, I would argue that China is going to be the largest trading nation in the world. I believe that China is going to have the upper hand on many of these technologies, and therefore why would we not want to use some of their innovation, some of their technology, why would we not actually be more orientated around trading with them than we might be with the U.S.? I think the U.S. is throwing its weight around at this moment in time, but if we were to fast-forward I think looking in the longterm, if I had to put my money on Huawei or some of its competitors, I think given its level of investments in research and whatever, I think the better longterm bet is Huawei. >> No, no, actually you guys need to pick a camp. It's a village again. You have to pick a camp, you can't be with both guys. >> Global village. >> Oh, right, so we have to go with the guys that have been spying on us? >> How do you know the Chinese haven't been spying on you? (Ray and John laughing loudly) >> I think I'm very happy, you find a backdoor in the Huawei equipment and you show it to us, we'll take them to task on it. But don't start bullying us into making decisions based on what-ifs. >> I don't think I'm, I'm not qualified to represent the U.S., but what we would want to say is that if you look at the dynamics of what's going on, China, we've been studying that as well in terms of the geopolitical aspects of what happens in technology, they have to do what they're doing right now. Because in 20 years our population dynamics go like this, right? You've got the one child policy, and they won't have the ability to go out and fight for those same resources where they are, so what they're doing makes sense from a country perspective and country policy. But I think they're going to look like Japan in 20 years, right? Because the xenophobia, the lack of immigration, the lack of inside stuff coming in, an aging population. I mean, those are all factors that slow down your economy in the long run. And the lack of bringing new people in for ideas, I mean that's part of it, they're a closed system. And so I think the longterm dynamics of every closed system is that they tend to fail versus open systems. So, I'm not sure, they may have better technology along the way. But I think a lot of us are probably in the camp now thinking that we're not going to aid and abet them, in that sense to get there. >> You're competing a country with a company, I didn't say that China had necessarily everything rosy in its future, it'll be a bigger economy, and it'll be a bigger trading partner, but it's got its problems, the one child policy and the repercussions of that. But that is not one of the things, Huawei, I think Huawei's a massively unlimited company that has got a massive lead, certainly in 5G technology, and may continue to maintain a lead into 6G and beyond. >> Oh yeah, yeah, Huawei's done a great job on the 5G side, and I don't disagree with that. And they're ahead in many aspects compared to the U.S., and they're already working on the 6G technologies as well, and the roll outs have been further ahead. So, that's definitely -- >> And they've got a great backer too, the financer, the country China. Okay guys, (Ray laughing) let's wrap up the segment. Thanks for everyone's time. Final thoughts, just each of you on this core issue of the news that we discussed and the impact that was the conversation. What's the core issue? What should people think about? What's your solution? What's your opinion of how this plays out? Just final statements. We'll start with Bill, Ray, Sarbjeet and JD. >> All I'm going to ask you is stop spying on us, treat us equally, treat us like the allies that we are, and then I think we've got to a bright future together! >> John: Ray? >> I would say that Bill's right in that aspect in terms of how security agreements work, I think that we've needed to be more explicit about those. I can't represent the U.S. government, but I think the larger issue is really how do we view privacy, and how we do trade offs between security and convenience, and you know, what's required for personalization, and companies that are built on data. So, the sooner we get to those kind of rules, an understanding of what's possible, what's a consensus between different countries and companies, I think the better off we will all be a society. >> Yeah, I believe the most important kind of independence is the economic independence. Like, economically sound parties dictate the terms, that's what U.S. is doing. And the smaller countries have to live with it or pick the other bigger player, number two in this case is China. John said earlier, I think, also what JD said is the fine balance between national security and the privacy. You can't have, you have to strike that balance, because the rogue actors are sitting in your country, and across the boundaries of the countries, right? So, it's not that FISA is being fought by Europeans only. Our internal people are fighting that too, like how when you are mining our data, like what are you using it for? Like, I get concerned too, when you can use that data against me, that you have some data against me, right? So, I think it's the fine balance between security and privacy, we have to strike that. Awesome. JD? I'll include a little fake check, fact check, at the moment China is the largest economy, the European Union is the second largest economy, followed directly by the USA, it's a very small difference, and I recommend that these two big parties behind the largest economy start to collaborate and start to do that eye to eye, because if you want to balance the economical and manufacturing power of China, you cannot do that as being number two and number three. You have to join up forces, and that starts with sticking with the treaties that you signed, and that has not happened in the past, almost four years. So, let's go back to the table, let's work on rules where from both sides the rights and the privileges are properly reflected, and then do the most important thing, stick to them! >> Yep, I think that's awesome. I think I would say that these young kids in high school and college, they need to come up and solve the problems, this is going to be a new generational shift where the geopolitical landscape will change radically, you mentioned the top three there. And new alliances, new kinds of re-imagination has to be there, and from America's standpoint I'll just say that I'd like to see lawmakers have, instead of a LinkedIn handle, a GitHub handle. You know, when they all go out on campaign talk about what code they've written. So, I think having a technical background or some sort of knowledge of computer science and how the internet works with sociology and societal impact will be critical for our citizenships to advance. So, you know rather a lawyer, right so? (laughs) Maybe get some law involved in that, I mean the critical lawyers, but today most people are lawyers in American politics, but show me a GitHub handle of that congressman, that senator, I'd be impressed. So, that's what we need. >> Thanks, good night! >> Ray, you want to say something? >> I wanted to say something, because I thought the U.S. economy was 21 trillion, the EU is sittin' at about 16, and China was sitting about 14, but okay, I don't know. >> You need to do math man. >> Hey, we went over our 30 minutes time, we can do an hour with you guys, so you're still good. (laughs) >> Can't take anymore. >> No go on, get in there, go at it when you've got something to say. >> I don't think it's immaterial the exact size of the economy, I think that we're better off collaborating on even and fair terms, we are -- >> We're all better off collaborating. >> Yeah. >> Gentlemen -- >> But the collaboration has to be on equal and fair terms, you know. (laughs) >> How do you define fair, good point. Fair and balanced, you know, we've got the new -- >> We did define fair, we struck a treaty! We absolutely defined it, absolutely! >> Yeah. >> And then one side didn't stick to it. >> We will leave it right there, and we'll follow up (Bill laughing) in a later conversation. Gentlemen, you guys are good. Thank you. (relaxing electronic music)

>> Announcer: Live, from Copenhagen, Denmark, it's theCUBE! Covering Nutanix.NEXT 2019. Brought to you by Nutanix. >> Welcome back everyone to theCUBE's live coverage of Nutanix.NEXT. We are at the Bella Center in Copenhagen, Denmark. I'm your host, Rebecca Knight, alongside of Stu Miniman, of course. We are joined by a good friend of theCUBE, Ray Wang, principal analyst and CEO of Constellation Research. Thank you so much for returning to theCUBE. >> Hey, how you doing? Good morning! >> Good morning, good morning! >> Good morning! (laughing) >> Good morning! >> I don't know. I get all my accents wrong out here. >> (laughing) So, you got a shout out on the main stage this morning, from Monica Kumar, congratulations on that. She talked about you and your research on the infinite role of computing. You also do a lot with the future of work. I know that that is really right in your wheelhouse right now. What are you hearing, what are you seeing, what kinds of conversations are you having that are interesting you? >> Yeah, so, this infinite computing option, it's one of the that we're talking about, the fact that you can scale out forever, right? And the problem that's holding us back has been technical debt, right? So all that legacy that everyone's got to figure out. It's like, my connections, my server, my disk-rack recovery, my disaster recovery, my backup, everything. It's a pain in the butt. And I'm still trying to get onto the cloud. So on that end, we're like, okay, all this stuff is holding us back, how do we get there? Now, the future of work is a little bit different. We're seeing a very very different set of work. People have talked about where we are the gig economy, but that's just one aspect of it. Everything is being decomposed into microservices. Large processes are becoming smaller and smaller microservices, they're being reusable, well our work and tasks are following the same way. We're getting smaller and smaller tasks, some are more repetitive, some are going to be automated, and it's really about where we actually find the difference between augmentation of humanity, and full automation, and that's where the next battle's going to be. >> Yeah, Ray, some of the discussions we've been having this week, is how do we really simplify the environment? The balance I hear from customers, on the one hand, they're always like, I don't have enough money, I don't have enough personnel, on the other hand, oh my gosh, that full automation sounds like you're going to put me out of a job. We know we're not putting everybody out of work in the next couple of years. There are challenges; we worry about the hollowing out of the center of the economy, but here, what Nutanix is trying to do, of course, is, I don't want to have to thrive in that complexity anymore, I want to be able to drive innovation, keep up with that, take advantage of that unlimited resources out there, so, where do you see, you've been here at the show, what are you hearing from the customers here? Anything different in Europe versus back in North America that you'd share about that journey onto the changing roles? >> Oh it's a great point. It's about simplifying everything where you can, it's about areas of automation where they make sense. Here in Europe it's slightly different because a lot of the focus in Europe has been about cost and efficiency, followed by of course regulatory. Those have been the two drivers. And they've been battling that in order to be, even they will look at some level of innovation. Where in the US, people are head on doing innovation, regulatory and operational efficiency at the same time. So that creates a very very different environment. But what we have noticed are some patterns, especially when we look at automation and AI; there are four areas out of seven where we see a lot more automation that's happening. The first one is massively repetitive tasks, those are things, yeah, got to get that out of the way, we don't do this very very well. The second one is really thinking about massive nodes of interaction. When you're connected to multiple places, multiple organizations, multiple instances, that's something where we start to get overwhelmed, and then of course, there's lots of volume. If you've got lots of volume or requests that are coming through, you can't possibly handle that, and that's a place where we see a lot of machine scale. And the last piece is really when you have to scale, humans don't scale very well. However, it's actually not a hollowing out of the middle; it's actually a hollowing out of the ends in a very, very real end, because really really simple tasks go away, super complex tasks go away, and the middle actually remains, and the middle is things that are complex that cannot be recreated by math, they're also areas that require a lot of creativity, humans make the rules, we break the rules, and then the last part is really fine motor skills and presence, the machines still aren't as good. So we still have some hope. So the middle stays, it's the hollowing out of the ends, the high end jobs and the low end jobs are the ones where we're going to see a lot of risk. >> So what does that mean? So we have, leaving the middle there, and as you said, the high end jobs and the low end jobs go away, but what does that mean in terms of the skills? In terms of what employers are looking for, in terms of what they need in their prospective applicants and hirees. >> That's a great point. Soft skills are important; it's the qualitative skills that become even more important, it's also being able to manage and orchestrate the hard skills; because you don't necessarily have to know how to do the calculation, you have to just know which algorithm to apply. >> Okay, and then also, these soft skills of managing people, I'm assuming too? Because computers are not so good at that either. >> Yes. Soft skills are managing people, but also manage the human and machine equation that's going to happen. Because we have to train the machines, the machines aren't going to know that level of intuition, and there's a large amount of training that's going to happen over time. >> All right. So, Ray, one of the things Nutanix is doing is, as they've been transforming to not only subscription, software's always been at their core, but they're starting to do not just infrastructure software, but application software. I know you live in that world quite a lot, so when you hear Nutanix talking about building databases, delivering these services, it's something that I look at, Amazon does some of that, but for the most part they're infrastructure and build on top of us. How do you think, how is Nutanix doing, what are some of the challenges for them, going up against some of the bellwethers out there in tech, and all the open source projects that are out there. >> So the challenge is always going to be, there is a one dominant player in every market. And what they're providing is an alternative to allow the orchestration of not having that, not only that dominant player, but a choice. So in every single market, they're focused on giving users choice, and giving the ability to aggregate, and bring everything into one single plane. That is tough to do, right? And the fact that they see that as their big hairy audacious goal, that's impressive. If you said they were going to do this three years ago, I wouldn't have believed them. >> Well yeah, I think back to, remember almost 10 years ago, VMware tried to get into applications, they bought Zimbra, they bought a few others. Cisco did like 26 adjacencies, they were going to take over video and do all these things, and we've seen lots of failures over the years. They refocused on their core, was a big thing that I heard, that the users seem to be excited about. Are there areas that you're find especially interesting as to where Nutanix is poking? >> So, I would say that Nutanix three years ago was a little bit sleepy. They got comfortable, they did the stuff that they did really well, and it feels like, maybe about 12 months ago, Dheeraj had a different vision. Like something snapped, something hit, he said this isn't working, we're going to change things, and we've seen a whole bunch of new talent come into play. We've also seen a huge expansion of what they're trying to do, and a cleanup of all those side projects that were all going on before. So I think they've actually honed in on, okay, if we can simplify this piece, this is a money-winning business for some time, and they're talking about 80% margins last quarter, I mean that's huge, and that's just trying to save customers money, and make their lives simpler. >> Do you think that they have the messaging right? Because, I mean, they're going to this Thoreauvian/Emersonian idea of simplify, simplify, simplify, and it does resonate, of course! What customer doesn't want a simpler computing experience? But do you think that they are reaching the right people, and they have obviously very passionate customers, but are they getting into new businesses. >> I think they're getting to the businesses that their customers are asking them to, those adjacencies are huge, I think and when you think about cleaning up technical debt, all that legacy debt that you actually have to fix, I mean, this is where you begin. It's so hard to make that cloud journey to begin with, it's even harder to carry all that legacy with you. And we're going to see a lot more of this going forward. >> All right. So, Ray, talk a little bit about, I loved an event you did last year, the people's centered digital future. Help explain to our audience what this is about, and where you're taking it again this year. >> So that event was a one-time event. We were celebrating the 70th anniversary of the United Nations founding, we were celebrating almost 50 years of the internet, and 50% of the world being connected to the internet. And part of the reason that was an important event was, we really felt that there was a need to get back to the roots of where the internet had begun, and more importantly, talk about where we are today in the world of privacy. One of the biggest challenges we have in the a digital world is that your personal data, your genomics, all this information about you is being brokered for free. And what we have to do is take that back. And by taking that back, what I mean is, we've got to make all these rights, property right. If we can make that a property right, we can leverage the existing rules and legislation that's there, and we can actually start paying people for that data through consent, and giving people that ability, on consent to data, could create lots of things, from universal basic income, to a brand new set of data economy that equalizes the playing field, while keeping the large tech giants. >> There's some of those big journeys that we went on, you talk about the internet, this year's 50th anniversary of the first walking on the moon, and you look at how entire countries rallied together, so much technology was-- >> Yeah, look at India. >> Spun off of what they've done there, it's like we need some rallying cries in today's day and age to solve some of these big day and age. Is that AI? Where are some of the big areas that you see tech needing to drive forward in the next decade? >> I think the big area's going to be around decentralization, giving individuals more empowerment. We've got large, big tech companies, that are, I'd say, imbalanced. We start companies right away, building monopolies on day one, and we don't open up those markets. And the question is, how do we create a level playing field for the individual to be to compete, to bring a new idea, and to innovate, if that's continuously stifled by big technology companies without an opportunity, we're in trouble. And so that starts by making data a property right, to the personal data. It starts by also creating marketplaces for that data, and those marketplaces have to have regulations, similar to capital market flows. The way treat exchanges, we treat marketplaces, we need to do the same thing with the way we do with data, and then the third piece, there has to be some level of a tax, that goes to all these data economies, so that they can fund the infrastructure and the watch dogs that are there. Now this is coming from a free market, I'm a free market capitalist, okay? I can't stand regulation, but I also realize that it's so important that we have a fair market. >> But do you, we know so much about how Americans are so much more cavalier about their privacy than even Europeans, what will it take to galvanize Americans to care about those little crumbs that they're leaving on the internet, that is the data that you say should be a property right, that we should be paid for? >> I think it's going to start with companies actually take, and do the right thing, where they actually give them that opportunity to monetize that information. >> Will they do that? >> I think the new set of startups are starting to do that, because they're looking at the risk that's being posed, at Facebook and Google and Amazon, on the anti-trust, DOJ, FCC, they're all coming in at the same time, the FTC, they're all wondering, do we break these companies up or not? The short answer is, I don't think they're going to, because we're competing with China, and when you're looking at that scale of data, where Amazon's transactions are only 1/10 of Ali Baba's? That's huge. So the consolidation has to happen, but we need to create a layer that actually democratizes and creates a fair trading play. >> And those startups, you think, can compete with established players? >> I think once we set the roles, and the ground rules, I think people are going to be able to do that, but once you free that data, what are we competing on now? You have to pay for my consent, you have to earn my business, you can't trade it for free, or just say, "Hey look, you are the product." That changes everything. >> Rebecca: Yeah, that's a good point. >> Ray, I know you spend a lot of time talking to, and giving advice to some of the leaders in technology, you're welcome to get into some specifics about Nutanix, or some of the cloud players, but what are some of the key themes, what are people getting right, and what are they still doing wrong? >> Okay, so theme number one, this is going to be a multicloud hybrid world for a long time. Anybody that's bucking the multicloud trend, they've missed the point, right? Because we want portability in data, there's only two or three players in every single market, if I can't move my data, my workloads, and my IO in and out, then you've actually created vendor lock-in from hell. And I think customers are going to protest against that. The second one, and you guys are probably following this trend a lot, is really about AI ethics and design principles for AI. So what is ethical AI? We've got five things that are important: The first one is make sure it's transparent. See the algorithms, see what they write. Second one, make sure it's explainable. Hey, bias is not a bad thing, so if I'm discriminating against redheads, with, left-handed, and that happened to like, I don't know, Oracle, fine. But, if that was unintended, and you're discriminating against that, then we have to get rid of that, right? And so we have to figure out how to reduce that kind of bias, if it's unwanted bias. If you discover that you're discriminating, and not being inclusive, you've got to make sure that you address that. So then the next part is, it's got to be reversible. And once you have that reversibility, we also make sure that we can train these systems over time. And then the last piece is, Musk could be right! Musk could be right, the machines might take over, but if you insert a human at the beginning of the process, and at the end of the process, you won't get taken over. >> I want to hear about what the future of work looks like for Ray Wang. You are on the road constantly, you are (laughs) you are moving your data from one place, you are everywhere, all the time. So what do you have on next, what's exciting you about your professional life? >> I think the challenge's that we are living in a world where there's too much information, too much content. And you guys say this all the time, right? Separating the signal from the noise. And people are willing to pay for that signal. But that is a very very tough job, right? It's about the analysis, the insights, and when you have that, people don't want to read through your reports. They don't want to watch through the videos. They just want to call you up and say, "Hey, what's going on?" And get the short version of it. And that's what's making it very interesting, because you would expect this would be in a chat bot, it'd be in a robo advisor, doesn't work that way. People still want the human connection, especially given all that data out there, they want the analysis and insights that you guys provide, that's very very important, but even more important right now, it's really about getting back to those relationships. I think people are very careful about the relationships they're keeping, they're also curating those relationships, and coming back to spending more time. And so we're seeing a lot more of in-person meetings, in-person events, very very small, curated conversations, and I think that's coming back. I mean that's why we do our conference every year, as well, we try to keep 200 to 300 people intimately together. >> Those human connections, not going away. (laughs) >> Nope, not going away, in an automated, AI, digital world! This is our post-digital future. >> That's excellent. Well Ray, thanks you so much for coming on theCUBE, it's always so much fun to talk to you. >> Hey, thanks a lot. >> High energy guy (laughs). >> Low energy. >> I'm Rebecca Knight for Stu Miniman, we will have more from the Bella Center at Nutanix.NEXT coming up in just a little bit. (upbeat music)

>> from Santa Clara in the heart of Silicon Valley. It's the Q covering the Churchills 2019 brought to you by Silicon Angle Media. >> Hey, welcome back, everybody. Jefe Rick here with the Cube. We're in Santa Clara, California At the Churchills. It's the ninth annual kind of awards banquet at the Church O Club. It's on, and the theme this year is all about leadership. And we're excited to have not one of the winners, but one of the newest board members of the church, Oh, club. And someone is going to be interviewing some of the winners at a very many time. Cuba LEM Ray Wong, You know, from Constellation Research of founder, chief analyst >> and also >> a new board member for the Churchill Club Brigade, is >> also being back here. I love this event. There's one my favorite ones. You get to see all the cool interviews, >> right? So you're interviewing Grandstand from Pallet on for the life changer award. >> Yeah, so this is really incredible. I mean, this company has pretty much converge right. We're talking, It's media, It's sports, It's fitness. It's like social at the same time. And it's completely changed. So many people they've got more writers than soul cycle. Can you believe that? >> Yeah. I like to ride my bike outside, so I'm just not part of this whole thing. But I guess I guess on those bikes you can write anywhere >> you can write anywhere, anywhere with anyone. But it's not that. It's the classes, right? You basically hop on. You see the classes. People are actually pumping you up there. Okay, Go, go, go. You can see all the other riders are in the space. It's kind >> of >> addictive. Let's let's shift gears. Talk about leadership more generally, because things were a little rough right here in the Valley right now. And people are taking some hits and black eyes. You talk to a lot of leaders. She go to a tonic, shows you got more shows. A. We go to talk to a lot of CEOs when you kind of take a step back about what makes a good leader, what doesn't make a good leader? What are some of the things that jump into your head? >> You know, we really think about a dynamic leadership model. It's something conceit on my Twitter handle. It's basically the fact that you got a balance. All these different traits. Leaders have to perform in different ways in different situation. Something like Oh, wow, that's a general. They've done a great job commanding leadership. Other times we had individuals, a wonderful, empathetic leader, right? There's a balance between those types of traits that have to happen, and they curve like seven different dimensions and each of these dimensions. It's like sometimes you're gonna have to be more empathetic. Sometimes you got to be more realistic. Sometimes you're going to be harder. And I think right now we have this challenge because there's a certain style that's being imposed on all the leaders that might not be correct >> theater thing. The hypothesis for you to think about is, you know, when a lot of these people start the Silicon Valley companies the classic. It's not like they went to P and G and work their way up through the ranks. You know, they started a company, it was cool. And suddenly boom. You know, they get hundreds of millions of dollars, the I po and now you've got platforms that are impacting geopolitical things all over the world. They didn't necessarily sign up for that. That's not necessarily what they wanted to do, and they might not be qualified. So, you know, Is it? Is it fair to expect the leader of a tech company that just built some cool app that suddenly grew into, ah, ubiquitous platform over the world that many, many types of people are using for good and bad to suddenly be responsible? That's really interesting situation for these people. >> Well, that's what we talked about the need for responsive and responsible leadership. Those are two different types of traits. Look, the founding individual might not be the right person to do that, but they can surround themselves with team members that can do that. That could make sure that they're being responsive or responsible, depending on what's required for each of those traits. You know, great examples like that Black Mirror episode where you see the guru of, like, some slasher meet a guy. Some guys like Colin is like, you know, he wants to make sure that you know someone's paying attention to him. Well, the thing is like a lot of times, at least folks are surrounded by people that don't have that empathetic You might not have had what a founder is looking at, or it could be the flip side. The founder might not be empathetic. They're just gung ho, right, ready to build out the next set of features and capabilities that they wanted to d'oh! And they need that empathy that's around there. So I think we're going to start to see that mix and blend. But it's hard, right? I mean, going through a start up as a CEO and founder is very, very different than coming in through the corporate ranks. There's a >> very good running a company, you know. It's funny again. You go to a lot of shows. We get a lot of shows, a lot of key, knows a lot of CEO keynotes, and it's just interesting. Some people just seem to have that It factor one that jumps off the top is Dobie. You know, some people just seemed >> like the have it >> where they can get people to follow, and it's it's really weird. We just said John W. Thompson, on talking about Sathya changing the culture at Microsoft, with hundreds and hundreds of thousands of employees distributed all over the world. What a creative and amazing job to be able to turn that ship. >> Oh, it is. I mean, I can turn on the charm and just, like, get your view Lee excited about something just like that, right? And it's also about making sure you bring in the input and make people feel that they're inclusive. But you gotta make decisions at some point, too. Sometimes you have to make the tough choices. You cut out products, you cut out certain types of policies, or sometimes you gotta be much more responsive to customers. Right? Might look like you're eating crow. But you know what? At the inn today, cos they're really built around customers or state Kohler's stay close air bigger today than just shareholders. >> Right. Last question. Churchill Club. How'd you get involved? What makes you excited to jump on board? >> You know, this is like an institution for the valley, right? This is you know, if you think about like the top interviews, right? If you think about the top conversations, the interesting moments in the Valley, they've all happened here. And it's really about making sure that you know, the people that I know the people that you know there's an opportunity to re create that for the next set of generations. I remember coming here when it's like I go back, I think give Hey, just I don't hear anybody in 96 right? And just thinking like, Hey, what were the cool activities? What were the interesting conversations and the church? The club was definitely one of those, and it's time to give back. >> Very good. All right, well, congrats on that on that new assignment. And good luck with the interview tonight. Hey, thanks a lot. All right. He's Ray. I'm Jeff. You wanted the Cube with that? Churchill's in Santa Clara, California. Thanks for watching. We'll see you next time.

>> Live from San Francisco, it's theCUBE, covering IBM Think 2019. Brought to you by IBM. >> Hey, welcome back everyone this is theCUBE's live coverage in San Francisco, California Moscone Center for IBM Think 2019. It's the wrap up of our four days of wall-to-wall live coverage. All the publishing on Siliconangle.com. I've got the journalism team cranking it out. Dave Vellante just put up a post on Forbes, check that out. And Stu's got the team cranking on the videos. Stu and Dave, four days, team's done a great job. Tons of video, tons of content, tons of data coming through theCUBE. We're sharing that live, we're sharing it on Twitter, we're sharing it everywhere on LinkedIn. What's going on with the data? Let's synthesize, let's extract the signal from the noise, let's assess IBM's prospects in this chapter two, as Ginni says. A lot of A.I., lot of data, I mean IBM is an old company that has so much business, so many moving parts and they've been working years to kind of pivot themselves into a position to run the table on the Modern Era of computing and software. So, what do you think, Dave? >> Well, I mean, this has been a long time coming and we're here, you pointed out John, to me privately that IBM's taking a playbook similar to Microsoft in that they're cloudifying everything. But there's differences, right? There's a bigger emphasis on A.I. than when, not that Microsoft's not in A.I. they of course are, but when Microsoft cloudified itself there wasn't as much of an emphasis on A.I. Ginni Rometty said, "Well, the first chapter was only about 20%, the remaining 80% is going to be chapter two. We're going hard after that." I wrote in that post today that, in 2013, IBM had a wake-up call. They lost that deal to Amazon at the C.I.A. They had to go out and buy Softlayer because their product was deficient, their cloud product was deficient. >> And by the way it looks like they're going to lose the JEDI Contract by the D.O.D., another agency that's a 10 billion dollar contract. >> So we can talk about they're going to lose that one too. >> We can talk about is Amazon's lead extending in Cloud? And so, IBM cannot take on Amazon head-to-head in infrastructures of service period, the end. It doesn't have the volume, >> And they know that, I think. >> It doesn't have the margins, and they know that. They got to rely on it's, as a service business it's SaaS, it's data, it's data platforms, obviously A.I. and now Red Hat. The fact that IBM had to spend, or spent, 34 billion dollars on Red Hat, to me underscores the fact that it's Cloud and it's 10-year attempt to commercialize Watson, isn't enough. It needs more to be a leader in hybrid. >> And let's talk about the Red Hat acquisition because Ray Wang on theCUBE yesterday and said, "Oh, P.E., private equity prices are driving up 34 billion dollars, pretty much market in today's world." He thinks they overpaid and could have used those services. You debated that, you've heard me say that, hey I could have used that 34 billion dollars of cobbled-together stuff, but you made a comment around speed. They don't have the gestation period there to do it. So, if you take market price for Red Hat, Stu, with open shifts accelerated success since Kubernetes really accelerated its adoption. You got IBM now with a mechanism to address the legacy on premise into Cloud Modern, and you got with this Cloud Private, Stu, this really is a secret weapon for IBM and to me, what I'm pulling out of all the data is that Rob Thomas at Interpol, the CDO have a great data A.I. strategy as a group. They have a team that's one team and this Cloud Private is a secret weapon for them. I think it's going to be a very key product and not a lot of people are talking about it. >> Well John, it shouldn't be a secret weapon for IBM because of course IBM has a strong legacy in the data center. We've talked about Z this week, you talk about power, talk about all the various pieces. Red Hat absolutely can help that a lot. What we noticed is there wasn't a lot of talk about Red Hat here just because it's going through the final pieces. We expect later this year to come out, but it's about the developers. That is where Red Hat is going to be successful, where they are successful and where they should be able to help IBM leverage that going forward. The concern we have is culture. IBM says that Red Hat will be separate. There will be no layoffs, they'll keep that alone but when I wrote about the acquisition I said, we should be able to see, for this to really be a successful acquisition, we should be able to see the Red Hat culture actually influence what's happening at IBM. And to be honest when I talk to people around this show, they're like, "That's never going to happen, Stu." >> I just want to make a point about the price. Ray was saying how they overpaid and made the private equity thing. IBM's paying a hundred and ninety dollars a share. If you dial back to June of '18, Stu you and I talked about this in our offices, Red Hat was trading at one seventy five a share. So they're paying an 8 1/2% premium over that price. Yes, when they made the deal in the fall you're talking about a 60% premium. So, the premium is really single digits over what it was just a few months earlier. >> And Cisco, Google, >> It was competitive, right. >> Microsoft all could have gone after that. I think it's a great buy for IBM. >> That's what they had to pay to get it. >> And definitely it helped there. So from my stand-point, looking at the show this week, first of all I was impressed to see really that data strategy and how that's pervasive through the company and A.I. is something that everyone's talking about how it fits in. John you commented a bunch of times Ginni mentioned Kubernetes two times in her Keynote. So, they're in these communities, they're working on all these environments. The concern I have is if this is chapter two and if A.I. is one of the battlefields, Amazon's all deep into A.I. I think heavily about Google when I talk about that. When I talk to Microsoft people they're like, "Satya Nadella is Mr. A.I.", that's all they care about. >> I don't think Microsoft has a lot of meat on the A.I. bone either. >> Really? >> No look it, here's the bottom line. A.I. is a moonshot it is an aspirational marketplace. It's about machine learning and using data. A.I.'s been around for a while and whoever can take advantage of that is going to be about this low-hanging use cases of deterministic processes that you throw machine learning at no problem. Doing cognition and reasoning a whole 'nother ballgame. You got state, this is where the Cloud Native piece is important as a lynch-pin to future growth because that wave is coming. And I think it's not going to impact IBM so much now, as it is in the future, because you got developers with Red Hat and you got the enablement for Cloud growth, Modern Cloud, stuff in any Cloud. But IBM has a zillion customers Dave, they have a business, they have mission critical workloads. And you pointed out in the Forbes post that we posted and on the Silicon Angle, that I.T. Economics are changing. And that the cloud services market is growing, so IBM has pre existing, big mission critical companies that they're serving. So, you can't just throw Kubernetes at that and say lift and shift. Z's there, you got other things happening. So, to me, that is IBM's focus, they nail their bread and butter, they bring multi-cloud from the table. Throw hybrid at it with Private Cloud and they're stable. Everything else I think is window dressing in my mind, because I think you're going to see that adoption more downstream. >> Well, the other thing you gave me for the piece actually, you helped me understand that IBM with Red Hat can use Cloud Native techniques and apply them to its customer base and to really create a new breed of business developers, right? Probably not the hoodie crowd necessarily, but business developers that are driving value apps based on mission critical apps and using Cloud Native techniques. Your thoughts on that? >> The difference between Oracle and IBM is the following, Oracle has no traction in developers in Cloud Native, IBM now with Red Hat can take the Cloud Native growth and use containers and Kubernetes and these new technologies to essentially containerize legacy workloads and make them compatible with modern technologies. Which means, if you're in business or in I.T. or running a lot of big shops, you don't have to kill the old to bring in the new. That's one factor. The other factor is the model's flipped. Applications are dictating architecture. It used to be infrastructure dictates what applications can do, it's completely reversed. We've heard this time and time again from the leading platforms, the ones that are looking at the applications with data as a fabric in there will dictate resource, Whether it's one Cloud or multiple Clouds or whatever architecture that's the fundamental shift. The people who get that will win and the people who don't won't. >> And the other thing I've pointed out in that article is that Ginny kept saying it's not backend loaded, The Red Hat deal, it's not back end loaded. IBM has about a 20 billion dollar business, captive business, in outsourcing, application management, application modernization and they can just point Red Hat right at that base, bring it's services business, Stu you've made this point, it's about scaling Red Hat. Red Hat's what, about a three and a half billion dollar company? >> Yeah >> And so that really is, she was explaining the business case for the acquisition. >> Yeah absolutely, I mean we've watched IBM for years, Bluemix had a little bit of traction but really faltered after a while, that application modernization. You hear from IBM, similar to what we've heard from Cisco a few weeks ago, meet customers where they are and help them move forward. We did a nice interview this week with a UK financial services company talking about how they've modernized what they're doing. Things like I.T. ops, new ops, these environments that are helping people with that app development. 'Cause IBM does have a good application work flow. There's lots of the infrastructure companies don't have apps and that's a big strength. >> When was the last, I got a direct message from the crowd, I want to get to Stu, but I want to ask you guys a question. When was the last time you saw a real innovation and disruption in a positive way around business applications. We're talking about business applications, not a software app, that's in a created category. We're talking about blocking and tackling business applications. When have you seen any kind of large scale transition innovation. Transition and innovation at the business application level? >> Google Docs? I mean >> I mean think about it. >> Right? >> So I think this is where IBM has an opportunity. I think the data science piece is going to transform into a business app marketplace and I think that's where their value is. >> Workday? >> Service Now. >> It's a sass ification of everything. >> Salesforce? >> Service Now, features become products. Products become companies. I mean this a big debate. I mean you can win on >> But that's not, Service Now really not a business, I mean it is a business app but it's more of an I.T. app. Alright Workday I'd say is an example. Salesforce I guess. >> And look here's one of the flaws in that multi-cloud picture, is it's I'm going to take all this heterogeneous environment and I'm going to give you a multi-Cloud manager. We've seen that single pane of glass discussion my entire career and it never works. So I'm a little concerned about that. >> So Andy Jassy makes the case that multi-cloud is less secure, more complex, more expensive. It's a strong case that he makes. Now of course my argument is that it's multi-vendor. It's not really multi-cloud. >> Well here's the Silicon Valley >> So he didn't have any control over that. It's not a procurement thing, it's just the way that people go by. >> The world has changed with cloud and I'll give you a Silicon Valley example anecdote. It used to be an expression in Silicon Valley, in venture capital community if you were a start-up or entrepreneur you'd build a platform. And there was an old expression, that's a feature, not a company. Kind of a joke within the VC community and that's how they would vet deals. Oh, that's a good feature" >> "Oh it's a feature company." >> "That's a great idea." Now with Cloud as a platform and now with all the stuff that's coming to bear, horizontally scalable, all the things that IBM's rolling out, sets the table for a feature to be a company. Where you have an innovation at the business model level, you don't really need tech anymore other than to scale up build it out and that's all done for you by other people. So people who are innovating on say an idea, well let's change this little feature in HR app or, that could meet up to Workday. Or let's change this feature. Features can become companies now so I think that's my observation. >> I think it's really interesting >> It could live in the cloud marketplaces too. It's so easy to get that scale if I could plug into all those marketplaces. IBM for years has had thousands of partners in their ecosystem. Of course Amazon's Marketplace, growing like gangbusters. >> But this is what Jerry Chen said when we were at Reinvent last year and we were asking him about Amazon, will it go up the stack, will it develop applications? He said, well, look but then what we got to do is give people a platform for application developers to build those features to disrupt, to your point, the core enterprise apps. Now, can IBM get there before Amazon, who knows? I mean its. >> Alright guys let's look at the big picture, zoom out. Your thoughts on Think 2019 IBM Think, Stu what's your final thoughts? >> Yeah, final thoughts is, I think IBM first of all is coming together. Just as this show was six shows and last year it was in two locations, there's cohesion. I heard the four days of interviews, we saw a lot of different pieces. Everything from talking about augmented reality through storage and we talked about the Z, and those pervasive themes of data, A.I., Dave what do you call it, It's the innovation cocktail now in Cloud. Data A.I. in cloud, put those three together. >> Innovation sandwich, innovation cocktail. Got to have a cocktail with a sandwich. That's your big take away? Okay, my take away Dave is that the, you nailed it in your post I thought, you should go to Forbes and check out, search on IBM Think you'll find the post by me and Dave Vellante but it's really written by Dave. I think to me IBM can change the game on two fronts. I learned and I walked away with a learning this week about these business apps. To me, my walk away is there's going to be innovation at a new genre of developers. I think you're going to see IBM target, they should target these business app ties as well as with the Could Native in Red Hat. I really think highly of that acquisition. From a speed stand point, I think the culture of Red Hat, although different, will be a nice check against IBM's naturally ability to blue-wash it. Which means you don't want to lose the innovation. I think Ginni saying Kubernetes twice on stage, is a sign that she sees this path, I think the Cloud Private opportunity could be a nice lever to bring open shifts and Kubernetes into that growth. And I think A.I. is going to be one of those things where they're either going to go big or go home. I think it's going to be one of those things. >> My take, love the venue, way better than last year in terms of the logistics. I like the new Moscone, easy to get around. May next year, May 2020 is going to be better than February here. I would've liked to see Ginni sell harder. She laid out a vision, she talked about a lot of sort of of high level things. I would have liked to seen her sell the new IBM and Red Hat harder. I guess they couldn't do that because they're worried about compliance. >> Quiet Period? >> Yeah right, you know monopolistic behavior I guess. But that I'm really excited to hear that story and a harder sell on the new IBM. >> I think if they can take the Microsoft playbook of cloudifying everything going with the open source with Red Hat and then just getting the great Sass if app revenue up, they're going to, can do well. >> Alright guys, great job. Thanks for hosting this week. Lisa Martin's not here today. Want to thank Lisa Martin if you're out there watching, great time. Guys, thanks to the crew. Thanks to IBM. Thanks to all of our sponsors that make theCUBE do what we do and thanks for all of your support to the community. I'm John Furrier along with Stu Miniman. Thanks for watching. See you next time. (pulsing electronic music)

>> Live, from San Francisco. It's theCUBE. Covering IBM Think 2019. Brought to you by IBM. >> Welcome back to theCUBE's coverage of IBM Think 2019. Here in Moscone, we're talking so much multi clouds. It's been raining all day, really windy. To help us wrap up our third day, what we call theCUBE Insights, I have our co-CEO, Dave Vellante. I'm Stu Miniman and happy to welcome back to the program. It's been at least 15 times on the program, I think our counter is breaking as to how many you've been on, Ray Wang, who is the founder, chairman and analyst with Constellation Research, also the host of dDsrupTV who was gracious enough to have me on the podcast earlier this year, Ray. >> Little reciprocity there, Stu. >> Hey, we got to get you back on, this is awesome! Day three is wrap-up and this is going to be fun. >> Ray, as we say, theCUBE is everywhere, except it's really a subset of what you and the Constellation Research team do, we see you all over the place so thanks for taking time to join us. Alright, so tell us what's going on in your world, Ray. >> So what we're seeing here is actually really interesting, we've got a set of data-driven business models that are being lit up, and you see IBM everywhere in that network. And it's not about Cloud, it's not about AI, it's not about security, it's not about Blockchain. It's really about companies are actually building these digital networks, these business models, and they're lighting them up. IBM-Maersk, we saw things with insurance companies, you see it with food trust, you see it with healthcare. It's happening, and it's the top customers that are doing this. And so it's like we see a flicker of hope here at IBM that they're turning around, they're not just selling services, they're not just selling software, they're actually delivering these business models to executives and companies, and the early adopters are getting it. >> Ray that was one of the questions we had, is what's the theme of the show and-- >> There is no theme! >> You're giving us the theme here of what it should be because we talk digital, we talk cognitive, we talk all these other big thought-y words because we need to think while we're here, right? >> We need to think, we need to think! No, but the thing is this is a theme-less show, people can't figure it out but the main thing is, look, I've got a problem, this digital disruption is happening, my business models are changing. Help me be part of that shift, or I may go away! And people realize that and that's what they're starting to get, and you see that in all the reference customers the people that were on stage. The science slams were also really great. I don't know if you had a chance to catch those but the science slams were kind of a flicker into research, IBM research which is the heart of IBM, is coming up. They're going from concept to commercialization so much faster than they used to be, used to be research would do a project people are like, that's kind of cool, maybe I'll adopt it. They're now saying hey, let's get this into the market, let's get into academia, let's get early adopters on board. >> So Ray, what do you make of the Red Hat deal? What does it say about IBM's strategy? Do you like the deal? What does it say about the industry at large? >> It's a great question. The Red Hat deal to me was overpaid, however, at 20x multiples, that's what PE firms are paying. So every vendor is now competing with PE firms for assets. Red Hat, at about 9x, 10x? Makes a lot of sense, at 20x? It's kind of like, okay, is this the Hail Mary or is this the future strategy or is this basically what the new company is? I would have rather taken that money and put it into venture funds to continue what they're doing with these network models. That would have been a better strategy to me but Red Hat's a great company, you get a great team, you get great COs you get great tooling. >> So you would've rather seen tuck-ins to actually build that network effect that you've been alluding to. Of course that would have taken longer you know, wouldn't have solidified Ginni's legacy. So, it's a big move, a big move on the chessboard. >> Well the legacy's interesting, last year the stock was down some 20-some percent, it's up 20% since January so we're going to see what happens, but it's a doubt component. >> Well I've always said she inherited a bag of rocks from Palmisano at the peak of 2012 and then it got hit hard and she had to architect the transformation. It took, I don't know, five years plus, so, you know, she was dealt a tough hand, in my opinion. >> She had a bad hand, but we've had seven years to play this. I think that's what the market's saying. >> So it's on her, is what you're saying. >> It's now on her. She's got to turn this around, finish the legacy, but you've got a great CEO in waiting with the Red Hat guy. >> Jim Whitehurst you're saying? >> Yeah, he's good >> So she's what, Ginni is 60, 61? Is that about right? >> She's past the retirement age. Normally IBM CEOs would have gone through. >> 61 to 63 I think, is that range maybe, hey, women live longer so maybe they live longer as the CEO of IBM, I don't know. >> She did get a bad hand, but I think when you execute the strategy that money, here's the tough part. Investors are saying, hey, we'd rather take your money, back away from you through stock buybacks, dividends and mergers and acquisitions, and we don't trust you to do the innovation. That's happening to every company, including all of IBM's customers. The problem is if you do that, they're hedging against those companies too. The same investors are taking 50, 100 million, giving it to three kids in a start-up anywhere in the world and saying, hey, go disrupt these guys, so they're betting against their own investments and hedging. So that's the challenge she's up against. >> We talked about in our open for the show here. It's developers, though, that's the business model. We saw IBM struggle for years to get any real traction there, there's little pockets there, they've got great legacy in open source, but Red Hat's got developers. Ray, you go and see a lot of shows, who's doing well with developers out there? >> Microsoft redid their developer network by going younger with GitHub, whole bunch of other acquisitions, this is a great developer buy in that percent. But the other piece that we noticed here was it's the partner developers that are coming in in force. It's not your average developer. I'm going to build a coding and do a mobile app, it's people that work for large system integrators, large networks, small midsize VARs, those are where the developers are coming from and now they have a reason, right? Now they have a reason to build and I think that's been a good turnaround. >> How about Salesforce with the developer angle, what's your radar say there? >> It's not about the developer angle on the Salesforce side, what's interesting about the Salesforce side is Trailhead. This is, like, learning management meets gamification meets a whole LinkedIn training program in the back end. This is the way to actually take out LinkedIn without going after LinkedIn, by giving everyone a badge. There's a couple of million people actually on this thing. Think about this, all getting badges, all training each other, all doing customer support and experience, that's amazing! They crowd-source customer experience and learning right there. And they're building a community and they're building a movement. That's the thing, Salesforce is about a movement. >> Couple of others, SAP and Oracle, give us your update there. >> I think SAP's in the middle of trying to figure out what they have to do to make those investments. We see a lot of partnerships with Microsoft and IBM as they're doing the Cloud upgrades, that's an area. The acquisition of Qualtrics is another great example, 20x. 20x is the number people are now paying for for acquisitions and for assets on that end. And Oracle's going to be interesting to watch, post-Kurian to see how they come at it. They have a lot of the assets, they've got to put them together to get there, and then we've got all these interesting things like ServiceNow and Adobe on the other end. Like, ServiceNow is like, great platform! Awesome, people are building and extending the Cloud in ServiceNow, but no leadership! Right? I mean, you've got a consumer CEO trying to figure out enterprise, a consumer CMO trying to figure out enterprise, and they don't know if am I a platform or am I an app? You've got to figure that out now! People want to work with you! >> Well it is a company in transition at the top, for sure. >> But they can do nothing and still make a ton of money on the way out. >> And they've kicked butt since Donahoe came on, I mean just from a performance standpoint, amazing. >> Oh yeah, performance? You can do nothing and I think it's still going to coast but the thing is at some point it's going to come bite you, you got to figure that out. >> How do you think that Kurian will fit at Google, what's your take there? >> You know, early reactions on Kurian at Google is good, right? The developers are embracing him, he understands what the problems are. Let's be honest, I've said this many times to you guys in private and also in public, you know. It was a mess, it was a cluster before. I mean, you had three years, and you lost traction in the market, right? And it's because you didn't get enterprise, you couldn't figure out partners and, I mean, you paid sales people on consumption! Who does that? You're a sales rep, you're like, I'm not going to do this on consumption! Makes no sense! >> Ray, Kurian had been quoted that no acquisition is off the table, you know, they didn't buy GitHub, they didn't buy Red Hat, do you see them making a 10, 20 million dollar acquisition to get them into the enterprise space? >> Billion. >> Yeah, sorry, 20 billion. >> I think there's a lot that they go after. I know there's rumors about ServiceNow, there's a couple of other things. I think the first acquisition, if I were to make it would be Looker. I mean I love that thing that's on there and buy Snowflake too while you're at it. But we'll see what they do. I think the strategy is they've got to win back the trust of enterprises. People need to know, I'm buying your relationship, I have a relationship, I can count on you to be successful as opposed to, hey, you know, you can get this feature for less and if you do this on a sustained unit or, I want to know I can trust you and build that relationship and I think that's what they're going to focus on. >> Well, come on, isn't Google's business still ads? I mean, that's still where all their revenue is. >> It is, but the other category is $10 billion. That other category of devices and Cloud and all that? That's still a big category and that's where all the growth is. I mean look at this, it's a full frontal assault between Amazon and Google, Amazon Alexa versus Google Home, right? Amazon in ads, $10 billion in ads, going after Google's ad business. Amazon doing an AWS versus Google Cloud. Google's under assault right now! >> Give us the update on Constellation, your conference is really taking off, you've got great buzz in the industry, and congratulations on getting that off the ground. >> And the Tech for Good stuff, loved it. >> Thank you. We had great event, December 10th, talking about the future of the Internet. What it means in terms of, you know, digital rights, human rights in a digital age, was really that conference. Our big flagship conference is November 4th through 7th, it's at Half Moon Bay. We get about 250 CXOs together, about 100 vendors and tech folks that are visionaries and bring them together, that's doing well, and we do our healthcare summits. We brought on a new analyst, David Chou. David Chou, and if you've seen him before, he's like one of the top analysts for CIOs and chief data officers in the healthcare space, he's at HIMSS right now. >> He's awesome, we know him from Twitter. He's been on, he's great. >> Yeah, so we do healthcare summits twice a year and that's been picking up, some of the top thinkers in healthcare. We bring them in to Las Vegas, we do a brainstorming session, we work with them. They think about ideas and then we meet again, so. >> Alright, Ray, we want to give you the final word. We're halfway through IBM Think, what have you been thinking about this and any final musings on the industry? >> So I was very upset last year at how it was run. And I think this has run much better than last year. I think they did a good job. February in San Francisco? Never again, don't do that. I know it's May next year, is when this event's going to be. But I think the main thing is IBM's got to do more events than once a year. If you get enterprise marketing you realize it's at the beginning of the year, it's still sales kick-off and partners. March? March is like closing the quarter, so you do an event in April or May, and you do it in April or May but you have multiple events that are more targeted. This theme-less approach is not working. Right, partners are a little confused but they're here because it's once a year. But more importantly, build that pipeline over the quarters, don't just stop at a certain set of events, and I think they'll get very successful if they do that. >> Alright well, Ray, next time you come on the program, can you please bring a little bit of energy? We'll try to get you on early in the show when you're not so worn down. >> I know. >> Thanks as always. >> Appreciate you coming back on, man. >> Hey thanks, man, it's theCUBE! I love being on this thing.. >> Always a pleasure. >> Alright and, yeah, we always love helping you extract the signal from the noise. We're Dave Vellante, John Furrier, Lisa Martin. I'm Stu Miniman. Thanks for watching day three of theCUBE at IBM Think. Join us tomorrow, thanks for watching. (light music)

>> Narrator: Live from New York City, it's theCUBE covering IBM Data Science For All brought to you by IBM. >> Welcome back here on theCUBE. We are live in New York continuing our coverage here for Data Science for All where all things happen. Big things are happening. In fact, there's a huge event tonight I'm going to tell you about a little bit later on, but Tricia Wang who is our next guest is a part of that panel discussion that you'll want to tune in for live on ibmgo.com. 6 o'clock, but more on that a little bit later on. Along with Dave Vellante, John Walls here, and Tricia Wang now joins us. A first ever for us. How are you doing? >> Good. >> A global tech ethnographer. >> You said it correctly, yay! >> I learned a long time ago when you're not sure slow down. >> A plus already. >> Slow down and breathe. >> Slow down. >> You did a good job. Want to do it one more time? >> A global tech ethnographer. >> Tricia: Good job. >> Studying ethnography and putting ethnography into practice. How about that? >> Really great. >> That's taking on the challenge stretch. >> Now say it 10 times faster in a row. >> How about when we're done? Also co-founder of Sudden Compass. So first off, let's tell our viewers a little bit about Sudden Compass. Then I want to get into the ethnography and how that relates to tech. So let's go first off about Sudden Compass and the origins there. >> So Sudden Compass, we're a consulting firm based in New York City, and we help our partners embrace and understand the complexity of their customers. So whenever there are, wherever there's data and wherever there's people, we are there to help them make sure that they can understand their customers at the end of the day. And customers are really the most unpredictable, the most unknown, and the most difficult to quantify thing for any business. We see a lot of our partners really investing in big data data science tools and they're hiring the most amazing data scientists, but we saw them still struggling to make the right decisions, they still weren't getting their ROI, and they certainly weren't growing their customer base. And what we are helping them do is to say, "Look, you can't just rely only on data science. "You can't put it all into only the tool. "You have to think about how to operationalize that "and build a culture around it "and get the right skillsets in place, "and incorporate what we call the thick data, "which is the stuff that's very difficult to quantify, "the unknown, "and then you can figure out "how to best mathematically scale your data models "when it's actually based on real human behavior, "which is what the practice of ethnography is there to help "is to help you understand what do humans actually do, "what is unquantifiable. "And then once you find out those unquantifiable bits "you then have the art and science of figuring out "how do you scale it into a data model." >> Yeah, see that's what I find fascinating about this is that you've got hard and fast, right, data, objective, black and white, very clear, and then you've got people, you know? We all react differently. We have different influences, and different biases, and prejudices, and all that stuff, aptitudes. So you are meshing this art and science. >> Tricia: Absolutely. >> And what is that telling you then about how best to your clients and how to use data (mumbles)? >> Well, we tell our clients that because people are, there are biases, and people are not objective and there's emotions, that all ends up in the data set. To think that your data set, your quantitative data set, is free of biases and has some kind of been scrubbed of emotion is a total fallacy and it's something that needs to be corrected, because that means decision makers are making decisions based off of numbers thinking that they're objective when in fact they contain all the biases of the very complexity of the humans that they're serving. So, there is an art and science of making sure that when you capture that complexity ... We're saying, "Don't scrub it away." Traditional marketing wants to say, "Put your customers in boxes. "Put them in segments. "Use demographic variables like education, income. "Then you can just put everyone in a box, "figure out where you want to target, "figure out the right channels, "and you buy against that and you reach them." That's not how it works anymore. Customers now are moving faster than corporations. The new net worth customer of today has multiple identities is better understood when in relationship to other people. And we're not saying get rid of the data science. We're saying absolutely have it. You need to have scale. What is thick data going to offer you? Not scale, but it will offer you depth. So, that's why you need to combine both to be able to make effective decisions. >> So, I presume you work with a lot of big consumer brands. Is that a safe assumption? >> Absolutely. >> Okay. So, we work with a lot of big tech brands, like IBM and others, and they tend to move at the speed of the CIO, which tends to be really slow and really risk averse, and they're afraid to over rotate and get ahead over their skis. What do you tell folks like that? Is that a mistake being so cautious in this digital age? >> Well, I think the new CIO is on the cutting edge. I was just at Constellation Research Annual Conference in Half Moon Bay at-- >> Our friend Ray Wang. >> Yeah, Ray Wang. And I just spoke about this at their Constellation Connected Enterprise where they had the most, I would have to say the most amazing forward thinking collection of CIOs, CTOs, CDOs all in one room. And the conversation there was like, "We cannot afford to be slow anymore. "We have to be on the edge "of helping our companies push the ground." So, investing in tools is not enough. It is no longer enough to be the buyer, and to just have a relationship with your vendor and assume that they will help you deliver all the understanding. So, CIOs and CTOs need to ensure that their teams are diverse, multi-functional, and that they're totally integrated embedded into the business. And I don't mean just involve a business analyst as if that's cutting edge. I'm saying, "No, you need to make sure that every team "has qualitative people, "and that they're embedded and working closely together." The problem is we don't teach these skills. We're not graduating data scientists or ethnographers who even want to talk to each other. In fact, each side thinks the other side is useless. We're saying, "No, "we need to be able to have these skills "being taught within companies." And you don't need to hire a PhD data scientist or a PhD ethnographer. What we're saying is that these skills can be taught. We need to teach people to be data literate. You've hired the right experts, you have bought the right tools, but we now need to make sure that we're creating data literacy among decision makers so that we can turn these data into insights and then into action. >> Let's peel that a little bit. Data literate, you're talking about creativity, visualization, combining different perspectives? Where should the educational focus be? >> The educational focus should be on one storytelling. Right now, you cannot just be assuming that you can have a decision maker make a decision based on a number or some long PowerPoint report. We have to teach people how to tell compelling stories with data. And when I say data I'm talking about it needs the human component and it needs the numbers. And so one of the things that I saw, this is really close to my heart, was when I was at Nokia, and I remember I spent a decade understanding China. I really understood China. And when I finally had the insight where I was like, "Look, after spending 10 years there, "following 100 to 200 families around, "I had the insight back in 2009 that look, "your company is about to go out of business because "people don't want to buy your feature phones anymore. "They're going to want to buy smartphones." But, I only had qualitative data, and I needed to work alongside the business analysts and the data scientists. I needed access to their data sets, but I needed us to play together and to be on a team together so that I could scale my insights into quantitative models. And the problem was that, your question is, "What does that look like?" That looks like sitting on a team, having a mandate to say, "You have to play together, "and be able to tell an effective story "to the management and to leadership." But back then they were saying, "No, "we don't even consider your data set "to be worthwhile to even look at." >> We love our candy bar phone, right? It's a killer. >> Tricia: And we love our numbers. We love our surveys that tell us-- >> Market share was great. >> Market share is great. We've done all of the analysis. >> Forget the razor. >> Exactly. I'm like, "Look, of course your market share was great, "because your surveys were optimized "for your existing business model." So, big data is great if you want to optimize your supply chain or in systems that are very contained and quantifiable that's more or less fine. You can get optimization. You can get that one to two to five percent. But if you really want to grow your company and you want to ensure its longevity, you cannot just rely on your quantitative data to tell you how to do that. You actually need thick data for discovery, because you need to find the unknown. >> One of the things you talk about your passion is to understand how human perspectives shape the technology we build and how we use it. >> Tricia: Yes, you're speaking my language. >> Okay, so when you think about the development of the iPhone, it wasn't a bunch of surveys that led Steve Jobs to develop the iPhone. I guess the question is does technology lead and shape human perspectives or do human perspectives shape technology? >> Well, it's a dialectical relationship. It's like does a hamburger ... Does a bun shape the burger or does the bun shape the burger? You would never think of asking someone who loves a hamburger that question, because they both shape each other. >> Okay. (laughing) >> So, it's symbiote here, totally symbiotic. >> Surprise answer. You weren't expecting that. >> No, but it is kind of ... Okay, so you're saying it's not a chicken and egg, it's both. >> Absolutely. And the best companies are attuned to both. The best companies know that. The most powerful companies of the 21st century are obsessed with their customers and they're going to do a great job at leveraging human models to be scaled into data models, and that gap is going to be very, very narrow. You get big data. We're going to see more AI or ML disasters when their data models are really far from their actual human models. That's how we get disasters like Tesco or Target, or even when Google misidentified black people as gorillas. It's because their model of their data was so far from the understanding of humans. And the best companies of the future are going to know how to close that gap, and that means they will have the thick data and big data closely integrated. >> Who's doing that today? It seems like there are no ethics in AI. People are aggressively AI for profit and not really thinking about the human impacts and the societal impacts. >> Let's look at IBM. They're doing it. I would say that some of the most innovative projects that are happening at IBM with Watson, where people are using AI to solve meaningful social problems. I don't think that has to be-- >> Like IBM For Social Good. >> Exactly, but it's also, it's not just experimental. I think IBM is doing really great stuff using Watson to understand, identify skin cancer, or looking at the ways that people are using AI to understand eye diseases, things that you can do at scale. But also businesses are also figuring out how to use AI for actually doing better things. I think some of the most interesting ... We're going to see more examples of people using AI for solving meaningful social problems and making a profit at the same time. I think one really great example is WorkIt is they're using AI. They're actually working with Watson. Watson is who they hired to create their engine where union workers can ask questions of Watson that they may not want to ask or may be too costly to ask. So you can be like, "If I want to take one day off, "will this affect my contract or my job?" That's a very meaningful social problem that unions are now working with, and I think that's a really great example of how Watson is really pushing the edge to solve meaningful social problems at the same time. >> I worry sometimes that that's like the little device that you put in your car for the insurance company to see how you drive. >> How do you brake? How do you drive? >> Do people trust feeding that data to Watson because they're afraid Big Brother is watching? >> That's why we always have to have human intelligence working with machine intelligence. This idea of AI versus humans is a false binary, and I don't even know why we're engaging in those kinds of questions. We're not clearly, but there are people who are talking about it as if it's one or the other, and I find it to be a total waste of time. It's like clearly the best AI systems will be integrated with human intelligence, and we need the human training the data with machine learning systems. >> Alright, I'll play the yeah but. >> You're going to play the what? >> Yeah but! >> Yeah but! (crosstalk) >> That machines are replacing humans in cognitive functions. You walk into an airport and there are kiosks. People are losing jobs. >> Right, no that's real. >> So okay, so that's real. >> That is real. >> You agree with that. >> Job loss is real and job replacement is real. >> And I presume you agree that education is at least a part the answer, and training people differently than-- >> Tricia: Absolutely. >> Just straight reading, writing, and arithmetic, but thoughts on that. >> Well what I mean is that, yes, AI is replacing jobs, but the fact that we're treating AI as some kind of rogue machine that is operating on its own without human guidance, that's not happening, and that's not happening right now, and that's not happening in application. And what is more meaningful to talk about is how do we make sure that humans are more involved with the machines, that we always have a human in the loop, and that they're always making sure that they're training in a way where it's bringing up these ethical questions that are very important that you just raised. >> Right, well, and of course a lot of AI people would say is about prediction and then automation. So think about some of the brands that you serve, consult with, don't they want the machines to make certain decisions for them so that they can affect an outcome? >> I think that people want machines to surface things that is very difficult for humans to do. So if a machine can efficiently surface here is a pattern that's going on then that is very helpful. I think we have companies that are saying, "We can automate your decisions," but when you actually look at what they can automate it's in very contained, quantifiable systems. It's around systems around their supply chain or logistics. But, you really do not want your machine automating any decision when it really affects people, in particular your customers. >> Okay, so maybe changing the air pressure somewhere on a widget that's fine, but not-- >> Right, but you still need someone checking that, because will that air pressure create some unintended consequences later on? There's always some kind of human oversight. >> So I was looking at your website, and I always look for, I'm intrigued by interesting, curious thoughts. >> Tricia: Okay, I have a crazy website. >> No, it's very good, but back in your favorite quotes, "Rather have a question I can't answer "than an answer I can't question." So, how do you bring that kind of there's no fear of failure to the boardroom, to people who have to make big leaps and big decisions and enter this digital transformative world? >> I think that a lot of companies are so fearful of what's going to happen next, and that fear can oftentimes corner them into asking small questions and acting small where they're just asking how do we optimize something? That's really essentially what they're asking. "How do we optimize X? "How do we optimize this business?" What they're not really asking are the hard questions, the right questions, the discovery level questions that are very difficult to answer that no big data set can answer. And those are questions ... The questions about the unknown are the most difficult, but that's where you're going to get growth, because when something is unknown that means you have not either quantified it yet or you haven't found the relationship yet in your data set, and that's your competitive advantage. And that's where the boardroom really needs to set the mandate to say, "Look, I don't want you guys only answering "downstream, company-centric questions like, "'How do we optimize XYZ?"'" which is still important to answer. We're saying you absolutely need to pay attention to that, but you also need to ask upstream very customer-centric questions. And that's very difficult, because all day you're operating inside a company . You have to then step outside of your shoes and leave the building and see the world from a customer's perspective or from even a non existing customer's perspective, which is even more difficult. >> The whole know your customer meme has taken off in a big way right now, but I do feel like the pendulum is swinging. Well, I'm sanguined toward AI. It seems to me that ... It used to be that brands had all the power. They had all the knowledge, they knew the pricing, and the consumers knew nothing. The Internet changed all that. I feel like digital transformation and all this AI is an attempt to create that asymmetry again back in favor of the brand. I see people getting very aggressive toward, certainly you see this with Amazon, Amazon I think knows more about me than I know about myself. Should we be concerned about that and who protects the consumer, or is just maybe the benefits outweigh the risks there? >> I think that's such an important question you're asking and it's totally important. A really great TED talk just went up by Zeynep Tufekci where she talks about the most brilliant data scientists, the most brilliant minds of our day, are working on ad tech platforms that are now being created to essentially do what Kenyatta Jeez calls advertising terrorism, which is that all of this data is being collected so that advertisers have this information about us that could be used to create the future forms of surveillance. And that's why we need organizations to ask the kind of questions that you did. So two organizations that I think are doing a really great job to look at are Data & Society. Founder is Danah Boyd. Based in New York City. This is where I'm an affiliate. And they have all these programs that really look at digital privacy, identity, ramifications of all these things we're looking at with AI systems. Really great set of researchers. And then Vint Cerf (mumbles) co-founded People-Centered Internet. And I think this is another organization that we really should be looking at, it's based on the West Coast, where they're also asking similar questions of like instead of just looking at the Internet as a one-to-one model, what is the Internet doing for communities, and how do we make sure we leverage the role of communities to protect what the original founders of the Internet created? >> Right, Danah Boyd, CUBE alum. Shout out to Jeff Hammerbacher, founder of Cloudera, the originator of the greatest minds of my generation are trying to get people to click on ads. Quit Cloudera and now is working at Mount Sinai as an MD, amazing, trying to solve cancer. >> John: A lot of CUBE alums out there. >> Yeah. >> And now we have another one. >> Woo-hoo! >> Tricia, thank you for being with us. >> You're welcome. >> Fascinating stuff. >> Thanks for being on. >> It really is. >> Great questions. >> Nice to really just change the lens a little bit, look through it a different way. Tricia, by the way, part of a panel tonight with Michael Li and Nir Kaldero who we had earlier on theCUBE, 6 o'clock to 7:15 live on ibmgo.com. Nate Silver also joining the conversation, so be sure to tune in for that live tonight 6 o'clock. Back with more of theCUBE though right after this. (techno music)

>> Hey, welcome back everybody! Jeff Frick here with theCUBE. We're at Zuora Subscribe at downtown San Francisco, and every time we go out to conferences, there's a pretty high probability we're going to run into this Cube alumni. Sure enough, here he is, Ray Wang. He's the founder and principal of Constellation Research. Ray, always great to see you. >> Hey Jeff, this is awesome, thanks for having me. >> And close to your hometown, what a thrill! >> This is, it's a local conference! What else can I ask for? >> So what do you think? Subscription economy, these guys have been at it for a while, 1200 people here, I'm a big Spotify fan, Amazon Prime, go back to Costco if you want to go back that far. But it seems to really be taking off. >> It is. About three years ago, digital transformation became a hot topic. And because it became a hot topic, it's really about how do I get products to be more like services. How do I get services to get into insights, and how do I make insights more like experiences and outcomes? And that natural transition as companies make a shift in business models is what's driving and fueling the subscription economy. >> It's interesting. Do you think they had to put the two and two together, that once the products become services now you can tap into that service, you can pull all kinds of data after that thing, you can have analytics, as opposed to shipping that product out the door it goes and maybe you see it every 15,000 miles for a checkup? >> You know what it is? It's basically, about three years ago, people started to realize this. Tien's been talking about this for ages, right? He's been talking about everything's a subscription economy, everything is going to be SAS-ified. And in tech world, everybody got that. But it was when companies like GE, which we saw together, a Caterpillar or a Ford, started to realize, "Hey we can do remote monitoring and sensing "with IOT on our cars, "and I can now figure out what's going on "and monitor them or give an upgrade, "or give a company an upgrade on their appliance, "or give an upgrade on their vehicle, "or do safety and compliance." Then people started realizing, "Oh, wow. "We're not just selling products. "We're in the services business." >> Right. It's funny, if you read the Elon Musk book, how the model years of Teslas, there's no such thing as a model year. It's what firmware version are you on, and then they upgrade. >> Oh, no, that's what we do all the time. You click on a little T, and it's like, boom, firmware. Oh, I get a new upgrade. Only the other day, you touch your head seat, there's like a lumbar support thing, the software popped up for headrest! I never knew I could change the headrest! It literally showed up two months ago. It's unbelievable. >> So, the cool thing, I think, that doesn't get enough play is the difference in the relationship when now you have a subscription-based relationship. That's a monthly recurring or annual recurring, you got to keep delivering value. You got to keep surprising you every morning, when you come out and get in your car, as opposed to that one time purchase. "Adios, we'll see you in however many years "until you get your next vehicle." >> Oh, that's a great example. And the Tesla, we got the Easter eggs over Christmas, right? So the Christmas holiday thing with the Model X that actually did Trans-Siberian Express to the Bellagio fountains with the doors that popped up. You're like, "Hey, what is this thing?" It's just an upgrade that shows up. You're like, "Okay." But you do. You do have to delight customers, you're always capturing their attention, and the fact is, hey, I might buy a toaster. And in that toaster, I might get an upgrade two to three years out. Or maybe, I just buy toasters, and I subscribe to them. And every three years, I get a new toaster. And I can choose between a model L or I can go upsell, get a different color, or I can change out a different set of features, but we're starting to see that. Or maybe, I get a hotel room or a vacation. And that hotel room is at level X, and if I get a couple more members of my family, I get to level Z, and I get to another level, where I lose all the kids, I go back to level A. But the point being is I'm buying a subscription to having an awesome vacation. And that is the type of things that we're talking about here. It's that freedom that Tien was talking about. >> Because he talked about the freedom from obsolescence, freedom from maintenance. There's a whole bunch of benefits that aren't necessarily surfaced when you consume stuff as a service versus consuming it as a product. >> It does. And sometimes it may cost more, but you're trading the convenience, you're trading the velocity of innovation, right? For some people, they just want to own the same thing, they're not going to make the move, but for other people, it's about getting the newest thing, getting delighted, having a new feature. And in some cases, it's about safety, right? This is regulatory compliant or I'm actually doing rev rec correctly, as they were talking about, ASC606. >> Alright, so you're getting out on the road a lot, it's June 6, and I won't tell anyone on air how many miles you already have, because Tamara is probably watching, and she'll be jealous, but biggest surprise is you see here or recently as this digital transformation just continues to gain speed. I'm doing a little research now, and maybe you can help me out. Looking back at digital photography, because it's like, "No, no, no, no, no." for the film, and then it's like, boom. I think these really steep inflection points, or up if you're on the right side, are coming. >> Let's stick to digital photography, that was a great one. There was the point, remember, where we actually had all those disposable cameras at parties that'd get developed, one hour developing. Then we get to back to the point where you just showed up at Costco, dropped something off, you'd get the disk and the photo. Then we had O-Photo, and now we have nothing. Everything just went away because of the phones. These things changed everything, right? I mean, they changed the way we look at photography to the point where, do we even have an album? I was breaking out albums basically three weeks ago, showing my kids, like "Hey, this is what a photo album looks like." And they were completely mystified. "Oh, you print these, how do they get printed?" I mean, they're asking the basic questions. That transformation is what we're having right now. "You own a car?" "You actually buy a PC?" I'm buying compute power. Kilowatts per hour for artificial intelligence in the next year. It's not going to be, I bought the server, I loaded it up, I got it tuned, I got it ready. So yeah, we are in the middle of that shift. But it's the fact that companies are willing to change their business models, and they're willing to break free in the post ERP era. A lot of this is just, my old ERP does not do billing, it doesn't understand the smallest unit of something I sell, and I've got to fix that. And more importantly, my customers, they want to buy it today. The want to buy it in pieces. They want to buy it even smaller pieces. They might buy it every other week, they might buy it-- we have no idea. Yeah, I've got to make sure I can do that. >> It's just interesting too that this is happening now. We're talking about autonomous cars. We see the Waymo cars all the time. The guy from Caterpillar, he's got to a whole autonomous fleet of mining vehicles that are operating today. >> 500,000! He's got 500,000 little trucks. Well, they're not little trucks, they can't fit in this building. >> They're big trucks. Apparently, they tried. >> But they're trying to get these trucks in. We used to think about, like "Hey, these are agricultural vehicles that can be remotely controlled by GPS, they also work for tanks." These are things that are actually doing runs. Now, it's a great reason. Think Australia. Out in Perth, it's about $150,000 to hire a driver. Just to go back and forth. So they figured, "This is just getting ridiculous. "We don't have enough people out here. "We can't convince enough people "to come drive these trucks. "Let's go automate that." That's a lot of the story of where a lot of this came from. >> Or he had a bad night, or broke up with his girlfriend, or distracted about this or that. The whole autonomous vehicle versus regular people driver-- all you've got to do is ride around on your bicycle in your neighborhood, and watch how many people stop at stop signs. Should we answer that question real fast? >> Oh, I do that in California. That's kind of bad, actually. >> Alright Ray. Well, thanks for taking a few minutes. I'm glad you get a weekend at home. Where you off to next, I should ask? >> Oh, it's going to be a crazy next few weeks. I'm going to be in London and Paris and Boston all next week. >> Oh, you're going to eat well. >> I'll try. >> Alright, he's Ray Wang. I'm Jeff Frick. You're watching the Cube from Zuora Subscribe. Thanks for watching.

(sleek electronic music) >> Hey, welcome back, everybody. Jeff Frick here with the Cube at the RSA Conference in downtown San Francisco. And we got a really special guest that we grabbed out of the hallway, out of the airplanes, Tamara McCleary, the CEO of Thulium. She's the only person I know that goes to more conferences than me and Ray Wang together, I think. (laughs) Tamara, great to see you. >> Oh my goodness, it is so awesome to find you here! >> Absolutely. So, what do you think of the show? 40,000 people. >> It is absolutely bloody freaking crazy right now. And it is, the show has grown just immensely year after year. And there's so much going on. It's absolute craziness. In fact, it's so busy, I had hard time finding you. >> I know. (laughs) So do you feel more secure with all these fine professionals looking out for you? >> You know what? I actually think right here, right now, we are in the midst of geeks with capes. These are the new superheroes. My cybersecurity superheroes right here. >> Well I'm glad. Because the keynote was a little dark this morning. (laughs) John Lithgow got up there and basically said everything is going to fall apart, except for the heroes with capes that are going to keep our cars running, hospitals up, TV stations going, the lights on. >> Wait a minute, you're not suggesting that fear is being used as a motivator for cybersecurity, are you? >> Well, yeah, we don't want to get into that. I mean, the whole, you know, governments like to influence other government's elections. That's never happened before either. >> Well, you know, the other this is, it would be very scary if you didn't follow you on the Cube because you've got the cutting edge in the know information. >> That's right. We have all the tech-athletes like you. (laughs) >> A tech-athlete! So, what have you see so far? Who are you working for here? What have you kind of seen? What's the, uh, what's the vibe? >> Well I am here on a press pass, so I am covering and talking about what's going on here at the conference. And lots of new cool things that I'm interested in and that is, you know we're talking a lot about the internet of things, we're talking a lot about threats. And you're looking at AI, right? What's AI got to do with security? And what I find interesting is that we have to future forward into, all right, with this machine to machine, machines talking to machines. Machines really are going to be the new cyber attacker. Right? >> Right, right. >> So it's machines having to combat other machines who are posing cyber threats. So I think that's, I don't know. I really geek out on the futuristic stuff. So I'm very interested in seeing how companies are harnessing AI in the cybersecurity space. >> Right. Well we just had an instant guest said, you know, you can be a bad guy on AWS, launch your threat against a customer on AWS, and get paid through AWS. >> What? >> I mean, the whole thing happens inside of the cloud in Seattle. It's amazing. >> Wait a minute. That sounds like a show on Mr. Robot. Right, with Evil Corp! >> It could be. And that's before, no, then they flash to the nest, right? The dark shadow on the nest. >> Ooh! >> As they cut to commercial. (laughs) So what else you got going on this year? I mean, you are literally all over the place. We love to keep track of you on Twitter. We see your airplane pictures taking off and landing in cities all around the world. What do you have on the agenda? What's coming up next? >> Next is Mobile World Congress in Barcelona. >> In Barcelona? >> I'm really excited to be there. >> 'Cause 5G is all the rage, right? >> Yes. >> Big part of IOT. >> Yes, and there's going to be a lot of unveiling going on at Barcelona and I'm excited. >> Spanish ham, which is always good. (laughs) Olives. >> Are you going to be there? >> We are going to cover it from Palo Alto for the people that don't want to go on the airplane ride. So we're going to cover Mobile World Congress from the Palo Alto studio. It'll be kind of that follow the sun thing. You guys will cover it early in the morning, we'll pick up the coverage as you guys are out having good ham, red wine, and olives. >> So I got to remember that I shouldn't be tweeting you after a certain hour, because you're going to know. >> We'll definitely pick them up and retweet them. All right, Tamara, well, thanks. I know you're a busy lady. Thanks for taking a few minutes to stop by and say hi. >> Thank you. >> And find us in this big sea of people. >> Woo! Awesome! >> All right, she's Tamara McClearl. I'm Jeff Rick. And you're watching the Cube. Thanks for watching. (sleek electronic music) (upbeat electronic music)

>> Announcer: Live from San Francisco, it's The Cube, covering Oracle OpenWorld 2016, brought to you by Oracle. Now, here's your hosts, John Furrier and Peter Burris. >> Welcome back, everyone. We're here live in San Francisco for SiliconAngle's theCUBE, our flagship program. We go out to the events and extract the signal through noise. We are here at Oracle OpenWorld 2016 on the ground floor in the exhibit hall, big booth, big studio, breaking down Oracle OpenWorld. Of course, Larry Ellison just gave his keynote. He does the opening keynote Sunday night before the event and then saves his best for the keynote right in the middle of the afternoon from 1:30 to 3:30 on Tuesday, second day. And so, we're going to break it down. I'm John Furrier, the co-CEO of Silicon Media here. Peter Burris, Chief of Research at SiliconANGLE Media, and also General Manager at Wikibon Research and Rob Hoth, Editor-in-Chief of SiliconANGLE and heading up the editorial publication we're going to be expanding on. Guys, let's get into it. So Larry Ellison, he must have been tired Sunday and he must have saw out tweets about upping his game a bit. He delivered an epic performance. He really came out, guns blaring, Amazon Web Services clearly in his sights, being aggressive. Peter, your thoughts on the tone. Is this the new Oracle or what's your take? >> Larry was pumping so much energy into his speech that he actually overflowed a bunch of buffers and as a consequence, it was very, very halting when it came in over the TVs here. I think in general, he went back to his playbook or he's going back to the Oracle playbook and the Oracle playbook historically has been we're more open, we are faster and when you combine those two factors, we will be cheaper. So he used, they ran some benchmarks. He showed how Oracle on Oracle is faster, how everything on Oracle's faster. How Oracle on Oracle and not everything else is faster and how ultimately that turned into longer term, cheaper operations. So it looks like Oracle remembers what got it to where it is 20 years ago, 25 years ago. In the last big transition, or one of the last big transitions, sounds like he's kind of going back to the playbook and running it again. >> The guns are blaring, Rob you were in the session, you've been out scouring for stories, your headline you just posted at siliconangle.com says, "you're locked in, baby, Oracle's Larry Ellison "redoubles attack on AWS." Your thoughts on the keynote, what was the vibe, what struck you? >> Well I mean obviously Larry was really on his game there. He, as you said Sunday, was a little off, but this time he really came out blazing, guns blazing as you say, and he really attacked Amazon on a number of fronts, performance, openness, which is kind of ironic, isn't it? For oracle? So, you know, he's obviously gunning after Amazon, or at least wanting to appear to. What I wonder, though, is what that means. I mean, is he really going after Amazon, or is he trying to set some sort of tone for the customer to say, "look, if you're even thinking of Amazon, "you got to look at us first, right?" >> And certainly as on Oracle on Oracle, I heard things like, "our stuff is faster." "Our stuff works." end to end, back to the drumbeat of "our code is identical on premise, identical on cloud, it's the easiest way to move to the cloud, obviously Oracle Cloud, not the cloud. De-positioning Amazon as being locked in and closed is interesting. I thought it ironic, too, Rob, that's the first thing I came to, it's like, a lot of people have accused Oracle on their run after they started getting escape velocity as a venture, and when they really ran the table on the market, a lot of people were looking at Oracle as a lock-in, Oracle's database was so important they are buying companies, people saw all that goes on on the history of their, customers felt locked in, so it's ironic now the shoe's on the other foot. >> And not only that, he even recused them, he said, "you're locked in, baby, and if they want to raise "their prices, you better get out your checkbook," and I thought, "isn't that Oracle's playbook?" (laughing) >> So Peter, that is the playbook on the licensing side, we've heard from customers that the licensing has always been a sticky issue, we know the VMware has had that challenge with the Hypervisor, which Oracle's now announcing there's no Hypervisor on their network virtualization, so how does these companies make money, because certainly it's a shift of the dollars, Mark Hurd said 80% of IT spending will be in the cloud by 2025, so is there a ratchet, is there a sticky factor for Oracle to actually maintain that revenue growth? >> Well, as we talked about yesterday, there is nothing stickier than the application. When a business reconfigures itself to run an application, it is extremely hard to take that application without dramatically disrupting the business. You can take out a database manager if you can move that data to some other structure, some other mechanism, and still run the application, you can certainly change hardware, and you will be able to change (mumbles) providers, it won't be fun, it won't be easy, it'll be expensive, but you can move data around and stand new instances of things up in other places. But the most sticky thing, good or bad, is the application. So as Oracle goes forward, there's no doubt that it's going to talk about how Amazon is trying to lock people into it's platform and some of the services that it's coming out with. But most of the businesses out there are mainly focused on whether or not the applications that they've either got from Oracle or have built on top of Oracle databases are working. And one point to make here, John, I have never met with a CIO or a senior IT person who has ever said to me, "I really hope Oracle bones it in this next transition, "because I'd like to be able to throw them out." Nobody is looking for Oracle to lose. Most of these companies have so much invested in Oracle that they don't want to go through the pain and suffering of Oracle not succeeding. They would certainly like to have alternatives, and they would certainly like Oracle to modernize its practices so that it appears and presents itself more as a cloud supplier, but this is overall a good thing for customers. >> I would agree with you, but I'd make a point, Cisco is one of those other companies in the early days had that stickiness with the routers, you couldn't just pull one out, it had a nice nestedness into the fabric of every business that they did business, Oracle's the same way. But it's interesting, I find the tone, Rob, that you were mentioning, that they're going after Amazon and to quote thing, your article, "Oracle's cloud runs "24 times faster for analysts than Oracle on AWS." Now you're talking about Oracle on AWS. To your point, he's trying to keep the customer saying, "don't move to Amazon." And then the other thing I was taken aback by Redshift comments, he's going after Redshift, you pointed that out-- >> And Aurora. >> And Aurora, but Redshift is interesting. Redshift is the fastest growing service on AWS. Andy Jassy's told me that directly, and so he kind of did a nice little trick, he de-positioned Redshift great for analytics, but horrible for online transaction processing, the core for-- >> Which it's probably really not made for, right? >> Yeah, I wouldn't say that was Redshift's position. >> However, but it comes back down to what Amazon's all about, we speculate at the Cube that we don't yet know what Amazon will become, and the behemoth that they might be given their success, so I see Oracle really trying to kind of deposition Amazon as getting more territory in their accounts. So yeah, I don't think Oracle looks at Amazon as a replacement, that they will die, but the disruption factor coming from Amazon certainly is being felt by Oracle, would you agree? >> Oh absolutely. And, well, the disruption, look, nobody, or very few people look back 12, 13 years ago and say that Amazon is going to become what it has become in a lot of different markets. Jeff Bezos has demonstrated that he can get his troops to focus in and get very, very complex things done and have an enormous impact in a lot of different industries. Right now we are all wondering, we're all wondering what those new industry structures are going to look like that are going to be the dominate institutional forces in the next 10, 15 years. And it's clear that Amazon has identified what one part of that institutional basis will look like, and Oracle needs to respond. And that's what they're doing. And they seem to be doing it well, but it's going to be a long, long, long haul. >> Well let's bookmark that, 'cause in this segment, I want to get into what's not being talked about here at Oracle OpenWorld, and we'll get to that in a second. later in the segment, but let's keep on the theme of what we're hearing. Rob, you're out with your notebook, you're talking to people, what's the general point of view, what's the general consensus of your findings as you interview folks just after the keynotes? Is there a tone, is there a certain thing you're hearing outside of their messaging, which is pretty clear, "Oracle Cloud all the time," what's some of the things that you're finding in your reporting? >> Well there is some sense out there that, you know, questions about Oracle's commitment to cloud, especially the infrastructure part, and whether they're trying to position themselves, but not necessarily being completely serious about really taking on Amazon, and so-- >> As a red herring, or more of a posture, or legit competitor? >> Well, I don't know, but the doubts are kind of interesting you know they're obviously not spending as much on R&D on production of data centers, and so people look at that and go, on the one hand, the investors say, "maybe I don't want 'em to spend so much 'cause they're "going up against an entrenched competitor in Amazon," but the customer is probably, you know, "I want more." So they're a little doubtful, I think, about how far Oracle's going to go. >> Any other findings from other Oracle executives? Is there anything that's jumping out at you in the hallway conversations? >> No, they're pretty consistent in their messaging. (laughing) Needless to say, that's one of their strengths, but there was a Q and A with Thomas Kurian, people were trying to lead him off on saying things, and he was not taking any bait, he was completely on message, and-- >> Well, the Oracle executives are very strong with holding the line, party line, we do get some nuggets on the Q, Juan Loaiza came on, again, he didn't really reveal anything confidential or out of bounds with (mumbles) messaging, but he brought the database piece, and was really seeing that the database piece is going to be much more of a broader perspective, that's my interpretation, and I was saying earlier that getting out of those swim lanes is a key message. But it's interesting, I mean I think the customers, what I'm hearing in the hallways, Peter, is "what's the impact to the customer?" Right? Like okay, the buyers. So there's no real, no one's running for the exits with respect to Oracle, so I agree with you there, but there's definitely an investment criteria going on with the customers around the future that they need in their architecture, whether that's a hybrid multi-cloud environment, and then ultimately, the fear of being forclosed for opportunity. So as customers think about the future, they just don't want a forclosure situation where there's no end room, so they have to go outside of Oracle, if they have to. So I think that choice option is interesting. So I kind of see the difference as more of a fun factor-- (crosstalk) >> This is clearly the most important thing on the table, is new workloads. The second mot important thing on the table is if the new workloads go to the cloud, which it appears that they are going to, and they end up more in Amazon, that's going to create a center of gravity, that's going to have an impact on existing workloads, and there are few companies that have more to loose if existing workloads move into Amazon's cloud than Oracle. And so by, Oracle needs to intercept this, they absolutely need to intercept this. But it's also the right thing to do for the customer base. My guess is that they're figuring out how to transition the business models, you know, revenue comes down here, goes up there, how do we do it so that everybody wins? That's a very, very complex management undertaking, especially given that there may be a CEO change on the horizon at some point in time. But the bottom line is get the new workloads, make sure the center of gravity doesn't move too much, and keep your customers. >> I was out last night at the press event, also there was an Accenture party, and I bumped into a few folks, and I had an interesting conversation with one, and it's something we've talked about in the Cube a little bit, but I'll bring it out here. They said, "John, what do you think about Oracle and Amazon, and all this stuff?" Which you take, you know, a little bit socially lubricated at the time, I said, "Hey, someone's going to be a Blackberry in this equation." They're like, "what do you mean?" I go, "well the Blackberry had all the features "of the phone, they had email, they had browser support, "they had huge adoption installed base phones. "When the iPhone came out, that was the game changing shift "for applications, so every net new mobile app, "now called mobile first, was really build for a computer, "AKA, iPhone and then the Samsung and Android, "so all new applications essentially "were written for the iPhone and Android." So they're like, "where are you going with this?" I'm like, "okay, if you're an enterprise, "every net new application or cloud native application "will be written for the cloud. "My belief is that why wouldn't you "build an application for this next gen architecture? "Why would you even do it on a prim unless it was "some specific requirement or outdated software--" >> Edge computing, there's some other things. >> There's some specific enterprise things that will always be there, but every net new application, or Greenfield application, (speaking indistinctly)-- >> Peter: Who's going to have-- >> Is going to be in the cloud, so if you believe that argument, that means there's going to be a tsunami of action in cloud, period. That means everything's going on the cloud. So if you believe that then it's a simple scale game, so that's going to be share taken by the cloud guys, so who are they? Oracle's kind of new to the cloud, and it's only really Oracle Cloud, so Amazon's been getting the lions' share of that, so Google's ramping up for that with Diane Greene, and you've got Microsoft. Your thoughts on that Blackberry that is, will someone be the Blackberry of cloud? >> It's an interesting analogy. I think that there's going to be some early, let's put it this way, if there's going to be a Blackberry of the cloud, it would be Amazon. And I don't think Amazon's going to be the Blackberry of the cloud. Right? >> Rob: Not anytime soon. >> No, because the Blackberry was the first one to come out that said, "look, we can add more functionality "than what you normally think about a phone," and along came Apple, and said, "you know what, "we're actually almost anticipating a treason. "We can turn the phone into a piece of software "that runs this handheld computer." So I don't think that Amazon is likely to be the Blackberry. Now the question is will Oracle be a Blackberry as a consequence of the cloud. And again, there is, businesses have invested so much in their core enterprise applications that they are configured around, that the cost to rip them out would be so great, and the benefits would be so modest unless Oracle does a faceplant of absolutely epic proportions, I don't think it's going to happen. >> It's not a clean analogy, but I do remember people having two phones, 'cause work had a phone that was a Blackberry, and the other one's iPhone, but it's a hard question, but here's-- >> But the cloud is the iPhone. In your analogy, the cloud is the iPhone. >> Yes, so it's a hard question, right, so we can pontificate, but here's the thing that I want to ask you guys both, 'cause it's a hard question, because it's early to provocatively bring this out, but what would be the tell signs for the Blackberry? One, it's large pre-existing condition. Right, install base. Clutching and holding on to the old way. And trying to be new. Blackberry tried to be cool, but never really realized, let's just go and complete iPhone clone-- >> So what was the centerpiece of Blackberry strategy? That core, fundamentally core, enterprise telecommunications app that handled email and phone metrics. The telltale thing that Oracle's doing something wrong, quite frankly, the first one would be that they start cutting people out of the ecosystem. That they start going toward what you were talking about, was that the suite becomes more important than the innovation. Again, I don't think that's going to happen. I'm encouraged by the fact that this very comprehensive announcement so strongly features ISVs and partners, which, John, that is a really, really important thing to be looking for. Does the suite become more important than the innovation? >> That's a great point, and the other thing that's interesting, too, is the whole workload conversation, because if you bring this kind of analogy together, is that the Blackberry ran workloads, it ran email, and so those workloads were highly efficient on their device. >> Well remember, actually Exchange ran the email, Blackberry ran the presentation, so the Blackberry application was simply taking something and went somewhere else, so it was easier to displace it when somebody came along with an alternative. >> There's a lot of holes in the analogy, but it does ring true, because we all know what happened to Blackberry, so the question that's on the table is, you got to transform or die, right? I mean this is clearly a lot of stakes are at risk here, so interesting conversation, so-- >> So the question is, Is Oracle kind of being proactive and aggressive enough, not just on the marketing front, but in innovation? Because they said a defensive, even Hurd yesterday, Mark Hurd yesterday said, was painting the, you know, we basically have a situation where IT is not growing, traditional IT, so we have to get into these new things, but are they? >> I think they're defensive, good point, and I think my observation, one from doing all the Cube interviews and covering Oracle deeply than we have been is that I think they're being defensive for reasons of not making enough progress, and that's not a function of Oracle's a function of their build out, and Ray Wang pointed out that the progression of building the data centers, and Larry's presentation, hangs together if you're an Oracle customer. If you're an Oracle customer, everything he said on stage actually makes a lot of sense, totally no problem with that. The other thing that Oracle's managing is the public perception on Wall Street around their growth prospects. I think they're holding the line, they're over-amplifying their CNBC interview, you watch the CNBC interviews, you watch Bloomberg, Mark Hurd is messaging like a politician, there's no real substance to any future indication of the strategy. Now we all know what the strategy is, they are not even close to being ready to get to the cloud, and that's hwy they're staying with their core base first, but they are going into a position to be set up for a siege where they bring their database customers to the cloud. That's where the game will get interesting, when Oracle starts really having those foundational building blocks of infrastructures of service, PaaS, and SaaS set up on Oracle first, then the net new application metric becomes, the net new customer metric becomes important, then you star to see the real war going on, where then it's a frontal attack on Amazon. >> John, you're absolutely right, but again, there is an overarching user issue here. They may not like Oracle's pricing, they may not like negotiating with Oracle, especially on the database side, although I've heard recently there's been some moderation, there's something of a d'etat going on right now. But again, there is not a user on the planet who wakes up and says, "I can't wait for the fun of ripping out "my Oracle applications and replacing them "with something new." That's just not something that anybody looks forward to >> I 100% agree, and here's my analogy on that. The marketing cloud comps that we had earlier, and some of the other new stuff around Oracle is pretty exciting because they're talking about design, user experience, they're talking about some of the real interaction, engaging components of their software towards the front end, near the consumer. On the existing Oracle, I've said this on the Cube, going back to 2010, Oracle's like plumbing and pipes, it runs the water, it feeds everything into the enterprise, why would you want to rip out, replace something that's already working? What are you adding onto the plumbing? So as a utility, Oracle has a utility effect on some of these core systems, whether it's CRM, ERP, CM or whatever, I get that, and I don't think that's at risk. I think if better plumbing comes along, (laughing) >> But here's-- >> It's another-- >> Well that's very true, but here's another way of looking at that exact point, John. In most businesses, your ERP application really is your infrastructure, it's not your servers, and your storage, and your middleware and your network. From your Board of Directors' standpoint, from your CFO's standpoint, for most of the business, the infrastructure is the ERP application. So when we all talk about infrastructure as a service, we're talking amongst ourselves about the role that Amazon's going to play, and it's important, they're having a major impact, new way of thinking about infrastructure at a technology end. But from a business standpoint, they're not looking at Amazon necessarily and saying, "oh wow, let's go there "because I can get a bunch of virtual machines." >> I mean, you said it earlier, the user's the center of the conversation, the customer, and here's my acid test for kind of the monkey business that goes on between the suppliers, and it comes down to this: whoever can enable value will do well. And customers don't mind paying for value, right, so the value equation is interesting. As a platform, if you're a platform as a service or whatever platform you are, you have infrastructure that's hard or whatever happens, if you are creating value and enabling value for the customer, in whatever form, ISVs, developers, other things, customers will pay for it. And what I'm hearing is customers are afraid that that enablement will be constrained somehow and boxed into a framework-- >> The suite verses innovation >> Bingo. >> Argument you made yesterday. And it's a really good point, and Rob, I'd like to hear what people are saying on the floor, 'cause you've been wandering around more than John or I have, about this point specifically. That tension between where I am today and where I want to go, and whether or not they see Oracle, you said earlier, investing enough to maintain that stream of innovation that's becoming so important to articulating the next generation of what technology looks like. >> Well like I said there's a lot of uncertainty out there. As you said, I think a lot of them don't want to move off of Oracle, they just want to be able to go to the next thing that they need to do, analytics, big data, that sort of thing, and you know if Oracle can provide that, they're going to go for it, right? I mean, why not? >> Peter: Right, and you're absolutely right. >> So my question is, not knowing the technical ins and outs of what they're doing on that front, is are they going far enough on that front. I don't know yet. >> Rob, let me ask you a question for the folks watching, I know you're out getting stories, people always trying to get us to look at their stuff, get attention. As someone who's doing the reporting out there and leading the editorial for its Silicon angle, what do you look for when you come into Oracle OpenWorld, you come in in objectively looking at the signals, what do you look for in stories, how do you take the size of the show, because now Amazon started this, these shows are so big now, there's a slew of announcements, I mean we were talking about the number of releases going out alone, okay, there you go, there's 12 releases, how do you vet, how do you make that decision editorially to where the stories are? >> Well it is overwhelming, I mean, I kind of drowned on Sunday night, and I think Larry did, too, you could tell he was sort of saying, "oh no, another slide." But, you know, in the end they were mostly announcing customer relationships, partner relationships, some new technology. I look for, one, the new technology, I want to know what's real here. You can't know from a press release, but you can get a sense of that. But, you know, a lot of it's a business aspect, this has to work for businesses, and so, I want to know is this going to move a needle on Oracle, on their growth, is it going to keep 'em in the mix, that's what I care about. >> Great, thanks for that. Peter, what's missing? What are we not hearing here on this show that you expected to hear more of, or you think is an area that Oracle will have to flesh out as they go forward? >> Well, so we heard this really nice comprehensive vision of Oracle moving into the cloud and moving their customers into the cloud, and very importantly, their partners into the cloud, so that's really positive. What we didn't hear as much of is two things. And one is really crucial to the strategy, and maybe you heard some of this, Rob, but I'll do the first one and then that one. The first one is we're only hinting at how developers are going to do things differently as a consequence of Oracle's moving into the cloud. We're hearing, "yes, we're going to support "all of the languages," and "yes, we're going to do all the, "the database is going to be there." But just hints. And the developer ecosystem is still something that everybody's making a play for, nobody has really put their stake in the ground and said this is how we're going to do it. Amazon's play is, "don't worry about IT, come to the cloud, "get what you need, build your application, "make your business happy." Oracle is, and this is segueing to the other point, Oracle is more of a traditionalist in that they've got developers, they want to give them the tools that they need, bring their tools along, I expected to hear more about that. But the number two is in many respects, as I just said, Amazon's play is "okay, IT, if you want to marginize, come work with us." With business, "if you don't want to wait for IT, "you have another option to come to us directly." Many years ago IBM tried to play the hand that they were going to bring the IT professional along with them as they went through a transition. And they did a pretty decent job of it. This time, it's pretty much up to Oracle, I would say, to bring IT, the traditional IT manager along with them. So they're not only modernizing Oracle, they're in many respects modernizing their traditional customers. That's not necessarily, that's not going to be a particularly easy job, but a lot will go along with it. And we'll see the degree to which Amazon starts to fight not just for the hearts and minds of business, but the hearts and minds of technology, and the IT people as well. It's an interesting dynamic to see-- (crosstalk) I'm sorry, to answer your question directly, I expected to see more about how they were going to bring along IT people. >> Yeah, and I agree with that developer thing, they have Java one, so when the people say, "hey we're all developers," the comment I heard was, "oh they're all at Java one." Here's what Oracle has to do in my opinion, they have to integrate the goodness of Java one into this show, because if they want to be successful in the cloud and take on Amazon and others at the platform as a service level, this is a new middleware, I've said this before, Thomas Kurian, he knows middleware, and I guarantee you the database guys know exactly where the action's going to be, they're going to beat the four to five the pass layer, with developers and their ISV, so that's existing ISVs and new developers, and I hear zero value proposition coming out of this show around that particular piece. I think it's a major area of improvement Oracle needs to do, and if they want to win the hearts and minds of the developer, that is key, because the cloud is about DevOps, you can automate away IT, and bring them along, but applications, the core bread and butter of Oracle, that takes advantage of the database is coming from developers. >> John, I think that's a great play, we heard in the Cube yesterday, so where is the line between IAAS and PaaS? It's kind of a blurring, and we say it's, well, which is it going to be, PaaS of IAAS? And when the Cube guys came back and said, "we're thinking it's going to be PaaS." Which it may very well be. But it's not what the interest is thinking right now. That's going to be up to Oracle to make that PaaS. >> I just (speaking indistinctly) to end the segment is that Ray was commenting, and I agree with him, and I think your point about the coherent message. Oracle doesn't want to over-rotate and get ahead of their skis on this one, becusae they're sequencing this play out very carefully, a lot's at stake, foundational build the building blocks, get their existing infrastructure of service built out, then you're going to start to see the game change, so I think Oracle's doing, I think, the right thing, and their progress I don't think has anything to do with Oracle, per se, they have build out issues, and it's still early, so I'm not going to judge 'em on that, I like what I'm hearing, and they're doing Oracle on Oracle first, and then attacking the competition with the fudd to try to set expectations, and again, Hurd is keeping Wall Street at bay, kind of keeping them down, while they tool up and build out, so yeah, great stuff. Rob, thanks for coming on and sharing your notes from the reporter notebook out in the field writing stories, he just wrote a post on the keynote just now, and the headline is my favorite headline of the week, "You're locked in, baby, Oracle's Larry Ellison "re-doubles attack on AWS." That really is the top story here at the keynote. Peter, thanks for the commentary. We're going to talk about more live coverage here in the Cube, live in San Francisco, live coverage of Oracle OpenWorld. Be right back, you're watching the cube. (upbeat music)

>> Good Live from Las Vegas. It's the cute covering knowledge sixteen Brought to you by service. Now carry your host David, Dante and Jeffrey. >> Oh, >> welcome back to knowledge. Sixteen everybody, this is the cubicle wall to wall coverage. We got the events. We extract the signal from the noise. This is Day one for us will be going Three days of knowledge extraction from knowledge. Sixteen. Ray Wong is here. He's the founder and principal analyst and chairman of Consolation Research. Up and coming Smoking Hot research company. Ray, Always a pleasure to see you. Thanks for coming >> on. Excited to be here, man. It's been a world one week of events, so >> I'LL say So you were You were down. It's Sapphire, right? You were over it on Tampa Amplify And >> I'm Austin s Wait after this race, a >> normal week for you >> It's a normal week for all of us. >> So impressed You were telling us off camera that you were at one of the earlier knowledge events down in San Diego. So you've got a lot of experience with this company, >> you know, it was in a tent. It was outside they had detected. I think it's like a park. I'm not even sure what it was. I just But remember, there's one one hundred fifty people next. There's like five hundred people. Three years later, it's pretty wild. >> So they've come out of the blue and really, you know, escalated a lot of momentum. The latest billion dollar software company with a plan to get to four billion. So stepping back a second just looking at the software landscape, one has to be impressed with the progress that service now is made. What's your take on the industry and service now in particular? >> Well, I think what people don't understand this service now is a platform, right? There's a business model platform or the way that we used to look at paga or the way we used to look at a lot of those companies that were actually sit in the middle. That orchestration what's changes? Because everything's in the cloud. What we now have the ability to abstract orchestrating doing away that we've never seen before, right so you can take specific business problems. Take the heart of what's actually happened on the idle piece. Use it to not just manage the process, but also do the analytics and the monitoring. So when we get the things like Coyote coyotes really about having a set of smart services and being well. To put that in the construct is a lot of the opportunity that we see going forward >> so high. So I said three years ago in the Cube after I saw the platform capabilities and said, Wow, this is a collision course with sales force Investor's Business Daily wrote a article today. Collision course of sales for so glad they caught up with Theo. But But, I mean, it's you could kind of see it coming together. And now you Frank lays out this vision this morning. Have you got the AARP estate, the C R M estate and tea or a service management Rather kind of bridging those two. How do you see it? >> No, we definitely see this as a platform play. Now here's what's interesting is the lots of the developments, and you see this all the time has been happening in the APP to have side of the House package. APS have kind of been at a standstill for innovation compared to what's going on on the customs side. And so every so often we see that flip on platforms. This is the beginning of that flip, more than one person said. I it is going to be the end of the affair, right, because we're going to put all the intelligence into the interaction. You don't have to go to the specific app. No. And the fact is, what becomes important is the ability, the orchestration, the intelligence, the recommendation and what you want to build to get to the part where I'm making the right set of recommendations to augment the next set of processes. That's what gets really powerful and these platforms that are emerging on, What's the next set of clouds? That's going to be where we're going to see a lot of this advancement. >> So the FBI essentially becomes the product. Is that kind of? >> It's the orchestration of the AP eyes, the way the context was delivered against those AP eyes and more importantly, how we actually pulled together those journeys, like a couple things that we talk about time mass personalization of scale, lots of context, right, so rolls relationship, identity weather, location, time, all important, Then choose your own adventure journeys the ability to actually abstract different processes from different places and bring them together, and the more importantly, we call intention driven design, which is. I'm gonna give you three or four choices. Learn over time. Take that machine learning. Then apply that the next set of recommendations and then start building against that. And that power sits on the network. That power sits in these new platforms. >> So you're here speaking to the service now customers about customer experience, right? It's something we hear a lot about. Your an expert in that in that space. What did you say? What was the reaction? What was the feedback? >> Well, I think the important thing is we're seeing new business models and you hear me say this before it's we're in a post sale on demand, attention, economy. And what that means is everything after the sale is what's happening right now. That's the service. That's the experience. Peace. The on demand pieces were accessing smaller, smaller slices of a product. Maybe not even a product, a service, maybe not even a service, and incite maybe not even insight and experience. And then, more importantly, it's an attention to come. If you're not capturing my time and attention, which is mind share, or if you're not saving me time and money, I don't care. And That's what we're in. We're in. These business moms are built around. This is interesting. Came out of the Oracle Marketing cloud shows Well, same thing. Just smaller and smaller slices of attention based on the way you interact with all the other applications you have. You don't have time to give somebody the big story. You've got to get him when you can. They could be standing in line. They look at their phones, are in the middle of their kids, switching innings at the baseball game. And you got to get in that little tiny video that in between time is so important because you don't close there. You lose him, right? And it's not for something really big. It's move them along the needle down. The journal. Correct. >> What do you make of this, Dave? Dave Wright was just not talking about the new state of work. IBM has been talking about a new way to work in. He is kind of running the collaboration, you know, group. Now you you talk about millennials and how they work. What are you seeing in state of work? >> Well, a lot of the research we're looking on the future of work is by one of my colleagues, Alain Le Pastilles, and what he's been really looking as this shift in terms of conversations as a service. He's been looking at the shift in terms of intelligent collaboration. Right, and all this stuff is actually leading the point where we're actually using technology to augment ability. Teo do decisions had a lot more automation than we had him before. But then cognitive assistance pop up right and they help make a smarter. And they learned from our different our actions and all that's starting to come into the workplace, which is exciting and a little bit creepy and scary at the same time. >> So what's the What's the What's new with Constellation? You guys are growing. Bring it on. New analyst Cranking out Want to research? Your event keeps growing? Give us the update on Constellation. >> You know, I think the big thing is this digital transformation story we've been talking about for the last five to six years is huge. The next set is really not about transformation. It's about finding growth in times where there is no growth. That's where we're going to talk about the next five years at our conference. Really? Talking about what are those factors, right? We gotta jump start growth. Global GDP is growing two to three percent at best. Every company has a target of like five to ten. Someone's gonna lose, and it's gonna be very interesting. >> So you think that growth is going to come through productivity improvements or investments in technology? Actually, Dr sort of new productivity levels were taking away from >> someone else. I think we're taking me for someone else. That's what I'm really scared about, that they're smart growth that's sustainable and helps people with the jobs and the job transitions. And there's what we've been doing, which a lot of destructive Cross, which is actually limiting all of the jobs and actually making it harder to grow in the long run. >> Well, so yeah, we've talked about this on the Cuba lot machines replacing humans, which they've always replaced humans. But it seems to be now happening at the cognitive level. That's scary. I know you guys to the valley, wags. You know the seasonal nervous right now, You guys, you more sanguine? Then the VCs air >> well with these three big areas where we see a lot of investment. Deep learning happens to be one of them, right? We see a lot of medicine going off. Some of the smartest people I know are all focused and on deep learning. Very interesting thing. If you look at that university, California, Irvine there's a whole department around. This artificial intelligence that just lifted itself up became a private corporation. So there's very unfeeling things there. There's nanotech, which is also some erasers, things on the material science piece that's also playing a big role. And then, of course, there's stem cells in the biotech piece. Those three things are converging, and you know it's more than just building out the Star Trek roadmap that Apple's been doing. It's a lot bigger than that. There's some big societal shift that are happening. >> What, what's next for you? You say you're heading Teo. That's sweet, but we're So we work. We find Ray Juan. I'm >> off this sweet world, Max. There's a monetary it next week. There's a whole bunch of other events picking up in June as well as you. You're going to be at them, but I think we do our retreat every year at the end of the year. May June, we're going to be at Stanford, the faculty club. All the constellation folks get together on. Then we go back out into the field and it's a crazy summer as well. I don't know when this stops making, so yeah, you could always find him on Twitter That that's but I looked for you guys when I'm where you're at is where the events are. >> Well, hopefully our past will continue to cross. We love having you in the Cube was a great guests. Really appreciate your time. Thanks for coming on. >> You know, Thanks for having have a >> great conference. All right. They've travelled, right, everybody. We'LL be back after this short break. This's the Cube or live from knowledge. Sixteen, right? >> Service now is the

>>The cube at IBM. Impact 2014 is brought to you by headline sponsor. IBM. Here are your hosts, John furrier and Paul Gillin. >>Hey, welcome back everyone. This is Silicon angle's the cube. It's our flagship program. We go out to the events district as soon from the noise. We're ending out day two of two days of wall to wall coverage with myself and Paul Galen. Uh, 10 to six 30 every day. I'm just, we'll take as much as we can just to get the data. Share that with you. Restrict the signal from the noise. I'm John furrier the bonus look at angle Miko is Paul Gilliam and our special guests, Holger Mueller, Mueller from constellation research analyst covering the space. Ray Wang was here earlier. You've been here for the duration. Um, we're going to break down the event. We'll do a wrap up here. Uh, we have huge impact event for 9,000 people. Uh, Paul, I want to go to you first and get your take on just the past two days. And we've got a lot of Kool-Aid injection attempts for Kool-Aid injection, but IBM people were very, very candid. I mean, I didn't find it, uh, very forceful at all from IBM. They're pragmatic. What's your thoughts on it? >>I think pragmatism is, is what I take away, John, if it gets a good, that's a good word for it. Uh, what I saw was a, uh, not a blockbuster. Uh, there was not a lot of, of, uh, of hype and overstatement about what the company was doing. I was impressed with Steve mills, but our interview with him yesterday, we asked about blockbuster acquisitions and he said basically, why, why, I mean, why should we take on a big acquisition that is going to create a headache, uh, for us in integrating into your organization? Let's focus on the spots where we have gaps and let's fill those. And that's really what they've, you know, they really have put their money where their mouth is and doing these 150 or more acquisitions over the last, uh, three or four years. Um, I think that the, the one question that I would have, I don't think there's any doubt about IBM's commitment to cloud as the future about their investment in big data analytics. They certainly have put their money where their mouth is. They're over $25 billion invested in big data analytics. One question I have coming out of this conference is about power and about the decision to exit the x86 market and really create confusion in a part of their business partners, their customers about about how they're going to fill that gap and where are they going to go for their actually needs and the power. Clearly power eight clearly is the future. It's the will fill that role in the IBM portfolio, but they've got to act fast. >>Do you think there's a ripple effect then so that that move I'll see cause a ripple effect in their ecosystem? >>Well, I was talking to a, I've talked to two IBM partners today, fairly large IBM partners and both of them have expressed that their customers are suffering some whiplash right now because all of a sudden the x86 option from IBM has gone away. And so it's frozen there. Their purchasing process and some of them are going to HP, some of them are looking at other providers. Um, I don't think IBM really has has told a coherent story to the markets yet about how >>and power's new. So they've got to prop that up. So you, so you're saying is okay, HP is going to get some new sales out of this, so frozen the for IBM and yet the power story's probably not clear. Is that what you're hearing? >>I don't think the power story is clear. I mean certainly it was news to me that IBM is taking on Intel at the, at this event and I was surprised that, that, >>that that was a surprise. Hold on, I've got to go to you because we've been sitting here the Cuban, we've been having all the execs come here and we've been getting briefed here in the cube. Shared that with the audience. You've been out on the ground, we've bumped into you guys, all, all the other analysts and all the briefings you've been in, the private sessions you've been in the rooms you've been, you've been, you've been out, out in the trenches there. What have you, what are you finding, what have you been hearing and what are the, some of the soundbites that you could share with the audience? It's not the classic God, Yemen, what are the differences? >>The Austin executives in cloud pedal, can you give me your body language? He had impact one year ago because they didn't have self layer at a time, didn't want to immediately actionable to do something involving what? A difference things. What in itself is fine, but I agree with what you said before is the messaging is they don't tell the customers, here's where we are right now. Take you by the hand. It's going to be from your door. And there's something called VMs. >>So it's very interesting. I mean I would consider IBM finalized the acquisition only last July. It's only been nine months since was acquired. Everything is software now. It leads me to think of who acquired who IBM acquired a software or did soflar actually acquire IBM because it seems to, SoftLayer is so strategic. IBM's cloud strategy going forward. >>Very strategic. I think it's probably why most transformative seemed like the Nexans agenda. And you've heard me say assault on a single thing. who makes it seven or eight weeks ago? It's moving very far. >>What do you think about the social business? Is that hanging together, that story? Hang on. It's obviously relevant direction. It's kind of a smarter planet positioning. Certainly businesses will be social. Are you seeing any meat on the bone there? On the collaboration side, >>one of the weakest parts, they have to be built again. Those again, they also have an additional for HR, which was this position, this stuff. It's definitely something which gives different change. >>I have to say, John, I was struck by the lack of discussion of social business in the opening keynote in particular a mobile mobile, big data. I mean that that came across very clear, but I've been accustomed to hearing that the social business rugby, they didn't, it didn't come out of this conference. >>Yeah. I mean my take on that was, is that >>I think it's pretty late. I don't think there's a lot of meat in the bone with the social, and I'll tell you why. I think it's like it's like the destination everyone wants to go to, but there's no really engine yet. Right. I think there's a lot of bicycle riding when they need a car. Right? So the infrastructure is just not is too embryonic, if you will. A lot of manual stuff going on. Even the analytics and you know you're seeing in the leaderboard here in the social media side and big data analytics. Certainly there are some core engine parts around IBM, but that social engine, I just don't see it happening. You risk requires a new kind of automation. It's got some real times, but I think that this is some, some nice bright spots. I love the streams. I love this zone's concept that we heard from Watson foundations. >>I think that is something that they need to pull out the war chest there and bring that front and center. I think the thinking about data as zones is really compelling and then I'll see mobile, they've got all the messaging on that and to give IBM to the benefit of the doubt. I mean they have a story now that they have a revenue generating story with cloud and with big data and social was never a revenue generating story. That's a software story. It's not big. It's not big dollars. And they've got something now that really they're really can drive. >>I'll tell you Chris Kristin from mobile first. She was very impressive and, and I'll tell you that social is being worked on. So I put the people are getting it. I mean IBM 100% gets social. I think the, the, it's not a gimmick to them. It's not like, Oh, we got some social media stuff. I think in the DNA of their soul, they, they come from that background of social. So I give them high marks on that. I just don't see the engine yet. I'm looking for analytics. I'm looking for a couple of eight cylinders. I just don't see it yet. You know, the engine, the engines, lupus and she wants to build the next generation of education. Big data, tons of mobile as the shoulder equivalent to social. I'm skeptical. I'm skeptical on Bloomix. I'll tell you why. I'm not skeptical. I shouldn't say that. >>It's going to get some plane mail for that. Okay. I'll say I'll see what's out there. I'll say it. I'm skeptical of Blumix because it could be a Wright brothers situation. Okay, look, I'm wrong guys building the wrong airplane. So the question is they might be on the wrong side of history if they don't watch the open source foundations because here's the problem. I have a blue mix, gets rushed to the market. Certainly IBM has got muscle solutions together. No doubt debting on cloud Foundry is really a risk and although people are pumping it up and it's got some momentum, they don't have a big community, they have a lot of marketing behind it and I know Jane's Wars over there is doing a great job and I'm Josh McKinsey over there with piston cloud. It'll behind it. It has all the elements of open collaboration and architecture or collaboration. However, if it's not a done deal yet in my mind, so that's a, that is a risk factor in my my mind. >>We've met a number of amazing, maybe you can help to do, to put these in order, a number of new concepts out there. We've got Bloomex the soft player, and we've got the marketplace, and these are all three concepts that approval, which is a subset of which, what's the hierarchy of these different platforms? >>That's hopefully, that's definitely at the bottom. The gives >>us visibility. You talk about the CIO and CSI all the time. Something you securities on every stupid LCO one on OCS and the marketplace. Basically naming the applications. Who would folded? IBM. IBM would have to meet opensource platform as a service. >>Well, it's not, even though it's not even open source and doing a deal with about foundries, so, so they've got, I think they're going in the middle. Where's their angle on that? But again, I like, again, the developer story's good, the people are solid. So I think it's not a fail of my, in my mind that all the messaging is great. But you know, we went to red hat summit, you know, they have a very active community, multiple generations in the data center, in the Indiana prize with Linux and, and open, you know, they're open, open shift is interesting. It's got traction and it's got legit traction. So that's one area. The other area I liked with Steve mills was he's very candid about this turf. They're staking out. Clearly the cloud game is up, is there is hardcore for them and in the IBM flavor enterprise cloud, they want to win the enterprise cloud. They clearly see Amazon, they see Amazon and its rhetoric and Grant's narrative and rhetoric against Amazon was interesting saying that there's more links on SoftLayer and Amazon. Now if you count links, then I think that number is skewed. So it's, you know, there's still a little bit of gamification going to have to dig into that. I didn't want to call him out on that, but know there's also a hosting business versus, you know, cloud parse the numbers. But what's your take on Amazon soft layer kind of comparison. >>It's, it's fundamentally different, right? Mustn't all shows everything. Why did see retailers moves is what to entirely use this software, gives them that visibility machine, this accommodation more conservatively knowing that I buy them, I can see that I can even go and physically touch that machine and I can only did the slowly into any cloud virtualization shed everything. >>Oh, Paul, I gotta say my favorite interview and I want to get your take on this. It was a Grady food. She was sat down with us and talk with us earlier today. IBM fell up, walks on water with an IBM Aussie legend in the computer industry. Just riveting conversation. I mean, it was really just getting started. I mean, it felt like we were like, you know, going into cruising altitude and then he just walked away. So they w what's your take on that conversation? >>Well, I mean, certainly he, uh, the gritty boujee interview, he gave us the best story of, of the two days, which is, uh, they're being in the hospital for open heart surgery, looking up, seeing the equipment, and it's going to be used to go into his chest and open his heart and knowing that he knows the people who program that, that equipment and they programmed it using a methodology that he invented. Uh, that, that, that's a remarkable story. But I think, uh, uh, the fact that that a great igloo can have a job at a company like IBM is a tribute to IBM. The fact that they can employ people like that who don't have a hard revenue responsibility. He's not a P. and. L, he's just, he's just a genius and he's a legend and he's an IBM to its crude, finds a place for people like that all throughout his organization. >>And that's why they never lost their soul in my opinion. You look at what HP and IBM, you know, IBM had a lot of reorganizations, a lot of pivots, so to speak, a lot of battleship that's turned this in way. But you know, for the most part they kept their R and D culture. >>But there's an interesting analogy too. Do you remember the case methodology was mutual support of them within the finance language that you mailed something because it was all about images, right? You would use this, this methodology, different vendors that were prior to the transport itself. Then I've yet to that credit, bring it together. bring and did a great service to all for software engineering. And maybe it's the same thing at the end, can play around diversity. >>You've got to give IBM process a great point. Earlier we, Steve mills made a similar reference around, it wasn't animosity, it was more of Hey, we've helped make Intel a big business, but the PC revolution, you know, where, what's in it for us? Right? You know, where's our, you know, help us out, throw us a bone. Or you know, you say you yell to Microsoft to go of course with the licensing fee with Gates, but this is the point, the unification story and with grays here, you know IBM has some real good cultural, you know industry Goodwill, you agree >>true North for IBM is the Antal quest customer. They'll do what's right where the money and the budget of the enterprise customers and press most want compatibility. They don't want to have staff, of course they want to have investment protection >>guys. I'd be able to do a good job of defining that as their cloud strategy that clearly are not going head to head with Amazon. It's a hybrid cloud strategy. They want to, they see the enterprise customers that legacy as as an asset and it's something they want to build on. Of course the risk of that is that Amazon right now is the pure play. It has all the momentum. It has all the buzz and and being tied to a legacy is not always the greatest thing in this industry, but from a practical revenue generating standpoint, it's pretty good. >>Hey guys, let's go down and wrap up here and get your final thoughts on the event. Um, and let's just go by the numbers, kind of the key things that IBM was promoting and then our kind of scorecard on kind of where they, where they kind of played out and new things that popped out of the woodwork that got your attention. You see the PO, the power systems thing was big on their messaging. Um, the big data story continues to be part of it. Blue mix central to the operations and the openness. You had a lot of open, open openness in their messaging and for the most part that's pretty much it. Um, well Watson, yeah, continue. Agents got up to Watson. >>Wow. A lot of news still to come out of Watson I think in many ways that is their, is their ACE in the hole and then that is their diamond. Any other thoughts? >>Well, what I missed is, which I think sets IBM apart from this vision, which is the idea of the API. Everybody else at that pure name stops the platform or says, I'm going to build like the org, I'm going to build you. That's a clear differentiator on the IBM side, which you still have to build part. They still have to figure out granularity surface that sets them apart that they have to give one. >>Yeah, and I think I give him an a plus on messaging. I think they're on all the right fault lines on the tectonic shifts that we're seeing. Everyone, I asked every every guest interview, what's the game changing moment? Why is it so important? And almost consistently the answers were, you know, we're living in a time of fast change data, you know, efficiency spare or you're going to be left behind. This is the confluence of all these trends, these fall lines. So I think IBM is sitting on these fall lines. Now the question is how fast can they cobbled together the tooling from the machineries that they have built over the years. Going back to the mainframe anniversary, it's out there. A lot of acquisitions, but, but so far the story and the story >>take the customer by the hand. That's the main challenge. I see. This wasn't often we do in Mexico, they want zero due to two times or they're chilling their conferences. It's the customer event and you know, and it's 9,000 people somehow have to do something to just show, right? So why is my wave from like distinguished so forth and so and so into? Well Lou mentioned, sure for the cloud, but how do we get there, right? What can we use, what am I SS and leverage? How do I call >>guys, really appreciate the commentary. Uh, this is going to be a wrap for us when just do a shout out to Matt, Greg and Patrick here doing a great job with the production here in the cube team and we have another cube team actually doing a simultaneous cube up in San Francisco service. Now you guys have done a great job here. And also shout out to Bert Latta Moore who's been doing a great job of live tweeting and help moderate the proud show, which was really a huge success and a great crowd chat this time. Hopefully we'll get some more influencers thought leaders in there for the next event and of course want to thank Paul Gillen for being an amazing cohost on this trip. Uh, I thought the questions and the and the cadence was fantastic. The guests were happy and hold there. Thank you for coming in on our wrap up. >>Really appreciate it. Constellation research. Uh, this is the cube. We are wrapping it up here at the IBM impact event here live in Las Vegas. It's the cube John furrier with Paul Gillen saying goodbye and see it. Our next event and stay tuned if it's look at angel dot DV cause we have continuous coverage of service now and tomorrow we will be broadcasting and commentating on the Facebook developer conference in San Francisco. We're running here, Mark Zuckerberg and all Facebook's developers and all their developer programs rolling out. So watch SiliconANGLE TV for that as well. Again, the cube is growing with thanks to you watching and thanks to all of our friends in the industry. Thanks for watching..

okay we're back here live ending up day one of IBM's information on demand exclusive coverage for SiliconANGLE and Wikibon and constellation research breaking down the day one analysis I'm John furrier and join my co-host E on the cube Dave vellante of course as usual and for this closing wrap up segment of day one we have analyst and founder of constellation research ray Wang former analyst big data guru software heading up the partner pavilion kicking off all the flying around the world your own event this month past month things going great how are you how are you doing we're going to great man there's a lot of energy in q3 q4 we've been watching people look at trying to spend down their budgets and I think people are just like worried that there's going to be nothing in 2014 right so they're just bending down we're seeing these big orders like tonight I've got to fly out to New York to close out a deal and help someone else that's basically it was a big day to deal that's going down this is how crazy it's going on and so it's been like this pretty much like for the last four or five weeks so flows budget flush I just wash this budget lunchtime what are you seeing for the deals out there give us some of the examples of some of the sizes and magnitude is it you know you know how are you up and run to get get some cash into secure what size scopes are you seeing up yeah i mean what we're seeing I mean it's anything from a quarter million into like five million dollar deals some of our platform we sing at all levels the one that's really hot we were talking about this that the tableau conference was the date of is right dative is is still really really hot but on the back end we're saying data quality pop-up we're seeing the integration piece play a role we also saw a little bit of content management but not the traditional content management that's coming in more about the text mining text analytics to kind of drive that I mean I'm not sure what are you guys seeing alone yeah so what we're seeing a lot of energy I've seen the budget flush we're not involved in the deals like you are Dave is but for me what I'm seeing is IT the cloud is being accepted I'll you know those has not talked about publicly is kind of a public secret is amazon is just destroying the value proposition of many folks out there with cloud they're just winning the developers hand over fist and you know i'm not sure pivotal with cloud family even catch up even OpenStack has really got some consume energy around we're following that so it opens stack yet amazon on the public cloud winning everything no money's pouring into the enterprise saying hey we got to build the infrastructure under the hood so you can't have the application edge if you don't have the engine so the 100 x price advantage and that's really a scary thing but I think softlayer gives IBM a shot here yeah we were talking about self leyva so you are seeing more I'm seeing it aight aight figure deals and big data right and it's starting to get up there so softly I'd love to get your take on soft layers we've been having a debate all day Oh softlayer jaws mckenna what do you what's your take you're saying it's a hosting I've been a look at first of all yeah I love putting a huge gap 9 million dollars per lock event data center hosting now if that's a footprint they can shave that and kind of give their customers some comfort I think that's the way i see it i mean just I haven't gone inside the numbers to see where it's going to be where this energy is but like we're software virtualization is going on where everyone's going on with virtualization the data center I'll give them a cloud play I just don't see ya didn't have one before I mean happy cloud I mean whistling private club Wow is their software involved I think it provides them with an option to actually deliver cloud services with a compression ratio on storage and a speed that they need to do to deliver mobile mobile data analytics right there's things that are there that are required so it gives them an option to be playing the cloud well I just saw I mean in the news coverage and the small inspection that we did I did was I just didn't reek of software innovation it's simply a data center large hosting big on you agree they didn't really have a northern wobblin driving him before this was brilliant on your Sun setting their previous all these chairs deal kind of musical chairs me for the music stops get something it was that kind of the deal no I think they are feel more like customers asking for something and they wanted IBM to have it yeah IBM works it's an irr play for IBM they're gonna make money on this team not a tuck under deal 900 million no I know but they'll make money on it that's IBM almost always does with it I'll leave it up to you guys to rip on I was your conference oh thanks hey constellation connecting enterprise was awesome we were at the half moon bay Ritz we had 220 folks that were there senior level individuals one of the shocking things for me was the fact that when we pulled the audience on day one two things happen that I would never imagine first thing as ninety percent of the folks downloaded our mobile app which was like awesome right so the network was with them the knowledge is with them when they leave the event and all the relationships the second thing that really shocked me we knew we had really good ratios but it was seventy-five percent of the audience that was line of business execs and twenty-five percent IT it was like we were we didn't have to preach to the choir it was amazing and the IT folks that were they were very very innovative on that end so it was awesome in that way so a lot like the mix the mix here is much more line of business execs the last week at hadoop world loose you know the t-shirt crowd right a lot of practitioners you know scoop I've flume hey we got the earth animals ever right oh but no this event is actually interesting IBM iod for me is like I didn't realize this when I didn't I looked at numbers when we're doing a partner event yesterday and there are thirteen thousand attendees here that actually makes that the biggest big data and analytics conference bigger than strata bigger than a whole bunch of other ones and so I mean this is pretty much the Nexus of what about open world big data over there but this is a big opera you see world any world cloud big data yeah hey the between no but so IBM's done a fantastic job of really transitioning this conference from sort of an eclectic swix db2 informix right I'm management routine fest right yeah and now it's like what are the business things I mean what are we trying to save around the world are they telling the story effectively it's a hard story to tell you got big data analytics cloud mobile in the middle and you got social business but then you got all this use case they have success stories if customers that creating business outcomes they telling the story effectively is it not enough speeds and fees is it too what's your take the stories are there we've seen like 122 case studies from the business partner side we just haven't seen them percolate out and I think they've got to do a better job evangelizing stories but what's interesting is like there's that remember we talked about this data to decision level there's that data level that was IBM right here's the database here's the structure here's the content management here's the unstructured stuff this is where it sets then there was that information management level which that they started to do which is really about cleaning the data connecting that data connecting to upstream and downstream systems getting into CRM and payroll and then they got to this level about insights which was all the Cognos stuff right so they've been building up the stat from data decisions so they got data information information to insight and then we're getting to this decision-making level which they haven't made a lot of the assets or acquisitions there but that's the predictive analytics that's the cognitive computing you can see how they're wrapping around there I mean there's a lot of vendors to buy there's a lot of opportunity out there's a lot to connect and they've been working on it for a while but I guess I got to ask you how they doing what's your report card from last year this year better better storytelling better messaging I think the stories are getting better but we're seeing them in more deals now right before we'd see a lot more SI p traditional SI p oracle you know kind of competes and a little bit of IBM Cognos now we're seeing them in a lot of end-to-end deals and what we're talking about it's not like I T deals these are line of business folks that say look I really need to change my shopping experience what do you guys have we see other things like you know the fraud examples that any was talking about those are hilarious I mean those are real I see em in every place right I mean even with Obamacare right there's gonna be massive amounts of fraud there any places that people going to want to go in and figure out how to connect or correct those kind of things yeah so so seeing the use cases emerge yeah and in particular me last week in a dupe world it was financial services you're talking risk you talk a marketing you're talking fraud protection to forecasting yep the big three and then underneath that is predicted predictive analytics so you know that's all sort of interesting what's your take on on Amazon these days you know they are crushing it on so many different unbelievable right on more billion this year maybe it's when you build a whole company which is basically on the premise of hey let's get people to offset our cost structure from November 15th to january first I mean it's pretty amazing what you can do it's like everyone's covering for it and even more funny it's like they're doing in the physical world with distribution centers I know if we talked about this before but what's really interesting is they've got last mile delivery UPS FedEx DHL can't cat can't handle their capacity so now the ability from digital to physical goods they've got that and beezus goes out and buys the post so he can make the post for example a national paper overnight again he can do home delivery things that they couldn't do before they can take digital ads bring that back in and so basically what they're doing on the cloud side they're also doing on the physical distribution side amazing isn't it they're almost the pushing towards sunday delivery right US Postal Service go into five day deliveries sort of the different directions amazon I'm Amazon's going to be the postal service by the time they're done we're all going to subsidize it so so I gotta get you take on the the Oracle early statement Larry Ellison said were the iphone for the data center that's his metaphor a couple of couple or global enrolls ago now you got open stack and though we kind of laugh at that but but amazon is like the iPhone you know it's disruptive its new its emerging like Apple was reading out of the ashes with Steve Jobs Oracle I think trying to shoehorn in an iphone positioning but if OpenStack if everyone's open and you got amazon here there is a plausible strategy scenario that says hey these guys can continue to to put the naysayers at the side of the road as they march forward to the enterprise and be the iphone they've turned the data center into an API so so we got the date as their lock in right so this sim lock in Apple has lock in so is that lock in what's your take of that scenario you think it's video in the open ecosystem world they're all false open because a walk-in also applies but but you've been even to this for a long time right and probably one of the things that you're seeing is that it's not about open versus closed it's about ubiquity right Microsoft was a closed evil empire back ten years ago now it's like oh the standard right it's like ok they're harmless Google was like open and now they're the evil empire right it just depends on the perception and the really is ubiquity Amazon's got ubiquity on it so i did is pushing their winning the developers the winning the developers they got the ecosystem they got ubiquity they've got a cost structure I mean I don't know what else could go wrong I think they could get s la's maybe and once that had I don't know what is Amazon's blind spot I mean s la's I think well a lumpy performance no one wants lumpy right they want the big Dayton who's got ever who's got better public as public cloud SL is denied well I think about what he just said us everybody no but here's think that's a public road statement not an amazon said let's crunch big data computation December fifteenth you tell me what this is all I want to know well I think I think an easy move is I mean this day you've got to do that on premise I just I just don't I just don't think that people are forecasting amazon the enterprise properly and you just set out the Washington Post that is a left-field move we can now look back and say okay I said makes sense amazon can continue to commoditize and disrupt and be innovative then shift and having some sort of on prem playing oh then it's over right then and then gets the stir days surrounded the castle but they really don't have a great arm tremblay have no on print but they could they could get one good I think they want to see well think they want to but I think with them what they figured out was let's go build some cool public service get everyone else to subsidize our main offerings right it's basically ultimate shared service everyone's subsidizing Amazon's destruction of their business right so if you're Macy is why the heck are you on amazon right you know if you're competing with them why the heck are you on Amazon you're basically digging your own grave I'm paying them to do it it's amazing I mean that's that's the brilliance of this goes invade they brag about it yeah digging your own brave like it's a you know put the compute power is great okay great but you're subsidizing Amazon's for the you know compute power so r a great shot great to have you here congratulations on your event constellation research awesome successful venues ahead last month top folks in you're doing a great job with your company and the end the day out today in the last word tell the folks what's happening with IBM what do you expect to hear from them tomorrow I know you're going to be another thing you had to fly to but what does IBM what's a trajectory coming out of the show for IBM what's your analysis I think the executives have figured out that the important audience here is really the line of business leaders and to figure out how to do couple things one democratize decision-making the second thing figure out how they can actually make it easy to consume IBM at different entry points and I think the third thing is really how can we focus on improving data visualization graphics I think you'll see something about that ray Wang on the cube cube alumni tech athlete entrepreneur new for his new firm not new anymore it's a couple years on his belt doing a great job but three years old congratulations we'll be back day two tomorrow stay with us here exclusive coverage of IBM information I'm John prairie with Dave vellante this is the cube will see you tomorrow the queue

bye okay welcome back everyone this is SiliconANGLE and Mookie bonds to cube our flagship program we got the advances reconsider from the noise I'm John foreach n with Dave vellante here for just a conversation Dave about what's going on oracle openworld day one of three days of live coverage here in San Francisco what's your take dick well first of all John miss you yes I had furrier withdrawals here so welcome back them first segment we've done together all day I was out at Santa Barbara last night in checking out the scene down there made it back not going to miss an Oracle OpenWorld for the world I love a work eloping world because it's like Isla Vista in Santa Barbara except it's tech people going crazy over the technology so mas coyote is draped in Red John well different in a few weeks ago at vmworld but I mean it's always great because you know Oracle has the muscle Dave as you know we always talk about every year Oracle's so you know transitioning from that telco role of extracting value from the ecosystem Oracle's making moves Larry Ellison really is a gamer he wants to make his mark on the industry he sees himself as the heir apparent to steve jobs in the end the end the historic hall fame of tech industry and he's here to win it's a game to him and I think you see oracle just in the past four years since we've been covering them being kind of a this is a throwaway game for them to like really being in the game they're making the announcements they're heavy and cloud they're making a faster more relevant timely announcements again they're a monster they're in there a huge accounts huge dollars and a rounding number on their sales spreadsheet would take a company public these days so you know those startups are doing well Oracle still has the muscle and they have huge clients and I'm going to watch and I think you know you ask me might take perform over here a consistent story from Oracle it's engineered software engineered heart with hardware it's vertical integration it's trying to develop best to breed its spending on R&D now they've basically co-op to the Big Data theme you know we hear a lot about their cloud so you know it's fun to criticize Oracle right they charge a lot a you know coops industry terms and act like they invented it on and on but here's the deal they spent a lot of money on R&D Allison's like a start-up CEO I mean he's that engage them I resisted this session talking to some executives and in the infrastructure business and they're telling me I Larry's call me every week wants to know the update on the new product and output when it's coming when it's ready you know herds the same way so you guys are intense focus on as you said winning that is all about winning it's a zero-sum game to Oracle it's the chest it's a chess board for Larry and I think you know one of the things we're seeing some news here we had our guys at the press conference mark hurd made an announcement about the human capital management software you know they're you know it's classic Oracle swiping at the competition work day has been booming of late and you know they're under pressure you know and you know workday asli the PeopleSoft guides have a huge chip on their shoulder they're winning they're doing well and Oracle's not happy about it so I mean obviously they're going to be moving very very aggressive against that and then just in all fronts the chessboard of conversion infrastructure the Sun acquisition really the ultimate cherry on top for Oracle relative to their future positioning they are betting the ranch on an apple-like strategy where containing the hardware focusing on the software and bundling in the hardware to the software as a fully enclosed system purpose-built hardening it out is ultimately their big bet David I'm telling you it will work for some companies and that lock in is a small price to pay for the functionality if they can deliver well and I think they I think Oracle can deliver you know the question is is as we're talking about with ray Wang can they deliver both on the promise of integrated systems I have no doubt Oracle can do that because they're spending a lot of money on it they got good technology people they've got good technology and and so eventually they're going to make that integration play work and they already are making Network the big question I have John is can they innovate and be best to breed at each layer of the stack that's something that's really hard to do guys like EMC and Cisco and VMware have chosen to partner to do that that's always been IBM's big challenge right i mean what's IBM number one at what product is IBM number one besides mainframes it's hard to come up with one okay then same question of Oracle what product is Oracle number one at besides database that's Oracle's challenge you know can they be best in storage can they be best in servers can they be best in applications they would argue their best in applications and I think big date is a big challenge here we heard inside the cube here day one that people don't want to pay licenses for data that's not being used and there's a big issue around the how data works how people using their computing environment it's not a monolithic environment anymore relative to the database there's new unstructured environments most of the data is not stored in relational databases why should I pay an Oracle lights of them I got virtualization I got scale-out open source these are new environments that are putting great pressure on Oracle and if you look at Mark Hurd and how he reports to the street all he talks about is our revenues licenses are up x percent barrel tins of the market well if demarcus declining and you're up what does that mean maybe this shifting to another area so Dave this is a concern that I have about Oracle is their core business metrics might not be on the right numbers yes software's growing relative to what I'm a declining market or shifting market those are the open questions we will find out this backdoor I think that well here's here's something I want to share with you so we did some wheat research and Wikibon fifty percent of the customers that we talked to in the Wikibon community said they're willing to risk lock-in to get integration and function so then and only fifteen percent said we're dogmatic about open source now over time that open source crowd as you well know is going to build up the capabilities but fifteen percent is the toehold for the start of startup crowd Oracle's working on that fat middle and that's really where they do let's talk about the dogmen the dogma for IT enterprises simply there's contract negotiations all posturing for contract negotiations almost every single CIO I talk to and we've talked to Dave have either told us publicly and privately hey at the end of the day I care about the cost structure the environment and to if there's a hardened top unlock in it doesn't it's irrelevant then and the example that we've always using the cube is you the Intel microprocessor do you really care about the proprietary software involved in an Intel processor no just gets the job done and it enables other things that's the key question that we're looking at right now in the computer industry is where is that hardened environment where being collapse elation of the complexity has been taken away to the point where it's absolutely functional that is ultimately to be the key and I think that's going to have to enable data fabric layer and then top of stack of applications I think that's a VMware strategy is a good one I think of Oracle can pull that off they could be the Intel of this cloud error well the other big battle is the organizational battle because Oracle obviously sells the dbas and application heads and everybody else in the hardware business sells to infrastructure people and let's face it the dba's and the application heads have all the juice in the marketplace so that's those guys are driving the buying decisions now as companies like VMware become more strategic they can maybe get some access to those individuals but still Oracle an essay p own that it all you do skoda you go to sa p sapphire you come to oracle openworld a lot of suits you go to emc world and you're seeing you know a lot of infrastructure people so that's a big battle that people taking on but i would if i'm a customer i would absolutely have some alternative infrastructure around wouldn't go just all red stack there might be some situations where i want to do that i guess the point I'm making is a lot of the application heads don't care if they spend more on infrastructure they don't care if they get locked in because they care about how fast the application runs how easy it is deploy how agile it is what their service experience is like that's what they care about I think ultimately it's going to come down at ability to be flexible have the application support so Oracle obviously will have the ability in most their companies to do that the question is do they have the right product mix and I think giving the customer's choice that's what we've seen with OpenStack in particular and you look at OpenStack what that's done is given this choice to the enterprise's to do whatever they want relative to having a private and public and hybrid cloud environment and that's ultimately going to help with the kind of the choice option so I mean that's kind of we've heard Oracle's portfolio or has got one of everything we heard you were in the cards so you didn't hear Thomas curing this morning but I mean you would have thought they were invent big data I mean it was a dupe connectors in-memory databases you're talking oh you know no sequel key value stores we got at all and they do actually have a lot of that hey so the portfolio is very robust they can tick the boxes they can they can play that functionality game with anybody and the real advantages they talk to the CIO now over here you've got the walk-off the marc andreessen crowd right none of my startups by Oracle hey stuff so it's those guys it's the open source crowd that ultimately is going to get leverage in the marketplace and you know John you and I have talked about this in the cube a lot ultimately long term open source wins Gary Blum was on the cube earlier CEO of now CEO president MarkLogic Dave he's been a I think 17 years of Oracle insane amount of years he's been there from the beginning he goes back to veritas as well you know he had an interesting point he said that in MarkLogic they have a half a DBA for ten dba's that are on staff for oracle that's a nine and a half labor pool reduction in cost and you're granted some of those guys might retire kind of like mainframe guys in the old days but like still you don't know about a massive amount of restricting of resources I want to get your take on the data economy type role I mean the data economy we're talking about new economics what's your take on I mean that ratio is really the kind of magnitude we're seeing relative the big data so here's my take on that is is I think that rightly so the startups are doing what Larry always does he compares his state of the art to somebody else's n minus 2 and that's what the startups are doing right there's a lot of legacy Oracle environments very easy to go in and say okay I can reduce your operating expense here's the challenge Oracle knows this and they see that threat so what Oracle's trying to do is is is cut that you know to whatever degree it can cut that and and close that gap and then you know have the cios bet on oracle because their quote unquote less risky right nobody ever get fired for bringing on IBM so the game that they have to play I heard Gary say we have a five-year lead on the competition so it's like fusion-io and EMC right EMC it lead on on emc we had packed LC on the QB said hey we're behind we're going to catch up how did they catch up they went out and they bought a company now I haven't caught up yet but they went out bought a company they started investing R&D but they're closing that gap and so that's the game that they play okay we're here inside the cube this is SiliconANGLE Yvonne's coverage of the cube stay with us we're going to be going to come back with Jeff Kelly Dave next we have any more guests coming in we're done this is a wrap for the day okay we'll be back tomorrow on Tuesday stay here SiliconANGLE guns the cue our flagship program day one wrap up here at Oracle OpenWorld yes my goal she's coming on we got a bunch of guys coming on from emc emc has 80,000 oracle customers oracle itself says it has 40,000 hardware customers so that's going to be an interesting we want having a special thanks out the qlogic for letting us stay in their booth again fourth consecutive year the legacy SiliconANGLE and CNBC are broadcasting live here at oracle openworld this is day one coverage with new Act tomorrow with the keynote in the middle of the afternoon all day coverage starting at nine at ten o'clock tomorrow morning here from the cube stay with us and see you tomorrow