(upbeat music) >> Hey, everyone, welcome to theCube's special program series Women of the Cloud brought to you by AWS. I'm your host, Lisa Martin. I'm very pleased to welcome back one of our alumni Adrianna Bustamante joins me, the VP of Global Alliances at Rackspace Technology. Adrianna, it's great to see you. Thank you so much for joining me today. >> Lisa, thank you so much for having me again. I love this. >> Yeah, me too. Tell me a little bit about you, a little bit about Rackspace Technology, as well as the role that you currently have. >> Sure, so again, I'm Adrianna Bustamante. I look after our global alliances within Rackspace, specifically looking after some of our strategic partners. I've been with Rackspace for a little over 16 years now, working with partners in some form or fashion. Rackspace Technology, we are the multicloud solution experts. We really work with our clients to drive business outcomes and transformations in this multicloud world. And our mission is to embrace technology, empower our customers, and deliver the future. And I get to have the fun pleasure of building and curating and cultivating partnership relationships. So very much our partnerships are important to our success. We are privileged to be able to work with AWS along with other partners across the industry to help do more, and bring more value to clients. >> So you've been with Rackspace Technology for a while. Tell me a little bit about recommendations. Any tactical recommendations that you have for other women, maybe even men who are looking to grow their careers in tech maybe they're wanting to get into tech. What are some of the things that you've learned along the way that you highly recommend? >> Yeah, no, great, great question. I've had the fortune of being at Rackspace now for a number of years, and it's always 'cause I've been able to create my own opportunities and work. And so that really falls in line to some of the recommendations that I hold dear to my heart. And number one is really to stay curious and learn, from reading articles, to staying close, and asking questions from your colleagues. You know, I know just like at AWS and at Rackspace, there are some very talented people across all areas of the business, and they are the best to learn from. You know, I also am a firm believer in developing and expanding that network 'cause that helps you bring and build out your reach and helps you continue to learn in different areas outside the company. I think from raising your hand, leaning in, don't be afraid to speak up. Especially as we think about, you know, women of the cloud which is part of what the theme of this session is. And I think about, you know, how much I love to see women elevated within roles inside of Rackspace and out, you know. It is about raising your hand, getting uncomfortable in speaking up if you're, if you are a bit shy or timid. If there's an area that you are interested in and passionate about, go learn and drive. Because there's opportunities to create new roles for yourself, new ways to bring value into the organization. And then you become memorable for, you know, that, you know this person was known for helping solve this problem. It's been a good fortune. And within our company culture of any Racker, the front lines know how to solve most problems just as much as the top executives. >> Yeah, I love you saying stay curious. I think curiosity is probably one of the best things that people can have. It's, to your point of, I like to call it getting comfortably uncomfortable. Raise your hand, ask a question. I always think, if you're in a meeting, and maybe you tune out or there's something that you don't understand, ask a question. 'Cause I guarantee there's five other people in that room that have the same question, but they're not curious enough or hungry enough to ask the question to learn more. So I think those are such great recommendations that you have provided that I think you probably would tell your younger self stay curious, ask questions. >> Yes, for sure. I also am so big, at least for me personally, context is so important for me. If I understand context, then I'm really able to figure out where can I drive the most value for me personally. And then that goes into leading my teams. And so to me, the only way you get the context is if you're learning or asking the questions if you don't understand. 'Cause it really helps you understand the holistic business. >> A hundred percent. That context is everything. But a lot of people are just a little bit timid sometimes and don't want to be the one to raise their hand in a room or online these days. And I think it's such a great skill that anybody can benefit from. I'd love to know some of your other skills. Some examples of specific success stories where in your current role, where you've really helped organizations solve problems related to the cloud. >> Yes, so, you know, and I think about ultimately we're looking to see and always looking to see how we can help transform our clients' businesses. And often the underlying root of that is through technology solutions. And so, you know, we've helped clients who are mostly, you know, legacy data center based clients that have built large infrastructure components and environments, and they want to learn and lean into the cloud. And they're not really sure how to do that. They probably may have a leader that's told them that they need to do this. Everybody's at a different level of journey. And so, you know, specifically, and especially in partnership with some of our hyperscaler partners just at like AWS is, you know, we can help customers understand what that journey needs to look like. How to successfully move, let's say if they're a large VMware shop today they already have a little bit of cloud native. You know, together through our ecosystem of relationships, we've helped customers not only be able to build and maintain part of their data center footprint that's not ready yet to transform, but move some of this into a facility that is within our data centers to get out of that huge kind of CapEx heavy workload type environment. And then, and especially with AWS, and the partnership that they have along with Rackspace, with VMware, we leverage BMC on AWS solutions. And then we can help them fully embrace that cloud native. And from a Rackspace perspective we are providing those services and expertise across all levels in a single pane of glass. So you can manage from your more traditional workloads to embracing more of a cloud native approach. >> And it's all about helping clients drive business outcomes as you said. Every organization these days, I always like to think, whether it's my grocery store retailer or bank has to be a data driven company. But it has to leverage obviously the cloud. But there's so many options. It's quite nebulous, no pun intended, maybe pun intended. So, but it's all about helping clients drive those business outcomes. I imagine it's quite fulfilling for you to be able to help different types of organizations really maximize their use of technology, their understanding of technology, to really build bridges, deliver the products and services that everybody's expecting these days. >> Yes. No and I think what I, again, it's what I love about being in partnerships because those relationships become fundamental in helping remove those complexities for the clients. And so the more that we as Rackspace are able to connect and deepen these relationships it just becomes less decision making, less things that the client ultimately has to think about. So nothing gives me more joy than being able to help solve the customer's problems. And then in turn we're doing that through our partnership relationships. So we're bringing everybody together to ultimately provide a better outcome for the client. >> Yeah. And as you said, those relationships are foundational to everything and ultimately the outcomes that the end customer is able to deliver to these demanding, whether it's consumer or business or whatnot. A lot of challenges that organizations have today. But it sounds like the relationship cultivating that you're helping lead is really critical in those organizations being able to embrace technology, utilize it in ways that allow them to get products and services to market as fast as the consumer demands. I'd love to get your perspective as a female in technology. We talk a lot about diversity, inclusion, equity. We can talk about it all day long, but there's still some challenges there. What are some of the challenges that you see that are still persistent with respect to diversity and tech today? And maybe some of your recommendations to eradicate some of those? >> No, sure. So, you know, it starts really early. It starts almost in education and making sure that women, and a diverse set of applicants are taking certain, studying certain disciplines. And then I think about it from a recruiting and hiring perspective. Are organizations doing enough to expand their reach? You know, we were actually talking- I have the good fortune of being the executive sponsor of our resource group within Rackspace. It's called Power, which is the professional organization of women's empowerment at Rackspace. And we were talking just I think last week on, we need to make sure we're going where the women are to make sure we are letting them know about Rackspace, the benefits about Rackspace. And it ultimately, in turn that helps build more recruiting into the talent pool. More people are raising their hand and interviewing and hiring. I think talent in general as we're seeing right now, is so hard to come by, and so even more important to retain. And the more diverse pools that we have of Rackers, it's just bringing different perspectives, and Rackers are what we call Rackspace employees. It's bringing those Rackers together to help solve the bigger problems. Because you're able to do more with a diverse set of outlook. And I think, you know, as a woman, I want to have that equitable seat at the table. And so ultimately when I think about myself from a leadership perspective, am I making sure that all of those opportunities are available for the women that come along behind me? And how am I elevating other women within our organization from a day-to-day so they have that spotlight. So, you know, fundamentally, organizations need to focus on how to expand that reach to bring that diverse set of applicants and voices. And then you need strong leaders at every level to be advocates and sponsors to make sure that this is an important topic and top of mind in all organizations. So you can ultimately provide an equitable approach. >> Yeah, I love that. I agree a hundred percent. You know, it's so important to start at the education front, but also to be able to have just the thought diversity alone in organizations. I've seen many studies that show having females in executive positions are, companies that do that, are more profitable. There's a lot of data out there that demonstrates that there are huge advantages to any type of organization to really invest in diversity. But to your point, it's not just about attracting, it's about retaining the talent as well. I mean that, that is critical for every business. >> Yes. No absolutely. You know, more and more we're starting to see that soft benefits are becoming more important as we think about a younger workforce coming in. And when I think about soft benefits, it's more around our employee resource groups. What our benefits look like for our females within our healthcare, within the insurance plans? What type of time off and maternity benefits are we extending? What does that work-life balance look like in a hybrid world or a virtual world? Those questions become, I mean, when I remember years ago no one would even think about asking those questions. And now we see, not only those questions coming up more regularly, but we are trying to be more intentional within our organization. To be proactive about that messaging so we can help show and demonstrate that we are an inclusive community. And that there's support for women to be successful within Rackspace. You know, we have mentoring programs that we do that are you know, that we really try to highlight and promote for our female community. And then also for our broader community. We look at building different circles that women can come together in a space that they feel comfortable to ask questions. To figure out how do they excel and advance in their career. Those become very attractive for getting that talent that we want. >> Absolutely. And you just brought up such a great point, Adrianna and that's intention. Programs like what you're describing that the Rackers have opportunity to access, is that there's intention in all of this. Which is so critical for diversity programs to be successful. To attract the right talent, to retain the right talent. It's like a flywheel, I think it's all, it's all linked together. But I'd love to know what you see that's next in cloud. How do you see your role evolving in the industry? We talked about the great relationship building that you're doing. What do you see as next in cloud? >> No, sure. Again, 'cause I helplessly can't be biased. It is all about to me that that partner ecosystem. It is how we can build strong relationships that help minimize the complexities for the clients. You know, now the pace for innovation and competitive edge is faster than it was than we saw 24 months ago. You know, we saw COVID advance lots of different areas of the business, but really it forced a lot of companies to transform. And this is where I think there's a unique opportunity to really look at what a partner ecosystem looks like. You know, who are the right partners that organizations like AWS, like Rackspace should be working with. 'Cause oftentimes the partners that were our partners and key partners, maybe three to five years ago, maybe aren't going to be as relevant in that same ecosystem in the next five years. So constantly making sure that we have the right ecosystem in place, and the right relationships to help ultimately drive better outcomes for the clients. >> And that's like we said several times already during this interview. It's all about the outcomes for clients. You mentioned COVID, you know, there's been- I call 'em COVID catalysts. A lot of transformation, forcing function. There's definitely been some silver linings, but I'd love to get your perspective if we go back like the last five years. Some of the biggest changes that you've seen in the tech workforce, in innovation, in the last, you know, three to five years that really excite you. >> Yeah, so I think we all had to learn to be virtual by default. And so I think we're just coming out. People are excited to be in person again. You know, when we have different events, whether they be with internal Rackers or with partners or clients, like everyone's excited to to see each other again. But you're still seeing this mix of, we need to be hybrid by default, which I know wasn't in everybody's DNA from a technology perspective. And I think that's enabling more virtual teams, more matrixed type of teams, where you're bringing together different expertise across the organization to move at a faster pace. You know, we talk about, you know, we talk about COVID which led to that great resignation where you saw many people changing their jobs. You know, we saw women not only within Rackspace, but even outside, like really, you know, take a pause and really start thinking about what's important to them in that returning to work. And so I just think all of this has really, as you mentioned, Lisa, of forcing function on being intentional to create the right environments that are building a place that we can retain that level of skill and expertise. And I think that's just going to become something that's more increasingly important with every year and profession choice. >> I agree. It's going to be building upon, like it's that flywheel that I'm talking about. That of successes, of promoting women, of making sure that there's plenty of opportunity. Encouraging women, to your point, to be curious raise your hand, ask the question. There's so much value, it's invaluable for organizations to really have diversity throughout their organization. You did a great job of explaining. Even in the benefits framework. So, I so appreciate you being on theCUBE. Adrianna, it's great to see you again. Thank you for sharing your story, the successes that you've had as a Racker in cloud, and some of the things that you recommend to the next generation. We really appreciate your time. >> No, thank you. If I can walk into more rooms where there is more women at the table and on the calls, I am a happier individual. So I love any opportunity to really see how we can continue to make more space in the rooms for women that are just overly talented and deserve to be there. >> I am with you on that. Again, thank you so much. Great to see you and we'll see you again soon. >> Thank you, Lisa. Take care. Have a good afternoon. >> Thank you. We want to thank you for watching theCube's special program series Women of the Cloud, brought to you by AWS. I'm Lisa Martin, thanks for watching. (upbeat music)

(upbeat funky music) >> From our studios in the heart of Silicon Valley, Palo Alto, California. This is a Cube conversation. >> Hello everyone welcome to this special Cube conversation here in Palo Alto, California. I'm John Furrier. Co-host of the Cube. We got two special expert guests here talking multi-cloud, Jonathan King, Vice President of Strategy, Data Center, and Cloud for WWT. And Fabio Gori, Senior Director Cloud Solution and Marketing at Cisco. Multi-cloud is the topic. Guys are in the throes of it. Jonathan, you're in the front wave of a massive shift. Cisco powers networks for all companies these days, so guys multi-cloud is a reality. It's here. I want to get your thoughts on that, have a conversation. Thanks for joining us. >> Great, glad to be here. >> So multi-cloud is not really been debated. I mean people generally now step back and say multi-cloud is a reality. It's here, people have multiple clouds. Should only have data center on premise. But this idea of multi-cloud and hybrid cloud are somewhat getting mixed up, but multi-cloud is certainly more realistic in the reality sense than anything else. What's your take on multi-cloud, Jonathan? >> So I think we're at a point where there's a growing acceptance of multi-cloud as the architecture of the future. And when you arrive at that point it also means that multi-cloud is the architecture for today. Because if you see your competitors, you see new entrants in your space, moving in a rapid digital pace to meet their business needs, and you're not on the same kind of architecture. The same footing. Then you're going to be left behind. So, used to debate private cloud, hybrid cloud, multi-cloud. The way we see it is that we're in this multi-cloud world. And multi-cloud embraces an end-to-end imperative. How am I getting my apps and my development teams building those apps closer to my business and meeting my needs more rapidly? And then how am I connecting my entire business, my data, my network, all of it, to meet that needs. So multi-cloud architecture's really an imperative. It doesn't mean it's the only thing. There's other elements in terms of having a clear digital strategy. Thinking about how you're going to modernize your infrastructure. Of course, thinking about how you're transforming your security. All four of those elements really comprise a enterprise architecture. Multi-cloud being a core part of it. >> Fabio, Cisco, you guys have seen the waves of innovation, internet, connecting companies together through networking etc. Multi-cloud's a big part of your focus. Certainly at Cisco Live we covered that. What's the definition of multi-cloud now, because I've heard, it's been debunked, but I've heard people say, oh multi-cloud's an application workload moving across multiple clouds. Some say, no, it just means I have two clouds. So what is the definition? Baseline us here. >> So it's interesting because you can go Wikipedia and actually read the definition of multi-cloud, but what I'm really interested in is exactly what Jonathan was saying a moment ago. This is one of those rare cases where what you hear architecture is actually a technology architecture and the business architecture really coincide. People want to use innovation wherever it comes from. And because you can't allow yourself to be just restricted your choice, people want to have choice. Multiple choices. And that's why we're seeing adoption of multiple cloud services. Multiple SaaS solutioning for structure service solutions and the likes. So this is really what multi-cloud means. You're satisfying a business need. And while cloud computing was born, as we know, around 10 years ago, and it probably started with a kind of cost connotation, the speed and agility that you can get out of it now overwhelm the other parameters. And people are ready to spend anything it takes to become faster than their competitor, because that ultimately will really determines your destiny in the marketplace. >> And I want to drill into the tech side and have some specific pointed questions I'd love to ask you. Jonathan, first, talk about the relationship that WWT, World Wide Technology, has with Cisco, and your credibility in multi-cloud. You guys have a unique view First of all you work with Cisco, you guys partner together. A big part of your business. But you guys are in the middle of a lot of the action. Talk about the company. What kind of deals you guys are doing? What visibility do you guys have? Is it a landscape? Give an example of some of the work that you guys do, and then talk about the relationship with Cisco. >> Yeah so, the Cisco is a very strategic partner of ours. They have been for a long time. And we have the benefit of being at scale with Cisco. For repeatable waves of technology roll outs. In repeatable domains of technologies. So, customers come to us and look for our help as a trusted advisor to help them with their architectural decisions. And to help them often with knowledge gaps. So, architecture is a challenge. Especially when you're dealing with rapid change. So you have a pace of change externally. You cover this space. I mean every day, right? We were sitting here there's some kind of new thing going on. And, that change, I mean even companies who know what they're doing, and have deep benches of talent, have architectural challenges. But you take it to an enterprise or a government agency. How are they going to keep up? Well that's really our job and the value we bring is. We are constantly watching, talking to partners, talking to customers. And there's almost no one we're that as closely with as we are with Cisco, in terms of how we're watching trends, looking what's happening. And from a multi-cloud standpoint, in answer to your question there, it's a bit of a thought experiment. So if you define multi-cloud as really just, oh it's just between Amazon, Azure, Google. Multi-cloud is just multi public cloud. We do not see it that way, our clients don't see it that way. Our clients see it as a bigger domain. That multi-cloud includes how you're connecting to SaaS. How you're, there's multiple public clouds, a bigger definition there. But then it's also the edge, the cloud edge, the different edges that are out there are are being deployed in a cloud architecture. Your core data center has a private cloud. All of that we see as multi-cloud. And when you define it that way, you start to look at it. Companies are saying who do I turn to to help me with a multi-cloud architecture? Do I turn to someone that was born in the cloud. Who just really knows AWS. They know it really well. But that's what they know. Or a similar consulting company who's over here. The credibility that we have, we have those capabilities. But we also have depth and breadth, and history, and knowledge, and contracts and relationships. An incredible ecosystem. And important with Cisco, it's not just a one-way relationship. We have an ecosystem around us, collectively, that Cisco benefits because we have that ecosystem. And that's really what companies look for. It puts us in a very unique position because we see this AND world. It's not an OR world. And I think even the investments and movements that the public clouds have made recently. The hybrid offerings that they're bringing, and where Kubernetes is going to enable portability. All these things really are about a multi-cloud world, and we're just excited about where we are. >> It's interesting, there's the first wave, Amazon, I call it the Amazon wave because they really did take out the beach. And then public cloud. It kind of showed the way, the economics and the value creation piece. And you mentioned a few things that point at this next wave. That next big wave I see it is about people and technology. This holistic view around multiple architectures is a systems concept so it's not unproven. And Fabio we've seen this movie before in systems. Operating systems. You need networking. You got to connect things together. So this next wave of thinking about workloads and applications in context to an architecture see to the next narrative that people are starting to talk about. Versus. >> Absolutely >> Public cloud, because the people equation, who's going to run it, who's going to service it, who's the coders, what tools and APIs do I use. People behave in certain ways, and they like their favorite cloud, so it's a whole different ball game. You're thoughts. What's driving all this? >> I would say, look, we could talk about this forever. But I think we're seeing a pretty dramatic shift into an architectural model, right? I mean, if you remember a few years ago, we had networking specialists in the data center, storage specialists and compu-specialists, well guess what, people moved to full-stack type of expertise, right? And now we even have systems that are completely converged. Or hybrid converged. Well, we're seeing the same movie in the cloud. Where we're seeing the rise of cloud architectures, enterprise architectures, which become really determinable of the business. And these people, especially in the companies that are ahead of the game, in terms of cloud adoption and expertise. These guys are issuing the new guidance and guardrails for the entire organization in terms of what governance role you need to take, right? And the other groups actually execute this kind of strategy. This is, some people say this is finally SOA coming alive. The SOA, Service Oriented Architecture. That's exactly what it is without probably some of the kind of propriety underpinnings, or driven by certain market players in the past. This is a true, so if you think about microservices in containers, that's exactly what it is. And also we're seeing a lot of companies that are starting getting even organized by microservices. Which is the ultimate demonstration that the technology architecture and the business architecture are really converged. It's a fairly complicated concept, but in the end it's about really connecting the business to the underlying technology. >> And it's a shift that's happening in front of our eyes. And we're covering a lot of the news. Some notable news that we've been covering lately, the Department of Defense JEDI contract. That's in the public sector and military. CNCF, Amazon re:Invent. Google Nexus coming out. You're starting to see the formation where it's not about the cloud vendor or the cloud supplier anymore, as much as it is about the workload. So, there's been a debate of sole sourcing the cloud, that's certainly, we're seeing that on the DOD side 'cause it's more a military procurement thing. But that's not the right answer anymore, we're seeing that whole, spread the multi-vendor love around. It's not so much like it used to be. It's different now, there's new architecture. So, Jonathan, I want to go back to your multi-cloud architecture because I think the strategic question that I'd like to get to is. It might not be a bad thing to pick a cloud, a sole cloud for workload. But that's not meaning you're going to not use other clouds. This is a whole different thinking. So I can pick Amazon for this workload or pick Azure for that workload and Google for that workload. And holistically connect them all together. Seamlessly, this is not a bad thing. Your thoughts. >> There's a somewhat of a paradox when you talk about multi-cloud architecture and then you talk about moments in time where it makes architectural sense to pick one cloud, right? That particular decision there's issues around people and training and technology, and time to market, and API coverage. So there's all these things that you're trying to get a job done or a mission done and the amount of time that you have to achieve that job or that mission. What path am I going to choose? What engine am I going to put on the plane to get me there? Now that doesn't mean that that's the only engine you're going to put on your fleet. It just means that particular plane is going to have that kind of engine. And then the next time, you got another engine, you got a different kind of plane. You're thinking about how you're doing these things in waves and modules, and you're trying to build your aggregate velocity, 'cause really if you strip it all down. You know earlier we were talking about multi-cloud and people and talent, we're in a distributed computing land rush. And businesses of all sizes, government agencies, companies are trying to figure out how do we, you know. Electricity came along, now cloud has come along, right over the horizon cognification's coming along. How am I as an enterprise getting digitally ready, and getting on a footing to be able to do what I need to do in that domain? And really, it's about velocity and movement, so. Now that means that, that's why architecture is so important, because you have to make, you want a, people talk about one-way doors and two-way doors. So you want stop and think about, am I going through a one-way door or am I going through a two-way door? Meaning, do I have a way to come back? Is this a decision that I'm going to live with? If so how long? Is this a decision I can go through and I can come back? These kinds of approaches let you look across it. So an example would be networking. So networking is a foundation to every multi-cloud strategy. So you have to think, today my network in many enterprises is still a campus branch architecture. Well traffic patterns have changed. Even if you've just done nothing your customers have moved. Like all of a sudden, you know we talk to customers. We work with retailers, we work with all kinds of people, and it is like Global Climate Change. It's like global network change. The scale at which the clouds have arrived have changed the network patterns. So, if you start to look at it, you're saying, well what is a multi-cloud networking strategy? How do I need to rethink, well, guess what, the campus, my headquarters, is no longer the hub it used to be. The hub is now at the cloud edge, where all the other clouds are geographically aggregated. I need to move my network closer to that location. So we do a lot of work with Equinix in that context, right? So they have and have built a business around >> Sort of re-architecture's happening, and it's being driven by value creation, value shifting. >> Yes. >> Moving everything around. >> And that's where from a cloud networking standpoint, you look at that's a discussion where Cisco's so uniquely situated, because they are the networking company. They've been through the generations and they've been through different changes of generations. You know Wi-Fi, didn't used to be Wi-Fi. Now it is, right, it's here. And now we're in this next paradigm, where cloud networking didn't used to be here. Now it is, so. >> What's the new thought process for cloud networking. Because it makes a lot of sense, you have to connect clouds, obviously networking latency, SLAs around moving things around from point a to point b, storing stuff as well. Fabio, what's the equation look like? What's changed? Where do your customers go in this new architecture? >> Well, just building on top of what Jonathan was saying before, first of all the way we architect the networks, enterprise networks were networks in the past. Of course this is coming to an end. We need to rethink them, right? The fact that users now are going to use an enormous amount of software as a service applications that don't sit in your data center, means that constricting all the software in a single place doesn't make any more sense. But there's not just the traffic element. Think about all the intrusion detection and prevention, firewalling capabilities. Because you're moving away from that model, you need to start visualizing also those security functions and distributing them all the way to the edge of the network. In some cases, you need to have them in the cloud as well. We believe that the best way is a fully distributed model. Where you have a choice. Whether you keep it in your data center, or you put into the cloud, or even the to edge of the network. Again, you got to be ready for any kind of scenario. It's interesting how, you know, we're going to distributed computing as you said. But everything else is getting distributed as well. >> Oh yeah. >> Your entire infrastructure needs to follow your application and data. Wherever they go. And that's actually something unprecedented that we're seeing right now. >> And you brought up cloud architecture earlier, Jonathan. You mentioned it briefly. And this comes back to some of that this nuanced point around cloud architecture. The procurement standards aren't driving what you buy, its architectural workload dynamics are now telling procurement how we're buying. So the world shifting from, oh, I'm going to buy these servers. I'm going to buy this gear, the approved vendors. When you think about architecture the way you pointed it out, it's a completely different decision making process. So what's happening is old ways of procuring and buying and consuming technology are now shifting to. Still not going to stand up a cloud with a credit card if I'm doing dev ops, but now you start thinking holistically. The decision making on what that will look like has changed. This is probably impacting the cultural people side as well. What's your thoughts on this dynamic between cloud selection, security, architecture, and procurement? >> The example I normally give is, it's changing but it's also evolving, right? Because you're dealing with patterns that are there, and they're not going to go away, right? Money still has to be paid. Processes have to be followed and respected. The examples that I give would be, I've run large clouds in my past. Different platforms. And one thing you always watch out for when you're running a cloud is capacity. How much money do I have in the bank, so to speak, right? Am I going to have a run on the bank? So if you're running that cloud, either, and this is true if you're a service provider or you have your own private cloud. You're very concerned about you don't want to run out of capacity. Because bad things happen. Even unrecoverable bad things happen. Well in the public cloud, hey, I'm free and clear, I no longer have a capacity management team, I don't need to worry about them anymore. No, no, no no. 'Cause, you know, we just saw some press recently of a company that had a big overage. In cloud, what used to be capacity management is now cost optimization. 'Cause if you don't have it, you're going to have a similarly bad outcome. It's those kinds of things, right? How do you go, and it's those things, right? >> Once a benefit, now it's a challenge. So this could back down to the billion dollar question on the table in the industry is, how do I manage all this? I know how to connect it. Cisco could help me there. I understand multi-cloud, I totally buy into the architecture. I think this is clearly the direction. The management piece is kind of a fuzzy area. Can you guys help unpack cloud management? What are the table stakes? How should people be thinking about it? Because you mentioned security and intrusion detection. Not just moving packets around. We were talking before you came on about Kubernetes. There's all new sets of services moving up the stack, inside this dynamic. How do I manage it all? What single pane of glass is going to do it for me? >> Well, yeah, it's interesting you mentioned there. We've talked a lot about almost like an East West type shift you can think of where, multi-cloud is this thing that goes this way. Well, there's an equally crazy paradigm that's happening in a very fast period of time where it's almost like a North South North shift. Which is, Kubernetes, containers, service meshes. These architectures that are abstracting and lifting everything up. And in some ways, coming underneath as well, at the same time. Because now you've got a return of bare metal. You have these concepts architecturally where the VM is here to stay, it ain't going anywhere. It's still, the tooling around is insanely valuable. But you have now another benefit layer at a container orchestration layer, where there's portability, speed. There's all these benefits that come. And you just look at the stats of how fast containers are growing as a share. You're approaching a billion containers out there right now. And therein lies the challenge. Is that it'd be enough of a difficulty if you were saying I need to go from managing my private cloud, the stuff I have at a cloud edge, edge location, and the stuff I have in multiple public clouds. That's not all we're saying. We're saying also, you have a new tooling and a new set, and it's all software defined, and there's security, network, there's data. It just it's -- >> Complex. >> Exploding, it's complex. So the area that we're working on and want to hear more from Fabio is were innovating with Cisco on, we have great offerings and capabilities around cross cloud and VM orchestration. We're also looking now at that Kubernetes layer. >> Absolutely. >> What's real on that, the complexity he just pointed out is an opportunity at the same time because it just validates the shift that's going on. >> Absolutely. >> Management is an opportunity. >> Jonathan almost went through the entire set of needs. And what you take away from this is that fundamentally you have to instrument this incredibly distributed environment multiple sources and sourcing of this. In fact I love the analogy that you did with the planes, because there's a lot of kind of similarities to a supply chain management kind of business model, right? Where you want to supply different services. But a bottom line is that you're now moving away from what you have. It's a journey. And so this instrumentation, whether it's networking, security, analytics, management, these are actually the four pillars of our company multi-cloud strategy. They need to work across the old and the new. You can't afford to build another silo and maybe leveraging a bunch of open stores like-- >> So a data plane strategy is critical. >> It's, yeah, and it has to-- >> Across the hybrid and multi-cloud. >> East West, North South, and across the old and the new. It sounds very complex, but in reality the-- >> But you could build a taxonomy around this. And we've seen some research come out certainly from Wikiban and others. If it fits into the architecture that seems to be the question. So Jonathan, where does that fit in to the multi-cloud architecture in your opinion? >> So we, there's, you get into different terminology. We think about every company needs a cloud services strategy. So there's a taxonomy of services that we've developed. Where companies have to think about their application services strategy. Their operation strategy, governance strategy, foundation strategy. And this is, it's sort of coming what I teased upon earlier about moving from capacity planning when you own the cloud to cost optimization when you're running the cloud, right? It's the same, but different. And a lot of that difference gets down to services. I am going from a model of running my own product in an information technology modality to now I'm consuming services. So, I used to architect, and design, and build. Now I have to architect and really understand those differences. And so that's our cloud services strategy portfolio. And what we often see is we also have a dev ops portfolio. And we short-hand it, you could call it cloud native, right? Where we're looking at solutions around infrastructures code, around CICD pipelines, around cloud foundation capabilities that connect back-- >> Are they best practices or actually implementation? >> So both, we have content and workshops that we've developed, and then we have. Helping clients on projects very actively. And, you know, that's where it gets back to that architectural gap and knowledge gap. Is companies are looking for, hey, what's the pattern, what are the best practices. And then they don't expect, 'cause there's so many elements that change for a given company. And that change in the market, that there's a shelf-life to this. And it's like fresh produce. >> I love your example of engine in a plane. Do you have it for a single plane or fleet of planes? Does your company have two three big planes. It depends really, I mean, beauty's in the eye of the beholder, here, right? How you build and architect cloud, there's no boilerplate. It really is comes down to figuring it out. >> Where you are. >> So, with that, I want to go to my final point I want to dig into on the people side. So technology shift, business shift, check. You guys did a great job there. Great insight. Comes up every time I have to go to a Cube event and talk about cloud, is the cultural people skills gap problem. One, our company doesn't have the culture and/or we don't have the skill and we don't have the people to run it. So, automation certainly can help there but at the end of the day, if you don't have the people to do this. How do you solve the people problem? How are you guys helping companies? What is some of the state-of-the-art techniques? What's out there? >> So, I'll say a little. I appreciate Fabio's perspective, too. I think for us, really, you know, the old saying, culture eats strategy for breakfast. Culture's more important than ever. Because really, you're now moving to a mode where siloed organizations implementing siloed technology is enormously challenging. You have to move, and that's where dev ops and other patterns come in, where the people who build the app are doing the operations. Storage and networking and compute and apps and the business, they're all talking to each other. So culture really is foundational so that a culture where you're not making boundaries more rigid, you have to get to a point, and there's different ways to do this. I already recommend if people haven't already read the Phoenix Project. Hard to believe but it's an excellent book. And it's a fictional work about tech. It's like a novel about tech. >> I haven't read it yet, I'm going to get that. >> It's awesome. And it really gets you in the mindset of an organization going through change with the net. And it really, I mean I'm a geek, so I like it, but I've had other non-Geeks read it and they like it. But that's the key, it's a-- >> So you really got to set the table and invest in culture, making sure it's >> Culture's foundational. >> appropriately aligned. >> Culture's foundational. And then there's other best practices that always apply, right? So, what is your business vision? What is your mission? What are your values? What are the objectives you're trying to achieve in this space and time relationship? How are you prioritizing? These are all things because then if you have the right build around all that. Then what you drive to is an outcome at a certain point of time. And time's critical. We're in a market that's competing on time. So if you are not hyper aware of time. And what you're doing in a set point of time. And the trade-offs in making changes if your assumptions are wrong. These are all things that are foundational. >> Fabio, I want to get your thoughts. Chuck Robbins talks about solving the tech problems just because a tech company can solve tech problems all day long. He's also behind the people skillset. I've heard him publicly talk about it. But you guys at Cisco have actually had a great transformation with the DevNet Create community, where you harness the culture, and everyone's engaged around cloud, cloud native, and you have a kind of cloud DNA developing out of the core network. Your thoughts and Cisco's view on culture and people solving the problem. Because we need an army of cloud architects out there. There's not enough people. >> So that's true, but we carry an enormous responsibility in the marketplace as a vendor. We have to make things simple, right? There's still, you know, most of the IT infrastructure's still very complex to program and automate and the likes. That's why we're putting an enormous amount of RnD efforts, right? DevNet is like the tip of the spear. It's showing fundamentally our very loyal CCIEs and everybody else there's a better way to do things, right? Where you can actually really automate things together. You can get access to the APIs and simplify your life. You can simplify your life and the life of the business 'cause you can get faster. So making things simple, automating them, I don't know, if you think about, for instance, our cloud management orchestration philosophy. With the cloud center, we have a patent where we can actually model the application at once. And deploying it to wherever you want. We can deploy that application on-prem, on a VM, or like viralize kind of infrastructure. You can put it into AWS, you can put it into Azure, whatever you want. Kubernetes is kind of target on-prem. That is simplicity, right? We have to drive simplicity. And for me, it's all about automation, and sometimes you hear things like, in 10-base architecture and infrastructure all of that means simplicity and security. And that's the complexity of the whole thing for us is trading off, of course some of the complexity, richness, and flexibility. But it's got to be simple. If we don't make it simple, we are actually failing our goals. And that's where we're putting an enormous amount of RnD effort. >> And Jonathan, you guys at WWT have a unique aperture, view of the marketplace. You see a lot of the landscape, knowing what you guys do. Every vendor says they it, but you're really customer focused, so you're in you're digging in with the customers, it's a real value added service. I got to ask you the question with multi-cloud it sounds easy just to connect them all, right? It's like a subnet plug it in the coax, put a hub there. Put some adapter cards on a PC. The old days of connecting things. It just metaphorically seems easy What's the opportunity for connecting multi-cloud? So, as people realize when they wake up tomorrow or today. And they go, hey, you know what, I got lot of multi-cloud around. How do I connect them together? What's the opportunity, what's the opportunity for Cisco. 'Cause that seems to be the first order of business. I can connect things together in the architecture. And then what happens next? What's the opportunity to connect these clouds. >> The opportunity is gigantic. If you look at just the growth of the public clouds themselves. The CAGRs that they're representing. They're growing the rate their growing on very big numbers already. And it often gets overlooked, but Gartner will tell you also that the co-location, that cloud edge space, is also growing at a good CAGR. So you have just more and more going there. All of that needs to be connected. All of it needs to be protected. So networking is not just networking. Networking is security. A critical pillar of any security practice is really understanding and knowing in-depth your network. The introspection of it all. And at the same time, we're moving from a physical world. And we've moved and virtualized, but now the virtualization of the network now with SD-WAN coming, you're moving to a programmable model, where everything needs to be programmed. So it's not humans. So it's almost like every arc. Just in terms of the amount of data, the amount of traffic, that's all growing. Now, it's not just humans, it's machines doing things. And then also it's not just physical connections. It's software. So it's a three dimensional plot and it's growing on every axis. >> It just not in every device, it's software as a device. Software device connections. Service connections. What's Cisco's opportunity? How positioned are they that can do this? Because there's a lot of conversation around edge. Now you just mentioned a few of them, 5G. What's Cisco's opportunity in all this? >> Well I mean I think Cisco's shown recently and then through generations that they have a unique ability to lead and move with the market. And they're demonstrating that now. So, I think the importance of where the network sits, and not just the network, but again there's an adjacency of security. There's an adjacency of orchestration and management. Their global presence, their global operation. The sophistication of their channel business. All those things put them in a really strong place, we feel. >> You mentioned SD-WAN in a previous comment around talking about edge and stuff. If you think about Office 365, when companies roll that out. That basically takes SD-WAN from a little niche industry to all the internet. SD-WAN is basically the internet now. Your old grandfather's SD-WAN was over here, now everything's SD-WAN. That's basically the internet. So talk about the SD-WAN impact in this because with edge, that's super important too. Your thoughts. >> Well, it was back when we were talking about that traffic patterns are changing. So you're moving to no longer really this campus branch closed network. There's still an important need for that, of course. But now you're doing your business where your customers are. On their phone, in their car. Which means you're having to traverse and work and scale in a very different way. It's part where you have to put the network. And then, it's how you have to run and connect the network in your retail store or in these other things. Part of it is doing what we've always done in a better way. And then probably every day, more of it is about doing things in a new way that you couldn't do in the past to achieve a new business objective. >> Well Jonathan, thanks for coming on theCUBE conversation. I'd love to have you back on. Great insight. We could also do remotes. So when you go back to the home branch in St. Louis we can bring you in. >> Tells you Silicon Valley and St. Louis, man. Silicon angle, Silicon Valley, St. Louis. >> Let's do it. And I'll say congratulations on your success with Cisco. Fabio, it's been great to see you. Final word, Fabio, just bring it all together. Multi-cloud, it's here, kind of that's the reality. >> Yeah, I want to go back really to where we started the conversation, right? We can't forget the multicloud is still like a mean to and end. The end is, companies want to become and need to become innovative and fast. And that's actually why all this interest in multicloud. It's a business engine. That's why we're all so excited. Because it's a business issue. It's not so much a brand new technology that probably in two years is going to be out of fashion. My personal prediction, we're going to be talking about multicloud for several years. On the contrary of other trends. >> And just to real quickly bring in what we talked about before we came on camera. This is a CEO issue of companies, not CIO. >> Absolutely. >> This is showing the culture and the urgency, really, in all this. >> That's right. >> Absolutely. Guys, thanks so much for coming on. Great insight. Multi-cloud conversation, fantastic. Jonathan King, Vice President of Strategy, Data Center, and Cloud for WWT. Also Fabio Gori, friend of theCUBE, Senior Director Cloud Solution and Marketing at Cisco. Thanks for coming on. This theCUBE conversation. I'm John Furrier, thanks for watching. (upbeat funky music)

live from Las Vegas it's the cube covering AWS reinvent 2018 brought to you by Amazon Web Services Intel and their ecosystem partners hey welcome back everyone we're live here in Las Vegas with AWS Amazon webster's reinvent our 6th year I'm Jeff our table what they did six years two sets people rolling out of the keynote so much action we got another day coming tomorrow they're two great guests here we got dr. feci philomon is the general manager the machine learning and AI at Amazon Web Services and dr. Taha costs senior leader at healthcare and AI at Amazon guys welcome to the cube Thank You thanks itíd that you're here because I've been waiting to have this conversation Dave and I have been we just had an analysis of the distractions and glued up the stack around machine learning so much value now coming online that's been in the works around AI are really mainly machine learning that's creating a I like benefits and II just had to spend a lot of time with key nuts they almost a third of it around a I like capabilities and how Amazon integrates in from you know chipsets with elastic inference beautiful it's just good stuff so congratulations so what does it mean what does it mean for customers right now who want to kind of grok what's going on with Amazon and AI is that new sense the services coming online is that how long has been the works explaining yeah our mission at AWS has always been to take technologies that have been traditionally available for a few special technology companies and take that and make it available to all developers and we've done that I should say that we've done that fairly well when it comes to compute when it comes to storage when it comes to databases the analytics and we're doing the same thing for machine learning and AI and what we're doing because it's a new field is we've got to innovate at three layers of our stack to the bottom most layer as you saw in the keynote earlier has to do with frameworks and infrastructure so this is more for the people that fully understand how to deal with machine learning models and like to go in and tweak these models the middle layer then is for everyday developers and the data scientists and that's sort of where sage maker fits in and finally at the top layer of the stack is where we have our application services and this is meant for developers that don't want to get into the weeds of machine learning but they still want to use make use of all of these technologies to make their applications more smarter so they get the insight benefits get the insights have the day that without getting in town on the weeds exactly who want to get down in the weeds you can get down and dirty with all this other stuff yeah look at that right yeah and typically what we do with the top layer of the stack as we try and solve really hard problems and so customers can now take advantage of it because we've solved it for them and they can just take that and integrate it into their Apple quick what what's the hardest problem that you guys solve I mean traditionally speech recognition is a very hard problem that's one of the hard problems the other one is NLP natural language processing but I would say speech recognition is probably a hard problem and we just launched streaming transcription so you can now transcribe live as somebody speaks and of course you can connect it to translate and translate it as well live so great for our cute beers looking forward to having that on as a health care practitioner how does this all apply to that industry what kind of projects are you guys working on in that regard of course yeah so I mean to to posses point is want to continue to innovate on behalf of the customers across all layers of the stack machine learning in particular this week we launched Amazon comprehend medical particularly in a hardier heart problem where the majority of healthcare data is captured conversation and observations and unstructured formality so petabytes of data is stored across entire healthcare system that's a nun structure for form so to drive actionable insights and to be able to find the right elements to treat patients or to manage a population or even to do accurate billing it's been really an important that we can empower our customers with building blocks for them to build the right solutions to take advantage of that so Amazon comprehend Medical is able to understand the medical language and the context similar how clinicians understand the medical language and context for example if you're looking at a patient medical note Amazon campaign medicals able to with high accuracy extract medical conditions medications tests procedures being done on the patients as well as the relationship between those and understanding that context at this condition and this treatment go together as well as the nuances for example you know a patient has no family history of X or there's no smoking history all those are things in relation in the past or in the future or other members and this is really what we're really proud about launched an Amazon comprehend medical talk about how it works because you know I Healthcare has been a great field around where a is old-fashioned a is a queer when I wasn't doing it in the 80s early 90s ontologies were really popular and it's linguistics is kind of known but now that but you need that linguistics guru to do that he mentioned streaming the transcribed got metadata how do you guys get this kind of benefit when the balls moving so fast around these rapidly changing and verticals like healthcare because healthcare is got a big problem like other verticals where it's too many notifications what I pay attention to so much data how do you put the puzzle together let me first give you some context here as you probably we're at last reinvent we launched Amazon comprehend right comprehend is a text analytics service it helps you look into text and understand what's in there right we started out with general things that we could detect like people places things sentiment the language the text is written in and so on but when we started customers are picked on it and they're using it a lot but as they keep using it they came back to us and said hey it's great that you guys have this this you're giving us the capability to understand general language but some of our domains have some special language like jargon like yeah like take the legal domain for example right it's got charges and defendants and very particular things that are very relevant to the legal domain so they were asking us for a capability to sort of extend the comprehend to include their custom domain terms and phrases as well right so last week we actually launched a custom custom entities feature that allows them to bring in their custom domain into comprehend so the comprehend be extended to include their domain the so legal language is difficult to understand but medical language on the other hand is even more harder to understand that quick right acronyms jargon absolutely what is an entity looks like extracting that and extracting it uses alone yeah miss spells right but relating those entities together is super important because you could in one clinical note you could have multiple drugs in there with different dosages different frequencies and so you need to be able to relate those entities together right and that's the sort of thing that comprehend Medical allows our customers to do to solve some really so you're doing one of that entity extraction is under the covers is that right has it were I mean how does comprehending the medical work I mean just out of the box you have to train it there's no training meet needed know machine learning expertise needed so the algorithm extract these entities as well as the relationship between those entities and then also extracts any attributes that might be related such as negation or past and future or what's anatomy of the body relates one now all that is done out of the box and that's super important you want to know whether the patient's stopped taking a medication right yeah so negation things like that you want to know because that gives you the context just getting the terms alone doesn't really tell you much it each has had a great video about the f1 point of ethics imagine that for personal that's right you're not doing good right now take a break yeah so I feel like we're kind of now scratching the service of stress in the surface of health care yeah information yeah think about the health care industry for years it's been compliance-driven yeah whether it's hip Affordable Care Act yeah EMR and meaningful use right but the industry hasn't been you know dramatically transformed and disrupted and it kind of needs to be yeah how do you guys see that evolving I feel like you're now beginning to see that see change and that's going to take a while it's a high-risk business obviously but what's your sort of prognosis for that transformation and what's the vision as to the outcome yes now that's a really great question I mean one thing I mean one great things happen over the last decade is the digitization of your medical record so and that's really wonderful because before was all paper-based primarily unless you were an acute setting so now the majority of the US for example and globally there's this huge adopt adoption and propagation of these electronic medical records the issue there remains now when the majority of that data is observations and conversations as well as unstructured that that creates a different kind of roadblock for our customers and this is what we're hoping for service like Amazon comprehend medical that's HIPPA eligible means a lot of the early the compliance or help our customer meet their compliance needs that we'll be able to remove the heavy lifting of this undepreciated task about you know having in a large amount of time being spent on analyzing this text and extracting very low we're now with Amazon company and medical be able to really fast track that and be able to elevate it hit the nail on the head of the undifferentiated heavy lifting right that's the ethos of DevOps is that yeah let me give you some stats actually there are one point two billion medical documents that are generated every year in the US and 80% of them it's unstructured text so to make sense of that it's going to enable our customers to do some really amazing things one of the things one of the use cases that we see is its clinical trial recruitment so Fred Hutchinson which is one of the yeah the nation's top cancer research centers they recruit patients for clinical trials if you go to clinical trials.gov you'll see like 290 thousand four and 50 clinical trials open and typically from history we know that most of these clinical trials don't end up recruiting they don't end up meeting their recruiting goals because it's very hard to figure out which patients fit the clinical trial that you're actually trying to perform so comprehend medical helps these customers to very quickly narrow it down expand on the involvement of people in the community mentioned Fred hutch Roach has also been involved what I heard yeah what who was involved in this project sound it was a collaboration take a minute to explain that right I mean it's very similar to a lot of other services that we put it into the market we collaborate a lot with customers 90% of what we do is really coming from customers so we've collaborated with people like Fred hutch and some of the nation's top institutions to help us validate the service that we've built to actually make sure that its meeting sort of the requirements for those use cases that they are thinking of so we collaborate closely with them to get the service to where this today and we announced it as generally available yesterday ok so what's the use case I'll go ahead yeah I can expand a little bit some of the customers as well their use cases we're talking anywhere from hospital systems that when I use or take advantage of their unstructured text for things such as identify people who are for their follow-up appointments or stopping treatments or find an alternative routes to billers we're trying to identify it is accurate procedures were done if we account for all the procedures or care for all the billing which often time is hidden in those unstructured text and require a lot of manual process and often time the rules that can't really scale to things such as clinical trials recruitment how can you if example in Fred Hutchinson Cancer Institute use case for identify a patient and match them to the right clinical trial these patients often time have Harry Potter's worth of clinical notes down on the minute their longitudinal journey and to go from one institution another another and be able to really find it's no longer needed a haystack it's like a needle in the bottom of Atlantic Ocean and then be able to really do that match from hours and months down to a few seconds and that's really the beauty about the service John likes to talk about the 20 mile stare and I wonder if we could just look ahead how far can we take AI and machine learning in in healthcare and how far should we take it and maybe a more specific question as as a practitioner you know when do you think machines might make better diagnosis than doctors if ever how do you feel about that where do you see this all going I think I mean the whole idea about machine learning the beauty about it I mean the seta scope was introduced or how the thermometer was introduced in medicine and these are tools that we use to our advantage to really provide better care and and better outcomes and that's really what we're that's the mission that our health IT and customers and wanna are really driving tower's machine learning can do a lot of great things for routine things that human being can't can go and focus their attention to other things such as the Fred Hutchinson instead of going and mining these diagnoses in mountain amounts of data a machine learning will be able to identify that with a clinical staff can focus on care and that's really where I think I mean over the next decade and so we can see a lot of this advancement in in these building blocks as well as what Amazon's offering from forecasting and prediction algorithms Rana will be able to find you know fine-tune our capabilities to help customers achieve even precision medicine real-world impact because you're changing the workflow I mean someone's within the wrong line or the wrong process based upon their history yeah HIPPA HIPPA requirements really cause a lot of this record sharing thing to be a problem from what we've been reporting over the years it's kind of a solution to that so if I move to a service medical service I get all that records with me it's just kind of how you see going and how does other regulations that are holding you back that are blockers is that clear now how does that solve the industry challenge it's of privacy and if you look at the healthcare system today there are lots of inefficiencies in there right in the end this is all about improving patient outcomes and making sure that we reduce costs and that's what this boils down to and these are tools that allow our customers to do exactly that well guys thanks for sharing this insight comprehend medicals really awesome opportunities I think it's early days day one is you guys think right I think there's so much more that could be there I'd love to see the industry just from the personal is decided change it's just get out of the way of all these pretty broad hurdles get the data out there expose the data check the privacy box would be good right this is gonna change the game yeah maybe we should say a little bit about the how we built the service in terms of that right as you know at AWS security and privacy is number one for us right so this service is HIPAA eligible it's a stateless service what that means is nothing gets stored this is not the data is not used to improve the models or anything like that the only person that can actually see the data is the customer he's got the keys he's the only one that's sending the data to the endpoint and whatever he gets back only he can decrypt it so we've taken care to make sure that we can remove some of those hurdles that people have always been worried about well doctors take you so much for sharing thank you so much for having us here we are bringing you all the action here from 80s reinvent again as the compute power is increased as software is written with new apps a eyes changing the game of course the cube a lot of video we don't need some of these services to make these transcribes on the fly they succumb and I really appreciate it you think back on the more after this short break [Music]

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Our program will begin momentarily. ♪ Hey ♪ (female singer scatting) (male singer scatting) ♪ Hey ♪ ♪ Whoo ♪ (female singer scatting) (electronic dance music) ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ Red don't go ♪ ♪ All hands are in don't go ♪ ♪ In don't go ♪ ♪ Oh red go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ Red red red red ♪ ♪ All hands are red don't go ♪ ♪ All hands are in red red red red ♪ ♪ All hands are in don't go ♪ ♪ All hands are in red go ♪ >> Ladies and gentlemen, there are available seats. Towards house left, house left there are available seats. If you are please standing, we ask that you please take an available seat. We will begin momentarily, thank you. ♪ Let go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ ♪ All hands are in don't go ♪ ♪ Red all hands are in don't go ♪ (upbeat electronic dance music) ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ I live ♪ ♪ Just make me ♪ ♪ Just make me ♪ ♪ Hey ♪ ♪ Yeah ♪ ♪ Oh ♪ ♪ Ah ♪ ♪ Ah ah ah ah ah ah ♪ ♪ Just make me ♪ ♪ Just make me ♪ (bouncy techno music) >> Ladies and gentlemen, once again we ask that you please take the available seats to your left, house left, there are many available seats. If you are standing, please make your way there. The program will begin momentarily, thank you. Good morning! This is Lenovo Transform 2.0! (keyboard clicks) >> Progress. Why do we always talk about it in the future? When will it finally get here? We don't progress when it's ready for us. We need it when we're ready, and we're ready now. Our hospitals and their patients need it now, our businesses and their customers need it now, our cities and their citizens need it now. To deliver intelligent transformation, we need to build it into the products and solutions we make every day. At Lenovo, we're designing the systems to fight disease, power businesses, and help you reach more customers, end-to-end security solutions to protect your data and your companies reputation. We're making IT departments more agile and cost efficient. We're revolutionizing how kids learn with VR. We're designing smart devices and software that transform the way you collaborate, because technology shouldn't just power industries, it should power people. While everybody else is talking about tomorrow, we'll keep building today, because the progress we need can't wait for the future. >> Please welcome to the stage Lenovo's Rod Lappen! (electronic dance music) (audience applauding) >> Alright. Good morning everyone! >> Good morning. >> Ooh, that was pretty good actually, I'll give it one more shot. Good morning everyone! >> Good morning! >> Oh, that's much better! Hope everyone's had a great morning. Welcome very much to the second Lenovo Transform event here in New York. I think when I got up just now on the steps I realized there's probably one thing in common all of us have in this room including myself which is, absolutely no one has a clue what I'm going to say today. So, I'm hoping very much that we get through this thing very quickly and crisply. I love this town, love New York, and you're going to hear us talk a little bit about New York as we get through here, but just before we get started I'm going to ask anyone who's standing up the back, there are plenty of seats down here, and down here on the right hand side, I think he called it house left is the professional way of calling it, but these steps to my right, your left, get up here, let's get you all seated down so that you can actually sit down during the keynote session for us. Last year we had our very first Lenovo Transform. We had about 400 people. It was here in New York, fantastic event, today, over 1,000 people. We have over 62 different technology demonstrations and about 15 breakout sessions, which I'll talk you through a little bit later on as well, so it's a much bigger event. Next year we're definitely going to be shooting for over 2,000 people as Lenovo really transforms and starts to address a lot of the technology that our commercial customers are really looking for. We were however hampered last year by a storm, I don't know if those of you who were with us last year will remember, we had a storm on the evening before Transform last year in New York, and obviously the day that it actually occurred, and we had lots of logistics. Our media people from AMIA were coming in. They took the, the plane was circling around New York for a long time, and Kamran Amini, our General Manager of our Data Center Infrastructure Group, probably one of our largest groups in the Lenovo DCG business, took 17 hours to get from Raleigh, North Carolina to New York, 17 hours, I think it takes seven or eight hours to drive. Took him 17 hours by plane to get here. And then of course this year, we have Florence. And so, obviously the hurricane Florence down there in the Carolinas right now, we tried to help, but still Kamran has made it today. Unfortunately, very tragically, we were hoping he wouldn't, but he's here today to do a big presentation a little bit later on as well. However, I do want to say, obviously, Florence is a very serious tragedy and we have to take it very serious. We got, our headquarters is in Raleigh, North Carolina. While it looks like the hurricane is just missing it's heading a little bit southeast, all of our thoughts and prayers and well wishes are obviously with everyone in the Carolinas on behalf of Lenovo, everyone at our headquarters, everyone throughout the Carolinas, we want to make sure everyone stays safe and out of harm's way. We have a great mixture today in the crowd of all customers, partners, industry analysts, media, as well as our financial analysts from all around the world. There's over 30 countries represented here and people who are here to listen to both YY, Kirk, and Christian Teismann speak today. And so, it's going to be a really really exciting day, and I really appreciate everyone coming in from all around the world. So, a big round of applause for everyone whose come in. (audience applauding) We have a great agenda for you today, and it starts obviously a very consistent format which worked very successful for us last year, and that's obviously our keynote. You'll hear from YY, our CEO, talk a little bit about the vision he has in the industry and how he sees Lenovo's turned the corner and really driving some great strategy to address our customer's needs. Kirk Skaugen, our Executive Vice President of DCG, will be up talking about how we've transformed the DCG business and once again are hitting record growth ratios for our DCG business. And then you'll hear from Christian Teismann, our SVP and General Manager for our commercial business, get up and talk about everything that's going on in our IDG business. There's really exciting stuff going on there and obviously ThinkPad being the cornerstone of that I'm sure he's going to talk to us about a couple surprises in that space as well. Then we've got some great breakout sessions, I mentioned before, 15 breakout sessions, so while this keynote section goes until about 11:30, once we get through that, please go over and explore, and have a look at all of the breakout sessions. We have all of our subject matter experts from both our PC, NBG, and our DCG businesses out to showcase what we're doing as an organization to better address your needs. And then obviously we have the technology pieces that I've also spoken about, 62 different technology displays there arranged from everything IoT, 5G, NFV, everything that's really cool and hot in the industry right now is going to be on display up there, and I really encourage all of you to get up there. So, I'm going to have a quick video to show you from some of the setup yesterday on a couple of the 62 technology displays we've got on up on stage. Okay let's go, so we've got a demonstrations to show you today, one of the greats one here is the one we've done with NC State, a high-performance computing artificial intelligence demonstration of fresh produce. It's about modeling the population growth of the planet, and how we're going to supply water and food as we go forward. Whoo. Oh, that is not an apple. Okay. (woman laughs) Second one over here is really, hey Jonas, how are you? Is really around virtual reality, and how we look at one of the most amazing sites we've got, as an install on our high-performance computing practice here globally. And you can see, obviously, that this is the Barcelona supercomputer, and, where else in New York can you get access to being able to see something like that so easily? Only here at Lenovo Transform. Whoo, okay. (audience applauding) So there's two examples of some of the technology. We're really encouraging everyone in the room after the keynote to flow into that space and really get engaged, and interact with a lot of the technology we've got up there. It seems I need to also do something about my fashion, I've just realized I've worn a vest two days in a row, so I've got to work on that as well. Alright so listen, the last thing on the agenda, we've gone through the breakout sessions and the demo, tonight at four o'clock, there's about 400 of you registered to be on the cruise boat with us, the doors will open behind me. the boat is literally at the pier right behind us. You need to make sure you're on the boat for 4:00 p.m. this evening. Outside of that, I want everyone to have a great time today, really enjoy the experience, make it as experiential as you possibly can, get out there and really get in and touch the technology. There's some really cool AI displays up there for us all to get involved in as well. So ladies and gentlemen, without further adieu, it gives me great pleasure to introduce to you a lover of tennis, as some of you would've heard last year at Lenovo Transform, as well as a lover of technology, Lenovo, and of course, New York City. I am obviously very pleasured to introduce to you Yang Yuanqing, our CEO, as we like to call him, YY. (audience applauding) (upbeat funky music) >> Good morning, everyone. >> Good morning. >> Thank you Rod for that introduction. Welcome to New York City. So, this is the second year in a row we host our Transform event here, because New York is indeed one of the most transformative cities in the world. Last year on this stage, I spoke about the Fourth Industrial Revolution, and our vision around the intelligent transformation, how it would fundamentally change the nature of business and the customer relationships. And why preparing for this transformation is the key for the future of our company. And in the last year I can assure you, we were being very busy doing just that, from searching and bringing global talents around the world to the way we think about every product and every investment we make. I was here in New York just a month ago to announce our fiscal year Q1 earnings, which was a good day for us. I think now the world believes it when we say Lenovo has truly turned the corner to a new phase of growth and a new phase of acceleration in executing the transformation strategy. That's clear to me is that the last few years of a purposeful disruption at Lenovo have led us to a point where we can now claim leadership of the coming intelligent transformation. People often asked me, what is the intelligent transformation? I was saying this way. This is the unlimited potential of the Fourth Industrial Revolution driven by artificial intelligence being realized, ordering a pizza through our speaker, and locking the door with a look, letting your car drive itself back to your home. This indeed reflect the power of AI, but it just the surface of it. The true impact of AI will not only make our homes smarter and offices more efficient, but we are also completely transformed every value chip in every industry. However, to realize these amazing possibilities, we will need a structure built around the key components, and one that touches every part of all our lives. First of all, explosions in new technology always lead to new structures. This has happened many times before. In the early 20th century, thousands of companies provided a telephone service. City streets across the US looked like this, and now bundles of a microscopic fiber running from city to city bring the world closer together. Here's what a driving was like in the US, up until 1950s. Good luck finding your way. (audience laughs) And today, millions of vehicles are organized and routed daily, making the world more efficient. Structure is vital, from fiber cables and the interstate highways, to our cells bounded together to create humans. Thankfully the structure for intelligent transformation has emerged, and it is just as revolutionary. What does this new structure look like? We believe there are three key building blocks, data, computing power, and algorithms. Ever wondered what is it behind intelligent transformation? What is fueling this miracle of human possibility? Data. As the Internet becomes ubiquitous, not only PCs, mobile phones, have come online and been generating data. Today it is the cameras in this room, the climate controls in our offices, or the smart displays in our kitchens at home. The number of smart devices worldwide will reach over 20 billion in 2020, more than double the number in 2017. These devices and the sensors are connected and generating massive amount of data. By 2020, the amount of data generated will be 57 times more than all the grains of sand on Earth. This data will not only make devices smarter, but will also fuel the intelligence of our homes, offices, and entire industries. Then we need engines to turn the fuel into power, and the engine is actually the computing power. Last but not least the advanced algorithms combined with Big Data technology and industry know how will form vertical industrial intelligence and produce valuable insights for every value chain in every industry. When these three building blocks all come together, it will change the world. At Lenovo, we have each of these elements of intelligent transformations in a single place. We have built our business around the new structure of intelligent transformation, especially with mobile and the data center now firmly part of our business. I'm often asked why did you acquire these businesses? Why has a Lenovo gone into so many fields? People ask the same questions of the companies that become the leaders of the information technology revolution, or the third industrial transformation. They were the companies that saw the future and what the future required, and I believe Lenovo is the company today. From largest portfolio of devices in the world, leadership in the data center field, to the algorithm-powered intelligent vertical solutions, and not to mention the strong partnership Lenovo has built over decades. We are the only company that can unify all these essential assets and deliver end to end solutions. Let's look at each part. We now understand the important importance data plays as fuel in intelligent transformation. Hundreds of billions of devices and smart IoTs in the world are generating better and powering the intelligence. Who makes these devices in large volume and variety? Who puts these devices into people's home, offices, manufacturing lines, and in their hands? Lenovo definitely has the front row seats here. We are number one in PCs and tablets. We also produces smart phones, smart speakers, smart displays. AR/VR headsets, as well as commercial IoTs. All of these smart devices, or smart IoTs are linked to each other and to the cloud. In fact, we have more than 20 manufacturing facilities in China, US, Brazil, Japan, India, Mexico, Germany, and more, producing various devices around the clock. We actually make four devices every second, and 37 motherboards every minute. So, this factory located in my hometown, Hu-fi, China, is actually the largest laptop factory in the world, with more than three million square feet. So, this is as big as 42 soccer fields. Our scale and the larger portfolio of devices gives us access to massive amount of data, which very few companies can say. So, why is the ability to scale so critical? Let's look again at our example from before. The early days of telephone, dozens of service providers but only a few companies could survive consolidation and become the leader. The same was true for the third Industrial Revolution. Only a few companies could scale, only a few could survive to lead. Now the building blocks of the next revolution are locking into place. The (mumbles) will go to those who can operate at the scale. So, who could foresee the total integration of cloud, network, and the device, need to deliver intelligent transformation. Lenovo is that company. We are ready to scale. Next, our computing power. Computing power is provided in two ways. On one hand, the modern supercomputers are providing the brute force to quickly analyze the massive data like never before. On the other hand the cloud computing data centers with the server storage networking capabilities, and any computing IoT's, gateways, and miniservers are making computing available everywhere. Did you know, Lenovo is number one provider of super computers worldwide? 170 of the top 500 supercomputers, run on Lenovo. We hold 89 World Records in key workloads. We are number one in x86 server reliability for five years running, according to ITIC. a respected provider of industry research. We are also the fastest growing provider of hyperscale public cloud, hyper-converged and aggressively growing in edge computing. cur-ges target, we are expand on this point soon. And finally to run these individual nodes into our symphony, we must transform the data and utilize the computing power with advanced algorithms. Manufactured, industry maintenance, healthcare, education, retail, and more, so many industries are on the edge of intelligent transformation to improve efficiency and provide the better products and services. We are creating advanced algorithms and the big data tools combined with industry know-how to provide intelligent vertical solutions for several industries. In fact, we studied at Lenovo first. Our IT and research teams partnered with our global supply chain to develop an AI that improved our demand forecasting accuracy. Beyond managing our own supply chain we have offered our deep learning supply focused solution to other manufacturing companies to improve their efficiency. In the best case, we have improved the demand, focused the accuracy by 30 points to nearly 90 percent, for Baosteel, the largest of steel manufacturer in China, covering the world as well. Led by Lenovo research, we launched the industry-leading commercial ready AR headset, DaystAR, partnering with companies like the ones in this room. This technology is being used to revolutionize the way companies service utility, and even our jet engines. Using our workstations, servers, and award-winning imaging processing algorithms, we have partnered with hospitals to process complex CT scan data in minutes. So, this enable the doctors to more successfully detect the tumors, and it increases the success rate of cancer diagnosis all around the world. We are also piloting our smart IoT driven warehouse solution with one of the world's largest retail companies to greatly improve the efficiency. So, the opportunities are endless. This is where Lenovo will truly shine. When we combine the industry know-how of our customers with our end-to-end technology offerings, our intelligent vertical solutions like this are growing, which Kirk and Christian will share more. Now, what will drive this transformation even faster? The speed at which our networks operate, specifically 5G. You may know that Lenovo just launched the first-ever 5G smartphone, our Moto Z3, with the new 5G Moto model. We are partnering with multiple major network providers like Verizon, China Mobile. With the 5G model scheduled to ship early next year, we will be the first company to provide a 5G mobile experience to any users, customers. This is amazing innovation. You don't have to buy a new phone, just the 5G clip on. What can I say, except wow. (audience laughs) 5G is 10 times the fast faster than 4G. Its download speed will transform how people engage with the world, driverless car, new types of smart wearables, gaming, home security, industrial intelligence, all will be transformed. Finally, accelerating with partners, as ready as we are at Lenovo, we need partners to unlock our full potential, partners here to create with us the edge of the intelligent transformation. The opportunities of intelligent transformation are too profound, the scale is too vast. No company can drive it alone fully. We are eager to collaborate with all partners that can help bring our vision to life. We are dedicated to open partnerships, dedicated to cross-border collaboration, unify the standards, share the advantage, and market the synergies. We partner with the biggest names in the industry, Intel, Microsoft, AMD, Qualcomm, Google, Amazon, and Disney. We also find and partner with the smaller innovators as well. We're building the ultimate partner experience, open, shared, collaborative, diverse. So, everything is in place for intelligent transformation on a global scale. Smart devices are everywhere, the infrastructure is in place, networks are accelerating, and the industries demand to be more intelligent, and Lenovo is at the center of it all. We are helping to drive change with the hundreds of companies, companies just like yours, every day. We are your partner for intelligent transformation. Transformation never stops. This is what you will hear from Kirk, including details about Lenovo NetApp global partnership we just announced this morning. We've made the investments in every single aspect of the technology. We have the end-to-end resources to meet your end-to-end needs. As you attend the breakout session this afternoon, I hope you see for yourself how much Lenovo has transformed as a company this past year, and how we truly are delivering a future of intelligent transformation. Now, let me invite to the stage Kirk Skaugen, our president of Data Center growth to tell you about the exciting transformation happening in the global Data C enter market. Thank you. (audience applauding) (upbeat music) >> Well, good morning. >> Good morning. >> Good morning! >> Good morning! >> Excellent, well, I'm pleased to be here this morning to talk about how we're transforming the Data Center and taking you as our customers through your own intelligent transformation journey. Last year I stood up here at Transform 1.0, and we were proud to announce the largest Data Center portfolio in Lenovo's history, so I thought I'd start today and talk about the portfolio and the progress that we've made over the last year, and the strategies that we have going forward in phase 2.0 of Lenovo's transformation to be one of the largest data center companies in the world. We had an audacious vision that we talked about last year, and that is to be the most trusted data center provider in the world, empowering customers through the new IT, intelligent transformation. And now as the world's largest supercomputer provider, giving something back to humanity, is very important this week with the hurricanes now hitting North Carolina's coast, but we take this most trusted aspect very seriously, whether it's delivering the highest quality products on time to you as customers with the highest levels of security, or whether it's how we partner with our channel partners and our suppliers each and every day. You know we're in a unique world where we're going from hundreds of millions of PCs, and then over the next 25 years to hundred billions of connected devices, so each and every one of you is going through this intelligent transformation journey, and in many aspects were very early in that cycle. And we're going to talk today about our role as the largest supercomputer provider, and how we're solving humanity's greatest challenges. Last year we talked about two special milestones, the 25th anniversary of ThinkPad, but also the 25th anniversary of Lenovo with our IBM heritage in x86 computing. I joined the workforce in 1992 out of college, and the IBM first personal server was launching at the same time with an OS2 operating system and a free mouse when you bought the server as a marketing campaign. (audience laughing) But what I want to be very clear today, is that the innovation engine is alive and well at Lenovo, and it's really built on the culture that we're building as a company. All of these awards at the bottom are things that we earned over the last year at Lenovo. As a Fortune now 240 company, larger than companies like Nike, or AMEX, or Coca-Cola. The one I'm probably most proud of is Forbes first list of the top 2,000 globally regarded companies. This was something where 15,000 respondents in 60 countries voted based on ethics, trustworthiness, social conduct, company as an employer, and the overall company performance, and Lenovo was ranked number 27 of 2000 companies by our peer group, but we also now one of-- (audience applauding) But we also got a perfect score in the LGBTQ Equality Index, exemplifying the diversity internally. We're number 82 in the top working companies for mothers, top working companies for fathers, top 100 companies for sustainability. If you saw that factory, it's filled with solar panels on the top of that. And now again, one of the top global brands in the world. So, innovation is built on a customer foundation of trust. We also said last year that we'd be crossing an amazing milestone. So we did, over the last 12 months ship our 20 millionth x86 server. So, thank you very much to our customers for this milestone. (audience applauding) So, let me recap some of the transformation elements that have happened over the last year. Last year I talked about a lot of brand confusion, because we had the ThinkServer brand from the legacy Lenovo, the System x, from IBM, we had acquired a number of networking companies, like BLADE Network Technologies, et cetera, et cetera. Over the last year we've been ramping based on two brand structures, ThinkAgile for next generation IT, and all of our software-defined infrastructure products and ThinkSystem as the world's highest performance, highest reliable x86 server brand, but for servers, for storage, and for networking. We have transformed every single aspect of the customer experience. A year and a half ago, we had four different global channel programs around the world. Typically we're about twice the mix to our channel partners of any of our competitors, so this was really important to fix. We now have a single global Channel program, and have technically certified over 11,000 partners to be technical experts on our product line to deliver better solutions to our customer base. Gardner recently recognized Lenovo as the 26th ranked supply chain in the world. And, that's a pretty big honor, when you're up there with Amazon and Walmart and others, but in tech, we now are in the top five supply chains. You saw the factory network from YY, and today we'll be talking about product shipping in more than 160 countries, and I know there's people here that I've met already this morning, from India, from South Africa, from Brazil and China. We announced new Premier Support services, enabling you to go directly to local language support in nine languages in 49 countries in the world, going directly to a native speaker level three support engineer. And today we have more than 10,000 support specialists supporting our products in over 160 countries. We've delivered three times the number of engineered solutions to deliver a solutions orientation, whether it's on HANA, or SQL Server, or Oracle, et cetera, and we've completely reengaged our system integrator channel. Last year we had the CIO of DXE on stage, and here we're talking about more than 175 percent growth through our system integrator channel in the last year alone as we've brought that back and really built strong relationships there. So, thank you very much for amazing work here on the customer experience. (audience applauding) We also transformed our leadership. We thought it was extremely important with a focus on diversity, to have diverse talent from the legacy IBM, the legacy Lenovo, but also outside the industry. We made about 19 executive changes in the DCG group. This is the most senior leadership team within DCG, all which are newly on board, either from our outside competitors mainly over the last year. About 50 percent of our executives were now hired internally, 50 percent externally, and 31 percent of those new executives are diverse, representing the diversity of our global customer base and gender. So welcome, and most of them you're going to be able to meet over here in the breakout sessions later today. (audience applauding) But some things haven't changed, they're just keeping getting better within Lenovo. So, last year I got up and said we were committed with the new ThinkSystem brand to be a world performance leader. You're going to see that we're sponsoring Ducati for MotoGP. You saw the Ferrari out there with Formula One. That's not a surprise. We want the Lenovo ThinkSystem and ThinkAgile brands to be synonymous with world record performance. So in the last year we've gone from 39 to 89 world records, and partners like Intel would tell you, we now have four times the number of world record workloads on Lenovo hardware than any other server company on the planet today, with more than 89 world records across HPC, Java, database, transaction processing, et cetera. And we're proud to have just brought on Doug Fisher from Intel Corporation who had about 10-17,000 people on any given year working for him in workload optimizations across all of our software. It's just another testament to the leadership team we're bringing in to keep focusing on world-class performance software and solutions. We also per ITIC, are the number one now in x86 server reliability five years running. So, this is a survey where CIOs are in a blind survey asked to submit their reliability of their uptime on their x86 server equipment over the last 365 days. And you can see from 2016 to 2017 the downtime, there was over four hours as noted by the 750 CXOs in more than 20 countries is about one percent for the Lenovo products, and is getting worse generation from generation as we went from Broadwell to Pearlie. So we're taking our reliability, which was really paramount in the IBM System X heritage, and ensuring that we don't just recognize high performance but we recognize the highest level of reliability for mission-critical workloads. And what that translates into is that we at once again have been ranked number one in customer satisfaction from you our customers in 19 of 22 attributes, in North America in 18 of 22. This is a survey by TVR across hundreds of customers of us and our top competitors. This is the ninth consecutive study that we've been ranked number one in customer satisfaction, so we're taking this extremely seriously, and in fact YY now has increased the compensation of every single Lenovo employee. Up to 40 percent of their compensation bonus this year is going to be based on customer metrics like quality, order to ship, and things of this nature. So, we're really putting every employee focused on customer centricity this year. So, the summary on Transform 1.0 is that every aspect of what you knew about Lenovo's data center group has transformed, from the culture to the branding to dedicated sales and marketing, supply chain and quality groups, to a worldwide channel program and certifications, to new system integrator relationships, and to the new leadership team. So, rather than me just talk about it, I thought I'd share a quick video about what we've done over the last year, if you could run the video please. Turn around for a second. (epic music) (audience applauds) Okay. So, thank you to all our customers that allowed us to publicly display their logos in that video. So, what that means for you as investors, and for the investor community out there is, that our customers have responded, that this year Gardner just published that we are the fastest growing server company in the top 10, with 39 percent growth quarter-on-quarter, and 49 percent growth year-on-year. If you look at the progress we've made since the transformation the last three quarters publicly, we've grown 17 percent, then 44 percent, then 68 percent year on year in revenue, and I can tell you this quarter I'm as confident as ever in the financials around the DCG group, and it hasn't been in one area. You're going to see breakout sessions from hyperscale, software-defined, and flash, which are all growing more than a 100 percent year-on-year, supercomputing which we'll talk about shortly, now number one, and then ultimately from profitability, delivering five consecutive quarters of pre-tax profit increase, so I think, thank you very much to the customer base who's been working with us through this transformation journey. So, you're here to really hear what's next on 2.0, and that's what I'm excited to talk about today. Last year I came up with an audacious goal that we would become the largest supercomputer company on the planet by 2020, and this graph represents since the acquisition of the IBM System x business how far we were behind being the number one supercomputer. When we started we were 182 positions behind, even with the acquisition for example of SGI from HP, we've now accomplished our goal actually two years ahead of time. We're now the largest supercomputer company in the world. About one in every four supercomputers, 117 on the list, are now Lenovo computers, and you saw in the video where the universities are said, but I think what I'm most proud of is when your customers rank you as the best. So the awards at the bottom here, are actually Readers Choice from the last International Supercomputing Show where the scientific researchers on these computers ranked their vendors, and we were actually rated the number one server technology in supercomputing with our ThinkSystem SD530, and the number one storage technology with our ThinkSystem DSS-G, but more importantly what we're doing with the technology. You're going to see we won best in life sciences, best in data analytics, and best in collaboration as well, so you're going to see all of that in our breakout sessions. As you saw in the video now, 17 of the top 25 research institutions in the world are now running Lenovo supercomputers. And again coming from Raleigh and watching that hurricane come across the Atlantic, there are eight supercomputers crunching all of those models you see from Germany to Malaysia to Canada, and we're happy to have a SciNet from University of Toronto here with us in our breakout session to talk about what they're doing on climate modeling as well. But we're not stopping there. We just announced our new Neptune warm water cooling technology, which won the International Supercomputing Vendor Showdown, the first time we've won that best of show in 25 years, and we've now installed this. We're building out LRZ in Germany, the first ever warm water cooling in Peking University, at the India Space Propulsion Laboratory, at the Malaysian Weather and Meteorological Society, at Uninett, at the largest supercomputer in Norway, T-Systems, University of Birmingham. This is truly amazing technology where we're actually using water to cool the machine to deliver a significantly more energy-efficient computer. Super important, when we're looking at global warming and some of the electric bills can be millions of dollars just for one computer, and could actually power a small city just with the technology from the computer. We've built AI centers now in Morrisville, Stuttgart, Taipei, and Beijing, where customers can bring their AI workloads in with experts from Intel, from Nvidia, from our FPGA partners, to work on their workloads, and how they can best implement artificial intelligence. And we also this year launched LICO which is Lenovo Intelligent Compute Orchestrator software, and it's a software solution that simplifies the management and use of distributed clusters in both HPC and AI model development. So, what it enables you to do is take a single cluster, and run both HPC and AI workloads on it simultaneously, delivering better TCO for your environment, so check out LICO as well. A lot of the customers here and Wall Street are very excited and using it already. And we talked about solving humanity's greatest challenges. In the breakout session, you're going to have a virtual reality experience where you're going to be able to walk through what as was just ranked the world's most beautiful data center, the Barcelona Supercomputer. So, you can actually walk through one of the largest supercomputers in the world from Barcelona. You can see the work we're doing with NC State where we're going to have to grow the food supply of the world by 50 percent, and there's not enough fresh water in the world in the right places to actually make all those crops grow between now and 2055, so you're going to see the progression of how they're mapping the entire globe and the water around the world, how to build out the crop population over time using AI. You're going to see our work with Vestas is this largest supercomputer provider in the wind turbine areas, how they're working on wind energy, and then with University College London, how they're working on some of the toughest particle physics calculations in the world. So again, lots of opportunity here. Take advantage of it in the breakout sessions. Okay, let me transition to hyperscale. So in hyperscale now, we have completely transformed our business model. We are now powering six of the top 10 hyperscalers in the world, which is a significant difference from where we were two years ago. And the reason we're doing that, is we've coined a term called ODM+. We believe that hyperscalers want more procurement power than an ODM, and Lenovo is doing about $18 billion of procurement a year. They want a broader global supply chain that they can get from a local system integrator. We're more than 160 countries around the world, but they want the same world-class quality and reliability like they get from an MNC. So, what we're doing now is instead of just taking off the shelf motherboards from somewhere, we're starting with a blank sheet of paper, we're working with the customer base on customized SKUs and you can see we already are developing 33 custom solutions for the largest hyperscalers in the world. And then we're not just running notebooks through this factory where YY said, we're running 37 notebook boards a minute, we're now putting in tens and tens and tens of thousands of server board capacity per month into this same factory, so absolutely we can compete with the most aggressive ODM's in the world, but it's not just putting these things in in the motherboard side, we're also building out these systems all around the world, India, Brazil, Hungary, Mexico, China. This is an example of a new hyperscale customer we've had this last year, 34,000 servers we delivered in the first six months. The next 34,000 servers we delivered in 68 days. The next 34,000 servers we delivered in 35 days, with more than 99 percent on-time delivery to 35 data centers in 14 countries as diverse as South Africa, India, China, Brazil, et cetera. And I'm really ashamed to say it was 99.3, because we did have a forklift driver who rammed their forklift right through the middle of the one of the server racks. (audience laughing) At JFK Airport that we had to respond to, but I think this gives you a perspective of what it is to be a top five global supply chain and technology. So last year, I said we would invest significantly in IP, in joint ventures, and M and A to compete in software defined, in networking, and in storage, so I wanted to give you an update on that as well. Our newest software-defined partnership is with Cloudistics, enabling a fully composable cloud infrastructure. It's an exclusive agreement, you can see them here. I think Nag, our founder, is going to be here today, with a significant Lenovo investment in the company. So, this new ThinkAgile CP series delivers the simplicity of the public cloud, on-premise with exceptional support and a marketplace of essential enterprise applications all with a single click deployment. So simply put, we're delivering a private cloud with a premium experience. It's simple in that you need no specialists to deploy it. An IT generalist can set it up and manage it. It's agile in that you can provision dozens of workloads in minutes, and it's transformative in that you get all of the goodness of public cloud on-prem in a private cloud to unlock opportunity for use. So, we're extremely excited about the ThinkAgile CP series that's now shipping into the marketplace. Beyond that we're aggressively ramping, and we're either doubling, tripling, or quadrupling our market share as customers move from traditional server technology to software-defined technology. With Nutanix we've been public, growing about more than 150 percent year-on-year, with Nutanix as their fastest growing Nutanix partner, but today I want to set another audacious goal. I believe we cannot just be Nutanix's fastest growing partner but we can become their largest partner within two years. On Microsoft, we are already four times our market share on Azure stack of our traditional business. We were the first to launch our ThinkAgile on Broadwell and on Skylake with the Azure Stack Infrastructure. And on VMware we're about twice our market segment share. We were the first to deliver an Intel-optimized Optane-certified VSAN node. And with Optane technology, we're delivering 50 percent more VM density than any competitive SSD system in the marketplace, about 10 times lower latency, four times the performance of any SSD system out there, and Lenovo's first to market on that. And at VMworld you saw CEO Pat Gelsinger of VMware talked about project dimension, which is Edge as a service, and we're the only OEM beyond the Dell family that is participating today in project dimension. Beyond that you're going to see a number of other partnerships we have. I'm excited that we have the city of Bogota Columbia here, an eight million person city, where we announced a 3,000 camera video surveillance solution last month. With pivot three you're going to see city of Bogota in our breakout sessions. You're going to see a new partnership with Veeam around backup that's launching today. You're going to see partnerships with scale computing in IoT and hyper-converged infrastructure working on some of the largest retailers in the world. So again, everything out in the breakout session. Transitioning to storage and data management, it's been a great year for Lenovo, more than a 100 percent growth year-on-year, 2X market growth in flash arrays. IDC just reported 30 percent growth in storage, number one in price performance in the world and the best HPC storage product in the top 500 with our ThinkSystem DSS G, so strong coverage, but I'm excited today to announce for Transform 2.0 that Lenovo is launching the largest data management and storage portfolio in our 25-year data center history. (audience applauding) So a year ago, the largest server portfolio, becoming the largest fastest growing server OEM, today the largest storage portfolio, but as you saw this morning we're not doing it alone. Today Lenovo and NetApp, two global powerhouses are joining forces to deliver a multi-billion dollar global alliance in data management and storage to help customers through their intelligent transformation. As the fastest growing worldwide server leader and one of the fastest growing flash array and data management companies in the world, we're going to deliver more choice to customers than ever before, global scale that's never been seen, supply chain efficiencies, and rapidly accelerating innovation and solutions. So, let me unwrap this a little bit for you and talk about what we're announcing today. First, it's the largest portfolio in our history. You're going to see not just storage solutions launching today but a set of solution recipes from NetApp that are going to make Lenovo server and NetApp or Lenovo storage work better together. The announcement enables Lenovo to go from covering 15 percent of the global storage market to more than 90 percent of the global storage market and distribute these products in more than 160 countries around the world. So we're launching today, 10 new storage platforms, the ThinkSystem DE and ThinkSystem DM platforms. They're going to be centrally managed, so the same XClarity management that you've been using for server, you can now use across all of your storage platforms as well, and it'll be supported by the same 10,000 plus service personnel that are giving outstanding customer support to you today on the server side. And we didn't come up with this in the last month or the last quarter. We're announcing availability in ordering today and shipments tomorrow of the first products in this portfolio, so we're excited today that it's not just a future announcement but something you as customers can take advantage of immediately. (audience applauding) The second part of the announcement is we are announcing a joint venture in China. Not only will this be a multi-billion dollar global partnership, but Lenovo will be a 51 percent owner, NetApp a 49 percent owner of a new joint venture in China with the goal of becoming in the top three storage companies in the largest data and storage market in the world. We will deliver our R and D in China for China, pooling our IP and resources together, and delivering a single route to market through a complementary channel, not just in China but worldwide. And in the future I just want to tell everyone this is phase one. There is so much exciting stuff. We're going to be on the stage over the next year talking to you about around integrated solutions, next-generation technologies, and further synergies and collaborations. So, rather than just have me talk about it, I'd like to welcome to the stage our new partner NetApp and Brad Anderson who's the senior vice president and general manager of NetApp Cloud Infrastructure. (upbeat music) (audience applauding) >> Thank You Kirk. >> So Brad, we've known each other a long time. It's an exciting day. I'm going to give you the stage and allow you to say NetApp's perspective on this announcement. >> Very good, thank you very much, Kirk. Kirk and I go back to I think 1994, so hey good morning and welcome. My name is Brad Anderson. I manage the Cloud Infrastructure Group at NetApp, and I am honored and privileged to be here at Lenovo Transform, particularly today on today's announcement. Now, you've heard a lot about digital transformation about how companies have to transform their IT to compete in today's global environment. And today's announcement with the partnership between NetApp and Lenovo is what that's all about. This is the joining of two global leaders bringing innovative technology in a simplified solution to help customers modernize their IT and accelerate their global digital transformations. Drawing on the strengths of both companies, Lenovo's high performance compute world-class supply chain, and NetApp's hybrid cloud data management, hybrid flash and all flash storage solutions and products. And both companies providing our customers with the global scale for them to be able to meet their transformation goals. At NetApp, we're very excited. This is a quote from George Kurian our CEO. George spent all day yesterday with YY and Kirk, and would have been here today if it hadn't been also our shareholders meeting in California, but I want to just convey how excited we are for all across NetApp with this partnership. This is a partnership between two companies with tremendous market momentum. Kirk took you through all the amazing results that Lenovo has accomplished, number one in supercomputing, number one in performance, number one in x86 reliability, number one in x86 customers sat, number five in supply chain, really impressive and congratulations. Like Lenovo, NetApp is also on a transformation journey, from a storage company to the data authority in hybrid cloud, and we've seen some pretty impressive momentum as well. Just last week we became number one in all flash arrays worldwide, catching EMC and Dell, and we plan to keep on going by them, as we help customers modernize their their data centers with cloud connected flash. We have strategic partnerships with the largest hyperscalers to provide cloud native data services around the globe and we are having success helping our customers build their own private clouds with just, with a new disruptive hyper-converged technology that allows them to operate just like hyperscalers. These three initiatives has fueled NetApp's transformation, and has enabled our customers to change the world with data. And oh by the way, it has also fueled us to have meet or have beaten Wall Street's expectations for nine quarters in a row. These are two companies with tremendous market momentum. We are also building this partnership for long term success. We think about this as phase one and there are two important components to phase one. Kirk took you through them but let me just review them. Part one, the establishment of a multi-year commitment and a collaboration agreement to offer Lenovo branded flash products globally, and as Kurt said in 160 countries. Part two, the formation of a joint venture in PRC, People's Republic of China, that will provide long term commitment, joint product development, and increase go-to-market investment to meet the unique needs to China. Both companies will put in storage technologies and storage expertise to form an independent JV that establishes a data management company in China for China. And while we can dream about what phase two looks like, our entire focus is on making phase one incredibly successful and I'm pleased to repeat what Kirk, is that the first products are orderable and shippable this week in 160 different countries, and you will see our two companies focusing on the here and now. On our joint go to market strategy, you'll see us working together to drive strategic alignment, focused execution, strong governance, and realistic expectations and milestones. And it starts with the success of our customers and our channel partners is job one. Enabling customers to modernize their legacy IT with complete data center solutions, ensuring that our customers get the best from both companies, new offerings the fuel business success, efficiencies to reinvest in game-changing initiatives, and new solutions for new mission-critical applications like data analytics, IoT, artificial intelligence, and machine learning. Channel partners are also top of mind for both our two companies. We are committed to the success of our existing and our future channel partners. For NetApp channel partners, it is new pathways to new segments and to new customers. For Lenovo's channel partners, it is the competitive weapons that now allows you to compete and more importantly win against Dell, EMC, and HP. And the good news for both companies is that our channel partner ecosystem is highly complementary with minimal overlap. Today is the first day of a very exciting partnership, of a partnership that will better serve our customers today and will provide new opportunities to both our companies and to our partners, new products to our customers globally and in China. I am personally very excited. I will be on the board of the JV. And so, I look forward to working with you, partnering with you and serving you as we go forward, and with that, I'd like to invite Kirk back up. (audience applauding) >> Thank you. >> Thank you. >> Well, thank you, Brad. I think it's an exciting overview, and these products will be manufactured in China, in Mexico, in Hungary, and around the world, enabling this amazing supply chain we talked about to deliver in over 160 countries. So thank you Brad, thank you George, for the amazing partnership. So again, that's not all. In Transform 2.0, last year, we talked about the joint ventures that were coming. I want to give you a sneak peek at what you should expect at future Lenovo events around the world. We have this Transform in Beijing in a couple weeks. We'll then be repeating this in 20 different locations roughly around the world over the next year, and I'm excited probably more than ever about what else is coming. Let's talk about Telco 5G and network function virtualization. Today, Motorola phones are certified on 46 global networks. We launched the world's first 5G upgradable phone here in the United States with Verizon. Lenovo DCG sells to 58 telecommunication providers around the world. At Mobile World Congress in Barcelona and Shanghai, you saw China Telecom and China Mobile in the Lenovo booth, China Telecom showing a video broadband remote access server, a VBRAS, with video streaming demonstrations with 2x less jitter than they had seen before. You saw China Mobile with a virtual remote access network, a VRAN, with greater than 10 times the throughput and 10x lower latency running on Lenovo. And this year, we'll be launching a new NFV company, a software company in China for China to drive the entire NFV stack, delivering not just hardware solutions, but software solutions, and we've recently hired a new CEO. You're going to hear more about that over the next several quarters. Very exciting as we try to drive new economics into the networks to deliver these 20 billion devices. We're going to need new economics that I think Lenovo can uniquely deliver. The second on IoT and edge, we've integrated on the device side into our intelligent devices group. With everything that's going to consume electricity computes and communicates, Lenovo is in a unique position on the device side to take advantage of the communications from Motorola and being one of the largest device companies in the world. But this year, we're also going to roll out a comprehensive set of edge gateways and ruggedized industrial servers and edge servers and ISP appliances for the edge and for IoT. So look for that as well. And then lastly, as a service, you're going to see Lenovo delivering hardware as a service, device as a service, infrastructure as a service, software as a service, and hardware as a service, not just as a glorified leasing contract, but with IP, we've developed true flexible metering capability that enables you to scale up and scale down freely and paying strictly based on usage, and we'll be having those announcements within this fiscal year. So Transform 2.0, lots to talk about, NetApp the big news of the day, but a lot more to come over the next year from the Data Center group. So in summary, I'm excited that we have a lot of customers that are going to be on stage with us that you saw in the video. Lots of testimonials so that you can talk to colleagues of yourself. Alamos Gold from Canada, a Canadian gold producer, Caligo for data optimization and privacy, SciNet, the largest supercomputer we've ever put into North America, and the largest in Canada at the University of Toronto will be here talking about climate change. City of Bogota again with our hyper-converged solutions around smart city putting in 3,000 cameras for criminal detection, license plate detection, et cetera, and then more from a channel mid market perspective, Jerry's Foods, which is from my home state of Wisconsin, and Minnesota which has about 57 stores in the specialty foods market, and how they're leveraging our IoT solutions as well. So again, about five times the number of demos that we had last year. So in summary, first and foremost to the customers, thank you for your business. It's been a great journey and I think we're on a tremendous role. You saw from last year, we're trying to build credibility with you. After the largest server portfolio, we're now the fastest-growing server OEM per Gardner, number one in performance, number one in reliability, number one in customer satisfaction, number one in supercomputing. Today, the largest storage portfolio in our history, with the goal of becoming the fastest growing storage company in the world, top three in China, multibillion-dollar collaboration with NetApp. And the transformation is going to continue with new edge gateways, edge servers, NFV solutions, telecommunications infrastructure, and hardware as a service with dynamic metering. So thank you for your time. I've looked forward to meeting many of you over the next day. We appreciate your business, and with that, I'd like to bring up Rod Lappen to introduce our next speaker. Rod? (audience applauding) >> Thanks, boss, well done. Alright ladies and gentlemen. No real secret there. I think we've heard why I might talk about the fourth Industrial Revolution in data and exactly what's going on with that. You've heard Kirk with some amazing announcements, obviously now with our NetApp partnership, talk about 5G, NFV, cloud, artificial intelligence, I think we've hit just about all the key hot topics. It's with great pleasure that I now bring up on stage Mr. Christian Teismann, our senior vice president and general manager of commercial business for both our PCs and our IoT business, so Christian Teismann. (techno music) Here, take that. >> Thank you. I think I'll need that. >> Okay, Christian, so obviously just before we get down, you and I last year, we had a bit of a chat about being in New York. >> Exports. >> You were an expat in New York for a long time. >> That's true. >> And now, you've moved from New York. You're in Munich? >> Yep. >> How does that feel? >> Well Munich is a wonderful city, and it's a great place to live and raise kids, but you know there's no place in the world like New York. >> Right. >> And I miss it a lot, quite frankly. >> So what exactly do you miss in New York? >> Well there's a lot of things in New York that are unique, but I know you spent some time in Japan, but I still believe the best sushi in the world is still in New York City. (all laughing) >> I will beg to differ. I will beg to differ. I think Mr. Guchi-san from Softbank is here somewhere. He will get up an argue very quickly that Japan definitely has better sushi than New York. But obviously you know, it's a very very special place, and I have had sushi here, it's been fantastic. What about Munich? Anything else that you like in Munich? >> Well I mean in Munich, we have pork knuckles. >> Pork knuckles. (Christian laughing) Very similar sushi. >> What is also very fantastic, but we have the real, the real Oktoberfest in Munich, and it starts next week, mid-September, and I think it's unique in the world. So it's very special as well. >> Oktoberfest. >> Yes. >> Unfortunately, I'm not going this year, 'cause you didn't invite me, but-- (audience chuckling) How about, I think you've got a bit of a secret in relation to Oktoberfest, probably not in Munich, however. >> It's a secret, yes, but-- >> Are you going to share? >> Well I mean-- >> See how I'm putting you on the spot? >> In the 10 years, while living here in New York, I was a regular visitor of the Oktoberfest at the Lower East Side in Avenue C at Zum Schneider, where I actually met my wife, and she's German. >> Very good. So, how about a big round of applause? (audience applauding) Not so much for Christian, but more I think, obviously for his wife, who obviously had been drinking and consequently ended up with you. (all laughing) See you later, mate. >> That's the beauty about Oktoberfest, but yes. So first of all, good morning to everybody, and great to be back here in New York for a second Transform event. New York clearly is the melting pot of the world in terms of culture, nations, but also business professionals from all kind of different industries, and having this event here in New York City I believe is manifesting what we are trying to do here at Lenovo, is transform every aspect of our business and helping our customers on the journey of intelligent transformation. Last year, in our transformation on the device business, I talked about how the PC is transforming to personalized computing, and we've made a lot of progress in that journey over the last 12 months. One major change that we have made is we combined all our device business under one roof. So basically PCs, smart devices, and smart phones are now under the roof and under the intelligent device group. But from my perspective makes a lot of sense, because at the end of the day, all devices connect in the modern world into the cloud and are operating in a seamless way. But we are also moving from a device business what is mainly a hardware focus historically, more and more also into a solutions business, and I will give you during my speech a little bit of a sense of what we are trying to do, as we are trying to bring all these components closer together, and specifically also with our strengths on the data center side really build end-to-end customer solution. Ultimately, what we want to do is make our business, our customer's businesses faster, safer, and ultimately smarter as well. So I want to look a little bit back, because I really believe it's important to understand what's going on today on the device side. Many of us have still grown up with phones with terminals, ultimately getting their first desktop, their first laptop, their first mobile phone, and ultimately smartphone. Emails and internet improved our speed, how we could operate together, but still we were defined by linear technology advances. Today, the world has changed completely. Technology itself is not a limiting factor anymore. It is how we use technology going forward. The Internet is pervasive, and we are not yet there that we are always connected, but we are nearly always connected, and we are moving to the stage, that everything is getting connected all the time. Sharing experiences is the most driving force in our behavior. In our private life, sharing pictures, videos constantly, real-time around the world, with our friends and with our family, and you see the same behavior actually happening in the business life as well. Collaboration is the number-one topic if it comes down to workplace, and video and instant messaging, things that are coming from the consumer side are dominating the way we are operating in the commercial business as well. Most important beside technology, that a new generation of workforce has completely changed the way we are working. As the famous workforce the first generation of Millennials that have now fully entered in the global workforce, and the next generation, it's called Generation Z, is already starting to enter the global workforce. By 2025, 75 percent of the world's workforce will be composed out of two of these generations. Why is this so important? These two generations have been growing up using state-of-the-art IT technology during their private life, during their education, school and study, and are taking these learnings and taking these behaviors in the commercial workspace. And this is the number one force of change that we are seeing in the moment. Diverse workforces are driving this change in the IT spectrum, and for years in many of our customers' focus was their customer focus. Customer experience also in Lenovo is the most important thing, but we've realized that our own human capital is equally valuable in our customer relationships, and employee experience is becoming a very important thing for many of our customers, and equally for Lenovo as well. As you have heard YY, as we heard from YY, Lenovo is focused on intelligent transformation. What that means for us in the intelligent device business is ultimately starting with putting intelligence in all of our devices, smartify every single one of our devices, adding value to our customers, traditionally IT departments, but also focusing on their end users and building products that make their end users more productive. And as a world leader in commercial devices with more than 33 percent market share, we can solve problems been even better than any other company in the world. So, let's talk about transformation of productivity first. We are in a device-led world. Everything we do is connected. There's more interaction with devices than ever, but also with spaces who are increasingly becoming smart and intelligent. YY said it, by 2020 we have more than 20 billion connected devices in the world, and it will grow exponentially from there on. And users have unique personal choices for technology, and that's very important to recognize, and we call this concept a digital wardrobe. And it means that every single end-user in the commercial business is composing his personal wardrobe on an ongoing basis and is reconfiguring it based on the work he's doing and based where he's going and based what task he is doing. I would ask all of you to put out all the devices you're carrying in your pockets and in your bags. You will see a lot of you are using phones, tablets, laptops, but also cameras and even smartwatches. They're all different, but they have one underlying technology that is bringing it all together. Recognizing digital wardrobe dynamics is a core factor for us to put all the devices under one roof in IDG, one business group that is dedicated to end-user solutions across mobile, PC, but also software services and imaging, to emerging technologies like AR, VR, IoT, and ultimately a AI as well. A couple of years back there was a big debate around bring-your-own-device, what was called consumerization. Today consumerization does not exist anymore, because consumerization has happened into every single device we build in our commercial business. End users and commercial customers today do expect superior display performance, superior audio, microphone, voice, and touch quality, and have it all connected and working seamlessly together in an ease of use space. We are already deep in the journey of personalized computing today. But the center point of it has been for the last 25 years, the mobile PC, that we have perfected over the last 25 years, and has been the undisputed leader in mobility computing. We believe in the commercial business, the ThinkPad is still the core device of a digital wardrobe, and we continue to drive the success of the ThinkPad in the marketplace. We've sold more than 140 million over the last 26 years, and even last year we exceeded nearly 11 million units. That is about 21 ThinkPads per minute, or one Thinkpad every three seconds that we are shipping out in the market. It's the number one commercial PC in the world. It has gotten countless awards but we felt last year after Transform we need to build a step further, in really tailoring the ThinkPad towards the need of the future. So, we announced a new line of X1 Carbon and Yoga at CES the Consumer Electronics Show. And the reason is not we want to sell to consumer, but that we do recognize that a lot of CIOs and IT decision makers need to understand what consumers are really doing in terms of technology to make them successful. So, let's take a look at the video. (suspenseful music) >> When you're the number one business laptop of all time, your only competition is yourself. (wall shattering) And, that's different. Different, like resisting heat, ice, dust, and spills. Different, like sharper, brighter OLA display. The trackpoint that reinvented controls, and a carbon fiber roll cage to protect what's inside, built by an engineering and design team, doing the impossible for the last 25 years. This is the number one business laptop of all time, but it's not a laptop. It's a ThinkPad. (audience applauding) >> Thank you very much. And we are very proud that Lenovo ThinkPad has been selected as the best laptop in the world in the second year in a row. I think it's a wonderful tribute to what our engineers have been done on this one. And users do want awesome displays. They want the best possible audio, voice, and touch control, but some users they want more. What they want is super power, and I'm really proud to announce our newest member of the X1 family, and that's the X1 extreme. It's exceptionally featured. It has six core I9 intel chipset, the highest performance you get in the commercial space. It has Nvidia XTX graphic, it is a 4K UHD display with HDR with Dolby vision and Dolby Atmos Audio, two terabyte in SSD, so it is really the absolute Ferrari in terms of building high performance commercial computer. Of course it has touch and voice, but it is one thing. It has so much performance that it serves also a purpose that is not typical for commercial, and I know there's a lot of secret gamers also here in this room. So you see, by really bringing technology together in the commercial space, you're creating productivity solutions of one of a kind. But there's another category of products from a productivity perspective that is incredibly important in our commercial business, and that is the workstation business . Clearly workstations are very specifically designed computers for very advanced high-performance workloads, serving designers, architects, researchers, developers, or data analysts. And power and performance is not just about the performance itself. It has to be tailored towards the specific use case, and traditionally these products have a similar size, like a server. They are running on Intel Xeon technology, and they are equally complex to manufacture. We have now created a new category as the ultra mobile workstation, and I'm very proud that we can announce here the lightest mobile workstation in the industry. It is so powerful that it really can run AI and big data analysis. And with this performance you can go really close where you need this power, to the sensors, into the cars, or into the manufacturing places where you not only wannna read the sensors but get real-time analytics out of these sensors. To build a machine like this one you need customers who are really challenging you to the limit. and we're very happy that we had a customer who went on this journey with us, and ultimately jointly with us created this product. So, let's take a look at the video. (suspenseful music) >> My world involves pathfinding both the hardware needs to the various work sites throughout the company, and then finding an appropriate model of desktop, laptop, or workstation to match those needs. My first impressions when I first seen the ThinkPad P1 was I didn't actually believe that we could get everything that I was asked for inside something as small and light in comparison to other mobile workstations. That was one of the I can't believe this is real sort of moments for me. (engine roars) >> Well, it's better than general when you're going around in the wind tunnel, which isn't alway easy, and going on a track is not necessarily the best bet, so having a lightweight very powerful laptop is extremely useful. It can take a Xeon processor, which can support ECC from when we try to load a full car, and when we're analyzing live simulation results. through and RCFT post processor or example. It needs a pretty powerful machine. >> It's come a long way to be able to deliver this. I hate to use the word game changer, but it is that for us. >> Aston Martin has got a lot of different projects going. There's some pretty exciting projects and a pretty versatile range coming out. Having Lenovo as a partner is certainly going to ensure that future. (engine roars) (audience applauds) >> So, don't you think the Aston Martin design and the ThinkPad design fit very well together? (audience laughs) So if Q, would get a new laptop, I think you would get a ThinkPad X P1. So, I want to switch gears a little bit, and go into something in terms of productivity that is not necessarily on top of the mind or every end user but I believe it's on top of the mind of every C-level executive and of every CEO. Security is the number one threat in terms of potential risk in your business and the cost of cybersecurity is estimated by 2020 around six trillion dollars. That's more than the GDP of Japan and we've seen a significant amount of data breach incidents already this years. Now, they're threatening to take companies out of business and that are threatening companies to lose a huge amount of sensitive customer data or internal data. At Lenovo, we are taking security very, very seriously, and we run a very deep analysis, around our own security capabilities in the products that we are building. And we are announcing today a new brand under the Think umbrella that is called ThinkShield. Our goal is to build the world's most secure PC, and ultimately the most secure devices in the industry. And when we looked at this end-to-end, there is no silver bullet around security. You have to go through every aspect where security breaches can potentially happen. That is why we have changed the whole organization, how we look at security in our device business, and really have it grouped under one complete ecosystem of solutions, Security is always something where you constantly are getting challenged with the next potential breach the next potential technology flaw. As we keep innovating and as we keep integrating, a lot of our partners' software and hardware components into our products. So for us, it's really very important that we partner with companies like Intel, Microsoft, Coronet, Absolute, and many others to really as an example to drive full encryption on all the data seamlessly, to have multi-factor authentication to protect your users' identity, to protect you in unsecured Wi-Fi locations, or even simple things like innovation on the device itself, to and an example protect the camera, against usage with a little thing like a thinkShutter that you can shut off the camera. SO what I want to show you here, is this is the full portfolio of ThinkShield that we are announcing today. This is clearly not something I can even read to you today, but I believe it shows you the breadth of security management that we are announcing today. There are four key pillars in managing security end-to-end. The first one is your data, and this has a lot of aspects around the hardware and the software itself. The second is identity. The third is the security around online, and ultimately the device itself. So, there is a breakout on security and ThinkShield today, available in the afternoon, and encourage you to really take a deeper look at this one. The first pillar around productivity was the device, and around the device. The second major pillar that we are seeing in terms of intelligent transformation is the workspace itself. Employees of a new generation have a very different habit how they work. They split their time between travel, working remotely but if they do come in the office, they expect a very different office environment than what they've seen in the past in cubicles or small offices. They come into the office to collaborate, and they want to create ideas, and they really work in cross-functional teams, and they want to do it instantly. And what we've seen is there is a huge amount of investment that companies are doing today in reconfiguring real estate reconfiguring offices. And most of these kind of things are moving to a digital platform. And what we are doing, is we want to build an entire set of solutions that are just focused on making the workspace more productive for remote workforce, and to create technology that allow people to work anywhere and connect instantly. And the core of this is that we need to be, the productivity of the employee as high as possible, and make it for him as easy as possible to use these kind of technologies. Last year in Transform, I announced that we will enter the smart office space. By the end of last year, we brought the first product into the market. It's called the Hub 500. It's already deployed in thousands of our customers, and it's uniquely focused on Microsoft Skype for Business, and making meeting instantly happen. And the product is very successful in the market. What we are announcing today is the next generation of this product, what is the Hub 700, what has a fantastic audio quality. It has far few microphones, and it is usable in small office environment, as well as in major conference rooms, but the most important part of this new announcement is that we are also announcing a software platform, and this software platform allows you to run multiple video conferencing software solutions on the same platform. Many of you may have standardized for one software solution or for another one, but as you are moving in a world of collaborating instantly with partners, customers, suppliers, you always will face multiple software standards in your company, and Lenovo is uniquely positioned but providing a middleware platform for the device to really enable multiple of these UX interfaces. And there's more to come and we will add additional UX interfaces on an ongoing base, based on our customer requirements. But this software does not only help to create a better experience and a higher productivity in the conference room or the huddle room itself. It really will allow you ultimately to manage all your conference rooms in the company in one instance. And you can run AI technologies around how to increase productivity utilization of your entire conference room ecosystem in your company. You will see a lot more devices coming from the node in this space, around intelligent screens, cameras, and so on, and so on. The idea is really that Lenovo will become a core provider in the whole movement into the smart office space. But it's great if you have hardware and software that is really supporting the approach of modern IT, but one component that Kirk also mentioned is absolutely critical, that we are providing this to you in an as a service approach. Get it what you want, when you need it, and pay it in the amount that you're really using it. And within UIT there is also I think a new philosophy around IT management, where you're much more focused on the value that you are consuming instead of investing into technology. We are launched as a service two years back and we already have a significant number of customers running PC as a service, but we believe as a service will stretch far more than just the PC device. It will go into categories like smart office. It might go even into categories like phone, and it will definitely go also in categories like storage and server in terms of capacity management. I want to highlight three offerings that we are also displaying today that are sort of building blocks in terms of how we really run as a service. The first one is that we collaborated intensively over the last year with Microsoft to be the launch pilot for their Autopilot offering, basically deploying images easily in the same approach like you would deploy a new phone on the network. The purpose really is to make new imaging and enabling new PC as seamless as it's used to be in the phone industry, and we have a complete set of offerings, and already a significant number customers have deployed Autopilot with Lenovo. The second major offering is Premier Support, like in the in the server business, where Premier Support is absolutely critical to run critical infrastructure, we see a lot of our customers do want to have Premier Support for their end users, so they can be back into work basically instantly, and that you have the highest possible instant repair on every single device. And then finally we have a significant amount of time invested into understanding how the software as a service really can get into one philosophy. And many of you already are consuming software as a service in many different contracts from many different vendors, but what we've created is one platform that really can manage this all together. All these things are the foundation for a device as a service offering that really can manage this end-to-end. So, implementing an intelligent workplace can be really a daunting prospect depending on where you're starting from, and how big your company ultimately is. But how do you manage the transformation of technology workspace if you're present in 50 or more countries and you run an infrastructure for more than 100,000 people? Michelin, famous for their tires, infamous for their Michelin star restaurant rating, especially in New York, and instantly recognizable by the Michelin Man, has just doing that. Please welcome with me Damon McIntyre from Michelin to talk to us about the challenges and transforming collaboration and productivity. (audience applauding) (electronic dance music) Thank you, David. >> Thank you, thank you very much. >> We on? >> So, how do you feel here? >> Well good, I want to thank you first of all for your partnership and the devices you create that helped us design, manufacture, and distribute the best tire in the world, okay? I just had to say it and put out there, alright. And I was wondering, were those Michelin tires on that Aston Martin? >> I'm pretty sure there is no other tire that would fit to that. >> Yeah, no, thank you, thank you again, and thank you for the introduction. >> So, when we talk about the transformation happening really in the workplace, the most tangible transformation that you actually see is the drastic change that companies are doing physically. They're breaking down walls. They're removing cubes, and they're moving to flexible layouts, new desks, new huddle rooms, open spaces, but the underlying technology for that is clearly not so visible very often. So, tell us about Michelin's strategy, and the technology you are deploying to really enable this corporation. >> So we, so let me give a little bit a history about the company to understand the daunting tasks that we had before us. So we have over 114,000 people in the company under 170 nationalities, okay? If you go to the corporate office in France, it's Clermont. It's about 3,000 executives and directors, and what have you in the marketing, sales, all the way up to the chain of the global CIO, right? Inside of the Americas, we merged in Americas about three years ago. Now we have the Americas zone. There's about 28,000 employees across the Americas, so it's really, it's really hard in a lot of cases. You start looking at the different areas that you lose time, and you lose you know, your productivity and what have you, so there, it's when we looked at different aspects of how we were going to manage the meeting rooms, right? because we have opened up our areas of workspace, our CIO, CEOs in our zones will no longer have an office. They'll sit out in front of everybody else and mingle with the crowd. So, how do you take those spaces that were originally used by an individual but now turn them into like meeting rooms? So, we went through a large process, and looked at the Hub 500, and that really met our needs, because at the end of the day what we noticed was, it was it was just it just worked, okay? We've just added it to the catalog, so we're going to be deploying it very soon, and I just want to again point that I know everybody struggles with this, and if you look at all the minutes that you lose in starting up a meeting, and we know you know what I'm talking about when I say this, it equates to many many many dollars, okay? And so at the end the day, this product helps us to be more efficient in starting up the meeting, and more productive during the meeting. >> Okay, it's very good to hear. Another major trend we are seeing in IT departments is taking a more hands-off approach to hardware. We're seeing new technologies enable IT to create a more efficient model, how IT gets hardware in the hands of end-users, and how they are ultimately supporting themselves. So what's your strategy around the lifecycle management of the devices? >> So yeah you mentioned, again, we'll go back to the 114,000 employees in the company, right? You imagine looking at all the devices we use. I'm not going to get into the number of devices we have, but we have a set number that we use, and we have to go through a process of deploying these devices, which we right now service our own image. We build our images, we service them through our help desk and all that process, and we go through it. If you imagine deploying 25,000 PCs in a year, okay? The time and the daunting task that's behind all that, you can probably add up to 20 or 30 people just full-time doing that, okay? So, with partnering with Lenovo and their excellent technology, their technical teams, and putting together the whole process of how we do imaging, it now lifts that burden off of our folks, and it shifts it into a more automated process through the cloud, okay? And, it's with the Autopilot on the end of the project, we'll have Autopilot fully engaged, but what I really appreciate is how Lenovo really, really kind of got with us, and partnered with us for the whole process. I mean it wasn't just a partner between Michelin and Lenovo. Microsoft was also partnered during that whole process, and it really was a good project that we put together, and we hope to have something in a full production mode next year for sure. >> So, David thank you very, very much to be here with us on stage. What I really want to say, customers like you, who are always challenging us on every single aspect of our capabilities really do make the big difference for us to get better every single day and we really appreciate the partnership. >> Yeah, and I would like to say this is that I am, I'm doing what he's exactly said he just said. I am challenging Lenovo to show us how we can innovate in our work space with your devices, right? That's a challenge, and it's going to be starting up next year for sure. We've done some in the past, but I'm really going to challenge you, and my whole aspect about how to do that is bring you into our workspace. Show you how we make how we go through the process of making tires and all that process, and how we distribute those tires, so you can brainstorm, come back to the table and say, here's a device that can do exactly what you're doing right now, better, more efficient, and save money, so thank you. >> Thank you very much, David. (audience applauding) Well it's sometimes really refreshing to get a very challenging customers feedback. And you know, we will continue to grow this business together, and I'm very confident that your challenge will ultimately help to make our products even more seamless together. So, as we now covered productivity and how we are really improving our devices itself, and the transformation around the workplace, there is one pillar left I want to talk about, and that's really, how do we make businesses smarter than ever? What that really means is, that we are on a journey on trying to understand our customer's business, deeper than ever, understanding our customer's processes even better than ever, and trying to understand how we can help our customers to become more competitive by injecting state-of-the-art technology in this intelligent transformation process, into core processes. But this cannot be done without talking about a fundamental and that is the journey towards 5G. I really believe that 5G is changing everything the way we are operating devices today, because they will be connected in a way like it has never done before. YY talked about you know, 20 times 10 times the amount of performance. There are other studies that talk about even 200 times the performance, how you can use these devices. What it will lead to ultimately is that we will build devices that will be always connected to the cloud. And, we are preparing for this, and Kirk already talked about, and how many operators in the world we already present with our Moto phones, with how many Telcos we are working already on the backend, and we are working on the device side on integrating 5G basically into every single one of our product in the future. One of the areas that will benefit hugely from always connected is the world of virtual reality and augmented reality. And I'm going to pick here one example, and that is that we have created a commercial VR solution for classrooms and education, and basically using consumer type of product like our Mirage Solo with Daydream and put a solution around this one that enables teachers and schools to use these products in the classroom experience. So, students now can have immersive learning. They can studying sciences. They can look at environmental issues. They can exploring their careers, or they can even taking a tour in the next college they're going to go after this one. And no matter what grade level, this is how people will continue to learn in the future. It's quite a departure from the old world of textbooks. In our area that we are looking is IoT, And as YY already elaborated, we are clearly learning from our own processes around how we improve our supply chain and manufacturing and how we improve also retail experience and warehousing, and we are working with some of the largest companies in the world on pilots, on deploying IoT solutions to make their businesses, their processes, and their businesses, you know, more competitive, and some of them you can see in the demo environment. Lenovo itself already is managing 55 million devices in an IoT fashion connecting to our own cloud, and constantly improving the experience by learning from the behavior of these devices in an IoT way, and we are collecting significant amount of data to really improve the performance of these systems and our future generations of products on a ongoing base. We have a very strong partnership with a company called ADLINK from Taiwan that is one of the leading manufacturers of manufacturing PC and hardened devices to create solutions on the IoT platform. The next area that we are very actively investing in is commercial augmented reality. I believe augmented reality has by far more opportunity in commercial than virtual reality, because it has the potential to ultimately improve every single business process of commercial customers. Imagine in the future how complex surgeries can be simplified by basically having real-time augmented reality information about the surgery, by having people connecting into a virtual surgery, and supporting the surgery around the world. Visit a furniture store in the future and see how this furniture looks in your home instantly. Doing some maintenance on some devices yourself by just calling the company and getting an online manual into an augmented reality device. Lenovo is exploring all kinds of possibilities, and you will see a solution very soon from Lenovo. Early when we talked about smart office, I talked about the importance of creating a software platform that really run all these use cases for a smart office. We are creating a similar platform for augmented reality where companies can develop and run all their argumented reality use cases. So you will see that early in 2019 we will announce an augmented reality device, as well as an augmented reality platform. So, I know you're very interested on what exactly we are rolling out, so we will have a first prototype view available there. It's still a codename project on the horizon, and we will announce it ultimately in 2019, but I think it's good for you to take a look what we are doing here. So, I just wanted to give you a peek on what we are working beyond smart office and the device productivity in terms of really how we make businesses smarter. It's really about increasing productivity, providing you the most secure solutions, increase workplace collaboration, increase IT efficiency, using new computing devices and software and services to make business smarter in the future. There's no other company that will enable to offer what we do in commercial. No company has the breadth of commercial devices, software solutions, and the same data center capabilities, and no other company can do more for your intelligent transformation than Lenovo. Thank you very much. (audience applauding) >> Thanks mate, give me that. I need that. Alright, ladies and gentlemen, we are done. So firstly, I've got a couple of little housekeeping pieces at the end of this and then we can go straight into going and experiencing some of the technology we've got on the left-hand side of the room here. So, I want to thank Christian obviously. Christian, awesome as always, some great announcements there. I love the P1. I actually like the Aston Martin a little bit better, but I'll take either if you want to give me one for free. I'll take it. We heard from YY obviously about the industry and how the the fourth Industrial Revolution is impacting us all from a digital transformation perspective, and obviously Kirk on DCG, the great NetApp announcement, which is going to be really exciting, actually that Twitter and some of the social media panels are absolutely going crazy, so it's good to see that the industry is really taking some impact. Some of the publications are really great, so thank you for the media who are obviously in the room publishing right no. But now, I really want to say it's all of your turn. So, all of you up the back there who are having coffee, it's your turn now. I want everyone who's sitting down here after this event move into there, and really take advantage of the 15 breakouts that we've got set there. There are four breakout sessions from a time perspective. I want to try and get you all out there at least to use up three of them and use your fourth one to get out and actually experience some of the technology. So, you've got four breakout sessions. A lot of the breakout sessions are actually done twice. If you have not downloaded the app, please download the app so you can actually see what time things are going on and make sure you're registering correctly. There's a lot of great experience of stuff out there for you to go do. I've got one quick video to show you on some of the technology we've got and then we're about to close. Alright, here we are acting crazy. Now, you can see obviously, artificial intelligence machine learning in the browser. God, I hate that dance, I'm not a Millenial at all. It's effectively going to be implemented by healthcare. I want you to come around and test that out. Look at these two guys. This looks like a Lenovo management meeting to be honest with you. These two guys are actually concentrating, using their brain power to race each others in cars. You got to come past and give that a try. Give that a try obviously. Fantastic event here, lots of technology for you to experience, and great partners that have been involved as well. And so, from a Lenovo perspective, we've had some great alliance partners contribute, including obviously our number one partner, Intel, who's been a really big loyal contributor to us, and been a real part of our success here at Transform. Excellent, so please, you've just seen a little bit of tech out there that you can go and play with. I really want you, I mean go put on those black things, like Scott Hawkins our chief marketing officer from Lenovo's DCG business was doing and racing around this little car with his concentration not using his hands. He said it's really good actually, but as soon as someone comes up to speak to him, his car stops, so you got to try and do better. You got to try and prove if you can multitask or not. Get up there and concentrate and talk at the same time. 62 different breakouts up there. I'm not going to go into too much detai, but you can see we've got a very, very unusual numbering system, 18 to 18.8. I think over here we've got a 4849. There's a 4114. And then up here we've got a 46.1 and a 46.2. So, you need the decoder ring to be able to understand it. Get over there have a lot of fun. Remember the boat leaves today at 4:00 o'clock, right behind us at the pier right behind us here. There's 400 of us registered. Go onto the app and let us know if there's more people coming. It's going to be a great event out there on the Hudson River. Ladies and gentlemen that is the end of your keynote. I want to thank you all for being patient and thank all of our speakers today. Have a great have a great day, thank you very much. 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