>> live from Orlando, Florida It's the que covering accelerate nineteen. Brought to you by important. >> Welcome back to the Cube. We air live in Orlando, Florida, for accelerate border, not accelerate twenty nineteen. Lisa Martin with Peter Burroughs And we're pleased to welcome back to the Cube. Chief information Security officer See, So from Fortinet fell quite Phil. Thank you so much for joining Peter and me on the Cube today. >> Thanks for much. >> So lots of news, Lots of buzz. You can hear a lot of the folks behind us in the Expo hall here. We've had probably, I think five or six or seven guests today. So far you are on the front lines as to see so afforded it talking with si sos. I'd love to get your your view on what are some of the things they're top of mind for si sos today. The challenge is that they're facing and how are they looking to for doughnut to mitigate this challenge is >> the good news is that the solution sets not as complicated a cz youthink So all the sea says and senior people I talked to are very much focused on How can they reduce complexity, And how can they better leverage automation? I know there's some overlap between those two things, but they care quite a bit about that. Why? Because with less complexity, there's less mistakes with less complexity. There's less optics, right costs, costs for people and then with automation. It also helps with the op ex problem. But automation also allows humans to do things that humans you're better doing things. That and let's machines do things that their better doing that. So, complexity management, Lebanese automation are really top of mind. Of course, you know the next level down, you really need to do segmentation. Well, you need to have good visibility, need to inspection something that But I'd say those couple things are definitely top of mind, no matter who you talked to. >> But one of the things that's especially important about this issue complexity is that the threat surface goes to value, right so that, as you think about I ot as you think about Mohr devices, Mohr elements, et cetera, the threat surface is going to go up the on ly way that you're going to be able to bring that in in a managed way that delivers consistent value without dramatically exploding amount of risk is to reduce the complexity of the rest of the threat >> surface. Thie. If you're trying to place the face the problem of of, of speed and scale, you have to adopt the solutions of automation in integration you need a strategy on. Of course, hope is never a strategy, and so you need to leverage these technologies to do that. Instead, it's all about automation integration, >> right on this notion of the threats surface going to values, gotta have some mean si SOS sort of. Some of the ones that I'm talking to are using terminology like that. Maybe not that concept directly, but they want to make sure that whatever task that they're performing, whatever, uh, whatever risked their engendering or dealing with has some corresponds back to value. Are you seeing that as well? >> Yeah, and since we're talking about value, the end point is becoming a whole lot more interesting in terms of value. So traditionally we think of the endpoint is being a place where there's desktops and then laptops and tablets, and now smartphones, and they've always been part of our cyber domain. But there's this new thing that's happening, I think just left of end point. And it's where there's going to be the heavy instrumentation of physical processes and things. So it's starting with OT operational technology. It's going to be magnified by I ot and, of course, building automation. And so all of a sudden, the definition of value, I think, is going to be places that can collect data about physical processes and things, protect that data and then commoditize it. So value is moving further, further and out into the endpoint defined as thie, a collection of information about physical processes, something so I call this environment cyber physical or, more specifically, more catchy. SciFi right. It's where cyber data, physical data will be intermingled to provide value and efficiencies to customers and things like that. It's a really important area that's the new in point >> in physics. We talk about transducers, right? The transducer is something that takes one form of energy and turns into another form of energy so they could perform a different kind of work. We're talking about what we call information transducers the idea, take one form of information and turn it into another form of information so that it can perform work that's seminal to this notion that you're describing with the side fi. >> That's a >> great analogy. I haven't heard it described that way before. It's kind of like, you know, back in the day where where people use fire to heat and people used sales to move things right. And one day >> it was a more >> wins, right? Wait, move sales. Sorry. Wings. Yeah. Okay. And, uh, someone saw the story. As the story goes, someone saw a pot on the fire, a kettle full of water boil and the lid of the pop move. So they realized I can use heat to move it. So they started integrating different ways of doing things to achieve new effects. And I think that's what you're talking about. He used the word trans transducer, but I think it's the same thing. And how can you use things previously kept separate to do things that you previously couldn't D'Oh. >> So let's talk about this SciFi era C y dash p H y. For those watching at home, what are some of the security challenges that this brings, but also the opportunities to be uncovered by that boiling point analogy. >> Yeah, if you don't mind, I'LL start with the start with positives right where the was a potential benefits to society. So we are all of us and everyone behind us. We're creatures, the physical domain and the opportunities that there will be new data connected about this physical domain that can affect his very personally. So in cyberspace, its ultimate a virtual world. So there could be compromises in cyberspace. That effect is in cyber ways, but when you have compromises in the physical domain, it could be a lot more personal. So let's say that you have a medical device or you have a something else that instruments the temperature, heat, humidity, vector, you name it. Failures in those areas can have a really profound effect on a negative way in this physical oriented domain. So now the flip side of that is because it has a very, very positive effect, Right? Thes healthcare devices could bring new conveniences or perhaps even help address some very important things where they'd be physical or mental disabilities weaken instrument very heavily how we create food products. And so maybe this heavy instrumentation of how you create food can help address world hunger. I know I'm getting kind of heavy about this, but heavy instrumentation of this physical domain has a lot of promise. Now back to the other side. It also has a lot of responsibility involved, right, because, as I mentioned earlier, we're creatures of the physical domain. So if you get it wrong, you could mess up something really important to our health. Care for our transportation, Andi. We also have a very strong feeling towards privacy. At some point, collecting too much about us physically is just too much. So you need to make sure that that any sense data's you have privacy protections built it. So like anything with great opportunity. There's great challenges involved. But by giving their name and starting described, this challenge is we are. We're one step down the path, I think. >> But if we take that and then turn it into a set of cyber security challenges, no secure network challenges, that one of the other things you describe is we're constantly learning about what are the characteristics of a good, competent, reasonable interface between the physical and digital worlds. That knowledge then has to be put back into how we handle network security. >> That's right. I like your use of the word knowledge. And earlier today I gave a talk about something I'm calling a digital big bang. It's an analogy of that. We had a digital big bang fifty years ago where an explosion of data is among us and there's some challenges will get back that in a second. The analogy is thie cosmic big bang of fourteen billion years ago. And it wasn't until we started certain had a quest for knowledge about the fundamental elements of the cosmic Big Bang and the hard sciences behind it. Physics, chemistry, biology, things like that that we actually started obtaining an accumulating knowledge. So I think to your point, there's a lot of knowledge accumulation that we need to start a quest for in this cyber physical domain. And that's that's all about treating cybersecurity more like a science rather than an art. And I think this cyber SciFi domain is a great place to start practicing that accumulating knowledge in a very, very scientific way, build on the build on the successes of our our forefathers. I could say >> Sorry if I can build on this for one second. Sorry, Lisa, that the entropy gets everything in the end. But isn't it interesting that the process of creating Mohr information creating more knowledge and then securing it is our main fight against entropy? Right. That's how we create increase optimization of our resources. How we get Maura out of less on DH. That seems to me to be an especially important thing here. A CZ we think about it is how we utilize that knowledge, share it and in so doing security so that we're sharing inappropriately. >> There's a there's a great saying. I'm sure you're familiar with each of you. It's called. I use it often. Data is the oil the twenty first century, right? So the last century, those who could find oil explored it put it good use and protected dominated that century. Let's fast forward to the twenty first century. I think the same words apply data right. Those who can find it generate wisdom from it, insight from it and protect it will dominate in a good way the twenty first century. So, on the way you were going to do that. This is the collective we is bias. You said Collect, Ate it. Make it better. Send it back out, bring it back in. Make it better. Send it back out. It's a somewhat circular, but I think it's a very, very healthy example of, ah, circular augmentation. >> So don't think I want to touch on a little bit with you. Feel before we let you go is we talked about knowledge a minute ago and sharing that knowledge forty nights Very dedicated to education. Educating your customers, educating your partners When you're talking with si SOS and we know that there's an ostensible skills got with cyber security. What are some of the solutions that you talked to those customers that like Hey, this is how fourteen that nurse ecosystem partners can help you here. Address this so you can leverage the power of that data to, As you said, you know, for the twenty first century, for example, data becomes the new oil. What's that education conversation like there's >> a There's a long game in a short game, you know, the short game is about leveraging like we talked about a few minutes ago. Speed, speed, automation, integration, too. Compliment the shortage of human beings right rely machines, moron for what machines we're good at on DH. Take the humans, the humans, the steel personnel and have them do the higher order thinking. So the near term game. It's foreign. It's really well. Pasha provide our customers is speed, automation and integration. So that's the short game. Long game is about creating, Ah, larger workforce or larger population of folks who could all be construed contribute to this great new world we've been talking about. And that's training. And that's education. And I think, you know important. It's also, you know, working the long game as well, with some near term training at multiple levels for folks in in the networking world, but were also part of something called the World Economic Form West's Center for Cyber Security. We're founding member, and there were trying to create a long game where we can help educate a whole lot of people on cybersecurity and create the future. Workforce is in the long game. So short term long game, both her important >> except well, Phil, thank you so much for joining Peter and me on the cute this afternoon. We appreciate your time. >> Thanks again. It was nice. Nice being back and >> excellent. Our pleasure for Peter. Boris. I'm Lisa Martin. You're watching the Cube

>> Live from San Francisco. It's the cube covering IBM thing twenty nineteen brought to you by IBM. >> Welcome back to Mosconi North here in San Francisco, California. I'm student of my co host, A Volante. We're in day three of four days live. Walter. Wall coverage here at IBM think happened. Welcome back to the program. Talk about one of our favorite topics. Cube alarm. Steve Hill, who's the global head of innovation. That topic I mentioned from KPMG, Steve, welcome back to the program. >> Seems to have made good to see you. >> All right. So, you know, we know that the the only constant in our industry is change. And, you know, it's one of those things. You know, I look at my career, it's like innovation. Is it a buzz word? You know? Has innovation stalled out of the industry? But you know, you're living it. You you're you're swimming in it. Talkinto a lot of people on it. KPMG has lots of tools, so give us the update from from last year. >> Well, I think you know, we talked about several things last year, but innovation was a key theme. And and when I would share with you, is that I think across all industries, innovation as a capability has become more mature and more accepted, still not widely adopted across all industries and all competitors and all kinds of companies. But the reality is, innovation used to be kind of one person's job off in the closet today. I think a lot of organizations or realizing you have to have corporate muscle that is as engaged as in changing the status quo as the production muscle is in maintaining the status quo has >> become a cultural. >> It's become part of culture, and so I think innovation really is part of the evolution of corporate governance as far as I'm >> concerned. What one thing I worry about a little bit is, you know, I see a company like IBM. They have a long history of research that throws off innovation over the years. You know, I grew up, you know, in the backyard of Bell Labs and think about the innovation a drove today, the culture you know, faster, faster, faster and sometimes innovation. He does sit back. I need to be able to think longer, You know? How does how does an innovation culture fit into the ever changing, fast paced you? No need to deliver ninety day shot clock of reality of today. >> Well, I think innovation has to be smart, meaning you have to be able to feed the engines of growth. So your horizon one, if you will, of investments and your attention and efforts have to pay off the short term. But you also can't be strategically stupid and build yourself into an alleyway or to our corner, because you're just too short term thought through. Right? So you need to have a portfolio of what we call Horizon three blended with Horizon one and Horizon two types investment. So your short term, your middle term and your longer term needs are being met. Of course, if you think about it like a portfolio of investments, you're going tohave. Probably a smaller number of investments that air further out, more experimental and a larger proportion of them going to be helping you grow. You could say, almost tactically or sort of adjacent to where you are today, incrementally. But some of those disruptive things that you work on an H three could actually change your industry. Maybe you think about today where we are. Azan Economy intangibles are starting to creep into this notion of value ways we've never seen before. Today, the top five companies in terms of net worth all fundamentally rely on intangibles for their worth. Five years ago, it was one or two, and I would argue that the notion of intangibles, particularly data we'll drive a lot of very transformative types of investments for organizations going forward. So you've got to be careful not to starve a lot of those longer term investments, >> right? And it's almost become bromide. Large companies can innovate, but those five companies just mentioned well alluded to Amazon. Google, etcetera Facebook of Apple, Microsoft there, innovators, right? So absolutely and large companies innovate. >> Yes, clearly, yeah, but you have to have muscle, but it doesn't happen by accident, and you do put discipline and process and rigor and tools and leadership around innovation. But it's a different kind of discipline than you need in the operation, so I'll make him a ratio that makes sense. Maybe ninety five percent production, five percent innovation in an organization. That innovation engine is always challenging that ninety five percent Are you good enough? Are you relevant enough? Are you fast enough? Are you agile enough? You need that in every corporate organization in terms of governance to stay healthy and relevant overtime. >> So it's interesting. You know, I was in a session that Jack Welch talk wants, and he's like, I hear big companies can innovate is like big companies made up of people. People are the things that can innovate absolute. But, you know, I've worked in large organizations. We understand that the fossilization process and the goto market that you have, you know, will often kill, you know, those new flowers that are blooming, what separates the people that can drive innovation on DH? You know, put those positive place and kind of the also rans that, you know get left behind window disruption. >> Well, there's several. There's a couple things that I would highlight of a longer list, one of them we culture. I mean, I think innovation has been part of a culture. People in the institution have value innovation and want to be part of it. And there is, you know, a role that everyone can play. Just because you're in operations, if you will, doesn't mean you ignore change or you ignore the opportunity to improve the status quo. But you still have you get paid to operate what I find that is related to culture that gets a lot of people, you know, slow down or or roadblock is the disconnect between the operating part of the business and the innovative part of the business. If you try, if you build them to separately, what happens is you have a disconnection. And if you innovate the best idea in the world over here. But you can't scale it with production, you lose. So you have to make sure that, as as a leader overall, the entire enterprise you build those connections, rotations, leadership, You know, How do you engage the production, you know, engine into the innovation engine? It's to be very collaborative. It should be seamless. You know, everyone likes to say that, but that word, but relative seamlessness is, is heavy architecture. You've gotto build that, you know, collaboration into your model of of how you innovate >> and >> don't innovate in the vacuum. >> And it comes back to the cultural aspects we're talking about. Do you mentioned the ninety day shot? Clocks were here in the Bay Area. Silicon Valley. The most innovative place in the world. They've lived along the ninety day shot clock forever, and it seems to have not heard that so called short term thinking. Why is that? >> Well, there's so much start up here. I mean, at the end of the day, there is so much churn of new thinking and start up in V C. And there's so much activity that it's almost a microcosm, right? Not every place in the world smells, feels, looks like Silicon Valley, right? And the reason for it is in part because there's just so much innovation in what happens here. And these things change me. If you think about, uh, these unicorns that we have today. Today there's about three hundred ninety one unicorns. Just five years ago, there were one hundred sixty globally on before that. Hardly people didn't know they were hardly recognized. But that's all coming from pockets of innovation like Silicon Valley. So I'd argue that what you have here is an interesting amalgamation of culture being part of a macro environment region that that really rewards innovation and demonstrates that in in market valuations in capital raises, I mean, today one hundred million dollars capital raise is pretty common, especially for unicorns. Five, ten years ago. You never see me. It was very difficult to get a hundred million dollars capital, right? >> You mean you're seeing billion dollar companies do half a billion dollars raises today? I mean, it's >> all day, right? And some of them don't make a profit. Which is I mean, and that's kind of the irony, Which is, Are those companies? What did they get that the rest of us, you know, there was that live on Wall Street right out of in New York. What do we not see? Is that some secret that downstream there will be some massive inflow? Hard to say. I mean, look at Amazon is an example. They've used an intangible to take industries out that they were never in before they started selling books, and they leverage customer behavior data to move into other spaces. And this is kind of the intangible dynamic. And the infection >> data was the fuel for the digital disruption to travel around the world. You see that folks outside of Silicon Valley are really sort of maybe creating new innovation recipes? >> Yes. I think that what you see here is starting to go viral right on DH way that KPMG likes to share a holistic way to look at this for our clients. What is what we call the twenty first century enterprise. So the things that we used to do in the twentieth century to be successful, hire people, build more machines, right? You know, buy more assets, hard, durable assets. Those things don't necessarily give you the recipe for success in the twenty first century. And if you look at that and you think about the intangibles work that's been well written about there's there's all kinds of press on this today. You'll start to realize that the recipe for success in this new century is different, and you can't look at it in a silo to say, Okay, so I've gotta change my department or I've got a I've got to go change, You know, my widgets. What you've got to think is that your entire enterprise and so are construct called the twenty first Century prize. Looks at four things. Actually, it's five, and the fifth one is the technologies to enable change in the other four. And those technologies we talk about here and I have made him think which are, you know, cloud data, smart computers or a blockchain, etcetera. But those four pillars our first customer. How do you think about your customer experience today? How do you rethink your customer experience tomorrow? I think the customer dynamic, whether it's generational or it's technologically driven, change is happening more rapidly today than ever. And looking at that front office and the customer dementia, it is really important. The second is looking at your acid base. The value of your assets are changing, and intangibles are big category of that change. But do your do your hard assets make the difference today and forward. Or all these intangibles. Companies that don't have a date a strategy today are at peril of falling victim to competitors who will use data to come through a flank. And Amazons done that with groceries, right? The third category is as a service capabilities. So if you're growing contracting going into new markets are opening new channels. How do you build that capability to serve that? Well, there's a phenomenon today that we know is, you know, I think, very practised, but usually in functions called as a service by capability on the drink instead of going out and doing big BPO deals. Think about a pea eye's. Think about other kinds of ways of get access to build and scale very fucks Pierre your capabilities and in the last category, which actually is extremely important for any change you make elsewhere is your workforce. Um, culture is part of that, right? And a lot of organizations air bringing on chief culture officers. We and KPMG did the same thing, but that workforce is changing. It's not just people you hire into your four walls today. You've got contingent workforce. You have gig economy, workforce a lot of organizations. They're leveraging platform business models to bring on employees to either help customers with help. Dex needs or build code for problems that they like to solve for free. So when you talk about productivity, which we talked about last year and you start thinking about what's separating the leaders from a practical standpoint from the laggers from practically standpoint, a lot of those attributes of changing customer value of assets as a service growth and workforce are driving growth and productivity for that subset of our community and many injured. >> So when you look at the firm level you're seeing some real productivity gains versus just paying attention to the macro >> Correct, any macro way think proactive is relatively flat, and that's not untrue. It's because the bottom portion the laggards aren't growing. In fact, productivity is in many ways falling off, but the ones that are the frontier of those top ten percent fifteen hundred global clients we've looked at, uh, you know, you see that CD study show that they're actually driving growth and productivity substantially, and the chasm is getting larger. >> So, Steve, Steve, it's curious what this means for competition. I think about if I'm using external workforces in open source communities, you know, Cloud and I, you know, changes in the environment. A supposed toe I used to kind of have my internal innovation. Now I'm out in these communities s O You know, we're here than IBM show. You know, I think back the word Coop petition. I first heard in context of talking about how IBM works with their ecosystem. So how did those dynamics change of competition and innovation in this? You know, the gig. Economy with open source and cloud. May I? Everywhere. >> Big implications. I mean, I I think you know, and this is the funny point you made is nontraditional competitors, because I think most of our clients and ourselves recognized that we haven't incredible amount of nontraditional competitors entering our space in professional services. We have companies that are not overtly going after our space, but are creating capabilities for our clients to do for themselves what we used to do for them. Data collection, for example, is one of those areas where clients used to spend money for consultants coming in to gather data into aggregate data with tools today that's ah, a very short process, and they do it themselves. So that's a disintermediation or on bundling of our business. But every business has these types of competitive non Trish competitive threats, and what we're seeing is that those same principles that we talked about earlier of the twenty first century surprise applies, right? How are they leveraging there the base and how they leveraging their workforce? Are they? Do they have a data strategy to think through? Okay, what happens if somebody else knows more about my customers than I do? Right? What does that do to make those kinds of questions need to be asked an innovation as a capability I think is a good partner and driving that nothing I would say, is that eco systems and you made you mention that word, and I want to pick up on that. I mean, I think eco systems air becoming a force in competitive protection and competitive potential going forward. If you think about a lot of you know, household names relative Teo data, you know Amazon's one of them. They are involved in the back office in the middle ofthis have so many organizations they're in integrated in those supply chains. Value change, I think services firms, and particularly to be thinking about how do they integrate into the supply chains of their customers so that they transcend the boars of, you know, their four walls, those eco systems and IBM was We consider KPMG considers IBM to be part of our ecosystem, right? Um, as well as other technology. >> So they're one of one of the things we're hearing from IBM. Jenny talked about it yesterday, and her keynote was doubling down on trust. Essentially one. Could you be implying that trust is a barrier to ay? Ay adoption is that. Is that true? Is that what your data show? >> We we we see that very much in spades. In fact, um, you know, I I if you think about it quite frankly, our oppa has driven a lot of people to class to class three. Amalgamation czar opportunities. But what's happening is we're seeing a slowdown because the price of some of these initials were big. But trust, culture and trust are big issues. In fact, we just released recently. Aye, Aye. And control framework, which includes methods and tools assessments to help our clients that were working with the city of Amsterdam today on a system for their citizens that helped them have accountability. Make sure there's no bias in their systems. As a I systems learn and importantly, explain ability. Imagine, you know. Ah, newlywed couple going into a bank to get a house note and having the banker sit back and have his Aye, aye, driven. You know, assessment for mortgage applicability. Come up moored. Recommend air saying no. You Ugh. I can't offer you a mortgage because my data shows you guys going to be divorced, right? We don't want to tell it to a newlywed couple, right? So explain ability about why it's doing what it's doing and put it in terms that relate to customer service. I mean, that's a pretty it's a silly example, but it's a true example of the day. There's a lot of there's a lack of explain ability in terms of how a eyes coming up with some of its conclusions. Lockbox, right? So a trusted A I is a big issue. >> All right, Steve, Framework that you just talked about the twenty first century enterprise. Is there a book or their papers? So I just go to the website, Or do I need to be a client? Read more about, >> you know, absolutely. You can go to our website, kpmg dot com and you can get all the della you want on the twenty first century enterprise. It talks to how we connect our customers front to middle toe back offices. How they think about those those pillars, the technologies we can help them with. Make change happen there, etcetera. So I appreciate it that >> we'll check it out that way. Don't be left in the twentieth century. Come on. >> No, you can't use twentieth century answers to solve twenty first century challenges, right? >> Well, Steve, he'll really appreciate giving us the twenty first century update for day. Volante on student will be back with our next guest here. IBM think twenty nineteen. Thanks for watching you.