(upbeat music) >> Hi, everyone. Welcome to theCUBE's coverage of International Women's Day. I'm John Furrier, host of theCUBE. As part of International Women's Day, we're featuring some of the leading women in business technology from developer to all types of titles and to the executive level. And one topic that's really important is called Getting a Seat at the Table, board makeup, having representation at corporate boards, private and public companies. It's been a big push. And former technology operating executive and corporate board member, she's a board machine Sue Barsamian, formerly with HPE, Hewlett Packard. Sue, great to see you. CUBE alumni, distinguished CUBE alumni. Thank you for coming on. >> Yes, I'm very proud of my CUBE alumni title. >> I'm sure it opens a lot of doors for you. (Sue laughing) We're psyched to have you on. This is a really important topic, and I want to get into the whole, as women advance up, and they're sitting on the boards, they can implement policy and there's governance. Obviously public companies have very strict oversight, and not strict, but like formal. Private boards have to operate, be nimble. They don't have to share all their results. But still, boards play an important role in the success of scaled up companies. So super important, that representation there is key. >> Yes. >> I want to get into that, but first, before we get started, how did you get into tech? How did it all start for you? >> Yeah, long time ago, I was an electrical engineering major. Came out in 1981 when, you know, opportunities for engineering, if you were kind, I went to Kansas State as an undergrad, and basically in those days you went to Texas and did semiconductors. You went to Atlanta and did communication satellites. You went to Boston or you went to Silicon Valley. And for me, that wasn't too hard a choice. I ended up going west and really, I guess what, embarked on a 40 year career in Silicon Valley and absolutely loved it. Largely software, but some time on the hardware side. Started out in networking, but largely software. And then, you know, four years ago transitioned to my next chapter, which is the corporate board director. And again, focused on technology software and cybersecurity boards. >> For the folks watching, we'll cut through another segment we can probably do about your operating career, but you rose through the ranks and became a senior operating executive at the biggest companies in the world. Hewlett Packard Enterprise, Hewlett Packard Enterprise and others. Very great career, okay. And so now you're kind of like, put that on pause, and you're moving on to the next chapter, which is being a board director. What inspired you to be a board director for multiple public companies and multiple private companies? Well, how many companies are you on? But what's the inspiration? What's the inspiration? First tell me how many board ships you're on, board seats you're on, and then what inspired you to become a board director? >> Yeah, so I'm on three public, and you are limited in terms of the number of publics that you can do to four. So I'm on three public, and I'm on four private from a tech perspective. And those range from, you know, a $4 billion in revenue public company down to a 35 person private company. So I've got the whole range. >> So you're like freelancing, I mean, what is it like? It's a full-time job, obviously. It's a lot of work involved. >> Yeah, yeah, it's. >> John: Why are you doing it? >> Well, you know, so I retired from being an operating executive after 37 years. And, but I loved, I mean, it's tough, right? It's tough these days, particularly with all the pressures out there in the market, not to mention the pandemic, et cetera. But I loved it. I loved working. I loved having a career, and I was ready to back off on, I would say the stresses of quarterly results and the stresses of international travel. You have so much of it. But I wasn't ready to back off from being involved and engaged and continuing to learn new things. I think this is why you come to tech, and for me, why I went to the valley to begin with was really that energy and that excitement, and it's like it's constantly reinventing itself. And I felt like that wasn't over for me. And I thought because I hadn't done boards before I retired from operating roles, I thought, you know, that would fill the bill. And it's honestly, it has exceeded expectations. >> In a good way. You feel good about where you're at and. >> Yeah. >> What you went in, what was the expectation going in and what surprised you? And were there people along the way that kind of gave you some pointers or don't do this, stay away from this. Take us through your experiences. >> Yeah, honestly, there is an amazing network of technology board directors, you know, in the US and specifically in the Valley. And we are all incredibly supportive. We have groups where we get together as board directors, and we talk about topics, and we share best practices and stories, and so I underestimated that, right? I thought I was going to, I thought I was going to enter this chapter where I would be largely giving back after 37 years. You've learned a little bit, right? What I underestimated was just the power of continuing to learn and being surrounded by so many amazing people. When, you know, when you do, you know, multiple boards, your learnings are just multiplied, right? Because you see not just one model, but you see many models. You see not just one problem, but many problems. Not just one opportunity, but many opportunities. And I underestimated how great that would be for me from a learning perspective and then your ability to share from one board to the other board because all of my boards are companies who are also quite close to each other, the executives collaborate. So that has turned out to be really exciting for me. >> So you had the stressful job. You rose to the top of the ranks, quarterly shot clock earnings, and it's hard charging. It's like, it's like, you know, being an athlete, as we say tech athlete. You're a tech athlete. Now you're taking that to the next level, which is now you're juggling multiple operational kind of things, but not with super pressure. But there's still a lot of responsibility. I know there's one board, you got compensation committee, I mean there's work involved. It's not like you're clipping coupons and having pizza. >> Yeah, no, it's real work. Believe me, it's real work. But I don't know how long it took me to not, to stop waking up and looking at my phone and thinking somebody was going to be dropping their forecast, right? Just that pressure of the number, and as a board member, obviously you are there to support and help guide the company and you feel, you know, you feel the pressure and the responsibility of what that role entails, but it's not the same as the frontline pressure every quarter. It's different. And so I did the first type. I loved it, you know. I'm loving this second type. >> You know, the retirement, it's always a cliche these days, but it's not really like what people think it is. It's not like getting a boat, going fishing or whatever. It's doing whatever you want to do, that's what retirement is. And you've chose to stay active. Your brain's being tested, and you're working it, having fun without all the stress. But it's enough, it's like going the gym. You're not hardcore workout, but you're working out with the brain. >> Yeah, no, for sure. It's just a different, it's just a different model. But the, you know, the level of conversations, the level of decisions, all of that is quite high. Which again, I like, yeah. >> Again, you really can't talk about some of the fun questions I want to ask, like what's the valuations like? How's the market, your headwinds? Is there tailwinds? >> Yes, yes, yes. It's an amazing, it's an amazing market right now with, as you know, counter indicators everywhere, right? Something's up, something's down, you know. Consumer spending's up, therefore interest rates go up and, you know, employment's down. And so or unemployment's down. And so it's hard. Actually, I really empathize with, you know, the, and have a great deal of respect for the CEOs and leadership teams of my board companies because, you know, I kind of retired from operating role, and then everybody else had to deal with running a company during a pandemic and then running a company through the great resignation, and then running a company through a downturn. You know, those are all tough things, and I have a ton of respect for any operating executive who's navigating through this and leading a company right now. >> I'd love to get your take on the board conversations at the end if we have more time, what the mood is, but I want to ask you about one more thing real quick before we go to the next topic is you're a retired operating executive. You have multiple boards, so you've got your hands full. I noticed there's a lot of amazing leaders, other female tech athletes joining boards, but they also have full-time jobs. >> Yeah. >> And so what's your advice? Cause I know there's a lot of networking, a lot of sharing going on. There's kind of a balance between how much you can contribute on the board versus doing the day job, but there's a real need for more women on boards, so yet there's a lot going on boards. What's the current state of the union if you will, state of the market relative to people in their careers and the stresses? >> Yeah. >> Cause you left one and jumped in all in there. >> Yeah. >> Some can't do that. They can't be on five boards, but they're on a few. What's the? >> Well, and you know, and if you're an operating executive, you wouldn't be on five boards, right? You would be on one or two. And so I spend a lot of time now bringing along the next wave of women and helping them both in their career but also to get a seat at the table on a board. And I'm very vocal about telling people not to do it the way I do it. There's no reason for it to be sequential. You can, you know, I thought I was so busy and was traveling all the time, and yes, all of that was true, but, and maybe I should say, you know, you can still fit in a board. And so, and what I see now is that your learnings are so exponential with outside perspective that I believe I would've been an even better operating executive had I done it earlier. I know I would've been an even better operating executive had I done it earlier. And so my advice is don't do it the way I did it. You know, it's worked out fine for me, but hindsight's 2020, I would. >> If you can go back and do a mulligan or a redo, what would you do? >> Yeah, I would get on a board earlier, full stop, yeah. >> Board, singular, plural? >> Well, I really, I don't think as an operating executive you can do, you could do one, maybe two. I wouldn't go beyond that, and I think that's fine. >> Yeah, totally makes sense. Okay, I got to ask you about your career. I know technical, you came in at that time in the market, I remember when I broke into the business, very male dominated, and then now it's much better. When you went through the ranks as a technical person, I know you had some blockers and definitely some, probably some people like, well, you know. We've seen that. How did you handle that? What were some of the key pivot points in your journey? And we've had a lot of women tell their stories here on theCUBE, candidly, like, hey, I was going to tell that professor, I'm going to sit in the front row. I'm going to, I'm getting two degrees, you know, robotics and aerospace. So, but they were challenged, even with the aspiration to do tech. I'm not saying that was something that you had, but like have you had experience like that, that you overcome? What were those key points and how did you handle them and how does that help people today? >> Yeah, you know, I have to say, you know, and not discounting that obviously this has been a journey for women, and there are a lot of things to overcome both in the workforce and also just balancing life honestly. And they're all real. There's also a story of incredible support, and you know, I'm the type of person where if somebody blocked me or didn't like me, I tended to just, you know, think it was me and like work harder and get around them, and I'm sure that some of that was potentially gender related. I didn't interpret it that way at the time. And I was lucky to have amazing mentors, many, many, many of whom were men, you know, because they were in the positions of power, and they made a huge difference on my career, huge. And I also had amazing female mentors, Meg Whitman, Ann Livermore at HPE, who you know well. So I had both, but you know, when I look back on the people who made a difference, there are as many men on the list as there are women. >> Yeah, and that's a learning there. Create those coalitions, not just one or the other. >> Yeah, yeah, yeah, absolutely. >> Well, I got to ask you about the, well, you brought up the pandemic. This has come up on some interviews this year, a little bit last year on the International Women's Day, but this year it's resonating, and I would never ask in an interview. I saw an interview once where a host asked a woman, how do you balance it all? And I was just like, no one asked men that. And so it's like, but with remote work, it's come up now the word empathy around people knowing each other's personal situation. In other words, when remote work happened, everybody went home. So we all got a glimpse of the backdrop. You got, you can see what their personal life was on Facebook. We were just commenting before we came on camera about that. So remote work really kind of opened up this personal side of everybody, men and women. >> Yeah. >> So I think this brings this new empathy kind of vibe or authentic self people call it. Is remote work an opportunity or a threat for advancement of women in tech? >> It's a much debated topic. I look at it as an opportunity for many of the reasons that you just said. First of all, let me say that when I was an operating executive and would try to create an environment on my team that was family supportive, I would do that equally for young or, you know, early to mid-career women as I did for early to mid-career men. And the reason is I needed those men, you know, chances are they had a working spouse at home, right? I needed them to be able to share the load. It's just as important to the women that companies give, you know, the partner, male or female, the partner support and the ability to share the love, right? So to me it's not just a woman thing. It's women and men, and I always tried to create the environment where it was okay to go to your soccer game. I knew you would be online later in the evening when the kids were in bed, and that was fine. And I think the pandemic has democratized that and made that, you know, made that kind of an everyday occurrence. >> Yeah the baby walks in. They're in the zoom call. The dog comes in. The leaf blower going on the outside the window. I've seen it all on theCUBE. >> Yeah, and people don't try to pretend anymore that like, you know, the house is clean, the dog's behaved, you know, I mean it's just, it's just real, and it's authentic, and I think that's healthy. >> Yeah. >> I do, you know, I also love, I also love the office, and you know, I've got a 31 year old and a soon to be 27 year old daughter, two daughters. And you know, they love going into the office, and I think about when I was their age, how just charged up I would get from being in the office. I also see how great it is for them to have a couple of days a week at home because you can get a few things done in between Zoom calls that you don't have to end up piling onto the weekend, and, you know, so I think it's a really healthy, I think it's a really healthy mix now. Most tech companies are not mandating five days in. Most tech companies are at two to three days in. I think that's a, I think that's a really good combination. >> It's interesting how people are changing their culture to get together more as groups and even events. I mean, while I got you, I might as well ask you, what's the board conversations around, you know, the old conferences? You know, before the pandemic, every company had like a user conference. Right, now it's like, well, do we really need to have that? Maybe we do smaller, and we do digital. Have you seen how companies are handling the in-person? Because there's where the relationships are really formed face-to-face, but not everyone's going to be going. But now certain it's clearly back to face-to-face. We're seeing that with theCUBE as you know. >> Yeah, yeah. >> But the numbers aren't coming back, and the numbers aren't that high, but the stakeholders. >> Yeah. >> And the numbers are actually higher if you count digital. >> Yeah, absolutely. But you know, also on digital there's fatigue from 100% digital, right? It's a hybrid. People don't want to be 100% digital anymore, but they also don't want to go back to the days when everybody got on a plane for every meeting, every call, every sales call. You know, I'm seeing a mix on user conferences. I would say two-thirds of my companies are back, but not at the expense level that they were on user conferences. We spend a lot of time getting updates on, cause nobody has put, interestingly enough, nobody has put T&E, travel and expense back to pre-pandemic levels. Nobody, so everybody's pulled back on number of trips. You know, marketing events are being very scrutinized, but I think very effective. We're doing a lot of, and, you know, these were part of the old model as well, like some things, some things just recycle, but you know, there's a lot of CIO and customer round tables in regional cities. You know, those are quite effective right now because people want some face-to-face, but they don't necessarily want to get on a plane and go to Las Vegas in order to do it. I mean, some of them are, you know, there are a lot of things back in Las Vegas. >> And think about the meetings that when you were an operating executive. You got to go to the sales kickoff, you got to go to this, go to that. There were mandatory face-to-faces that you had to go to, but there was a lot of travel that you probably could have done on Zoom. >> Oh, a lot, I mean. >> And then the productivity to the family impact too. Again, think about again, we're talking about the family and people's personal lives, right? So, you know, got to meet a customer. All right. Salesperson wants you to get in front of a customer, got to fly to New York, take a red eye, come on back. Like, I mean, that's gone. >> Yeah, and oh, by the way, the customer doesn't necessarily want to be in the office that day, so, you know, they may or may not be happy about that. So again, it's and not or, right? It's a mix. And I think it's great to see people back to some face-to-face. It's great to see marketing and events back to some face-to-face. It's also great to see that it hasn't gone back to the level it was. I think that's a really healthy dynamic. >> Well, I'll tell you that from our experience while we're on the topic, we'll move back to the International Women's Day is that the productivity of digital, this program we're doing is going to be streamed. We couldn't do this face-to-face because we had to have everyone fly to an event. We're going to do hundreds of stories that we couldn't have done. We're doing it remote. Because it's better to get the content than not have it. I mean it's offline, so, but it's not about getting people to the event and watch the screen for seven hours. It's pick your interview, and then engage. >> Yeah. >> So it's self-service. So we're seeing a lot, the new user experience kind of direct to consumer, and so I think there will be an, I think there's going to be a digital first class citizen with events, so that that matches up with the kind of experience, but the offline version. Face-to-face optimized for relationships, and that's where the recruiting gets done. That's where, you know, people can build these relationships with each other. >> Yeah, and it can be asynchronous. I think that's a real value proposition. It's a great point. >> Okay, I want to get, I want to get into the technology side of the education and re-skilling and those things. I remember in the 80s, computer science was software engineering. You learned like nine languages. You took some double E courses, one or two, and all the other kind of gut classes in school. Engineering, you had the four class disciplines and some offshoots of specialization. Now it's incredible the diversity of tracks in all engineering programs and computer science and outside of those departments. >> Yeah. >> Can you speak to the importance of STEM and the diversity in the technology industry and how this brings opportunity to lower the bar to get in and how people can stay in and grow and keep leveling up? >> Yeah, well look, we're constantly working on how to, how to help the incoming funnel. But then, you know, at a university level, I'm on the foundation board of Kansas State where I got my engineering degree. I was also Chairman of the National Action Council for Minorities in Engineering, which was all about diversity in STEM and how do you keep that pipeline going because honestly the US needs more tech resources than we have. And if you don't tap into the diversity of our entire workforce, we won't be able to fill that need. And so we focused a lot on both the funnel, right, that starts at the middle school level, particularly for girls, getting them in, you know, the situation of hands-on comfort level with coding, with robot building, you know, whatever gives them that confidence. And then keeping that going all the way into, you know, university program, and making sure that they don't attrit out, right? And so there's a number of initiatives, whether it's mentoring and support groups and financial aid to make sure that underrepresented minorities, women and other minorities, you know, get through the funnel and stay, you know, stay in. >> Got it. Now let me ask you, you said, I have two daughters. You have a family of girls too. Is there a vibe difference between the new generation and what's the trends that you're seeing in this next early wave? I mean, not maybe, I don't know how this is in middle school, but like as people start getting into their adult lives, college and beyond what's the current point of view, posture, makeup of the talent coming in? >> Yeah, yeah. >> Certain orientations, do you see any patterns? What's your observation? >> Yeah, it's interesting. So if I look at electrical engineering, my major, it's, and if I look at Kansas State, which spends a lot of time on this, and I think does a great job, but the diversity of that as a major has not changed dramatically since I was there in the early 80s. Where it has changed very significantly is computer science. There are many, many university and college programs around the country where, you know, it's 50/50 in computer science from a gender mix perspective, which is huge progress. Huge progress. And so, and to me that's, you know, I think CS is a fantastic degree for tech, regardless of what function you actually end up doing in these companies. I mean, I was an electrical engineer. I never did core electrical engineering work. I went right into sales and marketing and general management roles. So I think, I think a bunch of, you know, diverse CS graduates is a really, really good sign. And you know, we need to continue to push on that, but progress has been made. I think the, you know, it kind of goes back to the thing we were just talking about, which is the attrition of those, let's just talk about women, right? The attrition of those women once they got past early career and into mid-career then was a concern, right? And that goes back to, you know, just the inability to, you know, get it all done. And that I am hopeful is going to be better served now. >> Well, Sue, it's great to have you on. I know you're super busy. I appreciate you taking the time and contributing to our program on corporate board membership and some of your story and observations and opinions and analysis. Always great to have you and call you a contributor for theCUBE. You can jump on on one more board, be one of our board contributors for our analysts. (Sue laughing) >> I'm at capacity. (both laughing) >> Final, final word. What's the big seat at the table issue that's going well and areas that need to be improved? >> So I'll speak for my boards because they have made great progress in efficiency. You know, obviously with interest rates going up and the mix between growth and profitability changing in terms of what investors are looking for. Many, many companies have had to do a hard pivot from grow at all costs to healthy balance of growth and profit. And I'm very pleased with how my companies have made that pivot. And I think that is going to make much better companies as a result. I think diversity is something that has not been solved at the corporate level, and we need to keep working it. >> Awesome. Thank you for coming on theCUBE. CUBE alumni now contributor, on multiple boards, full-time job. Love the new challenge and chapter you're on, Sue. We'll be following, and we'll check in for more updates. And thank you for being a contributor on this program this year and this episode. We're going to be doing more of these quarterly, so we're going to move beyond once a year. >> That's great. (cross talking) It's always good to see you, John. >> Thank you. >> Thanks very much. >> Okay. >> Sue: Talk to you later. >> This is theCUBE coverage of IWD, International Women's Day 2023. I'm John Furrier, your host. Thanks for watching. (upbeat music)

>> TheCUBE presents Ignite 22 brought to you by Palo Alto Networks. >> Welcome back to Las Vegas, everyone. We're glad you're with us. This is theCUBE live at Palo Alto Ignite 22 at the MGM Grant in Las Vegas. Lisa Martin here with Dave Vellante, day one of our coverage. We've had great conversations. The cybersecurity landscape is so interesting Dave, it's such a challenging problem to solve but it's so diverse and dynamic at the same time. >> You know, Lisa theCUBE started in May of 2010 in Boston. We called it the chowder event, chowder and Lobster. It was a EMC world, 2010. BJ Jenkins, who's here, of course, was a longtime friend of theCUBE and made the, made the transition into from, well, it's still data, data to, to cyber. So >> True. And BJ is back with us. BJ Jenkins, president Palo Alto Networks great to have you back on theCUBE. >> It is great to be here in person on theCube >> Isn't it great? >> In Vegas. It's awesome. >> And we can tell by your voice will be, will be gentle. You, you've been in Vegas typical Vegas occupational hazard of losing the voice. >> Yeah. It was one of the benefits of Covid. I didn't lose my voice at home sitting talking to a TV. You lose it when you come to Vegas. >> Exactly. >> But it's a small price to pay. >> So things kick off yesterday with the partner summit. You had a keynote then, you had a customer, a CISO on stage. You had a keynote today, which we didn't get to see. But talk to us a little bit about the lay of the land. What are you hearing from CISOs, from CIOs as we know security is a board level conversation. >> Yeah, I, you know it's been an interesting three or four months here. Let me start with that. I think, cybersecurity in general is still front and center on CIOs and CISO's minds. It has to be, if you saw Wendy's presentation today and the threats out there companies have to have it front and center. I do think it's been interesting though with the macro uncertainty. We've taken to calling this year the revenge of the CFO and you know these deals in cybersecurity are still a top priority but they're getting finance and procurements, scrutiny which I think in this environment is a necessity but it's still a, you know, number one number two imperative no matter who you talked to, in my mind >> It was interesting what Nikesh was saying in the last conference call that, hey we just have to get more approvals. We know this. We're, we're bringing more go-to-market people on board. We, we have, we're filling the pipeline 'cause we know they're going to split up deals big deals go into smaller chunks. So the question I have for you is is how are you able to successfully integrate those people so that you can get ahead of that sort of macro transition? >> Yeah I, you know, I think there's two things I'd say about uncertain macro situations and Dave, you know how old I am. I'm pretty old. I've been through a lot of cycles. And in those cycles I've always found stronger companies with stronger value proposition separate themselves actually in uncertain, economic times. And so I think there's actually an opportunity here. The message tilts a little bit though where it's been about innovation and new threat vectors to one of you have 20, 30, 40 vendors you can consolidate become more effective in your security posture and save money on your TCOs. So one of the things as we bring people on board it's training them on that business value proposition. How do you take a customer who's got 20 or 30 tools take 'em down to 5 or 10 where Palo is more central and strategic and be able to demonstrate that value. So we do that through, we're making a huge investment in our people but macroeconomic times also puts some stronger people back on the market and we're able to incorporate them into the business. >> What are the conditions that are necessary for that consolidation? Like I would imagine if you're, if you're a big customer of a big, you know, competitor of yours that that migration is going to be harder than if you're dealing with lots of little point tools. Do those, do those point tools, are they sort of is it the end of the subscription? Is it just stuff that's off the books now? What's, the condition that is ripe for that kind of consolidation? >> Look, I think the challenge coming into this year was skills. And so customers had all of these point products. It required a lot more human intervention as Nikesh was talking about to integrate them or make them work. And as all of us know finding people with cybersecurity skills over the last 12 months has been incredibly hard. That drove, if you know, if you think about that a CIO and a CISO sitting there going, I have all all this investment in tools. I don't have the people to operate 'em. What do I need to do? What we tried to do is elevate that conversation because in a customer, everybody who's bought one of those, they they bought it to solve a problem. And there's people with affinity for that tool. They're not just going to say I want to get consolidated and give up my tool. They're going to wrap their arms around it. And so what we needed to do and this changed our ecosystem strategy too how we leverage partners. We needed to get into the CIO and CISO and say look at this chaos you have here and the challenges around people that it's, it's presenting you. We can help solve that by, by standardizing, consolidating taking that integration away from you as Nikesh talked about, and making it easier for your your high skill people to work on high skill, you know high challenges in there. >> Let chaos reign, and then reign in the chaos. >> Yes. >> Andy Grove. >> I was looking at some stats that there's 26 million developers but less than 3 million cybersecurity professionals. >> Talked about that skills gap and what CISOs and CIOs are facing is do you consider from a value prop perspective Palo Alto Networks to be a, a facilitator of helping organizations deal with that skills gap? >> I think there's a short term and a long term. I think Nikesh today talked about the long term that we'll never win this battle with human beings. We're going to have to win it with automation. That, that's the long term the short term right here and now is that people need people with cybersecurity skills. Now what we're trying to do, you know, is multifaceted. We work with universities to standardize programs to develop skills that people can come into the marketplace with. We run our own programs inside the company. We have a cloud academy program now where we take people high aptitude for sales and technical aptitude and we will put them through a six month boot camp on cloud and they'll come out of that ready to really work with the leading experts in cloud security. The third angle is partners, right, there are partners in the marketplace who want to drive their business into high services areas. They have people, they know how to train. We give them, we partner with them to give them training. Hopefully that helps solve some of the short-term gaps that are out there today. >> So you made the jump from data storage to security and >> Yeah. >> You know, network security, all kinds of security. What was that like? What you must have learned a lot in the last better part of a decade? >> Yeah. >> Take us through that. >> You know, so the first jump was from EMC. I was 15 years there to be CEO of Barracuda. And you know, it was interesting because EMC was, you know large enterprise for the most part. At Barracuda we had, you know 250,000 small and mid-size enterprises. And it was, it's interesting to get into security in small and mid-size businesses because, you know Wendy today was talking about nation states. For small and mid-size business, it's common thievery right? It's ransomware, it's, and, those customers don't have, you know, the human and financial resources to keep up with the threat factor. So, you know, Nikesh talked about how it's taken 'em four and a half years to get into cybersecurity. I remember my first week at Barracuda, I was talking with a customer who had, you know, breached data shut down. There wasn't much bitcoin back then so it was just a pure ransom. And I'm like, wow, this is, you know, incredible industry. So it's been a good, you know, transition for me. I still think data is at the heart of all of this. Right? And I have always believed there's a strong connection between the things I learned growing up at EMC and what I put into practice today at Palo Alto Networks. >> And how about a culture because I, you know I know have observed the EMC culture >> Yeah. >> And you were there in really the heyday. >> Yeah. >> Right? Which was an awesome place. And it seems like Palo Alto obviously, different times but you know, similar like laser focus on solving problems, you know, obviously great, you know value sellers, you know, you guys aren't the commodity >> Yeah. For Product. But there seemed to be some similarities from afar. I don't know Palo Alto as well as I know EMC. >> I think there's a lot. When I joined EMC, it was about, it was 2 billion in in revenue and I think when I left it was over 20, 20, 21. And, you know, we're at, you know hopefully 5, 5 5 in revenue. I feel like it's this very similar, there's a sense of urgency, there's an incredible focus on the customer. you know, Near and Moche are definitely different individuals but the both same kind of disruptive, Israeli force out there driving the business. There are a lot of similarities. I, you know, the passion, I feel privileged as a, you know go to market person that I have this incredible portfolio to go, you know, work with customers on. It's a lucky position to be in, but very I feel like it is a movie I've seen before. >> Yeah. And but, and the course, the challenges from the, the target that you're disrupting is different. It was, you know, EMC had a lot of big, you know IBM obviously was, you know, bigger target whereas you got thousands of, you know, smaller companies. >> Yes. >> And, and so that's a different dynamic but that's why the consolidation play is so important. >> Look at, that's why I joined Palo Alto Networks when I was at Barracuda for nine years. It just fascinated me, that there was 3000 plus players in security and why didn't security evolve like the storage market did or the server market or network where working >> Yeah, right. >> You know, two or three big gorillas came to, to dominate those markets. And it's, I think it's what Nikesh talked about today. There was a new problem in best of breed. It was always best of breed. You can never in security go in and, you know, say, Hey it's good I saved us some money but I got the third best product in the marketplace. And there was that kind of gap between products. I, believe in why I joined here I think this is my last gig is we have a chance to change that. And this is the first company as I look from the outside in that had best of breed as, you know Nikesh said 13 categories. >> Yeah. >> And you know, we're in the leaders quadrant and it's a conversation I have with customers. You don't have to sacrifice best of breed but get the benefits of a platform. And I, think that resonates today. I think we have a chance to change the industry from that viewpoint. >> Give us a little view of the voice of the customer. You had, was it Sabre? >> Yeah. >> That was on >> Scott Moser, The CISO from Sabre. >> Give us a view, what are you hearing from the voice of the customer? Obviously they're quite a successful customer but challenges, concerns, the partnership. >> Yeah. Look, I think security is similar to industries where we come up with magic marketing phrases and, you know, things to you know, make you want to procure our solutions. You know, zero trust is one. And you know, you'll talk to customers and they're like, okay, yes. And you know, the government, right? Joe, Joe Biden's putting out zero trust executive orders. And the, the problem is if you talk to customers, it's a journey. They have legacy infrastructure they have business drivers that you know they just don't deal with us. They've got to deal with the business side who's trying to make the money that keeps the, the company going. it's really helped them draw a map from where they're at today to zero trust or to a better security architecture. Or, you know, they're moving their apps into the cloud. How am I going to migrate? Right? Again, that discussion three years ago was around lift and shift, right? Today it's about, well, no I need cloud native developed apps to service the business the way I want to, I want to service it. How do I, so I, I think there's this element of a trusted partner and relationship. And again, I think this is why you can't have 40 or 50 of those. You got to start narrowing it down if you want to be able to meet and beat the threats that are out there for you. So I, you know, the customers, I see a lot of 'em. It's, here's where I'm at help me get here to a better position. And they know it's, you know Scott said in our keynote today, you don't just, you know have layer three firewall policies and decide, okay tomorrow I'm going to go to layer seven. That, that's not how it works. Right? There's, and, and by the way these things are a mission critical type areas. So there's got to be a game plan that you help customers go through to get there. >> Definitely. Last question, my last question for you is, is security being a board level conversation I was reading some stats from a survey I think it was the what's new in Cypress survey that that Palo Alto released today that showed that while significant numbers of organizations think they've got a cyber resiliency playbook, there's a lot of disconnect or lack of alignment at the boardroom. Are you in those conversations? How can you help facilitate that alignment between the executive team and the board when it comes to security being so foundational to any business? >> Yeah, it's, I've been on three, four public company boards. I'm on, I'm on two today. I would say four years ago, this was a almost a taboo topic. It was a, put your head in the sand and pray to God nothing happened. And you know, the world has changed significantly. And because of the number of breaches the impact it's had on brand, boards have to think about this in duty of care and their fiduciary duty. Okay. So then you start with a board that may not have the technical skills. The first problem the security industry had is how do I explain your risk profile in a way you can understand it. I'm, I'm on the board of Generac that makes home generators. It's a manufacturing, you know, company but they put Wifi modules in their boxes so that the dealers could help do the maintenance on 'em. And all of a sudden these things were getting attacked. Right? And they're being used for bot attacks. >> Yeah. >> Everybody on their board had a manufacturing background. >> Ah. >> So how do you help that board understand the risk they have that's what's changed over the last four years. It's a constant discussion. It's one I have with CISOs where they're like help us put it in layman's terms so they understand they know what we're doing and they feel confident but at the same time understand the marketplace better. And that's a journey for us. >> That Generac example is a great one because, you know, think about IOT Technologies. They've historically been air gaped >> Yes. >> By design. And all of a sudden the business comes in and says, "Hey we can put wifi in there", you know >> Connect it to a home Wifi system that >> Make our lives so much easier. Next thing you know, it's being used to attack. >> Yeah. >> So that's why, as you go around the world are you discerning, I know you were just in Japan are you discerning significant differences in sort of attitudes toward, towards cyber? Whether it's public policy, you know things like regulation where you, they don't want you sharing data, but as as a cyber company, you want to share that data with you know, public and private? >> Look it, I, I think around the world we see incredible government activity first of all. And I think given the position we're in we get to have some unique conversations there. I would say worldwide security is an imperative. I, no matter where I go, you know it's in front of everybody's mind. The, on the, the governance side, it's really what do we need to adapt to make sure we meet local regulations. And I, and I would just tell you Dave there's ways when you do that, and we talk with governments that because of how they want to do it reduce our ability to give them full insight into all the threats and how we can help them. And I do think over time governments understand that we can anonymize the data. There's, but that, that's a work in process. Definitely there is a balance. We need to have privacy, we need to have, you know personal security for people. But there's ways to collect that data in an anonymous way and give better security insight back into the architectures that are out there. >> All right. A little shift the gears here. A little sports question. We've had some great Boston's sports guests on theCUBE right? I mean, Randy Seidel, we were talking about him. Peter McKay, Snyk, I guess he's a competitor now but you know, there's no question got >> He got a little funding today. I saw that. >> Down round. But they still got a lot of money. Not of a down round, but they were, but yeah, but actually, you know, he was on several years ago and it was around the time they were talking about trading Brady. He said Never trade Brady. And he got that right. We, I think we can agree Brady's the goat. >> Yes. >> The big question I have for you is, Belichick. Do you ever question Has your belief in him as the greatest coach of all time wavered, you know, now that- No. Okay. >> Never. >> Weigh in on that. >> Never, he says >> Still the Goat. >> I'll give you my best. You know, never In Bill we trust. >> Okay. Still. >> All right >> I, you know, the NFL is a unique property that's designed for parody and is designed, I mean actively designed to not let Mr. Craft and Bill Belichick do what they do every year. I feel privileged as a Boston sports fan that in our worst years we're in the seventh playoff spot. And I have a lot of family in Chicago who would kill for that position, by the way. And you know, they're in perpetual rebuilding. And so look, and I think he, you know the way he's been able to manage the cap and the skill levels, I think we have a top five defense. There's different ways to win titles. And if I, you know, remember in Brady's last title with Boston, the defense won us that Super Bowl. >> Well thanks for weighing in on that because there's a lot of crazy talk going on. Like, 'Hey, if he doesn't beat Arizona, he's got to go.' I'm like, what? So, okay, I'm sometimes it takes a good good loyal fan who's maybe, you know, has >> The good news in Boston is we're emotional fans too so I understand you got to keep the long term long term in mind. And we're, we're in a privileged position in Boston. We've got Celtics, we've got Bruins we've got the Patriots right on the edge of the playoffs and we need the Red Sox to get to work. >> Yeah, no, you know they were last, last year so maybe they're going to win it all like they usually do. So >> Fingers crossed. >> Crazy worst to first. >> Exactly. Well you said, in Bill we trust it sounds like from our conversation in BJ we trust from the customers, the partners. >> I hope so. >> Thank you so much BJ, for coming back on theCUBE giving us the lay of the land, what's new, the voice of the customer and how Palo Alto was really differentiated in the market. We always appreciate your, coming on the show you >> Honor and privilege seeing you here. Thanks. >> You may be thinking that you were watching ESPN just now but you know, we call ourselves the ESPN at Tech News. This is Lisa Martin for Dave Vellante and our guest. You're watching theCUBE, the Leader and live emerging in enterprise tech coverage. (upbeat music)

>>Hello. Welcome back to our super cloud 22 event. I'm John F host the cue with my co-host Dave ante. Extracting the signal from noise. We're proud to have two amazing cube alumnis here. We got Sanja Putin. Who's now the CEO of cohesive the emo Aaron who's the CTO. Co-founder also former CEO Cub alumni. The father of hyper-converged welcome back to the cube I endorsed the >>Cloud. Absolutely. Is the father. Great >>To see you guys. Thank thanks for coming on and perfect timing. The new job taking over that. The helm Mo it at cohesive big news, but part of super cloud, we wanna dig into it. Thanks for coming on. >>Thank you for having >>Us here. So first of all, we'll get into super before we get into the Supercloud. I want to just get the thoughts on the move Sanjay. We've been following your career since 2010. You've been a cube alumni from that point, we followed that your career. Why cohesive? Why now? >>Yeah, John David, thank you first and all for having us here, and it's great to be at your event. You know, when I left VMware last year, I took some time off just really primarily. I hadn't had a sabbatical in probably 18 years. I joined two boards, Phillips and sneak, and then, you know, started just invest and help entrepreneurs. Most of them were, you know, Indian Americans like me who were had great tech, were looking for the kind of go to market connections. And it was just a wonderful year to just de to unwind a bit. And along the, the way came CEO calls. And I'd asked myself, the question is the tech the best in the industry? Could you see value creation that was signi significant and you know, three, four months ago, Mohit and Carl Eschenbach and a few of the board members of cohesive called me and walk me through Mo's decision, which he'll talk about in a second. And we spent the last few months getting to know him, and he's everything you describe. He's not just the father of hyperconverge. And he wrote the Google file system, wicked smart, built a tech platform better than that second time. But we had to really kind of walk through the chemistry between us, which we did in long walks in, in, you know, discrete places so that people wouldn't find us in a Starbucks and start gossiping. So >>Why Sanjay? There you go. >>Actually, I should say it's a combination of two different decisions. The first one was to, for me to take a different role and I run the company as a CEO for, for nine years. And, you know, as a, as a technologist, I always like, you know, going deep into technology at the same time, the CEO duties require a lot of breadth, right? You're talking to customers, you're talking to partners, you're doing so much. And with the way we've been growing the with, you know, we've been fortunate, it was becoming hard to balance both. It's really also not fair to the company. Yeah. So I opted to do the depth job, you know, be the visionary, be the technologist. And that was the first decision to bring a CEO, a great CEO from outside. >>And I saw your video on the site. You said it was your decision. Yes. Go ahead. I have to ask you, cuz this is a real big transition for founders and you know, I have founder artists cuz everyone, you know, calls me that. But being the founder of a company, it's always hard to let go. I mean nine years as CEO, it's not like you had a, you had a great run. So this was it timing for you? Was it, was it a structural shift, like at super cloud, we're talking about a major shift that's happening right now in the industry. Was it a balance issue? Was it more if you wanted to get back in and in the tech >>Look, I, I also wanna answer, you know, why Sanja, but, but I'll address your question first. I always put the company first what's right for the company. Is it for me to start get stuck the co seat and try to juggle this depth and Brad simultaneously. I mean, I can stroke my ego a little bit there, but it's not good for the company. What's best for the company. You know, I'm a technologist. How about I oversee the technology part in partnership with so many great people I have in the company and I bring someone kick ass to be the CEO. And so then that was the second decision. Why Sanja when Sanjay, you know, is a very well known figure. He's managed billions of dollars of business in VMware. You know, been there, done that has, you know, some of the biggest, you know, people in the industry on his speed dial, you know, we were really fortunate to have someone like that, come in and accept the role of the CEO of cohesive. I think we can take the company to new Heights and I'm looking forward to my partnership with, with Sanja on this. >>It it's we, we called it the splash brothers and >>The, >>In the vernacular. It doesn't matter who gets the ball, whether it's step clay, we shoot. And I think if you look at some of the great partnerships, whether it was gates bomber, there, plenty of history of this, where a founder and a someone who was, it has to be complimentary skills. If I was a technologist myself and wanted to code we'd clash. Yeah. But I think this was really a match me in heaven because he, he can, I want him to keep innovating and building the best platform for today in the future. And our customers tell one customer told me, this is the best tech they've seen since VMware, 20 years ago, AWS, 10 years ago. And most recently this was a global 100 big customers. So I feel like this combination, now we have to show that it works. It's, you know, it's been three, four months. My getting to know him, you know, I'm day eight on the job, but I'm loving it. >>Well, it's a sluman model too. It's more modern example. You saw, he did it with Fred Ludy at service now. Yes. And, and of course at, at snowflake, yeah. And his book, you read his book. I dunno if you've read his book, amp it up, but app it up. And he says, I always you'll love this. Give great deference to the founder. Always show great respect. Right. And for good reason. So >>In fact, I mean you could talk to him, you actually met to >>Frank. I actually, you know, a month or so back, I actually had dinner with him in his ranch in Moana. And I posed the question. There was a number of CEOs that went there and I posed him the question. So Frank, you know, many of us, we grow being deaf guys, you know? And eventually when we take on the home of our CEO, we have to do breadth. How do you do it? And he's like, well, let me tell you, I was never a death guy. I'm a breath guy. >>I'm like, >>That's my answer. Yeah. >>So, so I >>Want the short story. So the day I got the job, I, I got a text from Frank and I said, what's your advice the first time CEO, three words, amp it up, >>Amp it up. Right? Yeah. >>And so you're always on brand, man. >>So you're an amazing operator. You've proven that time and time again at SAP, VMware, et cetera, you feel like now you, you, you wanna do both of those skills. You got the board and you got the operations cuz you look, you know, look at sloop when he's got Scarelli wherever he goes, he brings Scarelli with him as sort of the operator. How, how do you, how are you thinking >>About that? I mean it's early days, but yeah. Yeah. Small. I mean I've, you know, when I was, you know, it was 35,000 people at VMware, 80, 90,000 people at SAP, a really good run. The SAP run was 10 to 20 billion innovative products, especially in analytics and VMware six to 12 end user computing cloud. So I learned a lot. I think the company, you know, being about 2000 employees plus not to mayor tomorrow, but over the course next year I can meet everybody. Right? So first off the executive team, 10 of us, we're, we're building more and more cohesiveness if I could use that word between us, which is great, the next, you know, layers of VPs and every manager, I think that's possible. So I I'm a people person and a customer person. So I think when you take that sort of extroverted mindset, we'll bring energy to the workforce to, to retain the best and then recruit the best. >>And you know, even just the week we, we were announced that this announcement happened. Our website traffic went through the roof, the highest it's ever been, lots of resumes coming in. So, and then lots of customer engagement. So I think we'll take this, but I, I feel very good about the possibilities, because see, for me, I didn't wanna walk into the company to a company where the technology risk was high. Okay. I feel like that I can go to bed at night and the technology risk is low. This guy's gonna run a machine at the current and the future. And I'm hearing that from customers. Now, what I gotta do is get the, the amp it up part on the go to market. I know a little thing or too about >>That. You've got that down. I think the partnership is really key here. And again, nine use the CEO and then Sanja points to our super cloud trend that we've been looking at, which is there's another wave happening. There's a structural change in real time happening now, cloud one was done. We saw that transition, AWS cloud native now cloud native with an kind of operating system kind of vibe going on with on-premise hybrid edge. People say multi-cloud, but we're looking at this as an opportunity for companies like cohesive to go to the next level. So I gotta ask you guys, what do you see as structural change right now in the industry? That's disruptive. People are using cloud and scale and data to refactor their business models, change modern cases with cloud native. How are you guys looking at this next structural change that's happening right now? Yeah, >>I'll take that. So, so I'll start by saying that. Number one, data is the new oil and number two data is exploding, right? Every year data just grows like crazy managing data is becoming harder and harder. You mentioned some of those, right? There's so many cloud options available. Cloud one different vendors have different clouds. There is still on-prem there's edge infrastructure. And the number one problem that happens is our data is getting fragmented all over the place and managing so many fragments of data is getting harder and harder even within a cloud or within on-prem or within edge data is fragmented. Right? Number two, I think the hackers out there have realized that, you know, to make money, it's no longer necessary to Rob banks. They can actually see steal the data. So ransomware attacks on the rise it's become a boardroom level discussion. They say there's a ransomware attack happening every 11 seconds or so. Right? So protecting your data has become very important security data. Security has become very important. Compliance is important, right? So people are looking for data management solutions, the next gen data management platform that can really provide all this stuff. And that's what cohesive is about. >>What's the difference between data management and backup. Explain that >>Backup is just an entry point. That's one use case. I wanna draw an analogy. Let's draw an analogy to my former company, Google right? Google started by doing Google search, but is Google really just a search engine. They've built a platform that can do multiple things. You know, they might have started with search, but then they went down to roll out Google maps and Gmail and YouTube and so many other things on that platform. So similarly backups might be just the first use case, but it's really about that platform on which you can do more with the data that's next gen data management. >>But, but you am, I correct. You don't consider yourself a security company. One of your competitors is actually pivoting and in positioning themselves as a security company, I've always felt like data management, backup and recovery data protection is an adjacency to security, but those two worlds are coming together. How do you see >>It? Yeah. The way I see it is that security is part of data management. You start maybe by backing with data, but then you secure it and then you do more with that data. If you're only doing security, then you're just securing the data. You, you gotta do more with the data. So data management is much bigger. So >>It's a security is a subset of data. I mean, there you go. Big TA Sanjay. >>Well, I mean I've, and I, I, I I'd agree. And I actually, we don't get into that debate. You know, I've told the company, listen, we'll figure that out. Cuz who cares about the positioning at the bottom? My email, I say we are data management and data security company. Okay. Now what's the best word that describes three nouns, which I think we're gonna do management security and analytics. Okay. He showed me a beautiful diagram, went to his home in the course of one of these, you know, discrete conversations. And this was, I mean, he's done this before. Many, if you watch on YouTube, he showed me a picture of an ice big iceberg. And he said, listen, you know, if you look at companies like snowflake and data bricks, they're doing the management security and mostly analytics of data. That's the top of the iceberg, the stuff you see. >>But a lot of the stuff that's get backed archive is the bottom of the iceberg that you don't see. And you try to, if you try to ask a question on age data, the it guy will say, get a ticket. I'll come back with three days. I'll UNIV the data rehydrate and then you'll put it into a database. And you can think now imagine that you could do live searches analytics on, on age data that's analytics. So I think the management, the security, the analytics of, you know, if you wanna call it secondary data or backed up data or data, that's not hot and live warm, colder is a huge opportunity. Now, what do you wanna call one phrase that describes all of it. Do you call that superpower management security? Okay, whatever you wanna call it. I view it as saying, listen, let's build a platform. >>Some people call Google, a search company. People, some people call Google and information company and we just have to go and pursue every CIO and every CSO that has a management and a security and do course analytics problem. And that's what we're doing. And when I talk to the, you know, I didn't talk to all the 3000 customers, but the biggest customers and I was doing diligence. They're like this thing has got enormous potential. Okay. And we just have to now go focus, get every fortune 1000 company to pick us because this problem, even the first use case you talk back up is a little bit like, you know, razor blades and soap you've needed. You needed it 30 years ago and you'll need it for 30 years. It's just that the tools that were built in the last generation that were companies formed in 1990s, one of them I worked for years ago are aids are not built for the cloud. So I think this is a tremendous opportunity where many of those, those, those nos management security analytics will become part of what we do. And we'll come up with the right phrase for what the companies and do course >>Sanjay. So ma and Sanja. So given that given that's this Google transition, I like that example search was a data problem. They got sequenced to a broader market opportunity. What super cloud we trying to tease out is what does that change over from a data standpoint, cuz now the operating environments change has become more complex and the enterprises are savvy. Developers are savvy. Now they want, they want SAS solutions. They want freemium and expanding. They're gonna drive the operations agenda with DevOps. So what is the complexity that needs to be abstracted away? How do you see that moment? Because this is what people are talking about. They're saying security's built in, driven by developers. Developers are driving operations behavior. So what is the shift? Where do you guys see this new? Yeah. Expansive for cohesive. How do you fit into super cloud? >>So let me build up from that entry point. Maybe back up to what you're saying is the super cloud, right? Let me draw that journey. So let's say the legacy players are just doing backups. How, how sad is it that you have one silo sitting there just for peace of mind as an insurance policy and you do nothing with the data. If you have to do something with the data, you have to build another silo, you have to build another copy. You have to manage it separately. Right. So clearly that's a little bit brain damaged. Right. So, okay. So now you take a little bit of, you know, newer vendors who may take that backup platform and do a little bit more with that. Maybe they provide security, but your problem still remains. How do you do more with the data? How do you do some analytics? >>Like he's saying, right. How do you test development on that? How do you migrate the data to the cloud? How do you manage it? The data at scale? How do you do you provide a unified experience across, across multiple cloud, which you're calling the super cloud. That's where cohesive goes. So what we do, we provide a platform, right? We have tentacles in on-prem in each of the clouds. And on top of that, it looks like one platform that you manage. We have a single control plane, a UI. If you may, a single pin of glass, if, if you may, that our customers can use to manage all of it. And now it looks, starts looking like one platform. You mentioned Google, do you, when you go to, you know, kind Google search or a URL, do you really care? What happens behind the scenes mean behind the scenes? Google's built a platform that spans the whole world. No, >>But it's interesting. What's behind the scenes. It's a beautiful now. And I would say, listen, one other thing to pull on Dave, on the security part, I saw a lot of vendors this day in this space, white washing a security message on top of backup. Okay. And CSO, see through that, they'll offer warranties and guarantees or whatever, have you of X million dollars with a lot of caveats, which will never paid because it's like escape clause here. We won't pay it. Yeah. And, and what people really want is a scalable solution that works. And you know, we can match every warranty that's easy. And what I heard was this was the most scalable solution at scale. And that's why you have to approach this with a Google type mindset. I love the fact that every time you listen to sun pitch, I would, what, what I like about him, the most common word to use is scale. >>We do things at scale. So I found that him and AUR and some of the early Google people who come into the company had thought about scale. And, and even me it's like day eight. I found even the non-tech pieces of it. The processes that, you know, these guys are built for simple things in some cases were better than some of the things I saw are bigger companies I'd been used to. So we just have to continue, you know, building a scale platform with the enterprise. And then our cloud product is gonna be the simple solution for the masses. And my view of the world is there's 5,000 big companies and 5 million small companies we'll push the 5 million small companies as the cloud. Okay. Amazon's an investor in the company. AWS is a big partner. We'll talk about I'm sure knowing John's interest in that area, but that's a cloud play and that's gonna go to the cloud really fast. You not build you're in the marketplace, you're in the marketplace. I mean, maybe talk about the history of the Amazon relationship investing and all that. >>Yeah, absolutely. So in two years back late 2020, we, you know, in collaboration with AWS who also by the way is an investor now. And in cohesive, we rolled out what we call data management as a service. It's our SaaS service where we run our software in the cloud. And literally all customers have to do is just go there and sign on, right? They don't have to manage any infrastructure and stuff. What's nice is they can then combine that with, you know, software that they might have bought from cohesive. And it still looks like one platform. So what I'm trying to say is that they get a choice of the, of the way they wanna consume our software. They can consume it as a SAS service in the cloud. They can buy our software, manage it themselves, offload it to a partner on premises or what have you. But it still looks like that one platform, what you're calling a Supercloud >>Yeah. And developers are saying, they want the bag of Legos to compose their solutions. That's the Nirvana they want to get there. So that's, it has to look the same. >>Well, what is it? What we're calling a Superlo can we, can we test that for a second? So data management and service could span AWS and on-prem with the identical experience. So I guess I would call that a Supercloud I presume it's not gonna through AWS span multiple clouds, but, but >>Why not? >>Well, well interesting cuz we had this, I mean, so, okay. So we could in the future, it doesn't today. Well, >>David enough kind of pause for a second. Everything that we do there, if we do it will be customer driven. So there might be some customers I'll give you one Walmart that may want to store the data in a non AWS cloud risk cuz they're competitors. Right. So, but the control plane could still be in, in, in the way we built it, but the data might be stored somewhere else. >>What about, what about a on-prem customer? Who says, Hey, I, I like cohesive. I've now got multiple clouds. I want the identical experience across clouds. Yeah. Okay. So, so can you do that today? How do you do that today? Can we talk >>About that? Yeah. So basically think roughly about the split between the data plane and the control plane, the data plane is, you know, our cohesive clusters that could be sitting on premises that could be sitting in multiple data centers or you can run an instance of that cluster in the cloud, whichever cloud you choose. Right. That's what he was referring to as the data plane. So collectively all these clusters from the data plane, right? They stored the data, but it can all be managed using the control plane. So you still get that single image, the single experience across all clouds. And by the way, the, the, the, the cloud vendor does actually benefit because here's a customer. He mentioned a customer that may not wanna go to AWS, but when they get the data plane on a different cloud, whether it's Azure, whether it's the Google cloud, they then get data management services. Maybe they're able to replicate the data over to AWS. So AWS also gains. >>And your deployment model is you instantiate the cohesive stack on each of the regions and clouds, is that correct? And you building essentially, >>It all happens behind the scenes. That's right. You know, just like Google probably has their tentacles all over the world. We will instantiate and then make it all look like one platform. >>I mean, you should really think it's like a human body, right? The control planes, the head. Okay. And that controls everything. The data plane is large because it's a lot of the data, right? It's the rest of the body, that data plane could be wherever you want it to be. Traditionally, the part the old days was tape. Then you got disk. Now you got multiple clouds. So that's the way we think about it. And there on that piece of it will be neutral, right? We should be multi-cloud to the data plane being every single place. Cause it's customer demand. Where do you want your store data? Air gapped. On-prem no problem. We'll work with Dell. Okay. You wanna be in a particular cloud, AWS we'll work then optimized with S3 and glacier. So this is where I think the, the path to a multi-cloud or Supercloud is to be customer driven, but the control plane sits in Amazon. So >>We're blessed to have a number of, you know, technical geniuses in here. So earlier we were speaking to Ben wa deja VI, and what they do is different. They don't instantiate an individual, you know, regions. What they do is of a single global. Is there a, is there an advantage of doing it the way the cohesive does it in terms of simplicity or how do you see that? Is that a future direction for you from a technology standpoint? What are the trade offs there? >>So you want to be where the data is when you said single global, I take it that they run somewhere and the data has to go there. And in this day age, correct >>Said that. He said, you gotta move that in this >>Day and >>Age query that's, you know, across regions, look >>In this day and age with the way the data is growing, the way it is, it's hard to move around the data. It's much easier to move around the competition. And in these instances, what have you, so let the data be where it is and you manage it right there. >>So that's the advantage of instantiating in multiple regions. As you don't have to move the >>Data cost, we have the philosophy we call it. Let's bring the, the computation to the data rather than the data to >>The competition and the same security model, same governance model, same. How do you, how do you federate that? >>So it's all based on policies. You know, this overarching platform controlled by, by the control plane, you just, our customers just put in the policies and then the underlying nuts and bolts just take care >>Of, you know, it's when I first heard and start, I started watching some of his old videos, ACE really like hyperconverged brought to secondary storage. In fact, he said, oh yeah, that's great. You got it. Because I first called this idea, hyperconverged secondary storage, because the idea of him inventing hyperconverge was bringing compute to storage. It had never been done. I mean, you had the kind of big VC stuff, but these guys were the first to bring that hyperconverge at, at Nutanix. So I think this is that same idea of bringing computer storage, but now applied not to the warm data, but to the rest of the data, including a >>Lot of, what about developers? What's, what's your relationship with developers? >>Maybe you talk about the marketplace and everything >>He's yeah. And I'm, I'm curious as to do you have a PAs layer, what we call super PAs layer to create an identical developer experience across your Supercloud. I'm gonna my >>Term. So we want our customers not just to benefit from the software that we write. We also want them to benefit from, you know, software that's written by developers by third party people and so on and so forth. So we also support a marketplace on the platform where you can download apps from third party developers and run them on this platform. There's a, a number of successful apps. There's one, you know, look like I said, our entry point might be backups, but even when backups, we don't do everything. Look, for instance, we don't backup mainframes. There is a, a company we partner with, you know, and their software can run in our marketplace. And it's actually used by many, many of our financial customers. So our customers don't get, just get the benefit of what we build, but they also get the benefit of what third parties build. Another analogy I like to draw. You can tell. And front of analogy is I drew an analogy to hyperscale is like Google. Yeah. The second analogy I like to draw is that to a simple smartphone, right? A smartphone starts off by being a great phone. But beyond that, it's also a GPS player. It's a, it's a, it's a music player. It's a camera, it's a flashlight. And it also has a marketplace from where you can download apps and extend the power of that platform. >>Is that a, can we think of that as a PAs layer or no? Is it really not? You can, okay. You can say, is it purpose built for what you're the problem that you're trying to solve? >>So we, we just built APIs. Yeah. Right. We have an SDK that developers can use. And through those APIs, they get to leverage the underlying services that exist on the platform. And now developers can use that to take advantage of all that stuff. >>And it was, that was a key factor for me too. Cause I, what I, you know, I've studied all the six, seven players that sort of so-called leaders. Nobody had a developer ecosystem, nobody. Right? The old folks were built for the hardware era, but anyones were built for the cloud to it didn't have any partners were building on their platform. So I felt for me listen, and that the example of, you know, model nine rights, the name of the company that does back up. So there's, there's companies that are built on and there's a number of others. So our goal is to have a big tent, David, to everybody in the ecosystem to partner with us, to build on this platform. And, and that may take over time, but that's the way we're build >>It. And you have a metadata layer too, that has the intelligence >>To correct. It's all abstract. That that's right. So it's a combination of data and metadata. We have lots of metadata that keeps track of where the data is. You know, it allows you to index the data you can do quick searches. You can actually, you, we talking about the control plan from that >>Tracing, >>You can inject a search that'll through search throughout your multi-cloud environment, right? The super cloud that you call it. We have all that, all that goodness sounds >>Like a Supercloud John. >>Yeah. I mean, data tracing involved can trace the data lineage. >>You, you can trace the data lineage. So we, you know, provide, you know, compliance and stuff. So you can, >>All right. So my final question to wrap up, we guys, first of all, thanks for coming on. I know you're super busy, San Jose. We, we know what you're gonna do. You're gonna amp it up and, you know, knock all your numbers out. Think you always do. But what I'm interested in, what you're gonna jump into, cuz now you're gonna have the creative license to jump in to the product, the platform there has to be the next level in your mind. Can you share your thoughts on where this goes next? Love the control plane, separate out from the data plane. I think that plays well for super. How >>Much time do you have John? This guy's got, he's got a wealth. Ditis keep >>Going. Mark. Give us the most important thing you're gonna focus on. That kind of brings the super cloud and vision together. >>Yeah. Right away. I'm gonna, perhaps I, I can ion into two things. The first one is I like to call it building the, the machine, the system, right. Just to draw an analogy. Look, I draw an analogy to the us traffic system. People from all walks of life, rich, poor Democrats, Republicans, you know, different states. They all work in the, the traffic system and we drive well, right. It's a system that just works. Whereas in some other countries, you know, the system doesn't work. >>We know, >>We know a few of those. >>It's not about works. It's not about the people. It's the same people who would go from here to those countries and, and not dry. Well, so it's all about the system. So the first thing I, I have my sights on is to really strengthen the system that we have in our research development to make it a machine. I mean, it functions quite well even today, but wanna take it to the next level. Right. So that I wanna get to a point where innovation just happens in the grassroots. And it just, just like >>We automations scale optic brings all, >>Just happens without anyone overseeing it. Anyone there's no single point of bottleneck. I don't have to go take any diving catches or have you, there are people just working, you know, in a decentralized fashion and innovation just happens. Yeah. The second thing I work on of course is, you know, my heart and soul is in, you know, driving the vision, you know, the next level. And that of course is part of it. So those are the two things >>We heard from all day in our super cloud event that there's a need for an, an operating system. Yeah. Whether that's defacto standard or open. Correct. Do you see a consortium around the corner potentially to bring people together so that things could work together? Cuz there really isn't no stand there. Isn't a standards bodies. Now we have great hyperscale growth. We have on-prem we got the super cloud thing happening >>And it's a, it's kind of like what is an operating system? Operating system exposes some APIs that the applications can then use. And if you think about what we've been trying to do with the marketplace, right, we've built a huge platform and that platform is exposed through APIs. That third party developers can use. Right? And even we, when we, you know, built more and more services on top, you know, we rolled our D as we rolled out, backup as a service and a ready for thing security as a service governance, as a service, they're using those APIs. So we are building a distributor, putting systems of sorts. >>Well, congratulations on a great journey. Sanja. Congratulations on taking the hem. Thank you've got ball control. Now you're gonna be calling the ball cohesive as they say, it's, >>It's a team. It's, you know, I think I like that African phrase. If you want to go fast, you go alone. If you wanna go far, you go together. So I've always operated with the best deal. I'm so fortunate. This is to me like a dream come true because I always thought I wanted to work with a technologist that frees me up to do what I like. I mean, I started as an engineer, but that's not what I am today. Right? Yeah. So I do understand the product and this category I think is right for disruption. So I feel excited, you know, it's changing growing. Yeah. No. And it's a, it requires innovation with a cloud scale mindset and you guys have been great friends through the years. >>We'll be, we'll be watching you. >>I think it's not only disruption. It's creation. Yeah. There's a lot of white space that just hasn't been created yet. >>You're gonna have to, and you know, the proof, isn't the pudding. Yeah. You already have five of the biggest 10 financial institutions in the us and our customers. 25% of the fortune 500 users, us two of the biggest five pharmaceutical companies in the world use us. Probably, you know, some of the biggest companies, you know, the cars you have, you know, out there probably are customers. So it's already happening. >>I know you got an IPO filed confidentially. I know you can't talk numbers, but I can tell by your confidence, you're feeling good right now we are >>Feeling >>Good. Yeah. One day, one week, one month at a time. I mean, you just, you know, I like the, you know, Jeff Bezos, Andy jazzy expression, which is, it's always day one, you know, just because you've had success, even, you know, if, if a and when an IPO O makes sense, you just have to stay humble and hungry because you realize, okay, we've had a lot of success in the fortune 1000, but there's a lot of white space that hasn't picked USS yet. So let's go, yeah, there's lots of midmarket account >>Product opportunities are still, >>You know, I just stay humble and hungry and if you've got the team and then, you know, I'm really gonna be working also in the ecosystem. I think there's a lot of very good partners. So lots of ideas brew through >>The head. Okay. Well, thank you so much for coming on our super cloud event and, and, and also doubling up on the news of the new appointment and congratulations on the success guys. Coverage super cloud 22, I'm sure. Dave ante, thanks for watching. Stay tuned for more segments after this break.

(upbeat music) >> Hey guys and girls. Welcome back to theCUBE's coverage of Coupa Inspire 2022, from the Cosmopolitan, in bustling Las Vegas. Lisa Martin here, and as I mentioned, day two of our coverage and fresh from the main stage, Raja Hammoud joins me, the Executive Vice President of products at Coupa. Raja, welcome back to theCUBE and happy 10th anniversary at Coupa. >> Oh, thank you, thank you, thank you, and welcome back to Inspire. >> Thank you. It's so great- >> We're so happy you're here. >> It's great to be here. So you're just about coming up on your 10 anniversary with Coupa. You showed some great photos of your time there but you've seen, you've lived the evolution that is this rocket ship that's Coupa. >> Raja: It's been incredible journey. I really couldn't believe at first it's been 10. This is the longest I've ever been anywhere. And I honestly feel more refreshed and excited than even when I joined back in the day 10 years ago. And so much has changed, but also so much has not. >> Lisa: Yeah. >> The size of course. We were like 60 people when I joined, the product development team was one person in, in a product, roughly 12 engineers, and fast forward to the scale that's today, it's phenomenal difference. But what has not changed is the, the core values, how, the hustle, how people love working with each other, how we support customers, how we keep stepping up our game how we believe none of us is as smart as all of us, and the community keeps getting stronger and stronger. It's been, it's been really exciting journey. >> The theme of none of us is as smarter as all of us, I'm not sure if I got that right, but the idea is you feel that when you're talking to Coupa partners, I've had the opportunity to talk with Coupa partners and customers and Coupa folks that, that is not just a value statement, people are living that. >> Raja: Yeah. It's, it's everywhere. In the, in the company walls, outside the company walls, you often see product people in different organizations where, they start living in an ivory tower, they think they know everything, I mean, back to what we were discussing earlier about Barbara, when she talked about, get out of your doors, right? A lot of people can tend to do that. We always, from the beginning, believed in the best ideas are out there and you collaborate with each other. And I truly, truly believe that the success that we have achieved today to our community is in a large, large part, because we believed in that. So like on Monday, we hosted, I can't keep track of the number now, so, so many in-parallel Community Advisory Board meetings, and just talking to the products managers and everybody is buzzing with new ideas. And when we go back, there's so much new innovation that has just been co-created here in this conference, and this keeps going on and on and on. >> Lisa: Yeah. I like how you call it, the Community Advisory Board. I'm still used to hearing CAB as Customer Advisory Board, but what Coupa has built, especially with the launch of the Moonshot, the, the community AI, is, is just that. >> Yes. >> It's a very collaborative community. One of the things that's around here, hashtags everywhere, but #United by the Power of Spend. >> Yes. >> What does that mean to you as the EVP of products, and what do you think that means to the community? >> When I think... What we are doing, we're building this platform that is powering all these businesses out there. And the reality of it is you can only, only do so much when you try to do things alone. When we are doing things together, we are way more successful, we are more profitable, we are more sustainable, we are more efficient. And community.ai from a technology standpoint, is making that happen, because what we are doing is taking AI, applying it to all this 3.3 trillion in data, and then bringing back prescriptions that we give back to each and every customer so that everybody can see where they are, how they up their games, and we connect them with other people like them. Now, people love coming to conferences like this, but even in conferences like this, if you think about it, the people you're going to meet, it's, some people are going to do matchmaking but you are also losing an opportunities of meeting the maximum number of people who've done exactly the thing that you did. But when you have the ability to look at all of that data and you can match make people. So we did that already with, for sourcing professionals. So if you are somebody who source a certain category, we can tell somebody else has done something like this in this geography and we offer you to connect to each other. >> Lisa: Wow. >> So this is incredibly powerful way where we are really uniting the whole community by spend, making everybody truly stronger together. >> Lisa: Matchmaker in, in a sense. >> It is matchmaking. >> But it's, but it's- >> It's Spend matchmaking. >> Spend matchmaking, but it's also the opportunity to unite professionals across sourcing, procurement- >> Raja: Yes. >> ... finance, treasury. >> Raja: Yes. >> To your point, and, and Rob said this in his keynote, and he said it here on theCUBE, you know, we've got to break down these silos. >> Raja: Yes. >> People and companies functioning in silos are not going to be successful. >> Raja: Yes. This has been one of the, probably one of the things that we were talking earlier, what has changed, what hasn't. This is one of the fundamental things that has never changed since I've joined. The vision has been very clear. The execution on it, of how we drive successful business spend management program is by breaking down the silos and this idea of sweet synergy, where in product, you start building these capabilities that helps these professionals in the different organizations to actually connect on the touch points, where, where things really matter. >> Lisa: Sweet synergy, was that thing from a concept perspective, did that come from the community, in terms of Coupa going, this is actually what's happening, this synergy across the BSM suite? >> Yes. So in the very beginning, it was early idea. I would say in the first two Inspires that we did, we hadn't given it actually the name itself, and we used to call it unified capabilities, and it started with the first silos we broke down. The first silos we broke down were procurement and AP. And they didn't even used to talk in the same room or even want to care about each other. So we started building so many capabilities that brought these teams together and little by little the community started to feel that and see the value of that. And then the community started to ask us to go break down more silos. So in the beginning, I would say the, the vision before I even joined, the company was on that trajectory. And the early customers saw that and they championed it and then they drove us to do more. So they came to us and said could you please do what you did here in contract? Could you please do what you did here in sourcing? And I was in a meeting last week, a leadership meeting, and one question was asked to leaders in the services team about what are they hearing about, from the customers, about a particular area. And it was music to our ears when we heard the customers are asking for more synergy, right? So, they even have the name for it and they're asking for more and more, and we have built hundreds of these already, but the reality is there is so much opportunity. >> Lisa: Right. >> The world is siloed, no technology has attempted to do that. And I think that's what's a exciting is to go and forge new grounds and do something very special to unite everyone together. >> You guys talked about the waves. Rob talked about the waves yesterday. You talked about it again this morning. And when I think of Inspired community, as that third wave, I see it on both sides. I see the Inspired community that is the Coupa community, but also what you just talked about, that flywheel of that sort of symbiotic relationship that you guys have with your customers as Coupa in and of itself being in a community inspired by the community that it has built. >> Raja: Yes, it's, it's very, very, it's a circular effect. Like it, we inspire one another, and we strengthen one another, and it's, it's just a beautiful, beautiful thing. One of the special things that we are starting to do is we want to take the whole product experience itself, to be a complete community experience. So anywhere you are going to Coupa, when it makes sense, of course, you are not only looking at your data, you are getting connected with people for that particular thing. So we've done that already for 15 different product areas and we're constantly doing more and more and more and more. You can imagine one day we can, where we can start within the product pages themselves, where we host community experts to talk via video and connect with others. So you bring that whole community experience alive in a product in enterprise software, which has not been done. >> Kind of like creating your own influencer network. >> Yes, yes, yes. And give people their voice and, and, and it becomes exciting. It is very different when you're just working on your own and driving goals, and you have no idea how good that can pass on the world. And then when right then and there, you get to learn that some people have hit that, some people have achieved these goals, you just get excited, "I want to hit that goal too. Who are these people? Connect me with these leaders. Let's have a conversation. How did they do it?" And they start creating best practices together. We even have started places where they collaborate on actual documents and templates, and they put them in the community exchange as a way for people to share with others, even taking templates from the product putting them back into a community exchange. So it is sharing, being enabled on the platform, platform itself. >> Lisa: How did you guys function during the pandemic, the last two years when we couldn't get together? >> Raja: Yeah. >> I know that your customers are really the lifeblood of Coupa and vice versa. >> Raja: Yes. >> But talk to me about some of the things that Coupa did with its customers, you know, by video conferencing, for example, that really helped the evolution and some of the innovations that you announced this morning. >> When we first... when the pandemic first hit I think like we all didn't believe what, what is going on. And there was this, I would call it a beautiful period in a way, despite how horrific that was, and that period was where everyone rose to the occasion, everybody wanted to help one another. Across Coupa everywhere, we started having documents of how can step up and help our customers, help our communities. We started to look at how we get PPE, and get it in the hands of our customers. We have access to suppliers. We started looking at helping suppliers with digital payments to speed things up. So, so many things we started doing as a community to just help each other. And then as we got to the next level, then we started, of course, starting to do things over, over zoom. And the big surprise, was we were incredibly productive. If anything, we were worried about people feeling burnt out. >> Yeah. >> Because they were just in it, completely in it. And it created a lot of new avenues for us because often you go and do these meetings in person. Now you could have a user experience session with a customer very easily, they're available more often than they used to. >> Lisa: Right. >> So we did not miss a beat with the community. We moved into virtual caps. We had the advantage of having them recorded as well, where we could have the global development teams learn and see exactly what the, what the customers are are co-creating together. And our goal lives accelerated, because a lot of these implementations, they used to happen in person, so schedules, they actually got accelerated- >> Lisa: Right. >> ...through that. Now of course, there is nothing that matches to this. You can do it, you can do a lot, but a ton of the collaboration comes from real life dialogue and kind of conversation. So it's that balance between the two that I think will be great. >> Lisa: What are some of the things that you've heard the last few days? You mentioned the Partners Summit and, and the Community Advisory Boards on Monday, yesterday, everything kicked off today. What are some of the things that you've heard in your meetings that really inspire you on say the next 10 years at Coupa? >> Raja: By far, by far, by far, it's a validation of, that what we are doing is, we're absolutely on target with it, and that, we just can do so much more. The silos are massive and there are so so many opportunities that you hear in every different areas that we could be doing this, we could be doing this together. So we can break down more and more silos. And using community.ai is just the tip of the iceberg of what we are, what we are doing. Yes, we created tens and tens of capabilities, helping, helping the community with all of that, but data drives everything. And when you look at that, every single process in every single silo can be informed by the power of data within your own company, and then even better, data across. And, and to the point where we're talking about concepts that customers are really excited about, even thinking about this community, they're customers of each other. And when you are a customer of each other what are the different ways as a community, you can help one another more. So we're talking about community netting as new types of concepts. >> Lisa: Talk to me a little about that. You mentioned the community netting this morning but I didn't quite... Help me understand. >> Raja: It is very simple terms is if, if we are buying from each other and we have to do money movements every time I have to pay you, I have to incur fees and likewise, but since we are part of this community we can manage that relationship. So we just pay the Delta, we net it out. So it, it saves reconciliation times it saves money movement. And these are tip of the icebergs of these very cool things that we're doing together. >> Wow. That's fantastic. Last question for you, as you talk with prospects who are in the early stages, or, or still determining, do we go through like a supply chain digital transformation? I mean, I think of companies that probably haven't now or need to get on the bandwagon. >> Raja: Yeah. >> What are some of the things that you advise to those customers to be able to do what Mick Ebeling talked about this morning and that is, commit and then figure it out? >> Raja: Yes. The number one thing is just make sure you don't do the analysis paralysis. There are just so many opportunities so many opportunities start with a project, get going, and it creates incredible momentum, and then you can move on from one to another, to another, to another, instead of trying to just go for a year or two, trying to look at how the world has changed in that process. And so often you could see that projects pay for themselves within the first month of go life. You do that, you'll create another one. And it's not like you are coming in to do something so new nobody has done. Hundreds and hundreds and thousands as a matter of fact, of other community members have done that. It is proven. So get started with those and then continue. Other things I will be talking to them about is to make sure that they understand the way we work is all about partnerships spread. Often people who haven't worked with us in the enterprise software, they're used to working with vendors. We are not that. We never were that. Like the number one, if we're not going to be real partners, honest, transparent and work with each other, we don't waste each other's time. >> Lisa: Well, Raja, it's been great having you on the program. I've really enjoyed your keynote this morning. Congratulations on your 10 years at Coupa. >> Raja: Thank you. >> I'm excited to see what the next 10 years brings for you. We appreciate your insites and everything that Coupa is doing in partnership with its customers is very evident in an event like this. >> Raja: Thank you. And thank you for coming and covering us as well. We really appreciate it. >> Lisa: It's our pleasure to be here. >> Thank you. >> For Raja Hammoud, I'm Lisa Martin. You're watching theCUBE's coverage, day two of Coupa Inspire 2022, from Las Vegas. (upbeat music)

>> From around the globe it's theCUBE with coverage of the GLOBAL.NEXT DIGITAL EXPERIENCE brought to you by Nutanix. >> Hi and welcome back, we're wrapping up our coverage of the Nutanix .Next Global Digital Experience, I'm Stu Miniman and I'm happy to welcome to the program, help us as I said wrap things up. We're going to be talking about running better, running faster and running anywhere. A theme that we've heard in the keynotes and throughout the two day event of the show. We have three VPs to help go through all the pieces coming up on the screen with first of all we have Greg Smith who's the vice president of product technical marketing right next to him is Madhukar Kumar, who is the vice president of product and solutions marketing and on the far end, the senior vice president Thomas Cornely, he is the senior vice president, as I said for product portfolio management. Gentlemen, thank you so much for joining us. >> Good to be here Stu. >> Alright, so done next to show we really enjoy, of course this the global event so not just the US and the European and Asia but what really gets to see across the globe and a lot going on. I've had the pleasure of watching Nutanix since the early days, been to most of the events and the portfolio is quite a bit bigger than just the original HCI solution. Thomas since you've got to portfolio management is under your purview, before we get into summarizing all of the new pieces and the expansion of the cloud and software and everything just give us if you could that overview of the portfolio as it's coming into the show. >> Yeah absolutely Stu. I mean as you said we've been doing this now for 10 plus years and we've grown the portfolio we developed products over the years and so what we rolled out at this conference is a new way and to talk about what we do at Nutanix and what we deliver in terms of set of offerings and we talk about the 4 D's. We start with our digital hyper converged infrastructure cartridges, dual core HCI stack that you can run on any server and that stack these two boards are data center services which combines our storage solutions, our business computing and data recovery solution and security solutions on DevOps services, which is our database automation services, our application delivery automation services and now our new common and that's one of the service offerings and then our desktop services catridges which is our core VDI offering and offering our discipline and service offerings. So put all these together this is what we talk about in the 4 D's, which is on Nutanix cloud platform that you can run on premises and now on any job. >> Well thank you Thomas for laying the ground work for us, Greg we're going to come to you first that run better theme as Thomas said and as we know HCI is at the core a lot of discussions this year of course, the ripple effect of the global pandemic has more people working remotely that's been a tailwind for many of the core offerings, but help us understand, how's that building out some of the new things that we should look at in the HCI. >> Yeah ,thanks too for Nutanix and our customers a lot of it begins with HCI, right. And what we've seen in the past year is really aggressive adoption for HCI, particularly in core data center and private cloud operations and customers are moving to HCI in our not only for greater simplicity, but to get faster provisioning and scaling. And I think from a workload perspective, we see two things, that ACI is being called upon to deliver even more demanding apps those with a really very low latency such as large scale database deployments. And we also see that HCI is expected to improve the economics of IT and the data center and specifically by increasing workload density. So we have a long history, a storied history of continually improving HCI performance. In fact every significant software release we've optimized the core data path and we've done it again. We've done it again with our latest HCI software release that we announced just this week as our next. The first enhancement we made was in 518, was to reduce the CPU overhead and latency for accessing storage devices such as SSD and NBME and we've done this by managing storage space on physical devices in the HCI software. So rather than rely on slower internal file systems and this new technology is called block store and our customers can take advantage of block store simply by upgrading to the new software released and we're seeing immediate performance gains of 20 to 25% for IOPS and latency. And then we built on top of that, we've added software support for Intel Optane by leveraging user space library, specifically SPDK or storage performance development kit. And SPDK allows Nutanix to access devices from user space and avoid expensive interrupts and systems calls. So with this support along with block store we're seeing application performance gains about this 56% or more. So we're just building our own a legacy of pushing performance and software and that's the real benefit of moving to HCI. >> And just to add to that too when it comes to run better I think one of the things that we think of running better is automation and operation then when it comes to automation and operation there are a couple of ways I would say significant announcements that we also did to. One is around Comm as a service. Comm is one of those products that our customers absolutely love and now with Comm as a service you have a SaaS plane, so you can just without installing anything or configuring anything you could just take advantage of that. And the other thing we also announced is something called Nutanix central and Nutanix central gives you the way to manage all your applications on Nutanix across all of your different clusters and infrastructure from a single place as well. So two big parts of a run better as well. >> Well, that's great and I've really, is that foundational layer, Madhukar if we talk about expanding out, running faster the other piece we've talked about for a few years is step one is you modernize the platform and then step two is really you have to modernize your application. So maybe help us understand that changing workload cloud native is that discussion that we've been having a few years now, what are you hearing from your customers and what new pieces do you have to expand and enable that piece of the overall stack? >> Yeah, so I think what you mentioned which is around cloud data the big piece over there is around Cybernetics's and they already had a carbon, so with carbon a lot of the things of complexities around managing cybernetics is all taken care of, but there are higher level aspects on it like you have to have observability, you have to have log, you have to have managed the ingress ,outgress which has a lot of complexity involved with, so if you're really just looking for building of applications what we found is that a lot of our customers are looking for a way to be able to manage that on their own. So what we announced which is carbon platform service enables you to do exactly that. So if you're really concerned about creating cloud native applications without really worrying too much about how do I configure the cybernetics clusters? How do I manage Histio? How do I manage all of that carbon platform service that actually encapsulates all of that to a sass plate So you can go in and create your cloud native application as quickly and as fast as possible, but just in a typical Nutanix style we wanted to give that freedom of choice to our customers as well. So if you do end up utilizing this what you can also choose is the end point where you want these application to run and you could choose any of the public clouds or the hyper scaler or you could use a Nutanix or an IOT as an endpoint as well. So that was one of the big announcements we've made. >> Great, Greg and Madhukar before we go on, it's one of the things that I think is a thread throughout but maybe doesn't get highlighted as much but security of course is been front and center for a while, but here in 2020 is even more emphasized things like ransomware, of course even more so today than it has been for a couple of years. So maybe could it just address where we are with security and any new pieces along there that we should understand? >> Yeah, I can start with that if I could. So we've long had security in our platform specifically micro-segmentation, fire walling individual workloads to provide least privilege access and what we've announced this week at .Next is we've extended that capability, specifically we've leveraged some of the capabilities in Xi beam and this is our SAS based service to really build a single dashboard for security operators. So with security central, again a cloud based SAS app, Nutanix customers can get a single pane from which they can monitor the entire security posture of their infrastructure and applications, it gives you asset reporting, asset inventory reporting, you can get automated compliance checks or HIPAA or PCI and others. So we've made security really easy in keeping with the Nutanix theme and it's a security central is a great tool for that security operations team so it's a big step for Nutanix and security. >> Yeah. >> To actually add on this one, one bit piece of security central is to make it easier, right. To see your various network bills and leverage the flow micro segmentation services and configure them on your different virtual machines, right? So it's really a key enabler here to kind of get a sense of what's going on in your environment and best configure and best protect and secure infrastructure. >> Thomas is exactly right. In fact, one of the things I wanted to chime into and maybe Greg you could speak a little bit more about it. One of my favorite announcements that we heard or at least I heard was the virtualized networking and coming from a cloud native world, I think that's a big deal. The ability to go create your virtual private cloud or VPCs and subnets and then be able to do it across multiple clouds. That's, something I think has been long time coming, so I was personally very, very pleased to hear that as well. Greg, do you want to add a little bit more? >> Yeah, that's a good point I'm glad you brought that up, when we talk about micro-segmentation that's one form of isolation, but what we've announced is virtual networking. So we really adopted some cloud principles, specifically virtual private clouds constructs that we can now bring into private cloud data centers. So this gives our customers the ability to define and deploy virtual networks or overlays this sort of sit on top of broadcast domains and VLANs and it provides isolation for different environments. So a number of great use cases, we see HCI specifically being relied upon for fast provisioning in a new environment. But today the network has always been sort of an impediment to that we're sort of stuck with physical network plants, switches and routers. So what virtual networking allows us to do is through APIs, is to create an isolated network a virtual private cloud on a self service basis. This is great for organizations that increasing operating as service providers and they need that tenant level segmentation. It's also good for developers who need isolated workspace and they want to spin it up quickly. So we see a lot of great use cases for virtual networks and it just sort of adds to our full stack so we've software defined compute, we've software defined storage, now we're completing that with software defining networking. >> And if I have it right in my notes the virtual networking that's in preview today correct? >> Yes, we announce it this week and we are announcing upcoming availability, so we have number of customers who are already working with us to help define it and ready to put it into their environments. The virtual private network is upcoming from Nutanix. >> Yeah, so I absolutely I've got, Mudhakar, I've got a special place in my heart for the networking piece that's where a lot of my background is, but there was a different announcement that got a little bit more of my attention and Thomas we're going to turn to you to talk a little bit more about clusters. I got to speak with Monica and Tarkin, ahead of the conference when you had the announcement with AWS, for releasing Nutanix clusters and this is something we've been watching for a bit, when you talk about the multicloud messaging and how you're taking the Nutanix software and extending it even further that run anywhere that you have talk about in the conference. So Thomas if you could just walk us through the announcements as I said something we've been excited, I've been watching this closely for the last couple of years with Nutanix and great to see some of the pieces really starting to accelerate. >> Well absolutely and as you said this is something that's been core to the strategy in terms of getting and enabling customers to go and do more with hybrid cloud and public cloud and if you go back a few weeks when we announced clusters on AWS this was a few weeks back now, we talked of HCI is a prerequisite to getting the most of your hybrid cloud infrastructure, which is the new HCI in our mind and what we covered at .Next was this great announcement with Microsoft Azure, right, and just leveraging their technologies bringing some of their control plan onto our cloud platform but also now adding clusters on Azure and announcing that we'll be doing this in a few months. Enabling the customers to go and take the same internet cloud platform the same consistent set of operations and technology services from data center services, DevOps services and desktop services and deploying those anywhere on premises, on AWS or on Microsoft Azure and again for us cloud is not a destination. This is not a now we just accomplished something. This is a new way of operating, right? And so it's touching, giving customers options in terms of where they want to go to count so we keep on adding new counts as we go but also it's a new form of consuming infrastructure, right? From an economist perspective you probably know, you don't extend it you're pressing into the moving to is fiction based offering on all of our solutions and our entire portfolio and as we go and enable these clusters offering, we're not making consumptions more granular to non customers do not consume our software on an hourly basis or a monthly basis. So again this is kind of that next step of cloud is not just technology, it's not a destination it's a new way of operating and consuming technology. >> Why think about the flexibility that this brings to existing new techs customers it gives them enormous choices in terms of new infrastructure and whether they set up new clusters. So think about in text a customer today. They may have data centers throughout the US or in Europe and in Asia Pacific, but now they have a choice rather than employ their Nutanix environment, in an existing data center or Colo, they can put it into AWS and they can manage it exactly the same. So it just provides near infinite choice for our customers of how they deploy HCI and our full software stack. In addition to the consumption that Thomas talked about, consumption choices. >> Yeah, just to add to that again I should have said this is also one of my favorite announcements as well, yesterday. We Greg, myself, Thomas, we were talking to some industry analysts and they were talking about, Hey, you know how there is a need for pods where you have compute, you have network and you have storage altogether, and now people want to run it across multiple different destination but they have to have the freedom of choice. Today using one different kind of hardware tomorrow you want to use something else. They should be portability for that, so with clusters, I think what we have been able to do is to take that concept and apply it across public cloud. So the same whether you want to call it a pod or whatever but compute, storage, networking. Now you have the freedom of choice of choosing a public cloud as an end point where you want to run it. So absolutely one of those I would say game-changing announcements that we have made more recently. >> Yeah-- >> To close that loop actually and talk about portability as enabling quality of occupations. But also one thing that's really unique in terms of how we're delivering this to customers is probability of licenses. The fact that you have a subscription term license for on premises you can very easily now repay the license if you decide to move a workload and move a cluster from one premises to your count of choice, that distance is also affordable. But so again, full flexibility for these customers, freedom of choice from a technology perspective but also a business perspective. >> Well, one of the things I think that really brings home how real this solution is, it's not just about location, Thomas as you said, it's not about a destination, but it's about what you can do with those workloads. So one of the use cases I saw during the conference was talking about a very long partner of a Nutanix Citrix and how that plays out in this clusters type of environment so maybe if you could just illustrate that as one of those proof points is how customers can leverage the variety of choice. >> Yeah, we're very excited about this one, right? Because given what we're currently going through as a humanity right now, across the world with COVID situation, and the fact that we all have now to start looking at working from home, enabling scaling of existing infrastructure and doing it without having to go and rethink your design enabling this clusters in our Citrix solution is just paramount. Because what it will ask you to do is if you say you started and you had an existing VDI solution on premises using Citrix, extending that now and you putting new capacity in every location where you can go and spin this up in any AWS region or Azure region, no one has to go and the same images, the same processes, the same operations of your original desktop infrastructure would apply regardless of where you're moving now your workforce to work remotely. And this is again it's about making this very easy and keeping that consistency operations, from managing the desktops to managing that core infrastructure that is now enabled by using different clusters on Azure or AWS. >> Well, Thomas back in a previous answer, I thought you were teeing something up when you said we will be entering a new era. So when you talk about workloads that are going to the cloud, you talk about modernization probably the hottest area that we have conversations with practitioners on is what's happening in the database world. Of course, there's migrations, there's lots of new databases on there, and Nutanix era is helping in that piece. So maybe if we could as kind of a final workload talk about how that's expanding and what updates you have for the database. >> Absolutely and so I mean Eras is one of our key offerings when it comes to a database automation and really enabling teams to start delivering database as a service to their own and users. We just announced Era 2.0 which is now taking Era to a whole other level, allowing you to go and manage your devices on cross clusters. And this is very topical in this current use case, because we're talking of now I can use era to go in as your database that might be running on premises for production and using Era to spin up clones for test drive for any team anywhere potentially in cloud then using clusters on the all kind of environments. So those use cases of being which more leverage the power of the core is same structure of Nutanix for storage management for efficiency but also performance and scaling doing that on premises and in unique cloud region that you may want to leverage, using Era for all the automation and ensuring that you keep on with your best practices in terms of deploying and hacking your databases is really critical. So Era 2.0 great use cases here to go and just streamline how you onboard databases on top of HCI whether you're doing HCI on premises or HCI in public town, and getting automation of those operations at any scale. >> Yeah, hey Tom has mentioned a performance and Era has been a great extension to the portfolio sitting on top of our HCI. As you know Stu database has long been a popular workload to run it all HCI, particularly Nutanix and it extends from scalability performance. A lot of I talked about earlier in terms of providing that really low latency to support the I-Ops, to support the transactions per second, that are needed these very demanding databases. Our customers have had great success running SAP, HANA, Oracle SQL server. So I think it's a combination of Era and what we're doing as Thomas described as well as just getting a rock solid foundational HCI platform to run it on and so that's what we're very excited about to go forward in the database world. >> Wonderful, well look, we covered a lot of ground here. I know we probably didn't hit everything there but it's been amazing to watch Nutanix really going from simplicity at its core and software driving it to now that really spiders out and touches a lot of pieces. So I'll give you each just kind of final word as you having conversations with your customers, how do they think of Nutanix today and expect that we have a little bit of diversity and the answers but it's one of those questions I think the last couple of years you've asked when people register for .Next. So it's, I'm curious to hear what you think on that. Maybe Greg if we start with you and kind of go down the line. >> Yeah, for me what sums it up is Nutanix makes IT simple, It makes IT invisible and it allows professionals to move away from the care and feeding structure and really spend more time with the applications and services that power their business. >> And I agree with Greg I think the two things that always come up, one is the freedom of choice, the ability for our customers to be able to do so many different things, have so many more choices and we continue to do that every time we add something new or we announce something new and then just to add onto what Greg said is to try and make the complexities invisible, so if there are multiple layers, abstract them out so that our customers are really focused on doing things that really matter versus trying to manage all the other underlying layers, which adds more complexity. >> Yeah You could just kind of send me to it up right. In the end, internet is becoming much more than HCI, as hyper converged infrastructure this is not taking it to another level with the hybrid cloud infrastructure and when you look at what's been built over the last few years from the portfolio points that we now have, I think it was just growing recognition that internet actually delivers this cloud platform that you can all average to go and get to a consistency of services, operations and business operations in any location, on premises through our network constant providers through our Nutanix cloud offerings and hyper scaler with Nutanix clusters. So I think things are really changing, the company is getting to a whole other level and I couldn't be more excited about what's coming out now the next few years as we keep on building and scaling our cloud platform. >> And I'll just add my perspective as a long time watcher of Nutanix. For so long IT was the organization where you typically got an answer of no, or they were very slow to be able to react on it. It was actually a quote from Alan Cohen at the first .Next down in Miami he said, "we take need to take those nos "and those slows and get them to say go." So the ultimate, what we need is of course reacting to the business, taking those people, eliminating some of the things that were burdensome or took up too much time and you're freeing them up to be able to really create value for the business. Want to thank Greg, Madhukar, Thomas, thank you so much for helping us wrap up, theCUBE is always thrilled to be able to participate in .Next great community customers really engaged and great to talk with all three of you. >> Thank you. >> Alright so that's a rack for theCUBES coverage of the Nutanix Global.Next digital experience. Go to thecube.com. thecube.net is the website where you can go see all of the previous interviews we've done with the executives, the partners, the customers. I'm Stu Miniman and as always thank you for watching theCUBE.

>> Live from Barcelona, Spain it's theCUBE! Covering Cisco Live! Europe brought to you by Cisco and its ecosystem partners. >> Hello everyone, welcome back to theCube's live coverage here in Barcelona, Spain for Cisco Live! Europe 2019. We're at day three of three days of coverage I'm John Furrier with Dave Vellante Our next two guests we're going to talk about privacy data Michelle Dennnedy, VP and Chief Privacy officer at Cisco and Robert Waitman who is the Director of Security and Trust. Welcome back, we had them last year and everything we talked about kinda's happening on steroids here this year >> Yep. >> Welcome back >> Thank you glad to be here >> Thanks for having us >> So security, privacy all go hand in hand. A lot going on. You're seeing more breaches you're seeing more privacy challenges Certainly GDPR's going to the next level. People are, quote, complying here's a gig of data go figure it out. So there's a lot happening, give us the update. >> Well, as we suggested last year it was privacypalooza all year long running up to the enforcement deadline of May 25, 2018. There were sort of two kinds of companies. There's one that ran up to that deadline and said woohoo we're ready to drive this baby forward! And then there's a whole nother set of people who are still sort of oh my gosh. And then there's a third category of people who still don't understand. I had someone come up to me several weeks ago and say what do I do? When is this GDPR going to be a law? I thought oh honey you need a hug >> Two years ago, you need some help. >> And some companies in the US, at least were turning off their websites. Some media companies were in the news for actually shutting down their site and not making it available because they weren't ready. So a lot of people were caught off guard, some were prepared but still, you said people would be compliant, kind of and they did that but still more work to do. >> Lots more work to do and as we said when the law was first promulgated two and a half years ago GDPR and the deadline A, It's just one region but as you'll hear as we talk about our study it's impacting the globe but it's also not the end of anything it's the beginning of the information economy at long last. So, I think we all have a lot to do even if you feel rather confident of your base-level compliance now it's time to step up your game and keep on top of it. >> Before we get into some of the details of the new finding you guys have I want you to take a minute to explain how your role is now centered in the middle of Cisco because if you look at the keynotes data's in the center of a lot of things in this intent based network on one side and you've got cloud and edge on the other. Data is the new ingredient that's feeding applications and certainly collective intelligence for security. So the role of data is critical. This is a big part of the Cisco tech plan nevermind policy and or privacy and these other things you're in the middle of it. Explain your role within Cisco and how that shapes you. >> How we sort of fit in. Well it's such a good question and actually if you watch our story through theCUBE we announced, actually on data privacy day several years ago that data is the new currency and this is exactly what we're talking about the only way that you can operationalize your data currency is to really think about it throughout the platform. You're not just pleasing a regulator you're not just pleasing your shareholders you're not just pleasing your employee base. So, as such, the way we organize our group is my role sits under the COO's office our Chief Operations Office under the office of John Stewart who is our Chief Trust officer. So security, trust, advanced research all live together in operations. We have sister organizations in places like public policy, legal, marketing, the sales groups the people who are actually operationalizing come together for a group. My role really is to provide two types of strategy. One, rolling out privacy engineering and getting across inside and outside of the company as quickly as possible. It's something new. As soon as we have set processes I put them into my sister organization and they send them out as routine and hopefully automated things. The other side is the work Robert and I do together is looking at data valuation models. Working about the economics of data where does it drive up revenue and business and speed time to closure and how do we use data to not just be compliant in the privacy risk but really control our overall risk and the quality of our information overall. It's a mouth full >> So that's interesting and Robert, that leads me to a question when we've seen these unfunded mandates before we saw it with Y2K, the Enron backlash certainly the United States the Federal Rules of Civil Procedure. And the folks in the corner office would say oh, here we go again. Is there any way to get more value beyond just reducing risk and complying and have you seen companies be able to take data and value and apply it based on the compliance and governance and privacy policies? >> Dave that's a great question. It's sort of the thought that we had and the hypothesis was that this was going to be more valuable than just for the compliance reasons and one of the big findings of the study that we just released this week was that in fact those investments you know we're saying that good privacy is very good for business. It was painful, some firms stuck their head in the sand and said I don't want to even do this but still, going through the GDPR preparation process or for any of the privacy regulations has taken people to get their data house in order and it's important to communicate. We wanted to find out what benefits were coming from those organizations that had made those investments and that's really what came out in our study this week for international data privacy day we got into that quite a bit. >> What is this study? can you give us some details on it? >> It's the Data Privacy Benchmark study we published this week for international data privacy day. It's sort of an opportunity to focus on data privacy issues both for consumers and for businesses sort of the one day a year kind of like mother's day that you should always think of your mom but mother's day's a good day so you should always think of privacy when you're making decisions about your data but it's a chance to raise awareness. So we published our study this year and it was based on over thirty-two hundred responses from companies around the world from 18 countries all sorts of sizes of companies and the big findings were in fact around that. Privacy has become a serious and a boardroom level issue that the awareness has really skyrocketed for companies who are saying before I do business with you I want to know how you're using my data. What we saw this year is that seven out of eight companies are actually seeing some sales delay from their customers asking those kinds of questions. But those that have made the investment getting ready for GDPR or being more mature on privacy are seeing shorter delays. If you haven't gotten ready you're seeing 60% longer delays. And even more interestingly for us too is when you have data breaches and a lot of companies have them as we've talked about those breaches are not nearly as impactful. The organizations that aren't ready for GDPR are seeing three times as many records impacted by the breach. They're seeing system downtime that's 50% longer and so the cost of the whole thing is much more. So, kind of the question of is this still something good to do? Not only because you have to do it when you want to avoid 4% penalties from GDPR and everything else but it's something that's so important for my business that drives value. >> So the upshot there is that you do the compliance. Okay, check the box, we don't want to get fined So you're taking your medicine basically. Turns into an upside with the data you're seeing from your board. Sales benefit and then just preparedness readiness for breaches. >> Right, I mean it's a nice-- >> Is that right? >> That's exactly right John you've got it right. Then you've got your data house in order I mean there's a logic to this. So then if you figured out where your data is how to protect it, who has access to it you're able to deal with these questions. When customers ask you questions about that you're ready to answer it. And when something bad goes wrong let's say there is a breach you've already done the right things to control your data. You've got rid of the data you don't need anymore. I mean 50% of your data isn't used for anything and of course we suggest that people get rid of that that makes it less available when and if a breach occurs. >> So I got to ask you a question on the data valuation because a lot of the data geeks and data nerds like myself saw this coming. We saw data, mostly on the tech side if you invested in data it was going to feed applications and I think I wrote a blog post in 2007 data's going to be part of the development kits or development environment you're seeing that now here. Data's now part of application development it's part of network intelligence for security. Okay, so yes, check, that's happening. At the CFO level, can you value the data so it's a balance sheet item? Can you say we're investing in this? So you start to see movement you almost project, maybe, in a few years, or now how do you guys see the valuation? Is it going to be another kind of financial metric? >> Well John, it's a great point. Seeing where we're developing around this. So I think we're still in somewhat early days of that issue. I think the organizations that are thinking about data as an asset and monetizing its value are certainly ahead of this we're trying to do that ourselves. We probed on that a little bit in the survey just to get a sense of where organizations are and only about a third of organizations are doing those data mature things. Do they have a complete data map of where their stuff is? Do they have a Chief Data Officer? Are they starting to monetize in appropriate ways, their data? So, there's a long way to go before organizations are really getting the value out of that data. >> But the signals are showing that there's value in the data. Obviously the number of sales there's some upside to compliance not just doin it to check the box there's actually business benefits. So how are you guys thinking about this cause you guys are early adopters or leaders in this how are you thinking about the data measurement of it? Can you share your insights on that? >> Yeah, so you know, data on the balance sheet Grace Hopper 1965, right? data will one day be on the corporate balance sheet because it's in most cases more valuable than the hardware that processes. This is the woman who's making software and hardware work for us, in 1965! Here we are in 2019. It's coming on the balance sheet. She was right then, I believe in it now. What we're doing is, even starting this is a study of correlation rather than causation. So now we have at least the artifacts to say to our legal teams go back and look at when you have one of our new improved streamline privacy sheets and you're telling in a more transparent fashion a deal. Mark the time that you're getting the question. Mark the time that you're finishing. Let's really be much more stilletto-like measuring time to close and efficiency. Then we're adding that capability across our businesses. >> Well one use case we heard on theCUBE this week was around privacy and security in the network versus on top of the network and one point that was referenced was when a salesperson leaves they take the contacts with them. So that's an asset and people get sued over it. So this again, this is a business policy thing. so business policy sounds like... >> Well in a lot of the solutions that exist in the marketplace or have existed I've sat on three encrypted email companies before encrypted email was something the market desired. I've sat on two advisory boards of-- a hope that you could sell your own data to the marketers. Every time someone gets an impression you get a micro cent or a bitcoin. We haven't really got that because we're looking on the periphery. What we're really trying to do is let's look at what the actual business flow and processes are in general and say things like can we put a metric on having less records higher impact, and higher quality. The old data quality in the CDO is rising up again get that higher quality now correlate it with speed to innovation speed to close, launch times the things that make your business run anyway. Now correlate it and eventually find causal connections to data. That's how we're going to get that data on the balance sheet. >> You know, that's a great point the data quality issue used to be kind of a back office records management function and now it's coming to the fore and I just make an observation if you look at what were before Facebook fake news what were the top five companies in the United States in terms of market value Amazon, Google, Facebook was up there, Microsoft, Apple. They're all data companies and so the market has valued them beyond the banks, beyond the oil companies. So you're starting to see clearer evidence quantifiable evidence that there's value there. I want to ask you about we have Guillermo Diaz coming up shortly, Michelle and I want to ask you your thoughts on the technical function. You mentioned it's a board level issue now, privacy. How should the CIO be communicating to the board about privacy? What should that conversation be like? >> Oh my gosh. So we now report quarterly to the board so we're getting a lot of practice We'll put it that way. I think we're on the same journey as the security teams used to you used to walk into the board and go here's what ransomware is and all of these former CFOs and sales guys would look at you and go ah, okay, onto the financials because there wasn't anything for them to do strategically. Today's board metrics are a little soft. It's more activity driven. Have you done your PIAs? Have you passed some sort of a third party audit? Are you getting rejected for third party value chain in your partner communities? That's the have not and da da da. To me I don't want my board telling us how to do operations that's how we do. To really give the board a more strategic view what we're really trying to do is study things like time to close and then showing trending impacts. The one conversation with John Chambers that's always stuck in my head is he doesn't want to know what today's snapshot is cause today's already over give me something over time, Michelle, that will trend. And so even though it sounds like, you know who cares if your sales force is a little annoyed that it takes longer to get this deal through legal well it turns out when you multiply that in a multi-billion dollar environment you're talking about hundreds of millions of dollars probably a week, lost to inefficiency. So, if we believe in efficiency in the tangible supply chain that's the more strategic view I want to take and then you add on things like here's a risk portfolio a potential fair risk reporting type of thing if we want to do a new business Do we light up a business in the Ukraine right now versus Barcelona? That is a strategic conversation that is board level. We've forgotten that by giving them activity. >> Interesting what you say about Chambers. John you just interviewed John Chambers and he was the first person, in the mid 90s to talk about a virtual close, if you remember that. So, obviously, what you're talking about is way beyond that. >> Yeah and you're exactly right. Let's go back to those financial roots. One of the things we talk about in privacy engineering is getting people's heads-- the concept that the data changes. So, the day before your earnings that data will send Chuck Robbins to jail if someone is leaking it and causing people to invest accordingly. The day after, it's news, we want everyone to have it. Look at how you have to process and handle and operationalize in 24 hours. Figuring out those data stories helps it turn it on its head and make it more valuable. >> You know, you mentioned John Chambers one of the things that I noticed was he really represented Silicon Valley well in Washington DC and there's been a real void there since he retired. You guys still have a presence there and are doing stuff there and you see Amazon with Theresa Carlson doing some great work there and you still got Oracle and IBM in there doing their thing. How is your presence and leadership translating into DC now? Can you give us an update of what's happening at-- >> So, I don't know if you caught a little tweet from a little guy named Chuck Robbins this week but Chuck is actually actively engaged in the debate for US federal legislation for privacy. The last thing we want is only the lobbyists as you say and I love my lobbyists wherever you are we need them to help give information but the strategic advisors to what a federal bill looks like for an economy as large and complex and dependent on international structure we have to have the network in there. And so one of the things that we are doing in privacy is really looking at what does a solid bill look like so at long last we can get a solid piece of federal legislation and Chuck is talking about it at Davos as was everyone else, which was amazing and now you're going to hear his voice very loudly ringing through the halls of DC >> So he's upping his game in leadership in DC >> Have you seen the size of Chuck Robbins? Game upped, privacy on! >> It's a great opportunity because we need leadership in technology in DC so-- >> To affect public policy, no doubt >> Absolutely. >> And globally too. It's not just DC and America but also globally. >> Yeah, we need to serve our customers. We win when they win. >> Final question, we got to get wrapped up here but I want to get you guys a chance to talk about what you guys announced here at the show what's going on get the plug in for what's going on Cisco Trust. What's happening? >> Do you want to plug first? >> Well, I think a few things we can add. So, in addition to releasing our benchmark study this week and talking about that with customers and with the public we've also announced a new version of our privacy data sheets. This was a big tool to enable salespeople and customers to see exactly how data is being used in all of our products and so the new innovation this week is we've released these very nice, color created like subway maps, you know? They make it easy for you to navigate around it just makes it easy for people to see exactly how data flows. So again, something up on our site at trust.cisco.com where people can go and get that information and sort of make it easy. We're pushing towards simplicity and transparency in everything we do from a privacy standpoint and this is really that trajectory of making it as easy as possible for anyone to see exactly how things go and I think that's the trajectory we're on that's where the legislation both where GDPR is heading and federal legislation as well to try to make this as easy as reading the nutrition label on the food item. To say what's actually here? Do I want to buy it? Do I want to eat it? And we want to make that that easy >> Trust, transparency accountability comes into play too because if you have those things you know who's accountable. >> It's terrifying. I challenge all of my competitors go to trust.cisco.com not just my customers, love you to be there too go and look at our data subway maps. You have to be radically transparent to say here's what you get customer here's what I get, Cisco, here's where my third party's. It's not as detailed as a long report but you can get the trajectory and have a real conversation. I hope everybody gets on board with this kind of simplification. >> Trust.cisco.com we're going to keep track of it. Great work you guys are doing. I think you guys are leading the industry, Congratulations. >> Thank you. >> This is not going to end, this conversation continues will continue globally. >> Excellent >> Thanks for coming on Michelle, appreciate it. Robert thanks for coming on. CUBE coverage here day three in Barcelona. We'll be back with more coverage after this break.

>> From Palo Alto, California, it's theCUBE. Covering the Conference Boards Sixth Annual Innovation Master Class. >> Hey, welcome back here, everybody. Jeff Frick here with theCUBE. We're at the Innovation Mater Class at Xerox PARC in Palo Alto. Really excited to be here, never been here, surprisingly, for all the shows we do just up the hill next to VMware, and Tesla. This is kind of the granddaddy of locations and innovation centers, it's been around forever. If you don't know the history, get a couple books, you'll learn it pretty fast. So we're excited to be here and our next guess is Antony Brydon, four-time founder and CEO, which is not easy to do. Again, check the math on that, most people are successful a couple times, hard to do it four times. And now he's the co-founder and CEO of Directly. So Antony, great to see you. >> It's good to be here. >> So, Directly, what is directly all about for people aren't familiar with the company? >> Most companies are excited to, and pursuing, the opportunity of automating up to 85% of their customer service. That's the ambition, and giving customers a delightful answer in their first experience. Most of those companies are falling down out of the gates because there are content gaps, and data gaps, and training gaps, and empathy gaps in the systems. So we build a CX automation platform and it puts experts at the heart of AI, letting these companies build networks of product experts and then rewarding those experts for creating content for AI systems, for training AI systems, for resolving customer questions. >> Right. So let's back up a step. So Zendesk is probably one we're all familiar with. You send in a customer service node, a lot of the times it comes back, customer service to Zendesk. >> Yes. >> But you're not building kind of a competitor of Zendesk, you're more of a partner, if I believe, for those types of applications, to help those apps do a better job. >> We are, we're a partner for Zendesk, we're a partner for Microsoft Dynamics, for Service Cloud and the like, and, essentially, are building the automation systems that make their AI systems work and work better. >> Right. >> Those are pure technology systems that often lack the data and the content to deliver AI at scale and quality, and that's where our platform and the human network, the experts in the mix, come into play. >> We could probably go for a long, long time on this topic. So what are some of the key things that make them not work now? Besides just the fact that it's kind of like the old dial-in systems. It's like, I just want to hit 0000. I just want to talk to a person. I have no confidence or faith that going through these other steps is going to get me the solution. Do you still see that on the online world as well? >> No, there are very clear gaps. There are four or five areas where systems are falling down. AI project mortality, as I refer to it. Very few companies have the structured data that systems need to work at scale. >> On the back, to feed the whole thing. >> That's right. Labeled, structured, organized data. So that doesn't exist. Many companies don't have the content. That's a second area. They may have enterprised knowledge bases, but they're five years old, they're seven years old, they're outdated, they're not accurate. Many companies don't have the signal. When a automated answer's delivered, they have to wait for a customer to rate it, and that tends to be really poor signal on whether that answer was good or not. And then last, many companies just don't have the teams to maintain these algorithms and constantly tune them. And that is where experts at the heart of a platform can come into play, by building a network of product experts who know the products inside and out. These could be Airbnb hosts for one of our customers, these could by Microsoft Excel users in the Microsoft example. Those experts can create that content, train the data, and actually resolve questions, filling those gaps, solving those problems. >> Right. I'm just curious, on the expert side, how many--? I don't know if there's best practices or if there's kind of certain buckets depending on the industry. Of those expert answers are generated by people inside the company versus a really kind of active, engaged community where you've got third-party experts that are happy to participate and help provide that info. >> Over 99% of the answers and the content is actually generated by the external network. >> 99%? >> 99%. You start with sources of enterprise knowledge, but it's a long, hard, arduous process to create those internal knowledge bases, and companies really struggle to keep up, it's Britannica. By the time you ship it it's outdated and you have to start all over again. The external expert networks work more like Wikipedia. Content constantly being organically created, the successful content is promoted, the unsuccessful content is demoted, and it's an evergreen cycle where it's constantly refreshing. Overwhelmingly external. >> Overwhelming. I mean, I could see where there's certain types of products. I was telling somebody else the other day about Harley-Davidson, one of the all-time great brands. People tattoo it on their body. Now, there aren't very many brands that people tattoo on their body. So easy to get people to talk about motorcycles or some of these types of things, but how do you do it for something that's really not that exciting? What are some of the tricks and incentives to engage that community? Or is there just always some little corps that you may or may not be aware of that are happy to jump in and so passionate about those types of products? >> There are definitely some companies where there's very little expertise and passion in the ecosystem around it. They're few and far between. If you find a product, if you find a company, you can find people that rely, love, and depend on that company. I gave some of the B to C examples, but we've also got networks for enterprise software companies, folks like SAP, folks like Autodesk. And those networks have experts that are developers, resellers, VARs, systems integrators, and the like. In the overwhelming majority of cases, the talent and the passion exists, you just have to have a simple platform to onboard and start tapping that talent and passion. >> So if I hear you right, you use kind of your Encyclopedia Britannica because that's what you have to start, to get the fly wheel moving, but as you start to collect inputs from third-party community, you can start to refine and get the better information back. And I ask specifically that way because you mentioned the human factors, and making people part of this thing, which is probably part of the problem with adoption, as I'd want confidence that there's some person behind this, even if the AI is smart. I'd want at least feel like there's some human-to-human contact when I reach out to this company. >> Yeah, that's critically important, because the empathy gap is real in almost all of the systems that are traditionally out there, which is when an automated answer's delivered, in a traditional system, it typically has a much lower CSAT than when it comes from a human being. What we found is when you have an expert author that content, when his or her face is shown next to the answer as it's presented to the user, and where he or she is there to back it up should that user still need more help, there you retain the human elements that personalize the contact, that humanize the experience, and immediately get big gains in CSAT. So It think that empathy piece is really important. >> Right. I wondered if you could share any specific examples of a customer that had an automated, kind of dumb system, I'll just use that word, compared to what they can do today, and some of the impacts when they put in some of the AI-powered systems like you guys support. >> So one of the first immediate impacts is often when we go in, a automated or unassisted system will be handling a very small percentage of the queries, and percentage of the customer questions coming in, and-- >> And people are going straight to zero, they're just like, I got to go to a person. >> Yeah, we're mostly in digital channels, so less phone, but yes, because the content there-- >> As an analogy, right. >> Because the content isn't there, it doesn't hit and resolve the question in that frequent a rate, or because the training and the signal isn't there, it's giving answers that are a little off-base. So the first and lowest hanging fruit is with a content library that's get created that can get 10, 50, 100 times broader that enterprise content pretty quickly. You're able to hit a much broader set of questions at a much higher rate. That's the first low-hanging fruit and kind of immediate impact. >> And is that helping them orchestrate, coordinate, collect data form this passionate ecosystem that's outside the four walls? Is that, essentially, what you're doing in that step? >> It essentially is. It is about companies having these ecosystems of these users, millions of hours of expertise in their head, millions of hours free time on their hands, and the ability to tap that in a systematic way. >> Wow. Shift gears a little bit, you are participating on a panel here at the event, talking about startups working with big companies and there's obviously a lot of challenges, starting with vendor viability issues, which is more kind of selling to big customers versus, necessarily, partnering with big companies. But what are some of the themes that you've seen that make that collaboration successful? Because, obviously, you've got different cultures, you got different kind of rates of the way things happen, you've got, beware the big company who eats you up in meetings all the time when you're a little start-up, they'll kill you accidentally just by scheduling so many meetings. What are some of the secrets of success that you're going to share here at the event? >> So we've got experience in that. Microsoft is a partner of ours, Microsoft Ventures is an investor. I think the single biggest key is an aligned vision and a complementary approach. The aligned vision where both the start-up and the partner are aiming for a similar point on the horizon. For example, the belief that automation can delight a very large set of customers by providing them a good, instant answer, but complementary approaches where the core skillsets of the companies round out each other and become less competitive. In this case, we've partnered with-- Microsoft is best in class AI platform and cognitive services, and we're able to tap and leverage that. We're also able to bring something unique to the equation by putting experts at the heart of it. So I think that architectural structure, in the first place, is a great example of kind of getting it right. >> Right. And your experience, that's been pretty easy to establish at the head-end of the process, so that you have kind of smooth sailing ahead? >> No, I don't think it's easy to establish at the head of the process, and I think that's where all of the good work and investment needs to happen. Upfront, on that kind of shared vision, and on that kind of complementary approach. And I think it is probably 20% building that together, but it's also 80% just finding it. The selection criteria by which a corporate partner picks a startup and the startup partner picks the corporate partner. I think just selecting right is the majority of the challenge, rather than trying to craft it kind of midstream. >> If it doesn't feel good at the beginning, it's probably not going to to work out. >> Right, it's about finding it. It's a little bit like the Venture analogy. Do they find great companies, or do they build great companies? Probably a little of both, but that finding that great company is a large part of the equation. >> Yeah, helps. So, Antony, finally get a last question. So, again, four successful startups. That does not happen very often with the same team. And look at your background, you're a psychology and philosophy major, not an engineer. So I'd just love to get kind of your thoughts about being a non-tech guy starting, running, and successfully exiting tech companies here in silicon valley. What's kind of the nice thing being from a slightly different background that you've used to really drive a number of successes? So I think the-- I think two things, I think one, coming from a non-tech and coming from a psych background has given us an appreciation of the human elements in these systems that tech alone can't do it. I'd say, personally, one of the impacts of being a non-tech founder in this valley is a heck of a lot of appreciation for what teams can do. And realizing that what teams can do is far more important than what individuals can do. And I say that because as a non-tech founder, there's literally nothing I could accomplish without being a part of a team. So that, I think, non-tech founders have that in spades. A harsh and frank realization that it's about team and they can't do anything on their own. >> Well, Antony, thanks for taking a minute out of your time. Good luck on the panel this afternoon and we'll keep an eye, watch the story unfold again. >> Yep, I appreciate it. Thanks very much. >> He's Antony, I'm Jeff, you're watching theCUBE. We're at the Master at the Master Innovation Class at Xerox PARC, thanks for watching.

>> Live from New York City, it's theCUBE, covering Lenovo Transform 2.0 brought to you by Lenovo. >> Welcome back to theCUBE's live coverage of Lenovo Transform here in New York City. I'm your host Rebecca Knight along with my co-host Stu Miniman. We're joined by Melissa Massa. She is the Executive Director of Hyperscale Sales. Thanks so much for coming on theCUBE. >> Thank you, thank you for having me. It's quite exciting. >> It is, it is very exciting. You're a cube newbie. >> I'm a cube newbie, yes. >> So this is very exciting. I'm sure it's the first of many visits. So Melissa we're at this real inflection point in technology and in AI as AI is ushering in this new wave with increasing use of big data and analytics and machine learning. All this means hyperscale is increasingly important. Can you just set the stage for our viewers a little bit about where we are in this-- >> Absolutely, yeah the transformation is really taking place in this industry that we know and love. And it's really amazing at how fast rapid the change is coming so if you look at in the past traditional one U two U type compute were the standard requirements right and today it's much more complex. It's becoming a much faster paced and you look at some of the big guys out there right from the top ten space. They're really helping to evolve AI and machine learning much faster as it's part of the cloud now and it's centric from the cloud space. So it's making things whether it's for personal use, for play, for business or for good humanity type areas. It's really helping involve and change the space altogether. >> One of the themes we've talked about in our kickoff there is Lenovo has a global presence, but it's also through a lot of partnerships. So Intel, Nvidia of course has to be very important in the AI space, you know, people like Microsoft and VMware. That's very much you know, some of those last ones especially look like Microsoft and VMware very much on the enterprise side. The cloud, the hyperscale, you mentioned the top 10 providers. What are the pieces, what are they looking for? What's the expertise that Lenovo brings that helps you fight in this very competitive real tight margin and very demanding ever-changing marketplace? >> You know this marketplace well? You sum it up very well, but in this in this marketplace, when you look at what the big guys are doing right and then you talk about partnerships, in our space, we don't come in and we don't have predisposition in terms of what we're going to. It's really through understanding what they're trying to do with technology and the direction they're going and it's interesting because at Lenovo we have several hundred engineers now dedicated just in our hyperscale organization, but we have 2000 engineers across the globe. So this really allows us to tap into this expertise in our organization, everything from even HPC aspects to multi socket boxes to different types of platforms, you look at ARM, you can look at AMD, look at Intel. So we don't really try to be one provider. We try to be the provider for our customers, and what their needs and where their requirements are going. >> So where have you seen the most success and we're looking forward do you see the growth coming from? >> Yeah we've started out a little bit different in this space. I think a lot of companies take a while getting their name out and getting traction, trying to grow up in what I'll call more that tier two that tier three space. Lenovo really has come into the tier one space. We're very fortunate in that aspect that we kind of are doing more of a top-down trajectory, so we've been very successful. I think you've heard Kirk talk about and you'll hear us continue to talk about the partnerships we have today with ten of the largest, truth be known, I've got pilots going on with the others. I think in a very short period of time we'll be talking about what we're doing across all of the top ten that is really unique to Lenovo, but again I think one of the reasons there's been success there is there's an availability of an engineer to engineer relationship we bring to the table that is really unique and allows our customers as they're going through this evolution with this change in the cloud space, they're realizing that there's not always the expertise they need in house. They've got to go outside and external and look for help in certain areas. One of the areas is we have an eight socket box and it's a great box with an incredibly high memory footprint and there's not a reference architecture on that box in the marketplace. Lenovo really helped develop it. So that's been a great platform for us to be able to have conversations with clients around for SAP hosting, HANA hosting and whatnot. >> Can you talk a little bit about this kind of the scale and investment Lenovo needs to have to be successful in this space? For those of us that track the hyperscales it's like you know there's tens of billions of dollars a year that they're investing in people, plant, and infrastructure. Kirk mentioned in the keynote, what was it? 42 soccer field size manufacturing facility. Is that only for hyperscale? Is it used for some of the other businesses? Help us unpack that a little yeah. >> So that's great, great question. To be in this business, you have to be incredibly committed into this business right, and I can say from YY on down through our entire leadership organization, there is a passion around this space from a hyperscale compute perspective in ensuring our success. In order to do that it really comes with making those right investments, so we can take care of these customers both near-term and long-term. This is not a short-term thing. This is an incredibly long-term plan for us and I will tell you the growth numbers they've given me over the course of the next years so that we have to make these types of investments right, so not only do we leverage our own manufacturing plants, but fortunately for Lenovo, we own. So it really helps minimize margin stacking but I've got great manufacturing facilities around the world and also now as you heard today, and the 42 football fields, we have started our own motherboard lines in our Hefei China Factory. So we'll be producing over 40,000 boards there a year with the two lines we have and then we're going to continue to grow well beyond that. >> So you are a tech veteran. You've been, at this is not your first rodeo here at Lenovo. How would you describe, I mean talking about YY's vision and the commitment he has made to hyperscale, what do you think it is that differentiates Lenovo in this very crowded and competitive tech world? >> I came from a couple of different places before Lenovo. So I had seen the OEM, I had seen the ODM aspect. And I was nervous when we launched this out of Lenovo as to how well is the market going to receive it. It's a crowded place and then you've started to see some of the other players that have been there, have faded off right. So what's really interesting about Lenovo when people ask us about what is your strategy, it's really we call it our ODM plus model and what does that mean? Well it means I'm taking the best parts of an OEM from a size, the global perspective of the markets I can get into for my clients are incredible and for an export of record, being able to get them into markets that are very challenging for others, I have a global services organization. So if you do need me to happen to come into your data center and help with other things, we have that capability too. And then also, but because I own my own manufacturing and I don't outsource anything, I keep relatively low costs to do business with. I can compete with more of that traditional ODM size and now you take the full vertical integration we have and you bring that to the table with being able to we manufacture all of our own motherboards, all the way up through our systems, it's a pretty powerful story, and I think from what we've seen the clients have really resonated with this story. They like what they're seeing from the benefits. >> Yeah it's so much we can learn, maybe you talk so much about scale, I think first of all the customer base that you talk about, 5000 servers or more is kind of the entry level for that, and just the speed that they're changing. A question we get all the time is how do people keep up with this? Give us a little bit of insight as to what you're hearing from your customers in the hyperscale market? How are they keeping to innovate, keeping to grow and how can everybody deal with kind of the pace of change today? >> It's unbelievable, I mean you look around it's immersive data. It's the network you got all this data now and you've got to get it through a pipe right and so there's all these different aspects coming. I've always told our customers look if there are areas that I can't help you with in, I'm going to tell you. I'm going to be more what's right up the middle for you guys, so we really focus on where are you going, where are you evolving, where do you need help from, how can we help to get you? I don't know if Kirk or anybody at the team has talked about it, but really breaking news for you guys because I was going to announce it in pitch today is that we are actually going to build our own white box networking products, and we're going to leave them open source from an OS perspective for our customers too, because we feel this is going to be a very key area for them. We've got the in-house talent. We've actually moved a number of engineers on our networking team directly into our hyperscale organization to get this started. >> Okay is this announcement which, congratulations by the way, is this, are you hearing that demand from the hyperscalers? Some of the hyperscalers have-- >> Absolutely. >> Kind of dipped their toe in there. I know you've been at the OCP events where we see some of the big players like Microsoft and Google. How do they fit, how does that compete against Cisco, so yeah how much of that is kind of a requirement to the customers? >> It is a requirement. I think if you're going to be all-in with these customers because we happen to have a great investment in the networking space already. Also you see Lenovo I think we're a company that we don't come with 50 years of habits right? We come as a fresh company. I never hear inside the company oh we tried that 10 years ago, and we don't want to do it again. We come with a fresh perspective and approach to building our business. We've got the networking organization inside of our company. Why not proliferate it in the next generation and why does that matter? Open matters right? Everything look at what's coming today. Open BMC, open OS. I have major customers coming into Raleigh and sitting down and talking to us about where we going from a security perspective, and how we're going to bring open security standards into this market? >> The other thing when I think about you know, YY mentioned it. Cloud network and device kind of things like IOT and the global device because everybody, AI and IOT everybody's going there. How does that play in your space? >> It just continues, the data just continues to double in massive size and scale, and there are new technologies out. People are learning to use things like the FPGA is a lot smarter and you look at like what they're able to do today from that technology and deliver one server that can take the compute power of four now. So all of that is helping to evolve this rapid pace and where we're going. >> Finally what we'll be talking about next year? I mean perhaps inked deals with the remaining four players that you are in pilot programs with. What other things are most exciting to you? >> Yeah so I think in what you're going to find is I'm launching a team that's going to go after the tier II and tier III market. And we're going to really start to invest in this space. We're going to really start to proliferate. Paul and I, you saw up on the screen. We have 33 custom boards in design today. We have a factory that we need to fill right, so we're going to continue to really push the envelope on everything we're going to be developing from a custom perspective. I think you're going to see it evolve with quite a number of products, maybe even more so beyond just your traditional server approach. We're there to help clients in other areas where they also need to manufacture maybe a part or what could be a commodity for them. And they need special attention in that particular space. We're going to continue to work with them, but I would say the biggest thing. When I'm sitting here next year is going to be the sheer size of where this hyperscale team is going and the revenue and the growth that's bringing in to Lenovo overall. >> Great well thank you so much for coming into theCUBE Melissa. >> It was nice talking to you. >> I appreciate it. Thank you. >> I'm Rebecca Knight for Stu Miniman. We will have more from theCUBE live at Lenovo Transform in just a little bit. (upbeat music)

(electronic dance music) (Intel Jingle) (ethereal electronic dance music) ♪ Okay ♪ (upbeat techno dance music) ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh oh ♪ ♪ Oh oh oh oh ♪ ♪ Oh oh oh oh oh ♪ ♪ Take it back take it back ♪ ♪ Take it back ♪ ♪ Take it back take it back ♪ ♪ Take it back ♪ ♪ Take it back take it back ♪ ♪ Yeah everybody get loose yeah ♪ ♪ Yeah ♪ ♪ Ye-yeah yeah ♪ ♪ Yeah yeah ♪ ♪ Everybody everybody yeah ♪ ♪ Whoo whoo ♪ ♪ Whoo whoo ♪ ♪ Whoo yeah ♪ ♪ Everybody get loose whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ >> As a courtesy to the presenters and those around you, please silence all mobile devices, thank you. (electronic dance music) ♪ Everybody get loose ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ ♪ Whoo ♪ (upbeat salsa music) ♪ Ha ha ha ♪ ♪ Ah ♪ ♪ Ha ha ha ♪ ♪ So happy ♪ ♪ Whoo whoo ♪ (female singer scatting) >> Ladies and gentlemen, please take your seats. 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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(upbeat music) >> Announcer: Live from Vancouver, Canada. It's theCUBE covering OpenStack Summit North America 2018. Brought to you by Red Hat, the OpenStack Foundation, and its ecosystem partners. >> Welcome back. This is theCUBE's exclusive coverage of OpenStack Summit 2018 in Vancouver. I'm Stu Miniman with my co-host John Troyer. Happy to welcome back to the program two CUBE alums. We have Alan Clark, who's the board chair of the OpenStack Foundation and in the CTO office of SUSE. >> Yep, thank you. >> Thanks for joining us again. It's been a few years. >> It's been a while, I appreciate being back. >> And Lew Tucker, the vice chair of the OpenStack Foundation and vice president and CTO of Cisco. Lew, it's been weeks. >> Exactly right. >> All right. >> I've become a regular here. >> Yeah, absolutely. So, first of all, John Furrier sent his regard. He wishes he was here, you know. John's always like come on Lew and I, everybody, we were talking about when this Kubernetes thing started and all the conferences, so it's been a pleasure for us to be here. Six years now at this show, as well as some of the remote days and other things there. It's been fun to watch the progressions of-- >> Isn't it amazing how far we've come? >> Yeah, absolutely. Here's my first question for you, Alan. On the one hand, I want you to talk about how far we've gone. But the other thing is, people, when they learn about something, whenever they first learn about it tends to fossilize in their head, this is what it is and always will be. So I think most people know that this isn't the Amazon killer or you know it's free VMware. That we talked about years ago. Bring us a little bit of that journey. >> Well, so, you know, it started with the basic compute storage and as we've watched open-source grow and adoption of open-source grow, the demands on services grow. We're in this transformation period where everything's growing and changing very rapidly. Open-source is driving that. OpenStack could not stay static. When it started, it solved a need, but the needs continued to grow and continued to change. So it's not surprising at all that OpenStack has grown and changed and will continue to grow and change. >> So Lew, it's been fascinating for me, you know. I've worked with and all these things with Cisco and various pieces for my entire career. You're here wearing the OpenStack @ Cisco shirt. And Cisco's journey really did through that to digital transformation themselves. When I talked to Rowan at Cisco Live Barcelona, the future of Cisco is as a software company. So, help set OpenStack into that kind of broader picture. >> Sure, I think one of the aspects of that is that we're seeing now it is becoming this multi-cloud world. And that we see all of our customers are running in the public cloud. They have their own private data centers. And what they're looking for is they want their whole development model and everything else to now become targeted towards that multi-cloud world. They're going to do services in the public cloud, they still have their private data center. OpenStack is a place for them to actually meet and run all their services 'cause now you can build your environment within your data center that makes it look very much like your public cloud, so your developers don't have two completely different mindsets. They have the same one, it's extracting resources on demand. And that one, we're putting on top of that other newer technology that's coming, such as Kubernetes. We've got a real consistency between those environments. >> Yeah, please Alan. >> I was going to say, it enables you to leverage your existing infrastructure so you don't want to make them, particularly those SUSE's customers, they don't want us to come in and say throw everything away, start afresh right? But at the same time, you've got to be able to embrace what's new and what's coming. We're talking about many new technologies here in OpenStack Summit today right? Containers and all sorts of stuff. A lot of those things are still very new to our customers and they're preparing for that. As Lew said, we're building that infrastructure. >> One of the things, as I'm thinking about it, some people look at, they look at codec containers and some of these pieces outside of the OpenStack project and they're like, well what's the Foundation doing? But I believe it should be framed, and please, please, I would love your insight on this, in that multi-cloud discussion because this is, it can't just be, well, this is how you build private. It needs to be, this is how you live in this multi-cloud environment. >> That's why I think, you're beginning to see us talk about open infrastructure. And this is using open-source software to use software to manage your infrastructure and build it out instead of configuration, cabling, having guys going out, plugging in, unplugging network ports and whatever. We want software and automations to do all that, so OpenStack is one of the cloud platforms. But these other projects are now coming into the Foundation, which also expand that notion of open infrastructure, and that's why we're seeing these projects expand. >> Lew's exactly right and it goes beyond that. Back in 2017, early 2017, we recognized, as a board, that it's not going to be just about the projects within OpenStack. We have to embrace our adjacent communities and embrace those technologies. So that's why you're hearing a lot about Kubernetes and containers and networking and all sorts of projects that are not necessarily being done within OpenStack but you're seeing how we're collaborating with all those other communities. >> And codec is a perfect example of that. Codec containers came out of those clear containers. It's now combining the best of both worlds, 'cause now you get the speed of containers bringing up, but you get the security and isolation of virtual machines. That's important in the OpenStack community, in our world, because that's what we want out of our clouds. >> Well you both have just mentioned community a few times. I saw one thing coming in to this conference, I'm so impressed by the prominence of community. It's up on stage from the first minutes of the first keynote. People, the call to action, the pleas, for the folks, some of us have been here years and years, for the new folks, please come meet us right? That's really inviting, it's very clear that this is a community. >> Yeah I was surprised, actually, 'cause we saw it when we were asked when up on stage how many people were here for the first time? More than half the audience raised their hand. >> Alan: I was surprised by that as well. >> That was the real surprise. And at the same time, we're seeing, increasingly, users of OpenStack coming in as opposed the people who are in core projects. We're seeing Progressive insurance coming in. We're seeing Adobe Marketing Cloud having over 100,000 cores running OpenStack. That's in addition to what we've had with Walmart and others so the real users are coming. So our communities, not just the developers but the users of OpenStack and the operators. >> That's always an interesting intention for an open-source project right. You have the open-source contributors, and then you have the users and operators. But here at the show right? All of these different technology tracks. Part of community is identity. And so, as the technical work has been split-off, and is actually at another event, these are the users. But it does, with all these other technology conversations, I wonder what the core identity of, I'm an OpenStack member, like what does that end up meaning in a world of open infrastructure? if the projects, if the OpenStack itself is more mature, and as we get up the letters of the alphabet towards Z, How do you all want to steer what it means to be a member of the OpenStack community. >> We met on Sunday as a joint leadership. So we had, it wasn't just a board meeting, it was a meeting with the technical committee, it was a meeting with the user committee. So we're very much pushing to make sure we have those high interactions, that the use cases are getting translated into requirements and getting translated into blueprints and so forth. We're working very, very hard to make sure we have that communication open. And I think one of the things that sets the OpenStack community apart is what we call our Four Opens. We base everything on our Four Opens and one of those is communication, transparency and communication. And that's what people are finding enticing. And one of the big reasons is I think they're coming to OpenStack to do that innovation and collaboration. >> We've seen the same thing with Linux, for example. Linux is no longer just the operating system when people think about the Linux community. Linux community is the operating system and then all of these other projects associated with them. That's the same thing that we're seeing with OpenStack. That's why we're continuing to see, wherever there's a need as people are deploying OpenStack and operating it and running it, all of these other open-source components are coming into it because that's what they really were running, that conglomerate of projects around it. >> Certainly, the hype cycle, and maybe Linux went through it's own hype cycle, back in the day and I'm from Silicon Valley. I think the hype cycle outside the community and what's actually happening on the ground here actually are meshed quite well. What I saw this week, like you said, real users, big users, infrastructure built into every bank, transport, telecom in the world. That's a global necessary part of the infrastructure of our planet. So outside of investment, things like that-- >> Well I hope you can help us get the message out. Because that is, a major thing that we see and we experience the conf, people who are not here. They still, then maybe look at OpenStack the way it was, maybe, four years ago, and it was difficult to deploy, and people were struggling with it, and there was a lot of innovation happening at a very, very fast rate. Well now, it's proven, it's sort of industrial grade, it's being deployed at a very large scale across many, many industries. >> Well it's interesting. Remember, Lew, when we were talking about ethernet fabrics. We would talk about some of SDN and some of these big things. Well, look sometimes these things are over-hyped. It's like, well, there's a certain class of the market who absolutely needs this. If I'm at Telco, and I sat here a couple of years ago, and was like, okay, is it 20 or 50 companies in the world that it is going to be absolutely majorly transformative for them and that's hugely important. If I'm a mid-sized enterprise, I'm still not sure how much I'm caring about what's happening here, no offense, I'd love to hear some points there. But what it is and what it isn't with targets, absolutely, there are massive, massive clouds. Go to China, absolutely. You hear a lot about OpenStack here. Coming across the US, I don't hear a lot about it. We've known that for years. But I've talked to cloud provider in Australia, we've talked to Europeans that the @mail who's the provider for emails for certain providers around the world. It's kind of like okay, what part of the market and how do we make sure we target that because otherwise, it's this megaphone of yeah, OpenStack, well I'm not sure that was for me. >> So, yeah, what's your thought? >> We're seeing a lot of huge variety of implementations, users that are deploying OpenStack. And yeah we always think about the great big ones right? I love CERN, we love the Walmarts. We love China Mobiles, because they're huge, great examples. But I have to say we're actually seeing a whole range of deployments. They don't get the visibility 'cause they're small. Everybody goes, oh you're running on three machines or 10 machines, okay, right? Talk to me when you're the size of CERN. But that's not the case, we're seeing this whole range of deployments. They probably don't get much visibility, but they're just as important. So there's tons of use cases out there. There's tons of use cases published out there and we're seeing it. >> One of the interesting use cases with a different scale has been that edge discussion. I need a very small-- >> In fact that's a very pointed example, because they've had a ton of discussion because of that variety of needs. You get the telcos with their large-scale needs, but you've also got, you know, everybody else. >> It's OpenStack sitting at the bottom of a telephone pole. On a little blade with something embedded. >> In a retail store. >> It's in a retail store. >> Or in a coffee shop. >> Yeah. >> So this is really where we recognizing over and over again we go through these transitions that it used to be, even the fixed devices out of the edge. To change that, you have to replace that device. Instead, we want automation and we want software to do it. That's why OpenStack, moving to the edge, where it's a smaller device, much more capability, but it still computes storage and networking. And you want to have virtualized applications there so you can upgrade that, you can add new services without sending a truck out to replace that. >> Moving forward, do we expect to see more interaction between the Foundation itself and other foundations and open-source projects? And what might that look like? >> It depends on the community. It really does, we definitely have communications from at the board level from board-to-board between adjacent communities. It happens at the grassroots level, from, what we call SIGs or work groups with SIGs and work groups from those adjacent communities. >> I happen to sit on three boards, which is the OpenStack board the CNCF board, Cloud Foundry. And so what we're also seeing, though, now. For example, running Kubernetes, we just have now the cloud provider, which, OpenStack, being a cloud provider for Kubernetes similar in the open way that Amazon had the cloud provider for Kubernetes or Google is the cloud provider. So that now we're seeing the communities working together 'cause that's what our customers want. >> And now it's all driven by SIGs. >> The special interest groups, both sides getting together and saying, how do we make this happen? >> How do we make this happen? >> All right. One of the things you look at, there's a lot going on at the show. There's the OpenDev activity, there's a container track, there's an edge track. Sometimes, you know, where it gets a little unfocused, it's like let's talk about all the adjacencies, wait what about the core? I'd love to get your final takeaways, key things you've seen at the show, takeaways you want people to have when they think about OpenStack the show and OpenStack the Foundation. >> From my point of view it actually is back to where we started the conversation, is these users that are now coming out and saying, "I've been running OpenStack for the last three years, "now we're up to 100,000 or 200,000 cores." That shows the real adoption and those are the new operators. You don't think of Walmart or Progressive as being a service provider but they're delivering their service through the internet and they need a cloud platform in which to do that. So that's one part that I find particularly exciting. >> I totally agree with Lew. The one piece I would add is I think we've proven that it's the right infrastructure for the technology of the future, right? That's why we're able to have these additional discussions around edge and additional container technologies and Zuul with containers testing and deployment. It fits right in, so it's not a distraction. It's an addition to our infrastructure. >> I think the idea around, and that's why we actually broke up into these different tracks and had different keynotes around containers and around edge because those are primary use cases now. Two years ago when I think we were talking here, and like NFV and all the telcos were, and now that has succeeded because almost all the NFV deployments now are based on OpenStack. Now we're seeing it go to containers and edge, which are more application specific deployments. >> I'd love for you to connect the dots for us from the NFV stuff we were talking about a couple of years ago to the breadth of edge. There is no edge, it depends on who you are as to what the edge is, kind of like cloud was a few years ago. >> I mean, we actually have a white paper. If you go to OpenStack.org or just Google OpenStack edge white paper, I think you'll see that there are a variety of cases that are from manufacturing, retail, telco, I saw even space, remote driving vehicles and everything else like that. It's where latency really matters. So that we know that cloud computing is the fastest way to deploy and maintain, upgrade new applications, virtualize applications on a cloud. It's unfortunately too far away from many the places that have much more real-time characteristics. So if you're under 40 milliseconds or whatever, or you want to get something done in a VR environment or whatever, under five milliseconds, you can't go back to the cloud. It also, if you have an application, for example, a security monitoring application, whatever. 99% of the time, the video frames are the same and they're not interesting, don't push all that information back into the central cloud. Process it locally, now when you see frames that are changing, or whatever, you only use the bandwidth and the storage in the central cloud. So we're seeing this relationship between what do you want computed at the edge and how much computing can you do as we get more powerful there and then what do you want back in the centralized data centers. >> Daniel: While you simplify the management. >> Exactly right. >> Orchestration, policy. >> But you still need the automation, you need it to be virtualized, you need it to be managed in that way, so you can upgrade it. >> Alan Clark, Lew Tucker, always a pleasure to catch up. >> Thank you, yeah, >> Thank you so much for joining us. >> It's good to be here. >> John Troyer and I will be back with lots more coverage from OpenStack Summit 2018 here in Vancouver. Thanks for watching theCUBE. (upbeat music)

>> Announcer: Live from San Juan, Puerto Rico, it's theCUBE covering Blockchain Unbound. Brought to you buy Blockchain Industries. (upbeat music) >> Hello everyone, welcome to our exclusive coverage here in Puerto Rico with theCUBE on the ground for extensive two days of coverage for Blockchain Unbound in Puerto Rico where all the action is. It's a global conference where investors, entrepreneurs, thought leaders are all coming together to check out the future and set the agenda for Blockchain cryptocurrency and the decentralized internet. My next guest is John Hartigan, Executive Vice President in Intiva Health. Welcome to theCUBE. >> Thank you. >> So we were talking yesterday with Hash-Craft, CTO, you guys are part of that ecosystem, you guys are doing some of these things with health. Take a minute to explain what you guys are working on and your value proposition. >> Sure, so, Intiva Health is a career and credential management platform for physicians and all licensed medical professionals, and it streamlines and automates the credential management process that they have to go through every time that they either change positions or take on temporary work. And the Hash-Craft integration is allowing us to do instantaneous credential verification. Currently the state of affairs in the granting of privileges at a particular hospital or a facility can take literally weeks and in some cases months to complete. It's a very analog process, and with our integration with Hash-Craft, it will take seconds. >> So I was watching The New York Times today, an our Wall Street Journal article about verification of work history. This Blockchain is certainly a good example of that, but you're now getting it into more of health, what is the use case, what's the low hanging fruit that you guys are going after with your solution, and how does that evolve and how you see that evolving? >> Well, so, like I mentioned, the current verification process for the granting of privileges in a hospital setting, it is pretty much unchanged since the 1950s. The internet helps a lot but what you're talking about is somebody getting a credential paper file with 25 or 30 documents, and opening the file and picking up the phone and calling, and verifying the reputation and provenance of that particular physician. And it's truly a bureaucratic nightmare. It's red tape to the nth degree. And so that represents thousands and hundreds of thousands of hours and billions and billions of dollars in waste that could be reallocated to better patient care for example. >> The big use case we're seeing education, the workplace, but now healthcare. I see a perfect storm for innovation. Healthcare is not known for moving fast. >> John: Correct. >> HIPAA regulations in the past couple decades really put a damper on data sharing for privacy reasons. At that time it seemed like a good call. Has things like HIPAA, has the cloud computing model opened up new avenues for health because everyone wants great healthcare, but the data is stuck in some silo, database. >> Database, absolutely. >> That's the problem. >> That's absolutely a problem. >> So what's your reaction to that? >> So the approach that we're seeing a lot of organizations take is they are attempting to go after the EHRs and the EMRs, the Electronic Health Records for Patients. Of course that is something that needs to be fixed. However the medical space is truly influenced, the main stakeholders are the physicians. They sit on all the committees, they run all the budgets, they make the policy. So it's imperative that we address the physicians and get their buy into any kind of significant change. And what you're seeing now is states, as well as other organizations including the federal medical board, the Federal Association of Medical Boards, as well as the State of Illinois, Wyoming is here, as a matter of fact, representing, and they are all looking at Blockchain solutions for this verification problem for the medical space and remaining HIPAA compliant. >> Let's talk about security because hospitals and healthcare organizations have been really good targets for ransomware. >> John: Absolutely. >> And so we're seeing that mainly because their IT systems have been kind of ancient in some cases, but they're right in the target of, they don't have a lot of IT support. One of the things about Blockchain, it makes these things immutability. So is that something that is on the radar, and how is, I mean, not necessarily ransomware, that's one example of many security issues 'cause you got Internet of Things, you have a slew of cloud-edge technologies-- >> John: Yes. >> That are emerging, that opened up a surface area for a text. So what's your thoughts on that? >> So, as you mentioned, the traditional models have been layered on top of each other overtime. It's a patchwork situation. And because it's a patchwork situation, there is vulnerabilities all over the place, in facilities a lot of times. And besides that, the medical space is probably 10 years behind the times when it comes to technology, maybe five at a minimum. The model that we're using, you mentioned earlier that there are siloed information in these different facilities and hospitals, and that's absolutely true. So all of that information, you have facility A, facility B, facility C, they all have information on one particular provider or physician, but they don't talk to each, and that information is at different levels of accuracy and timeliness, you mentioned time and date stamps. So our model works where the information follows the provider, okay, it's all built around the provider themselves, and then the individual facilities can tap into that information, and also they can influence the information, they can update it. So everybody will then be talking to each other in an anonymous fashion around the one provider updating that information and making it the most accurate in the market, and we get away from the old SaaS model. >> Before we deep dive in here, I'm going to ask you one more thing around as you walked into healthcare providers and then the healthcare industry, you're a different breed, you have Blockchain, you got different solution, the conversation that they're having is, let's put a data leg out there, again, centralized data leg. ISPs are doing that. We know with cybersecurity, any time you have centralized data resources, it's just an easier target to hack. >> John: Correct. >> So it's clear that centralized is not going to be the ideal architecture, and this entire movement is based upon the principles of decentralized data. >> John: Yes. >> So what's it like when you go in there? It must be like, do you have like three heads to them? Or are you like a martian, you're like speaking some foreign language? I mean what is it like, are there people receptive to what you talk about? Talk about some of the experiences you had when you walked in the door and knocked on the front door and walked in and talked to them. >> So it is an interesting situation. When I speak with CEOs and when I speak with COOs, they understand that they're vulnerable when it comes to their data, and they understand how expensive it is if, for example, if they have a HIPAA breach, it's $10,000 per occurrence. Now that means if somebody texts patient information to somebody else on a normal phone, that $10,000 every time that happens, okay. And so if it's a major data breach, and a record of files if they have 50,000 files lost, I mean it could be a killing, a business killing event under the right circumstances. So I tried to educate them about-- >> Do they look at Blockchain as a solution there? Or are they scratching their heads, kicking the tires? What's the reaction? >> They're interested, they don't understand exactly how we can apply Blockchain, and we're trying to educate them as to how that is, we are capable of doing so. We're explaining about the vast security improvements by decentralizing the information, and they are receptive, they're just reticent because they're very, tend to be more conservative. So as these organizations like the State of Illinois and the Federal Association of Medical Boards, as they start to adopt the hospitals and facilities, they're starting to look in and oh say, "Hey, this is a real thing, "and there may be a real application here." >> Talk about your business, you market, you go on after obviously healthcare, product specifically in the business model, where are you guys? How big are you? Are you funded? Are you doing an ICO? How are you using token economics? How is it working? Give us a status on the company. >> Sure, so, we've been in business for approximately two years. We're a funded startup out of Austin, Texas. We are born actually out of a practice management company which is an important point because a technology company trying to solve this problem would really struggle because there is a lot of bureaucracy, there's a lot of nuance in how the system operates because it is evolved overtime. So that gives us a very significant advantage. We have an operating platform that has been out for a little over a year now, and we have thousands and thousands of physicians and other licensed medical professionals that use the platform now. >> Are they paying customers or are they just users? >> No, so the model works like this, it's free to the providers, it's also free to the facilities and medical groups, and so we allow that platform, that utility for them to use. How we monetize is we have other curated goods and services for the providers along their career journey. So, for example, continuing medical education. All providers are required to take so many units a year, and we have a very robust online library of CME. And we also have partnerships with medical malpractice organizations. >> So it's a premium model. You get them using the platform. >> Correct, that's right. >> Where does tokens fit in? Where does the cryptocurrency fit in? Do you have a token as a utility, obviously, it's a utility token. I mean explain the model. >> Correct. Yeah so we just announced last Friday. in South by Southwest that we are launching a token, a utility token, and it'll go on sale April 19th. And basically how it works is the providers, the physicians will earn tokens by taking actions in the platform that update their data for example, or if they look for a job on our platform, or if they do different tasks in the platform that improve the veracity of their data, and then they will be able to use those tokens to purchase the continuing medical education courses, travel courses, medical malpractice insurance, a number of different resources. >> Token will monitor behavior, engage behavior, and then a two-sided marketplace for clearing house. >> Exactly. >> How does the token go up in value? >> We have multiple partners that are involved, so the partners will be also purchasing advertising time, or it's a sponsorship model, so they'll be able to sponsor within the platform. So the more partners we bring in, the more providers we have, the value-- >> So suppliers, people who want to reach those guys. So >> Exactly. >> You get the coins, you see who's doing what. You get a vibe on who's active and then >> Exactly. That's a signal to potential people who want to buy coins. >> Yeah, and when we announced that we were doing this token, we had multiple partners that we have been in business with for the last two years, saying, "We want in, we want to do this, "we want to get involved." Oh another thing that we're doing with the token, we have an exclusive relationship with the National Osteoporosis Foundation, and we put forth to them that we would like to set them up with a crypto wallet so that they can accept donations, and then we would also match those donations up to a certain point that they receive in crypto. So we want to help our organizations, our not-for-profits by facilitating crypto acceptance. >> So talk about your relationship with Hash-Craft. It's two days old but it's been around for two years, they announced a couple days ago. It got good feedback, a lot of developers are using it. It's not a theorem but that's the compatibility to a theorem. You're betting on that platform. How long have you worked with these guys, and why the bet on Hash-Craft? >> So we were looking at Blockchain Technologies about two years ago because we realized, as you mentioned earlier, the security issues we have. We have to be very aware of the type of data that we're holding. So at the time though, there were significant issues with speed, significant issues with storage, and how it would work by actually putting a credential packet into Blockchain, and the technology frankly just wasn't there, and so we started looking for alternatives. Thankfully we were in Texas, and we happened to run into Hash-Craft, and they explained what they were doing, and we thought this must be too good to be true. It checked off all of our boxes. And we had multiple conversations about how we would actually execute an integration into our current platform with Hash-Craft. So we've been in talks with them for, I think, a little over five or six months, and we will actually, it looks like be one of the very first applications on the market integrating Hash-Craft. >> It's interesting, they don't really have a Blockchain-based solution, it's a DAG, a directed acyclic graphic model. Did that bother you guys? You don't care, it's plumbing. I mean does it matter? >> So actually the way that it is established, it has all of the benefits of Blockchain, and none of the fat and sugar, so to speak. I mean there are a number of things that they do that Blockchain-- >> You mean performance issues and security? >> Performance, speed is a big one, but also fairness on the date and timestamps, because with the verification system, you have to prove, you have to be able to prove and show that this date and timestamp is immutable, and that it has been established in a fair manner. And they have been able to solve that problem, where the Blockchain model, there is still some question about, if you have some bad actors in there, they can significantly influence the date and timestamps. And that was very significant for our model. >> Alright, well, congratulations. What's next for the company? What are you guys doing? What's the plan, what's the team like? Well, excited obviously. What's next? >> So we are going to be announcing some very big partnerships that we've established here late spring. I was hoping to do it here now, however we've-- >> Come on, break it out then. >> I would like to but I have to be careful. So we have some big partnerships we're going to be announcing, and of course we have the token sale coming up so there'll be a big-- >> Host: When is that sale happening? >> So it starts April 19th, and it'll run for about six weeks. >> What's the hard cap and soft cap? >> Yeah, we prefer not to talk about that, but let's say, soft cap, about 12 million. And we have some interested parties that want to do more, and so we're looking at what our best options are as far as setting the value to the token, and what the partnerships that are going to significantly impact it will be. >> Well, great job, congratulations. One of the big concerns to this market is scams versus legit, and you're starting to see clearly that this is a year, flight to quality, where real businesses are tokenizing for real reasons, to scale, provide value. You guys are a great example of that. Thanks for sharing that information. >> We're really excited, and it's very exciting to bring this to the healthcare space which is, as we said, conservative and somewhat traditional. And we believe that we will be setting the standard moving forward for primary source verification. >> And you can just summarize the main problem that you solve. >> Yeah, it is that analog primary source verification of the credential documents, and when our platform goes live, we will literally be putting hours of time a day, something like eight hours back into the providers' lives, and back to the money of that, associated with that back to their pockets, which we hope translates into better patient care. >> So verification trust and they save time. >> John: Absolutely. >> It's always a good thing when you can reduce the steps to do something, save time, make it easy. That's a business model of success. >> Absolutely and more secure. >> John Hatigan, who's with Intiva, Executive Vice President from Austin, Texas here in Puerto Rico for theCUBE coverage. Day Two of two days of live coverage here in Puerto Rico, I'm John Furrier with theCUBE host. We'll be back with more live coverage after this short break. (upbeat music)

>> Announcer: Live from Austin Texas, it's theCUBE. Covering KubeCon and CloudNativeCon 2017. Brought to you by Red Hat, the Linux Foundation, and theCUBE's ecosystem partners. >> Welcome back everyone, this is theCUBE live in Austin, Texas for our exclusive coverage at the CloudNative Conference and KubeCon with Kubernetes via theCUBE. theCUBE which we're live, and 8 years running, I'm John Furrier, the founder of SiliconANGLE Media, my colleague, Stu Miniman. And I'm excited to have Cube alumni, and its distinguished industry legend, Lew Tucker, Vice President CT of Cloud Computing at Cisco Systems. Welcome back to theCUBE, great to see you. >> Great to be back, it's one of my favorite shows. >> Lou, we've had many conversations over the years, and it's always great to have you on because you're on the cutting-edge perspective, but you have a historical view as well, you've seen many waves of innovation. And obviously you own lots of property in the Computer's History museum, your resume goes on and on. But, you got to admire this community. Three years old, it was you, me and JJ we're sitting around at OpenStack in Vancouver three and a half years ago, having a beer after the event one of these days, and we were talking about Kubernetes, and we were really riffing on orchestration and kind of shooting the arrow forward, kind of reading the tea leaves. And we were predicting inter-clouding, inter-networking, Cisco core competency, the notion of application developers wanting infrastructure as code. We didn't actually say mircoservices but we were kind of describing a world that would be microservices, and this awesomeness that's going on with the Cloud. What a ... [Lew] You were right. You were right. >> We were right, it wasn't me, it was the community. This is how communities operate. >> It is. I think that what we're seeing, and particularly in these open source communities, you're getting the best ideas. And therefore, a lot of people are looking at this future space, and then we bring the kids out of the communities, get the projects that we work together on it, and that's how we move it forward. >> You've been a great leader in the community, just want to give you some props for that, you deserve it, but more importantly is just the momentum going on right now. And I want to get your take, you're squinting through the growth, you're looking at the innovation, looking at the big picture, certainly from a Cisco perspective, but also as an industry participant. Where's the action? Obviously containers grew, that tide came in, a lot of boats floated up. We saw microservices boom, then we now, Kubernetes' getting better and better, multiple versions, it's - some say commoditized, some would say more inter-operable. Really, that's the connection tissue for multi-cloud. >> Exactly right. >> Do you see the same thing? Where's the action? >> So, cloud computing is going everywhere now. And so it's natural that we see one of the next phases of this is in the area of multi-cloud. The customers, they are in public cloud, they have private data centers where they want to run similar applications. They don't want to have a completely different environment. What they really want to see is a consistent environment across which they can deploy applications. And that consistent environment also has to have security policies, authentication services, and a lot of these things. And to really drive the innovation, what I find interesting is that, the services that are coming now out of public cloud, whether it be an AI or server list, event-driven kind of programming models. Enterprises want to connect into them. And so one of the things I think that that leads to is that you're beginning to hear talk now, just beginning to hear it, which is this project called Istio. Which is a service mesh, because what that really allows -- >> John: What's the project name? >> It's called Istio? >> John: Istio. >> Lew: I-S-T-I-O. >> Okay. >> dot I-O. Everything is open source, it's a project that's contributed to by Google, and IBM, and Lyft, and now Cisco's getting involved in it, as well. And what it really plays into is this world of multi-cloud. That now we can actually access services in the public cloud from your own private data center, or from the public running applications in a public cloud, you can access services that are back in your data center. So it's really about this kind of application-level networking stack, that means that application developers can now off-load all of that heavy work to a service mesh, and therefore that'll accelerate application development. >> So it's interesting, I heard some talk about things like Envoy edge and service proxies, and service proxies have been a nice tool to kind of cobble together old legacy stuff, but now you're seeing stuff go to the next level. This data I heard in the keynote, I want to get your reaction 'cause this kind of jumps out at me. Lyft had created a mesh over hundreds of thousands of services over millions of transactions per second. Lyft. Uber's got some stuff on the monitoring side, Google's donated - This is large scale cloud guys who had to build their own stuff with open source, now contributing all this stuff back. This is the mesh you're talking about, correct? >> This is exactly right, yes. Because what we're seeing is, we've talked about micro services, and Kubernetes is about orchestration of containers. And that has accelerated application development and deploying it. But now the services, each one of those services still has all of this networking stuff they have to deal with. They have to deal with load balancing, they have to deal with retries, they have to deal with authentication. So instead, what is happening now, we're recognizing these common patterns, this is what the community does (mumbles). You see a common pattern, you abstract it, and you push that out into what is known as side cars now, so that the application developer doesn't have to -- the application doesn't get changed when you need to change, like, 'bring up a couple more services over here' 'put this on a different cloud'. The individual components now are unaffected by that, because all of that work has been offloaded into a service mesh. >> Lew, bring us inside a little bit. Dig into that next level of kind of networking. 'Cause you speak, kind of networking administrator, running around the data center, you get everything from pulling cables to zoning and everything like that. Now it's multi-cloud, multi-service, everything's faster. Through all the architect, the person running it, automation ... We don't have an hour, but give us a little bit about what it means to be a networking person these days. >> Well, it's interesting, because one of the things that we know application developers did not want to become, is to be a network engineer. And yet to do a lot of what they had to do, they had to learn a lot of those skills. And instead they would rather set things up by policy. For example, they would like to be able to say, 'if I'm deploying now the version two of my application', it's a classic thing we talk about in this deal, 'the next version we want to just direct' '5% of the traffic to it, make sure it's okay' 'before we turn over the whole thing.' You should be able to do that at the application level, and through a service mesh that is built in networking at the application level, the application guys can do it. Now the role of the network engineer is still the same, they have to provide the basic infrastructure to allow that to happen. And for example, a lot of the infrastructure now is extending the Cloud from public cloud through the cloud BPM services that they have back into the data center. So Cisco, for example, is putting technologies that are running at AWS and at Google, and Azure, that allows that to come back into the data center. So we can run Cisco virtual routers in the Cloud, connected back up in the data center. So their standard networking policy that the networking engineers really want to see enforced, they can be assured that that's enforced, and then Istio layers on top of it. >> And that's decoupled from the application. >> Right. Right. >> This is what we've been talking about since 2010, our eighth year of theCUBE, infrastructure as code. This is what DevOps was all about, and now it's evolving mainstream. >> Absolutely right. You really want infrastructure to be as boring as possible. And capable and then secure. And now give a lot more control over to the application developer. And we also know, right now it's really based largely on Kubernetes, it's a great example, but that will connect into virtual machines, it will connect into legacy services. So all of this has to do with connecting all of those pieces that are today in an enterprise, moving to a public cloud. And that transition doesn't happen wholesale. You move a couple over. >> Lew, one thing. I want you to look back, John talked about - We interviewed a bunch of years in OpenStack. What's your take on the role of OpenStack today, is there still a roll in OpenStack, and how's that kind of compare/contrast to what we're doing here? >> Happy to answer, because I actually am on both boards, I'm on the CNCF board and I'm on the OpenStack board, and I have contributors on my teams to both efforts across the board. And I think that the role that we're seeing of OpenStack is Openstack is evolving also, and it's becoming more embracive and it's becoming about open infrastructure. And it's really about, how do you create these open infrastructure plays. So it is about virtual machines, and containers, and bare metal, and setting up of those services. So Kubernetes works just great on top of OpenStack, and so now people get to have a choice, because one of the hard things I think for, mostly enterprise developers and everything else, is that the pace is changing so fast. So how do they try out some of the newer technologies that still can be connected back into the existing legacy systems? And that's why I think that we're seeing the role for OpenStack is to make that, you can put it with virtual machines, you can stand them up in there, and you can have the same virtual machines essentially running in the Cloud. >> So virtual machines versus other approaches has come up as a trade off, we heard in the keynote, between cost - I mean, speed, and security. Security's super important. So let me get your thoughts on how that plays out, because we've got the pluggable logger tech, which is another big theme we heard in the keynote, which is essentially just meaning, having a very focused, leverageable piece of code that can be connected into Kubernetes. But with VM's now, some are saying VM's are slow when you're trying to do security, but you want slow, boring when you need it, but you want speed and secure when you need it, too. How do you get both out of that? >> Without being too geeky in terms of, a virtual machine is emulating an entire computer. And so it looks like a computer, so you're running your traditional applications on top of a virtual machine. The same as they would if they were running on what we call, bare metal machine. So that is by necessity, much heavier. You're bringing around a whole operating system and things like that. Containers -- >> And there's a role for that, too. >> There's absolutely a role for that. >> Now containers? >> But containers, then, are really much more about, it's an application packaging exercise, so that you can say, 'I'm going to run this application, I just want all its dependencies packaged up.' I'll assume there's an operating system there. I'm going to count on the fact that there's a single operating system. So you can spin up containers, they're much more lightweight, much more quickly. And now there's even things such as Kata Containers that are coming out of Intel, which is now merging those technologies. >> Male: The clear containers. >> Clear containers, they came originally Clear Containers, and now it's merging, because we're saying, 'we want the security and the protection that you get' 'with a virtual machine, tied into, like the VTX' 'instruction set, in the hardware'. So you can get that level of security, assurances, but now you get the speed of containers. So, I think we're continuing to see the whole community evolving in this direction and making things easier for application developers, faster to do. They're increasing in scale, so management and orchestration - we talked about that three years ago, that that would be a big issue, and guess what? Of course it is. That's exactly what Kubernetes is addressing. >> And the role of the data is going to be critical, this is where a lot of people in the enterprise that we talked to, love the story, they love the narrative, but they're hearing things that they've never heard before and they kind of, slow down. So I'd like you to take a minute, Lew, and explain to the person watching, CIO, chief architect, network guy, whatever - what the hell is this Kubernetes hubbub about? What is Kubernetes, from your perspective? How would you wrap that up and describe the, what it is, and the impact to the customer? >> So, formally it's an orchestration of the container. So what that means is that, when you're developing an application, if you want it to be resilient, you want several instances of that application running, and you want traffic, then, to be low-balanced across it. Kubernetes provides that level of orchestration, to make sure there's always three running. If one fails, it can bring up another one. And it can do that completely automated. So it's a layer that really manages the deployment of containers. As an application developer, you still write your application, you package it up into a container, could be a doc or a container, and then you deploy it using Kubernetes in there. What is interesting, and I think that this is what we've recognized in this last year, I think, is that Kubernetes has a very simple networking model. Which is basically that of having a way to load-balance across multiple containers and keep them running. If you have anything more complicated about different services that you want to talk to from those containers, that may be different places in the universe, we don't have a mechanism for doing that. And everybody was having to write their own. So again, that's where the idea of a service mesh, STF -- >> John: That's where the meshing comes in. >> That's where the mesh ... >> Hundreds and hundreds of services. >> Lynkerd has been doing it for a while, Envoy. >> And Lyft and Uber, they had to do it because they had massive explosion of devices. >> Right, exactly right. And so that's why getting together the code from Lyft and Envoy, adding a control plane to it, which is what Istio really is about, brings that out, too. >> Sounds like an operating system to me, but Lew I one more question for you. You mentioned in, as you described it, Kubernetes, isn't that auto-scaling? If I'm familiar with AWS, isn't that just auto-scaling? Or is it auto-scaling for application instances? Or is auto-scaling more - defined differently? >> It does do the scaling part, it does the resiliency part, but it has a very simple model for that. And that's why you need to have other - but it's a beginning of that orchestration layer. >> Because at the container level, it has all those inherent problems. >> Right. And it can make sure to keep those containers alive and well, and manage the life cycle. >> John: And that's the difference. >> And that's the real difference. Whereas the auto-scaling from Amazon, as a service, is purely a networking capability then tied into bringing up new instances. >> So this is like auto-scaling on steroids. >> It is. But one of the differences also is that Kubernetes and what we're doing here is all open source. So you can run it anywhere. You don't get, a lot of people are very concerned about being locked in to, it used to be, you were locked into Oracle, or to Microsoft, or Java, on premise of things like that. >> Whatever proprietary operating system. >> And now they have concern being locked into these services that are in the public cloud providers. And what we're seeing now with Kubernetes and we're seeing in almost everything around here, by open sourcing them, the advantage is now the enterprise can run the same technology inside, without being locked into a vendor, as they do in the public cloud. >> Lew, so we spent a bunch of time talking about multi-cloud. Some of the more interesting pieces is what's happening at the edge, and IOT. We've heard Cisco talking about it for many years, networking of course important. What's your take, what are you working on, with regards to that these days. >> There's a couple new trends that we've been, IOT is actually now really getting realized, I think, because it is pushing a lot of the computing out to the edge, whether it be in cell phone towers or base stations, retail stores, that kind of edge. At the same time, we're seeing this multi-cloud that we want the big services. If I want to use a machine learning service, I want to use it up in the cloud, and I need to now connect it back to those devices. So multi-cloud is really about, addressing how do you develop applications that run across multiple, in the cloud, on the edge, in an IOT device. There's also, I think you've probably been hearing, server lists, and function as a service. These are, again, a lighter weight way to have kind of an event-driven model, so that if you have an IOT device and it just causes an event, you want to be able to spawn essentially a service, in the cloud, that only runs to process that one event, and then it goes away. So you're not paying to run instances of virtual machines or whatever, sitting there waiting for some event. You get a trigger, and you only pay - so it has this micro-billing capability as a part of it - so that you just can use only the resources. We finally realized the promise that we always had in cloud computing, which is that, pay for only what you need, for what you use. And so this is another way to do that. >> Lew, it's great to have you on theCUBE again, good to see you, great to get the update. I'd like to ask you one more final question to end the segment here. You always have your ear to the ground, reading the tea leaves, you have a unique skill to understand the tech at the root level. What's coming next? If we go back and we have these nice conversations where we're riffing on what's coming out in the next two, three years. It's unclear to some of the visionaries out there, so I got to ask you, what's going to be hot, what do you see emerging? As we saw Kubernetes and discussed, we couldn't have predicted this, I couldn't have. I knew it was going to be hot, I knew it was going to be big, but not this big, changing industry. What do you see out there? What would be the conversation you'd say, 'You know, we've got to watch this,' 'this is going to be a value creation opportunity,' 'enabling technology that's going to make a lot of things' 'flow nicely' - what kind of tech should ... >> Well, it may be a trite answer, 'cause I think a lot of people are seeing the same thing, is that we're actually laying the groundwork here, when we talk about multi-cloud, things that are distributed across multiple things. Accessing different services. I'm still a big believer in, it's going to be in the strength of those services. Whether they be speech-translation services, whether they be recommendation engine, whether it means big data services. Access to those services is what's going to be important. Three or four years from now, we're going to be talking about the intelligence -- >> Without a lot of heavy lifting to integrate it. >> Yes, that's exactly the point. We want it so that somebody can almost visually wire up these things, and take advantage of tremendously powerful machine-learning algorithms. That they don't want to have to hire the machine-learning experts to do it, they want to use that as a service. >> Slinging API, slinging services, wiring things up, sounds like it's an operating system to me. >> It's always an operating system at the end of the day. >> Lew Tucker, Vice President and CTO at Cisco Systems. Industry legend, on the board of CNCF, the fastest-growing organization, where projects equal products equals profit, and of course the OpenStack. Lew, thanks for coming on theCUBE, I'm John Furrier with Stu Miniman, back here live in Austin for more live coverage of CloudNativeCon and KubeCon, after this short break. >> Lew: Thank you.

>> Announcer: Live from Santa Clara, California, it's The Cube. Covering open networking summit 2017. Brought to you by the Linux foundation. >> Welcome back. We are live in Santa Clara at the open networking summit 2017. Been coming here for a couple years, it's a lot of open source going on in storage, for a long time, a lot of open source going on in compute for a long time, and you know, networking was kind of the last one, but we had Martin Casado on on earlier today. He says it's 10 years since he started Nicira. And now, it's a billion dollar revenue run raid inside vmware, so I think the software defined networking is pretty real. We're excited for this next segment, Scott Raynovich, been cohosting all day, good to see you again, Scott. But we're kind of shifting, we're going to add to open networking, we're going to add to open, not compute, but OpenStack, I get them all mixed up, we were just-- >> It's all infrastructure, it's all in the family. >> All right, so our next guest here, representing the OpenStack foundation, is Ildiko Vancsa, get that right? She is the ecosystem technical lead for OpenStack, welcome. And Lisa-Marie Namphy, she's now officially the OpenStack ambassador, which if you follow her on Twitter, you would have known that a long time ago. >> For the U.S. There's several others globally, but for the U.S., yeah. >> So first off, welcome. >> Thank you. >> And what is the OpenStack team doing here at open networking summit? >> So OpenStack itself is a multipurpose generated cloud platform, so we are not just looking into enterprise, IT use cases, but also trying to address the telecom and NFV space. And this is the conference where we are finding many of our ecosystem member companies represented, and we are also learning what's new in the networking space, what are the challenges of tomorrow and how we can start to address them today. >> Right, 'cause the telco is a very active space for OpenStack as well, correct, there's been a good market segment for you. >> Yes, it is an emerging area. I would say we have more and more telecommunications company around and they are also more and more involved in open source. Because I think it's kind of clear that they are also using open source for a while now, but using open source and participating in open source, those are two different things. So this kind of mindset change and transition towards participating In these communities and going out to the public field and do software development there and collaborate with each other and the enterprise IT segment as well, this is what is happening today and it is really great to see it. >> Host: Great, great. >> And you've seen more and more telco's participating in the OpenStack summits, there was an NFV day, I think, even going all the way back to the Atlanta summit. And certainly, in Barcelona, Ildiko was actually doing one of the main stage key notes, which was very focused on telco. And some of the main sponsors of this upcoming summit are telco's. So there's definitely a nice energy between telco and OpenStack. >> Now, why do you think the telco is just the one that's kind of getting ahead of the curve in terms of the adoption? >> Scalable low class clouds. (all laugh) >> Right, and we had John Donovan from AT&T said today that they're either rapidly approaching or going to hit, very soon, more than 50% of software defined networking within the AT&T network. So if there's any questions as to whether it's real or still in POC's, I think that pretty much says it's in production and running. >> I'm doing a lot more of that, so I also run the OpenStack user group for the San Francisco bay area and have been for the last three years, and if we're not talking about Kupernetes, or Docker and OpenStack, we're talking about networking. And tonight, actually, we're going to, the open contrail team is talking about some of the stuff they're doing with open contrail and containers and sort of just to piggyback off of this conference. And next week, as well, we're talking about the network functionality in Kupernetes at OpenStack, if you want to run in down to the OpenStack cloud. So it's a huge focus and the user group can't get enough of it. >> and your guys' show is coming up very, very soon. >> The OpenStack summit? >> Yes. >> Oh, absolutely, May 8th through 11th in Boston, Massachusetts. >> Host: Like right around the corner. >> Yeah. >> The incredible moving show, right? It keeps going and going and going. >> Yeah, yeah, there's going to be 6,000 plus people there. There was just some recent press releases about some of the keynotes that are happening there. There's a huge focus on, you know, I keep calling this the year of the user, the year of OpenStack adoption. And we're really, throughout the meetups, we're really doing a lot to try to showcase those use cases. So Google will be one that's onstage talking about some really cool stuff they're doing with OpenStack, some machine learning, just really intelligent stuff they're working on, and that's going to be a great keynote that we're looking forward to. Harvard will be up on there, you know, not just big name foundation members, but a lot of use cases that you'll see presented. >> So why do you think this is the year, what's kind of the breakthrough that it is the year of the user, would you say? >> Well, I think that just the reliability of OpenStack. I think enterprises are getting more comfortable. There are very large clouds running on OpenStack, more in Asia and in Europe and Ildiko can probably talk about it, particularly some of the telco related ones. But you know, the adoption is there and you see more stability around there, more integration with other, I don't know what to call it, emerging technologies like containers, like AI, like IOT. So there's a big push there, but I think enterprises have just, they have adopted it. And there's more expertise out there. We've focused a lot on the administrators. There's the COA, the certified administrator of, you know, OpenStack administrator exam you can take. So the operators have come a long way and they're really helping the customers out there get OpenStack clouds up and running. So I just think, you know, it's seven years now, into it, right, so we got to turn the corner. >> So there have been some growing pains with OpenStack, so what can you tell us about the metrics today versus, say, three or four years ago in terms of total installations, maybe breakdown of telecom versus enterprise, what kind of metrics do you have you there? >> I'll let you take that one. >> We are running, continuously running a user survey and we are seeing growing numbers in the telecom area. I'm not prepared with the numbers from the top of my head, but we are definitely seeing more and more adoption in the telecom space like how you mentioned AT&T, they are one of the largest telecom operators onboard in the community, and they are also very active, showing a pretty great example of how to adopt the software and how to participate in the community to make the software more and more NFV ready and ready for the telecom use cases. We also have, as Lisa-Marie just mentioned, the China area and Asia are coming up as well, like we have China Mobile and China Telecom onboard as well. Or Huawei, so we have telecom operators and telecom vendors as well, around the community. And we are also collaborating with other communities, so like who you see around OPNFV, OpenDaylight, and so forth. We are collaborating with them to see how we can integrate OpenStack into a larger environment as part of the full NFV stack. If you look into the ETSI NFV architectural framework, OpenStack is on the infrastructure layer. The NFV infrastructure and virtual infrastructure manager components are covered with OpenStack services mostly. So you also need to look into, then, how you can run on top of the hardware that the telecom industry is expecting in a data center and how to onboard the virtual network functions on top of that, how to put D management and orchestration components on top of OpenStack, and how the integration works out. So we are collaborating with these communities and what is really exciting about the Upcoming summit is that we are transforming the event a little bit. So this time, it will not be purely OpenStack focused, but it will be more like an open infrastructure, even. We are running open source days, so we will have representation from the communities I mentioned and we will also have Kubernetes onboard, for example, to show how we are collaborating with the representatives of the container technologies. We will also have Cloud Foundry and a few more communities around, so it will be a pretty interesting event and we are just trying to show the big picture that how OpenStack and all these other components of this large ecosystem are operating together. And that is going to be a super cool part of the summit, so the summit is May 8th through 11th and on May 9th, the CNCF, the Linux foundation, actually, behind this, the CNCF day, they're calling it Kupernetes day. And the whole day will be dedicated, there will be a whole track dedicated to Kupernetes, basically. And so they did another call for papers and it's like a little mini conference inside the conference. So that's kind of what I was saying about the adoption of other technologies. I'm sure the OpenStack foundation is putting those numbers together that you asked about and probably Jonathan or Bryce will stand onstage on the first day and talk about them. But what I think is more interesting and what I would encourage people to go, there's a Superuser magazine. Superuser does a great job telling the stories of what's happening out there, and some of these use cases, and who's adopting this technology and what they're doing with it. And those stories are more interesting than just, you know, the numbers. Because you can do anything with numbers and statistics, but these actual user stories are really cool so I encourage readers to go out to Superuser magazine and check that out. >> It's like, Lego uses it. >> There you go. >> I had to check real fast. >> Lot of information on there. They do a good job of that. >> Lego alligators. >> So you talked about this day with the Linux foundation, is there increasing amounts of cooperation between OpenStack and Linux foundation? Given all the projects that seem to be blossoming. >> Yeah, I don't even know that it needed to increase, there's always been nice energy between the two. There is, you know, Eileen Evans, who we know very well, was on the board of both, the first woman on both boards. She was my colleague for many years at Hewlett-Packard. She's still on the Linux foundation board and there's been a lot of synergy between those foundations. They've always worked closely together, especially things like the Cloud Foundry foundation that came out of the Linux foundation has always worked very closely with OpenStack, the OpenStack foundation, and the board members, and it's all one big happy family. We're all open source, yeah. >> And you talked about the enterprises being, you know, they've been using open source for a long time, Linux has been around forever. They're really more adopting kind of an open source ethos in terms of their own contributions back and participating back in. So you see just increased adoption, really, of using the open source vehicle as a way to do better innovation, better product development, and to get involved, get back to their engineers to get involved in something beyond just their day job. >> It is definitely a tendency that is happening, so it's not just AT&T, like, I can mention, for example, NTT DoCoMo, who now has engineers working on OpenStack code. They are a large operator in Japan. And it is really not something, I think, that a few years back, they would've imagined that they will just participate in an open source community. I've been involved with OPNFV for, I think, two years now, or two and a half. I'm an OPNFV ambassador as well, I'm trying to focus on the cross-community collaboration. And OPNFV is an environment where you can find many telecom operators and vendors. And it was a really interesting journey to see them, how they get to know open source more and more and how they learned how this is working and how working in public is like and what the benefits are. And I remember when a few people from, for example, DoCoMo came to OPNFV and they were, like, a little bit more shy, just exploring what's happening. And then like a half year later when they started to do OpenStack contributions, they had code batches merged into OpenStack, they added new functionalities, they kind of became advocates of open source. And they were like telling everywhere that open source is the way to go and this is what everyone should be doing and why it is so great to collaborate with other operators out in the public so you can address the common pain points together, rather than everyone is working on it behind closed doors and trying to invent the same wheel at the same time, separately. >> Right. >> So that was a really, really Interesting journey. And I think more and more companies are following this example. And not just coming and giving feedback, but also more and more participating and doing coding documentation work in the community. >> And I think if I can understand, what I think, also, the question you might have been asking, there wasn't a ton of python developers in the beginning and everybody's like how do we get these OpenStack developers in the company, you know, it was this huge shortage. And Linux was the little hanging fruit, it's like well, why do we just hire some Linux developers and then teach them python, and that's how a lot of OpenStack knowledge came into companies. So that was the trend. And I think enough companies, enough enterprises do see the value of something like OpenStack or Linux or Kupernetes or whatever the project has, Docker, to actually dedicate enough full time employees to be doing just that for as long as it makes sense and then maybe it's another technology. But we saw that for years, right, with OpenStack, huge companies. And there still are. Not always the same companies, depending on what a company needs and where they are, they absolutely find value in contributing back to this community. >> Okay, and you said you got a meetup tonight? >> I do, yeah. >> Give a plug for the meetup. >> Juniper, it's open contrail talking about open contrailing and containers. And it's at Juniper here in Sunnyville, so if you go to meetup.com/openstack, that's our user group. We're the first ones, we got that one. So meetup.com/openstack is the Silicon Valley, San Francisco bay area user group. And then next week, we're talking about networking and Kupernetes. >> All right, it's always good to be above the fold, that's for sure. All right, Ildiko, Lisa-Marie, great to see you again and thanks for stopping by, and we'll see you in Boston, if not before. >> Absolutely, we'll both be quite busy, we have four, both four presentations each, it's going to be a nutty week. So I'm looking forward to seeing you guys in Boston, always a pleasure, thanks for inviting us. >> Absolutely, all right, thanks for stopping by. With Scott Raynovich, I'm Jeff Frick, you're watching The Cube from open networking summit 2017. We'll be back after this short break, thanks for watching.

>> Narrator: Live from Santa Clara, California, it's The Cube. Covering Open Networking Summit 2017. Brought you to by the Linux Foundation. >> Hey, welcome back everybody. Jeff Frick here with The Cube, along with Scott Raynovich. We're at the Open Networking Summit 2017. Linux Foundation has taken over this show a couple years ago, it's a lot of excitement. A lot of people would say that the networking was kind of the last piece of the puzzle to get software defined, to get open. We're really excited to kick off the show with a really great representative of SDN and everything that it represents. Martin Casado, now with Andreessen Horowitz, Martin, great to see you. >> Hey, I'm super happy to be here. >> So, coming off your keynote, you said it was ten years ago almost to the day that you guys started the adventure called Nicira, which kind of put us where we are now. >> You know, you and I are growing old together here. It has been a decade. I've actually been on The Cube throughout, so I'm very happy to be here. Thanks so much for the intro. >> Absolutely. So, what were your takeaways, Scott, on that keynote? >> It was great, we had some great stuff this morning. Not only was Martin giving the history of Nicira and the origins of SDN and talking about how you made it successful after all these challenges but we also had AT&T unveiling a new incredible white box program, where they're running open networking on their entire network now, so, it was kind of a, I thought, a big day in general to show how far we've gone, right? And you talked a little about that. >> Yeah, listen having come over here since the inception of ONS, what strikes me is, it originally, it was so speculative, it was kind of like wouldn't it be nice and you had all these dreamers. It was largely academics or people from the CTO's office and if you compare those first meetings to now, we're in the industry proper now, right? If you come and you look around, there's huge representation from Telcos, from vendors, from customers, and academics. So, I think we've seen a massive maturation in general. >> I just think I could make a mash-up of all the times we've had you on the Cube table where it's coming! We're almost here! >> Martin: And we're like it's here! >> It's here! But now John Donovan said that their goal, I don't know if it's in the short term or the very near term, is to be over 50 percent software defined, so I guess that's a pretty good definition of being here. >> Yeah, I think so. I think that we're seeing, and I think that the AT&T talk was fantastic, but I think you're seeing this across the industry, which is large customers that have been traditionally conservative, have these targets, and they're actually implementing. I mean, it's one thing to have something on the roadmap. And it's one thing to have something planned. It's another thing to actually start seeing it roll out. >> Jeff: Right. >> Again, this is a process. A lot of my talk was like, how long does it take for an industry to mature? But now, there's many things you can point to that are very real, and I think that was one great example of it. >> Well, the other thing I thought was great in your talk is you mapped out the 10 year journey and you said it so discounts often the hardest part which is changing behavior of the market. That is much harder than the technology and some of the other pieces. >> Right, exactly. So, take this from a technologist standpoint. I basically made a career on making fun of hardware. I'm like, software is so much faster than hardware, and hardware is so slow. But now if I stand back and take a long view, yeah, fine hardware's slower than software, but it's nothing compared to changing organizational behavior or consumer behavior and so, for me it was actually pretty humbling going through this last decade, because you realize that even if you have product market fit, and even if you have a good technical solution, there is a natural law of market physics that you have to overcome a moment of inertia that takes probably a decade, certainly five or six years. >> And that's before things like vendor viability, when you're trying to enter the enterprise space, or legacy infrastructure which is just not getting ripped out, you know? So many hurdles. >> Strictly consumer behavior, right? Consumers are used to doing one thing. I always talk to new entrepreneurs and I say the following: You have two jobs as an entrepreneur. Job number one is you identify a constituency. That constituency wakes up, they think about everything in the world, but they don't think about your thing, so job number one is to get them to think about your thing. That's difficult. It's like Inception. It's like Leonardo DiCaprio Inception. You're putting an idea in somebody's head and then the second thing that you have to do is you have to attach a value to that. So, just because they have the idea doesn't mean that they actually value it. So, you actually have to say, listen, this is worth X amount of dollars. And it turns out that this takes a long time and that's why market category creation is such an effort. That's why it's so neat, we're standing here and we're seeing that this has actually happened, which is fantastic. >> You talked about Nicira, which today, correct me if I'm wrong, it's still the biggest success story in SDN in terms of a startup, you know, 1.3 billion. You talked about different iterations, I think you said, six or seven product iterations and being frustrated at many levels. Did you ever sit there one day and think, "uh, we're going to fail." >> Martin: (laughs) >> Was failure a common- >> Oh man, I don't think there wasn't a quarter when we're like "we're dead." (laughs) By the way, that's every startup. I mean, I'm on- >> Scott: That's just normal, right? >> There's six or seven boards right now, I mean every startup has this oscillator. When we started at Nicira, it was in 2007. And in 2008, the nuclear winter set in, if you remember. The whole economy collapsed, and I think that alone could've killed us. So absolutely, and all startups who do that. But one thing that I never lost faith in was that the problem was real. I wasn't sure we had the right solution or the right approach, and we iterated on that, but I knew there was a real problem here. And when that is kind of a guiding star and a guiding light, we just kept going towards that. I think that's why ultimately we ended up solving the problem we set out to, it was just we took a very crooked path to get there. >> What was the feedback mechanism? Was it like just talking to as many customers as possible or? You talked about the market fit versus the industry fit, how did you gather that information? >> I think in core technical infrastructure, the strategic leaders of a startup have to be piped into the nervous system of both the technology trends and the product market fit. Technology trends because, technology trends provide the momentum for what's going to get adopted and what it looks like. And the product market fit is what is the customer problems that need to be solved. And so I think it's really critical to be deeply into both of those things, which is why things like ONS are so important, because they do kind of find a convergence of both of that. What do customers need but also where's the technology going. >> And it's really neat, that's kind of like the platform versus the application. You're going down the new platform strategy, right? Which is the software-defined networking, but at the end of the day, people buy solutions to their problems that they need to get fixed today. No one's buying a new platform today. >> Yeah, so there's two issues, you're right. There's the technical directions and then the specific applications for that, and one thing I talked about and I really believe is we focus a little bit too much on the technology platform, how those are shifting, early on and less on what the customers need. I don't think you want to 100% flip that, you need to focus on both, but I think that they both should be even-handed. What do customers need and then what is the right technical approach to get there. >> And you also stuck on a couple of really interesting points about decisions. You're going to make a lot mistakes going down the road. But you said, you got to make two or three really good ones and that will make up for a whole lot of little missteps along the path. >> So in retrospect, and this was actually a big a-ha! for me and maybe it's obvious to other people, but this was a big a-ha! to me, even as I was putting together this talk. So, the way venture capital works is you make a lot of bets, but only one in ten will actually produce returns, so you're kind of swinging for the fences and almost all the returns comes from the Googles and the Facebooks and the Ubers and so forth. That's just how it is. Now, as a venture capitalist, you can have a portfolio, you can place ten of those bets in parallel. Going back through all of the slides and everything we've done, I hadn't realized before how similar doing a startup is, which is you make a lot of mistakes in startups, but a few key decisions really drive the strategy. Does that make sense? I always thought maybe you need to do 50/50, or maybe even 80/20, 80% correct and 20 wrong, but it's not that. There's a few key decisions that make it correct, and so the key is you're straddling these two pieces of human nature. On one side, you want to stick with something, you want to make sure that you're not sticking too long with something that isn't going to work, and then the other side you don't want to get rid of something before it's going to work. You want to be both honest with yourself when it's not working and you want to be patient. And if you do that long enough I think that you will find one of the critical decisions to drive the startup forward. >> Yeah, one interesting thing you said, you arrived at a conclusion that the products and individual applications were more important than the platform, and that kind of runs contrary to the meme that you have now where the Harvard Business Review is saying "build a platform, build the next Airbnb." And what you're saying is kind of contrary to that. >> Right, so I went into this with a path from Mindframe, if you look at our original slide deck, which I showed, it was a platform. Now, I think that there's two aspects for this, I think in SDN specifically, there is a reason technically why a platform doesn't work, and the reason for that is networking is about distributed state management, which is very specific to applications. So it's hard for a platform to register that, so technically, I think there's reason for that. From a startup perspective, customers don't buy platforms, customers buy products. I think if you focus on the product, you build a viable business, and then for stickiness you turn that into a platform. But most customers don't know what to do with a platform because that's still a value-add. Products before platforms, I think, is a pretty good adage to live by. >> But design your product with a platform point of view. That way so you can make that switch when that day comes and now you're just adding applications, applications. So, I want to shift gears a little bit just kind of about open source and ONS specifically. We hear time and time again about how open source is such an unbelievable driver of innovation. Think of how your story might have changed if there wasn't, and maybe there was, I wasn't there, something here and how does an open source foundation help drive the faster growth of this space? >> So, I actually think, and I'm probably in the minority of this, but I've always thought that open source does not tend to innovation. That's not like the value of open source is innovation. If you look at most successful open source projects, traditionally they've actually entered mature markets. Linux entered Unix, which is, so I'd say the innovation was Unix not Linux. I would say, Android went into Palm, and Blackberry, and iPhone. I would say MySQL went into Oracle. And so, I think the power and beauty of open source is more on the proliferation of technology and more on the customer adoption, and less on the innovation. But what it's doing is it's driving probably the biggest shift in buying that we've ever seen in IT. So, IT is a 4 trillion dollar market that's this massive market, and right now, in order to sell something, you pretty much have to make it open source or offer it as a service. And the people that buy open source, they do it very different than you traditionally do it. It allows them to get educated on it, it allows them to use it, they get a community as part of it. And that shift from a traditional direct vendor model to that model means a lot of new entrants can come in and offer new things. And so, I think it's very important to have open source, I think it's changing the way people buy things, I think building communities like this is a very critical thing to do, but I do think it's more about go-to-market and actually less about innovation. >> So what does it mean for all these proprietary networking vendors? I mean, are they dead now? >> No, here's actually another really interesting thing, which is I think customers these days like to buy things open source or as a service. Those are the two consumption models. Now, for shipping software, I think shipping closed source software, I think those days are over or they're coming to the end. Like, that's done. But, customers will view, whether it's on-prem or off-prem, an appliance as a service. So, let's say I create MartinHub. So, it's my online service, MartinHub, people like MartinHub. I can sell them that on-premise. Now, MartinHub could be totally closed source, right? Like, Amazon is totally closed source, right? But people still consume it. Because it's a service, they think it's open. And if they want something on-prem, I can deploy that and they still consume it as a service. So, I think the proprietary vendors need to move from shipping closed source software to offering a service, but I think that service can just be on-prem. And I think prem senior shift happens, so I don't think there's going to be like a massive changing of the guard. I do think we're going to see new entrants. I think we're going to see a shift in the market share, but this isn't like a thermonuclear detonation that's going to kill the dinosaurs. (laughs) >> I want to get your take, Martin, on the next big wave that we're seeing which is 5G, and really 5G as an enabler for IoT. So, you've been playing in this space for a while. As you see this next thing getting ready to crest, what are some of your thoughts, also sitting in a VC chair, you probably see all kinds of people looking to take advantage of this thing. >> That's funny. I'm actually going to answer a different question. (laughs) Which is, I-- >> Scott: That's cause 5G doesn't exist yet, right? >> No, I love the question, but it's like, this is really a space that's really near and dear to my heart, which is cellular. And I've actually started looking at it personally, and even in the United States alone, there are something like 20 million people that are under-connected. And I think the only practical way to connect them is to use cellular. And so I've been looking at this problem for about a year, I've actually created a non-profit in it that brings cellular connectivity to indigenous communities. Like, Native American tribes, and so forth. >> Jeff: As the ultimate last mile. >> As the ultimate last mile. Which is interesting, like 5G is fantastic, but if you look at the devices available to these people that have coverage, I think LTE is actually sufficient. So what I'm excited about, and I'm sorry about answering a different question, but it's such a critical point, what I'm excited about is, it used to be 150 thousand dollars to set up a cell tower. Using SDN, I can set up an LTE cell tower for about five thousand dollars and I can use existing fiber at schools as backhaul, so I think now we have these viable deployment models that are relatively cheap that we can actually connect the underprivileged with. And I don't think it's about the next new cellular technology, I think it's actually SDN's impact on the existing one. And that's an area of course that's very personal to me. >> All right, love it. It is as you said, it's repackaging stuff in a slightly different way leveraging the technology to do a new solution. >> And it's truly SDN. If you look at this, there's an LTE stack all in software running on proprietary hardware. I'm sorry, on general purpose hardware that's actually being controlled from Amazon. And again, a factor of ten reduction in the price to set up a cell tower. >> Jeff: Awesome. >> What about the opportunity with Internet of Things and connecting the things with networks' artificial intelligence? >> So, as a venture capitalist, when it comes to networking I'm interested in two areas. One area is networking moving from the machine connecting machines to connecting APIs. So, we're moving up a layer. So we've got microservices, now we need a network to connect those and there're different types of end points, and they require different types of connectivity. But I'm also interested in networks moving out. So, it used to be connecting a bunch of machines but now there's all these new problem domains, the Internet is moving out to interact with the physical world. It's driving cars. It's doing manufacturing, it's doing mining, it's doing forestry. As we reach out to these more mature industries, and different deployment environments, we have to rethink the type of networks to build. So, that's definitely an area that I'm looking at from the startup space. >> What kind of activity's there? I mean, you have guys coming in every day pitching new automated connect-the-car software. >> I think for me it's the most exciting time in IT, right? It's like, the last, say ten fifteen years of the Internet has been the World Wide Web. Which is kind of information processing, it's information in, information out. But because of recent advances in sensors due to the cellphone, the ubiquity of cellphones, the recent advances in AI, the recent advances in robotics, that Internet is now growing hands and eyes and ears. And it's manipulating the physical world. Any industry that's out there, whether it's driving, whether it's farming, is now being automated, so we see all the above. People are coming in, they're changing the way we eat food, they're changing the way we drive cars, they're changing the way we fly airplanes. So, it's almost like IT is the new control layer for the world. >> All right, Martin, thanks again for stopping by. Unfortunately we got to leave it there, we could go all day I'm sure. I'll come up with more good questions for you. >> All right, I really appreciate you taking the time. It's good to see both of you. Thanks very much. >> Absolutely, all right, he's Martin Casado from Andreessen Horowitz. I'm Jeff Frick, along with Scott Raynovich. You're watching The Cube from Open Networking Summit 2017. We'll be back after this short break. Thanks for watching. (mellow music) >> Announcer: Robert Herjavec. >> Man: People obviously know you from Shark Tank, but the Herjavec group has been really laser fo--