In what is considered to be an industry first, Chevron, Schlumberger and Microsoft have announced a three-party collaboration to accelerate the development of petrotechnical and digital technologies.
DELFI is a stable, secure and open cloud-based environment for E&P software across the entire petrochemical lifecycle, including exploration, development and production. The three companies will work together to develop Azure-native applications in the DELFI environment.
The collaboration will roll out in three phases. In the first phase, the companies will deploy the Petrotechnical Suite within the DELFI environment. The second phase will involve deploying Azure-based, cloud-native applications, while the third phase will be centered around the development of a suite of cognitive computing capabilities across the entire E&P value chain.
All three companies are committed to ensuring their joint development efforts meet the latest security, performance and release management standards. In addition, the software will be compatible with the Open Subsurface Data Universe (OSDU) Data Platform, a standard data platform for the oil and gas industry. The OSDU’s stated goal is to ensure data is at the center of the industry, minimizing data silos.
Microsoft’s CEO, Satya Nadella, touted the collaboration as “an enormous opportunity to bring the latest cloud and AI technology to the energy sector and accelerate the industry’s digital transformation. Our partnership with Schlumberger and Chevron delivers on this promise, applying the power of Azure to unlock new AI-driven insights that will help address some of the industry’s—the world’s—most important energy challenges, including sustainability.”
“Customers continue to affirm the need to accelerate the digital transformation and take advantage of the explosion of data we see around us,” says HPE CEO Antonio Neri. “This ultimately is the core aspect of how they derive an improved business outcome. We have a very complete portfolio from the edge to the cloud. Digital transformation starts with secure connectivity. We have a phenomenal platform called Aruba that provides a mobile-first cloud-first approach.”
Antonio Neri, President and CEO of Hewlett Packard Enterprise, discusses on CNBC the companies latest earnings driven by customers continuing to accelerate their digital transformation:
Customers Accelerating Their Digital Transformation
Customers continue to affirm the need to accelerate the digital transformation and take advantage of the explosion of data we see around us. This ultimately is the core aspect of how they derive (an improved) business outcome. Obviously, the uncertainty (do to the China trade war) can create a little bit of a pause. It takes a little bit longer for them to make decisions, particularly with larger deals. That’s what we saw (this quarter), elongated sell cycles.
We executed with incredible discipline both on the cost side and on the pricing side. We actually have done a remarkable job in the last seven quarters to continue to make our cost structure more competitive and to streamline everything across the company. When I became the CEO I established three key priorities for ourselves. One of them, at the core, was to start with our HP Next next program which was to rearchitect the company from the ground up. That included a cost-benefit but at the same time, a portfolio shift. We are seeing the benefit of the portfolio shift today in our margin profile. That gives us the ability to expand margins significantly. I believe we will deliver record levels of year-to-date free cash flow which gives us the confidence to raise the guidance again for seven consecutive quarters.
Digital Transformation Starts With Secure Connectivity
It (the Huawei issue) is an opportunity for us. We have a very complete portfolio from the edge to the cloud. Digital transformation starts with secure connectivity. We have a phenomenal platform called Aruba that provides a mobile-first cloud-first approach. At the same time, we are here to serve our customers in the countries where they participate. We have a very diverse global supply chain that allows us to navigate through these challenges. I take this as an opportunity for us to serve our customers better and continue to provide the value they’re looking for. Obviously, we need to navigate through this uncertainty, whether it is Huawei or others. At the end, we are really focused on our business and our customers.
As our CFO Tarek Robbiati said we are focusing this year on stabilizing our business. We continue to shift our portfolio to higher value, higher margin and deliver everything we can as a service to our customers. You see the results of that in a portfolio mix in key strategic growth areas like high performance compute, which is the backbone for how analytics and AI will be run going forward. We are extremely excited about the completion almost of the acquisition of Craig which will be completed by the end of Q4. At the same time, in the core business, we have to continue to deliver what I call world load optimized hybrid cloud solutions delivered as a service. We are on that journey. We have made tremendous progress. We have a truly differentiated offer called HPE GreenLake, which is to deliver everything as a service.
Customers Accelerating Their Digital Transformation, Says HPE CEO Antonio Neri
“We’re working together with Microsoft to build next-generation supercomputers,” says OpenAI co-founder Greg Brockman. “The real goal of OpenAI and what we’re trying to accomplish is to build what we call artificial general intelligence. They’re trying to build a computer system that is as capable as a human at being able to master a domain of study and being able to master more fields of study than any one human can. We think whoever builds artificial general intelligence will be the number one most valuable company in the world by a huge margin.”
OpenAI Working With Microsoft To Build AI That Will Change The World
We’re working together with Microsoft to build next-generation supercomputers. The real goal of OpenAI and what we’re trying to accomplish is to build what we call artificial general intelligence. They’re trying to build a computer system that is as capable as a human at being able to master a domain of study and being able to master more fields of study than any one human can. If we succeed the kind of thing that we want to be able to do is, for example, build a computer system that can solve medicine better than humans can. If you think about how humans solve medicine today we do it by increased specialization.
I have a friend who’s going through medical procedures right now where he talks to a first doctor who does an ultrasound but can’t read it so he has to go to a different doctor who doesn’t really have context as to what’s going on. This is not a problem that we can solve by increasing the amount of knowledge that humans have to learn. There’s only so much we can fit in our minds. What we really need are tools that are capable of helping us solve these problems. That’s the kind of thing that we want to apply general intelligence to.
Our goal is to distribute the economic benefits of artificial general intelligence. You can imagine a general intelligence system that can generate huge amounts of value. If you look at the top ten most valuable companies in the world, seven of them are technology companies. We think whoever builds artificial general intelligence will be the number one by a huge margin. It’s really important that those benefits go to everyone rather than being locked up in one place.
Building Powerful Safe and Secure AI Technology
There’s a second part which is it’s really important that you keep these systems safe and secure and that you build them with ethics in the forefront. That’s something that both we and Microsoft are very aligned on doing from the beginning. What it really boils down to is that AI technology is becoming very powerful. That means that there’s both these amazing benefits and these amazing applications. Imagine a personalized tutor that can really understand you that is available for free to every person on the planet. That’s the kind of thing we should be able to build with the kind of systems that we want to create.
You also have to ask the questions of what are the risks. How can they be misused? Today, we already see AI technology, for example, deepfakes, that already has bad implications in the world. How do we maximize those benefits and mitigate the downsides? That’s our goal. Our goal is to push the technology forward and make sure that we’re capturing those benefits while making sure everyone benefits from them. But we also want to make sure that we keep it safe and secure to mitigate the downsides.
AI Computational Power Growing 5 Times Faster Than Moore’s Law
The timelines (of where AI will take us) are always really hard to predict. One story I really like thinking about is just looking, for example, at previous technological innovations. In 1878, Thomas Edison announced that he was going to create the incandescent lamp and gas securities in England fell. So British Parliament put together a commission of distinguished experts who came out to Menlo Park. They checked everything out. They said this isn’t going to work and one year later he shipped. I think that we’re in a similar sort of place here where it’s hard to predict what the future will be like.
We’re in this exponential right now where the computational power that we’re using is growing five times faster than Moore’s Law. What we do know is every year we’re going to have unprecedented AI technologies. We’ve been doing that for seven years and OpenAI has been doing it for three. This year we have systems that can understand and generate text. I think five years from now we should expect that we will have systems that you can really have meaningful conversations with. I think that we should see within a bunch of different domains, a lot of systems that can work with humans to augment what they can do much further than anything we can imagine today.
OpenAI Working With Microsoft To Build AI That Will Change The World – OpenAI co-founder Greg Brockman
“What we’ve done at Scale is built the data platform for AI,” says Scale AI’s 22-year-old CEO, Alexandr Wang. “AI is really built on top of data and these algorithms require billions and billions of examples of labeled data to be able to perform in a safe or reliable way. What we’ve done is built a platform that allows these companies to get the data they need to be able to build these algorithms in a safe and reliable way. Then they use the data to build their self-driving cars.”
Alexandr Wang, Scale AI co-founder and CEO, discusses how his company has built the data platform for AI that enables safe and reliable autonomous vehicles. Wang was interviewed on Bloomberg Technology.
We Built the Data Platform For AI To Enable Safe Autonomous Vehicles
What we’ve done at Scale is built the data platform for AI. AI is really built on top of data and these algorithms require billions and billions of examples of labeled data to be able to perform in a safe or reliable way. What we’ve done is built a platform that allows these companies to get the data they need to be able to build these algorithms in a safe and reliable way. Then they use the data to build their self-driving cars. I think it’s very exciting that all these companies have really incredible technology and it’s getting better and better every single year. We’re really getting closer and closer to solving the problem.
One of the big problems in machine learning is perception, being able to fully understand the environment around you using machine learning. So we process a lot of image data, LIDAR data, radar data, map data, etc. for some of these companies. Then for other companies, we process tax data or tabular data or speech data. The work we do is critical to building safe autonomous vehicles, for example, because without the data that we’re able to provide to these companies they actually wouldn’t even be able to build algorithms that could perform in any manner that is safe and reliable.
AI Is Really About Augmenting Humans With Technology
AI is really about augmenting humans with technology and making them more effective and more efficient using technology. In particular, I think for a lot of the problems that we work on where AI plays a really critical role in self-driving or medical imagery, etc., you really want to make sure that humans are a part of the process to ensure that these systems are performing very safely and reliably.
One view that we really take in is, how do we solve this in the most tech-enabled way as possible? How do we use as much machine learning and technology on our side to make the process as efficient and high quality as possible? That’s a very differentiated view actually. Many of these other efforts are much more human-powered than technology powered.
You Don’t Need a Degree To Be Able To Accomplish Your Goals
I was really lucky I grew up in Los Alamos, New Mexico, but after high school, I was lucky to be able to come out here to the Valley to work as a software engineer. That really exposed me to a lot of these problems where AI and machine learning are really core. I went back to school for a year and then after that year at school, I dropped out and started this company.
I think if you know what you want to do, more and more these days, you don’t need a degree to be able to accomplish what you need to do. I think people care a lot more about what can you accomplish and what are your skills.
We Built the Data Platform For AI To Enable Safe Self-Driving Cars, Says Scale AI CEO Alexandr Wang
“Imagine if IT had one tool to fix anything,” says the Chief Creatologist at Dell Technologies Joe Batista. “That’s nirvana. That’s not reality, because I have tool fatigue. I need to get to that simplicity. That’s public enemy number one for us. Now, today, with the influx of cash, the level of innovation cycle time and how the industry’s become more fragmented with lots of products, the complexity has increased exponentially. And the velocity around that complexity is even more accelerated. It hasn’t gotten easier, it’s gotten more difficult.”
Joe Batista, Chief Creatologist at Dell Technologies, discusses the challenges companies face with the exponential pace of changes in technology and innovation in an interview with theCube at WTGtransform 2019:
Helping IT Re-Image the Business
Literally, it (Joe’s ‘Creatologist’ job) sits at the nexus of business and technology. My job, simply, is to help IT re-image the business because now every company’s a technology company. So what does that look like? I’m involved in all sorts of really cool problems, opportunities, that customers are facing by re-imaging IT.
I’ve been around for a long time, and, in the old days, we had swim lanes. You thought about certain vendors, they were in swim lanes. Now, today, with the influx of cash, the level of innovation cycle time and how the industry’s become more fragmented with lots of products, the complexity has increased exponentially. And the velocity around that complexity is even more accelerated. It hasn’t gotten easier, it’s gotten more difficult.
You Have To Rethink the Logic
There’s a couple of thoughts (regarding keeping up with the competition as things constantly change). You have got to look at these vectors that impact a trajectory of the thinking. I love the Peter Drucker quote: If you’re using yesterday’s logic, you’re probably going to get in trouble. You have to rethink the logic, and the example I give was the high jumper and how we did high jumping before and after 1968. As in the Fosbury Flop. So the question becomes what are those vectors?
At Dell Technologies, we have a huge portfolio of technology. But how do you think about the parameter about how those things change over a depreciation cycle? During a conference talk I got a lot of post questions afterward and a lot of engagement regarding this, so it seemed to resonate with the field. The thing that they liked the most was the business conversation of IT. They’re like, we don’t do that enough.
Imagine If IT Had One Tool To Fix Anything
Imagine if IT had one tool to fix anything. That’s nirvana. That’s not reality, because I have tool fatigue. I need to get to that simplicity. It’s Glass’s Law. Every 25% increase in function is 100% increase in complexity. That’s public enemy number one for us.
I was absolutely amazed when I did my due diligence (before joining Dell) about all the innovation that happens in this company. Phenomenal. Not only about the hardware but the software. I think, actually, Jeff (Clarke) said it best. I think we have more software engineers now than we have hardware engineers. So the pivots there, we’re pivoting our talent to the software. But it’s the innovation that’s in this company. I think customers are amazed at that innovation.
The supercharger on it is, how does the innovation apply to the business mechanics of the company, and what value do you extract from that? And that’s where the whole language and conversation usually happens with us. I will tell you, though, I’m really excited that Dell Technologies is doubling down on business outcomes. They’re really trying to change the culture in helping customers understand what the technology means.
Imagine If IT Had One Tool To Fix Anything – Joe Batista, Chief Creatologist at Dell Technologies
“We have something brand-new we call the Commerce Page Designer,” says Mike Micucci, CommerceCloud CEO at Salesforce. “It allows you to create experiences with clicks not code. You can literally drag and drop things around on the page and just put them right where you want to. You don’t need to be a programmer or a data scientist to do it. Your marketers and your merchandisers can build those experiences super fast to respond to different market changes.”
You Have To Really Put the Customer Right At the Center
In today’s industry, it’s not just about showing up and having a pretty picture you have to really put the customer right at the center. When they are there experiencing your brand you’re not delivering just the premium experience but you’re personalizing it to them. It’s not just on the shopping site it’s everywhere they go, from how you engage with them on social all the way through on customer service.
Putting the customer at the center to deliver a premium, a personalized experience, that’s a differentiator today. That’s what the customers are expecting everywhere they go. That’s is the key.
Commerce Page Designer Creates Experiences With Clicks Not Code
Our team has been working all year to get ready for Connections. We’ve got some great news that we’re going to showcase. First and foremost, we have something brand-new we call the Commerce Page Designer. It allows you to create experiences with clicks not code. You can literally drag and drop things around on the page and just put them right where you want to. You don’t need to be a programmer or a data scientist to do it. Your marketers and your merchandisers can build those experiences super fast to respond to different market changes. That’s one of the biggest things that we’re producing.
The second thing is we also have a lot of new tech for developers. We’re connecting Heroku Solution kit and Commerce together in a whole new way. With this new Heroku Solution Kit, which includes templates to help you build mobile apps, shopping apps, and service cloud apps. They are all right there in front of you so they developers can be super productive with this great environment with Heroku where you can manage and build apps.
Thirdly is MuleSoft. It takes on average about 39 different systems to pull off a commerce scenario. Those are back-end systems like ERP, your order system, and inventory. What we’ve done with MuleSoft is we made it a lot easier to connect commerce through MuleSoft to all those legacy systems through one unified layer. So today, we’re announcing this new MuleSoft For Commerce Cloud Accelerator so that developers have a whole set of preset of APIs so they can jump-start that process.
Those are three great innovations. One for all your marketing and merchandisers. Then there are two great innovations for the developers that make them much more productive. Our goal is to help you not only deliver premium experiences but do it really fast.
Einstein and AI Are Really Reshaping Commerce
So what is next on the horizon? First and foremost, we always listen to our customers tell us here are the things that they need to drive their business. But what you should be looking for is how Einstein and AI are really reshaping commerce. You’ll see that in how Einstein is not just doing product recommendations but reshaping the entire customer experience.
Einstein takes away of a lot of those things that you used to do manually, let’s say like visual search where you can shop by pictures, where Einstein will figure out, hey, what’s in that picture and make it really easy to add it to the cart. It can take a lot of the guesswork out of it and just really make the shopping experience delightful. So stay tuned for a lot more AI and a lot more Einstein.
https://youtu.be/Wpu7zVQTZ-Q
Salesforce Commerce Page Designer – Creates Experiences With Clicks Not Code – Mike Micucci
“Fiverr is the everything store for digital services,” says Fiverr CEO Micha Kaufman. “The way people usually find freelancers is they post on Facebook asking if someone knows a good graphics designer. What we’re doing is we’re making it a one-click experience. There’s no bidding, betting, negotiating. There’s browse, search, buy. It’s an Amazon experience to buy a digital service.”
Micha Kaufman, CEO of Fiverr, discusses today’s IPO and how Fiverr has become the Amazon for digital services in an interview on CNBC:
Fiverr Is The Everything Store For Digital Services
Fiverr connects freelancers with businesses of all sizes. Really, the uniqueness of the platform is that the experience of buying a digital service on Fiverr is very similar to shopping on Amazon. You browse, you search, you find something, you click order, and it’s done. Graphic design is one of our most popular services on the platform. Also popular are content marketing, videography, animation, music services, and marketing and advertising. Anything you can imagine.
It’s the everything store for digital services. The system helps you productize your offering. You can define what you’re offering, how much time it’s going to take you to deliver, and the asking price. All the buyers have to do is screen through the offerings, find something they like, click order and pay, and they are done.
It’s An Amazon Experience To Buy a Digital Product
In the categories in which we operate there is a volume of activity of $100 billion in the US alone. It’s still only a single digit percentage online. It’s a very old-school business. The way people usually find freelancers is they post on Facebook asking if someone knows a good graphics designer. What we’re doing is we’re making it a one-click experience. There’s no bidding, betting, negotiating. There’s browse, search, buy. It’s an Amazon experience to buy a digital service. Nobody has done it before. The average time to make an order on Fiverr is 15 minutes. this is unbeatable. It’s unmatched.
We take a take out of every transaction. It’s one of the industry-leading take rates of over 26 percent. If you look at the EBITDA margins, you see that they’re shrinking. The way we actually structured the business is that we continue to grow aggressively while shrinking our negative EBITDA. There is a clear path to profitability. We are operating in over 160 countries. Our growth is coming globally from the adoption of freelancing online.
Our Primary Competitor is Definitely the Offline Market
Our primary competitor is definitely the offline market. I don’t know if it’s 96 or 97 percent of the activity offline, but we don’t need to eat anyone’s lunch to grow. We just need to move offline activity to the online. The offline freelancing market is massive. we’ve estimated that market to be a hundred billion dollars in the US alone. Europe is 1.5 times bigger than the US. There are over 162 million freelancers between the EU and the US. The opportunity is massive and it’s just starting to come online. This is like 1995 for ecommerce. This is so exciting.
Fiverr doesn’t hire its freelancers. It’s just the market that connects freelancers with businesses that have their digital needs. The way the marketplace is structured is such where we don’t have any employee-employer relationships. We are not relying on freelancers. We’re just connecting that supply with a demand that comes forward. We’re the platform on top of which they actually conduct their transaction. We just provide the platform to make that happen. It is very different than Uber and Lyft.
Fiverr Is The Everything Store For Digital Services, Says Fiverr CEO Micha Kaufman
“We’ve launched the biggest change we’ve ever made to our product, an all-new desktop app,: says Dropbox CEO Drew Houston. “It evolves the Dropbox experience from a folder full of files to a living team workspace. You can have not just files but any kind of cloud content. We saw so many of our customers, and frankly ourselves, struggling. There are all these new apps and they’re great but how do you stitch them all together? We see a big opportunity to make that a much more seamless experience.”
Drew Houston, CEO of Dropbox, discusses extensive new feature added to the Dropbox product from just a folder full of files to a living team workspace in an interview on Bloomberg Technology:
Evolves the Dropbox Experience To a Living Team Workspace
We’ve launched the biggest change we’ve ever made to our product, an all-new desktop app. It evolves the Dropbox experience from a folder full of files to a living team workspace. You can have not just files but any kind of cloud content. So G Suite, things like Google Docs, Sheets, and Slides, really anything that you’re using. It also includes integrations with tools like Slack and Zoom. From within Dropbox, you can send people messages, you can start meetings, you can send things out for signature, or see your calendar. It’s a much more integrated workspace.
We saw so many of our customers, and frankly ourselves, struggling. There are all these new apps and they’re great but how do you stitch them all together? We see a big opportunity to make that a much more seamless experience. We’re really excited about it and can’t wait to get it out there.
The New Dropbox Experience Integrates Your Workspace
New Dropbox Organizes and Simplifies Your Working Life
Most, if not all companies, are going to have integrations. The opportunity we saw is to organize it, to really bring it into a well-designed coherent experience, and different from some of the messaging tools. What Dropbox allows you to do is within a native app you can have all your content in one place work across all these different ecosystems. Instead of the interface of just being a list of messages, you can see here’s what you’re working on. Here are our projects and here are the most important pieces of content. We think from a design standpoint it’s a pretty different approach.
What we’re seeing is that users want choice. They are using all kinds of different apps for communication, for content, for coordination. What’s missing is a way to stitch it all together. That’s the role that we think we can play. It’s very similar to the role we played in the beginning with helping you get to your stuff from all these different platforms and operating systems. Now we’re thinking about how do we organize and simplify your working life and help stitch together all these different things.
Second, I’d say a lot of what we’re doing is complimentary. You’re not going to stop using Slack or stop using these other tools. In fact, we’re making it easier for you to get to them. We find that a lot of our customers love using these different tools but they need a more integrated experience. Not having that means you’re always switching back and forth and there’s a lot of friction.
New Launch Evolves the Dropbox Experience To a Living Team Workspace, Says CEO Drew Houston
“We have a pretty significant market segment leadership position in this infrastructure cloud computing space,” says AWS CEO Andy Jassy. “There are a few reasons for it. The first is we just have much more functionality by a large amount than anybody else. We are also iterating at a faster clip. When you actually look at the details that gap in functionality is widening.”
In My Wildest Dreams, I Never Imagined a 6-Year Head Start
We were trying just to get to launch (2006) without our friends across the lake (Microsoft) knowing about it. At that time Amazon was not known as a technology provider to companies. We felt it was really important for us to be first to market to have a chance to be successful. I was hoping we could just get to launch without anybody else knowing and beating us to the market. In my wildest dreams, of the many surprises we had, I never imagined we would have a six-year head start. I don’t know exactly why others didn’t follow. I think for some of the older guard technology companies our model was very disruptive to their existing businesses. It’s really hard to cannibalize yourself.
I think they kind of wished it away (Oracle, IBM, etc.). It’s hard when you have an existing business that’s working it’s hard to cannibalize it with a product with a much lower margin. I think that some of the other players probably were distracted by some of the other things they were working on. Then their initial attempt at the business turned out to be the wrong abstraction. It turned out to be a higher abstraction when builders really wanted the individual building blocks to construct and stitch together however they saw fit.
We Are Iterating At a Faster Clip
We have a pretty significant market segment leadership position in this infrastructure cloud computing space. There are a few reasons for it. The first is we just have much more functionality by a large amount than anybody else. We are also iterating at a faster clip. When you actually look at the details that gap in functionality is widening. That turns out to really matter if you’re an enterprise or a government who is going to move all their applications to the cloud. Or if you want to be able to unleash your builders to build anything they can imagine.
The second thing is we just have a much larger ecosystem of partners around our platform. It’s not just the thousands of systems integrators who build practices on AWS. Most ISVs and SAAS providers will adapt their software to work on one technology infrastructure platform, few will do two and hardly any will do three. They all start on AWS just because of our leadership position. You get to move to the cloud with a lot more of the software that you want to use.
The third thing that is pretty different is that we’re just at a different operating maturity than these other providers having been at six years longer. It turns out it’s really different running large scale infrastructure for yourself and your company where you get to tell everybody the way it’s going to be it is for running it for millions of external customers with every imaginal use case all over the world where they get to use you without any warning. It just forces a different kind of operating discipline and rigor. You can see that borne out in the operational performance.
Microsoft Is the Clear Number Two Player Right Now
We are pretty early in this space right now. It the infrastructure technology space I don’t think there are going to be 25 winners because scale really matters. But there’s not going to be just one. The market segments that we address in infrastructure software, hardware, and data center services globally is trillions of dollars ultimately. There are going to be several successful players. I do believe that Microsoft will have a business there. They are building the business and they are the clear number two player at this point. I think there will be other players who are successful as well. As for Google, I think they are working at it.
In all of our businesses, there are startups that none of us know about today that have the ability to disrupt. If you think the technology changes in the last ten years have been disruptive, and I think they have been unbelievably dynamic, I think the next ten years is going to be faster than the last ten. There are all kinds of new technology that will evolve that will give people a chance to build businesses and pursue various segments. I don’t know exactly who they will be in our space, but I’m confident there will be.
We Are Iterating At a Faster Clip, Says Amazon Web Services CEO Andy Jassy
“There’s a gap between what they think is happening and really what’s going on,” says Qualtrics CEO & Co-Founder Ryan Smith. “So we said, hey, we’re going to go hard into developing the coolest, easiest, and most sophisticated employee experience product (EmployeeXM). We’re going to build that and we’re going to tie it together with the customer experience.”
Ryan Smith, CEO & Co-Founder of Qualtrics, discusses the genesis of Qualtrics and how it has evolved into a sophisticated and integral platform for the enterprise in an extensive interview with Jason Calacanis:
We View Ourselves As a System Of Action
In the beginning, it was very much around being able to collect data, kind of being on the front end of that. You were able to collect data. You were able to put it into an analytical system and then you were able to report on it. Because of that, we were kind of branded as this survey platform for a long time. I’d say over the last eight to ten years all the survey is a form. There’s a form engine that allows you to do anything you could ever want to do with a form. A form can be through text, a form can be through a chatbot, it can be through anything. Then there’s an analytical platform and then there’s a reporting platform.
A lot of our investment has been into actioning. We view ourselves as a system of action. How do you actually gather data that doesn’t exist? What experience management is — most organizations are in a world where they’ve resigned to the fact that they have all the data that they need. From our standpoint and what we see it’s the opposite. We’ve got operational systems that are telling us what’s happened. But the “why” is able to be collected in ways that never could have been done in 2002 because we have such amazing access to people. We think it’s just starting, especially now that we can go gather the “why” data through 13 or 14 different methods. It all comes together and you get a full picture. You see what happened and now you get to see “why” and that’s pretty powerful.
If you’re thinking about the Google Analytics side it would be like these people visit our site. These people abandoned their shopping carts. These people are doing this. Or I’m an LA Hotel and I see a bunch of people from LA visiting. I don’t know why they’re visiting. They’re not staying with me. They used Qualtrics and the first ten people say that they’re there for the happy hour menu. The one person shop running IT just pops up the happy hour menu through Qualtrics without changing their whole website. Now they’re at home and they’re delivering a great experience and it only shows up for the people from LA.
EmployeeXM – Coolest, Easiest, and Most Sophisticated
If you look at the airline industry one of the interesting things is we power probably all the feedback on the 30 or 40 different airlines around the world. Most people know Qualtrics for the customer feedback because they’ll fly and they’ll get an email or a text that says thumbs-up thumbs-down, how was your experience? What we’ve seen as we launched the XM (Experience Management) platform, and this is what SAP is so excited about, we created this category because of all the uses we were seeing on Qualtrics. Our employee experience was taking off in a way where we were like, whoa, 50 percent of the customer problems have to do with an employee.
Then at the same time, the average tenure here in the Bay Area is like 18 months. I don’t know one CEO that says we’re going to go recruit and spend all this money but we’re going to bring people in for only 18 months. So there’s a massive gap. There’s a gap between what they think is happening and really what’s going on. So we said, hey, we’re going to go hard into developing the coolest, easiest, and most sophisticated employee experience product (EmployeeXM). We’re going to build that and we’re going to tie it together with the customer experience.
The Inside Manifests Itself On the Outside
From the time they start in the company to the time they exit how do we know everything that’s going? Even in the recruiting process, how do we make sure that as a company what we think we’re delivering is being received on the other side? I believe the inside manifests itself on the outside. We’re seeing this across brands. Now we’re seeing the customer and the employee. If you look in an airline, they’re using us on the customer, the employee, the product, and the brand side.
If you look at when someone goes and shows up to a gate a lot of times they’re upset before they even get there. The employee deals with an upset customer and that impacts the entire experience. When you rate or you think about how your flight was you’re only thinking about the brand. It’s a bunch of experiences tied together. We’re helping organizations manage all their experiences for the first time on one single platform. It doesn’t make sense that you’ve got five different software’s doing this. We’re doing this at an enterprise level. That’s how people are using it.
EmployeeXM – The “Coolest” and “Most Sophisticated” Employee Experience Product – Qualtrics CEO Ryan Smith
“The long-term goal (with Alexa) was to try to invent the Star Trek computer,” says David Limp, Amazon’s SVP of devices and services. “I grew up watching Roddenberry and loved it. We all loved watching it and the science had moved up enough where we thought we had a shot at it. It’s still going to take us years, if not decades more, to get to the shining star that is that Star Trek computer. But we think we can do it.”
David Limp, SVP of Devices & Services at Amazon, discusses the future of devices and Amazon’s role in building trust and protecting privacy in an interview on CNBC at the Amazonre:MARS conference in Las Vegas:
Long-Term Goal With Alexa Is To Invent the Star Trek Computer
The long-term goal (with Alexa) was to try to invent the Star Trek computer. I grew up watching Roddenberry and loved it. It was a lot more innocent than you might make it out to be. Which is, can we invent that computer? We all loved watching it and the science had moved up enough where we thought we had a shot at it. It’s still going to take us years, if not decades more, to get to the shining star that is that Star Trek computer. But we think we can do it.
If you have that in your house or in your car or in your conference room, you’re going to find all sorts of things to do with it. Some, Amazon will invent and it’ll help Amazon. But much more, it’ll help developers. There are 90,000 plus skills and hundreds of thousands of developers building around Alexa right now. If you’d five years ago said there’s going to be a new developer ecosystem that’s not about an operating system and that’s not about applications, but about skills in the cloud, you would have laughed at me. But here it is sitting in front of us, all around us, right here.
Star Trek popularized the idea of the Voice First computer. Amazon Alexa made it reality.
Our Focus Is To Invent On Behalf Of Customers
Our focus is to invent on behalf of customers. If we keep our focus there and build cool things that customers love to use and continue to earn their trust, which we have to do every day, then we think the outputs will speak for themselves. We focus on that. Customer trust is kind of the oil of the Amazon flywheel. We think about it every day. It’s thinking about privacy as you think about the kinds of products that we’re doing. Whether it’s a Ring doorbell or it’s an Echo sitting in your kitchen, it has to be foundational to the product. It’s not something you glom on later as an afterthought.
We think about it at the very upfront when we’re beginning to invent the product. We’re gonna put these in our homes. What do we want to think about privacy? What do we think about trust? We build features into the products and into the services where (those concepts) are first and foremost and paramount. We’re continuing to evolve that as well. It’s not like you’re going to get everything right day one. As we learn from customers we’ll add new features and services that build on that and add more privacy and trust as we go on.
The First Thing Is To Get Customers To Love A Product
The first thing is to get customers to love a product. If you build a product that customers love and use then good things usually come in consumer electronics when you do that. For us, that’s the first thing that you want to do. It happened early on with Kindle. People loved it and then we figured out how to build a book business around it. Similarly, the great thing about Echo and Alexa is that customers love the product.
I don’t think that they’re necessarily buying more yet because of that but they are doing certain things in digital that leads to buying some more things. Specifically, we’ve kind of brought music back into the home again. It had an atrophied in the home. Now music subscription services, Spotify, Amazon music, and Apple music starting last year. They’re growing on Echo and Alexa. People are listening to audiobooks. We have a business there in Audible with the subscription services. Those are the early signs where you start seeing that. In addition, people are buying more smart home products. Whether it’s a smart plug or a light bulb or a robotic vacuum, people are buying those more because it’s easier to control with a voice interface.
Anything That Advances Privacy For Customers, I’m a Fan Of
Anything that advances privacy for customers and gives them a more trusted environment, I’m a big fan of as a consumer. I don’t know enough about that product (announced on Monday by Apple) to weigh in on the specifics of it. As you think about Amazon and our credentials and being able to log on to Amazon, we’ve been doing that for 20 plus years. Your credit card number and your address which we ship your products to, that’s sacrosanct. We have to build trust every day. Any other company or any other person that’s furthering that I think it’s just great for the industry.
Long-Term Goal With Alexa Is To Invent the Star Trek Computer, Says Amazon SVP David Limp
“Our acquisition of Dynamic Yield has brought us a lot of excitement,” says McDonald’s CEO Steve Easterbrook. “Very simply put, in the online world when we’re shopping and we pick an item and put it into our shopping basket, any website will automatically suggest two or three things to go along with it. We’re the first business that we’re aware of that can bring that into the physical world. It’s really just taking data and machine learning and AI, all these sorts of technical capabilities.”
Steve Easterbrook, CEO of McDonald’s, discusses how the company is using technology to elevate the customer experience and accelerate growth in an interview on CNBC:
Continue To See How We Can Elevate the Customer Experience
As we’ve executed the growth plan we’ve spent the first two years, three or four years ago, turning the business around. Now we’ve had a couple of years of growth. We’re confident now that we’re beginning to identify further opportunities to further accelerate growth. That takes a little bit of research and development cost. It means you’ve got to bring some expertise into the business to help us do that. We’re still managing to effectively run the business. G&A is staying the same and we’re putting a little bit more into innovation.
We continue to see how can we help continue to elevate the experience for customers. With this pace of change in the world and with different technology and different innovations, whether it’s around food, technology, or design, we’re seeing opportunities that we think can either make the experience more fun and enjoyable or smoother for customers. If we can find that we’re going to go hard at it.
We need to continue growing. If where we are investing that money is helping drive growth across 38,000 restaurants then I think the shareholders and investors would be satisfied. We want to bring our owner-operators along with us as well. They’re investing their hard-earned dollars so that always means we got a business case. The owner-operators will want to see a return on their investment just the same as a shareholder would. We’ve got a wonderful check and balance in the system to help us make sure we spend that innovative money in the right way.
Using Data, Machine Learning, and AI to Accelerate Growth
Our acquisition of Dynamic Yield has brought us a lot of excitement. It was our first acquisition for 20 years. It was an acquisition in a way that was different from the past. It wasn’t looking at different restaurant businesses to try and expand our footprint. It’s bringing a capability, an IP and some talent, into our business that can help us accelerate the growth model. We completed the deal mid-April and within two weeks we had that technical capability in 800 drive-throughs here in the U.S. It’s a very rapid execution and implementation.
Very simply put, in the online world when we’re shopping and we pick an item and put it into our shopping basket, any website we’re on these days will automatically suggest two or three things to go along with it. People who buy that tend to like these things as well. We’re the first business that we’re aware of that can bring that into the physical world. As customers are at the menu board, maybe they’re ordering a coffee and we can suggest a dessert or they’re ordering a quarter pounder with cheese and we can suggest making that into a meal. It’s really just taking data and machine learning and AI, all these sorts of technical capabilities.
Mining All of the Data Will Improve the Business
The best benefit for customers is we’re more likely to suggest things they do want and less likely to suggest things they don’t. It’ll just be a nicer experience for the customer. But yes, for the restaurant itself, because we can put our drive-thru service lines in there, for example, the technical capability by mining all of the data will be to suggest items are easier to make at our busier times. That’ll help smooth the operation as well. The immediate result will be some ticket (increases). But frankly, if the overall experience is better customers come back more often. That’s ultimately where the success will be, driving repeat visits and getting people back more often.
Across the entire sector, traffic is tight right now and people are eating out less. They have been progressively eating out less for a number of years. Whether it’s the advent of home delivery, for example, which is something we participate in, but at the moment it’s just a little bit tight out there. It’s a fight for market share. Anyone who is getting growth, typically it’s because they’re adding new units. People are finding it hard to (increase) guest count growth. It’s something that we have stated as an ambition of ours. We think that’s a measure of the true health of the business. Last quarter, we did grow traffic and we’ve grown traffic for the last couple of years, but only modestly. We want to be stronger than that.
How McDonald’s Is Using Data, Machine Learning, and AI to Accelerate Growth
“The surprise outcome ten years from now is there’ll be something much bigger than the private cloud and the public cloud,” says Dell Technologies CEO Michael Dell. “It’s the edge. I actually think there will be way more computed data on the edge in ten years than any of the derivatives of cloud that we want to talk about. That’s the ten-year prediction.”
Data Has Always Been at the Center of How the Technology Industry Works
We feel great. Our business has really grown tremendously. All the things we’ve been doing have been resonating with customers. We’ve been able to restore the origins of the entrepreneurial dream and success of the company and reintroduce innovation and risk-taking into a now $91 billion company growing at double digits last year. Certainly, the set of capabilities that we’ve been able to build organically and inorganically, with the set of alliances we have, the trust that customers have given us, we are super happy about the position that we’re in and the opportunities going forward. I think all this is really just a pregame show to what’s ahead for our industry and for the role that technology is going to play in the world.
Data has always been at the center of how the technology industry works. Now we just have a tsunami, an explosion of data. Of course, now we have this new computer science that allows us to reason over the data in real time and create much better results and outcomes. That combined with the computing power all organizations have to reimagine themselves given all these technologies. Certainly, the infrastructure requirements in terms of the network, the storage, that compute, the build-out on the edge, tons of new requirements, we’re super well-positioned to go address all that.
Predicts in 10 Years More Computed Data on the Edge Than Cloud
The surprise outcome ten years from now is there’ll be something much bigger than the private cloud and the public cloud. It’s the edge. I actually think there will be way more computed data on the edge in ten years than any of the derivatives of cloud that we want to talk about. That’s the ten-year prediction. That’s what I see. Maybe nobody’s predicting that just yet, but let’s come back in ten years and see what it looks like.
Really what we’re doing is we’re bringing to customers all the resources they need to operate in the hybrid multi-cloud world. First, you have to recognize that the workloads want to move around. To say that they’re all going to be here or there is in some sense missing the point because they’re going to move back and forth. You’ve got regulation, cost, security, performance, latency, all sorts of new requirements that are coming at you and they’re not going to just sit in one place.
This is All Super Important As We Enter This AI Enabled Age
Now with the VMware cloud foundation, we have the ability to move these workloads seamlessly across now essentially all the public clouds. We have 4,200 partners out there, infrastructure on-premise built and tuned specifically for the VMware platform and empowered also for the edge. All of this together is the Dell Technologies cloud. We have obviously great capabilities from our Dell UMC infrastructure solutions and all the great innovations at VMware coming together.
Inside the business, the first priority was to get each of the individual pieces working well. But then we saw that the real opportunity was in the seams and how we could more deeply integrate all the aspects of what we’re doing together. You saw that on stage you know in vivid form yesterday with Pat and Jeff and Satya and even more today. Of course, there’s more to do. There’s always more to do. We’re working on how we build a data platform bringing together all of our capabilities with Boomi and Data Protection and VMware. This is all going to be super important as we enter this AI enabled age of the future.
We’ve Created an Incredible Business
I think investors are increasingly understanding that we’ve created an incredible business here. Certainly, if we look at the additional coverage that we have as they’re understanding the business, some of the analysts are starting to say hey this doesn’t really feel like a conglomerate. It’s a direct quote. If you think about what we demonstrated today and yesterday and will demonstrate in the future we’re not like Berkshire Hathaway. This is not a railroad that owns a chain of restaurants. This is one integrated business that fits together incredibly well and it’s generating substantial cash flows.
I think investors over time are figuring out the value that’s intrinsic to the overall Dell Technologies family. We’ve got lots of ways to invest, we got VMware, SecureWorks, Pivotal, and of course the overall Dell Technologies.
Michael Dell Predicts in 10 Years More Computed Data on the Edge Than Cloud
“If you think about where we are on the technology adoption curve and the trillion dollars of spend that are ultimately going to move, there’s no doubt that it’s a cloud-first world,” says Prashanth Chandasekar, Senior Vice President & General Manager at Rackspace. “But the vast majority of the workloads exist in traditional IT. How do we take on that hybrid movement? Amazon is very aggressively investing and we’re investing with them and helping our customers along their journey effectively.”
Prashanth Chandasekar, SVP & GM at Rackspace, discusses how Rackspace has transformed from primarily a hosting company to a technology service company helping enterprises effectively and efficiently move to the cloud on AWS and other platforms in an interview on theCUBE at AWS Summit London 2019:
Rackspace Helping Companies Navigate to the AWS Cloud
Ultimately part of the reason why customers in our install base were reaching out to us and saying, ”Hey Rackspace, you’ve done a phenomenal job helping us in the first evolution of our journey, can you help us now in this new world where it’s actually quite complicated?” Over 1,400 features on average are being launched by Amazon on a yearly basis. Despite what we hear in the headlines where cloud first companies and the startups of today are absolutely leveraging Lambda out of the gate or containers out of the gate.
There are a whole host of companies that are going through this massive digital disruption trying to compete with these startups. They need a lot of help to reskill their workforce to change the way they think about processes within their organizations between their business development and technology and operations teams. Then ultimately, how do they actually build out a much more agile way of responding to customers? That work requires a company like Rackspace to come and help them navigate through that really large set of features.
There’s No Doubt It’s a Cloud First World
That’s what’s so dynamic about the space. Nobody would have predicted this ten years ago. Even today we’re seeing a ton of momentum with concepts that were very nascent just a few years ago. Kubernetes is a concept where almost every one of our AWS customers at Rackspace, what we call fanatical AWS, are absolutely looking for help on Kubernetes. When we think about Docker a few years ago and Dock Enterprise and we think about Kubernetes and there was that battle, today the battle has been won. Kubernetes is pretty much the de-facto orchestration engine. Nobody would have predicted that a couple of years ago.
Hybrid and multi-cloud are becoming a lot more prevalent. I think even Amazon is very much acknowledging that the big opportunity is in hybrid cloud. If you think about where we are on the technology adoption curve and the trillion dollars of spend that are ultimately going to move, there’s no doubt that it’s a cloud-first world or a destination is the cloud. But the vast majority of the workloads exist in traditional IT. How do we take on that hybrid movement? Outposts is a great acknowledgment of that. Amazon is very aggressively investing and we’re investing with them and helping our customers along their journey effectively.
There’s No Doubt It’s a Cloud First World, Says Rackspace SVP Prashanth Chandasekar
PagerDuty began trading on the New York Stock Exchange for the first time this morning and is now trading at more than 60% above their IPO price of $24. That gives the company a market capitalization of more than $2.7 billion. PagerDuty offers a SAAS platform that monitors IT performance. The company had sales of $118 million for its last fiscal year, up close to 50% over the previous year.
The company uses machine learning to inform companies in real-time about technical issues. “Our belief is that machine learning and data should be used in the service of making people better, helping people do their jobs more effectively, and delivering those great brand experiences every time,” says PagerDuty CEO Jennifer Tejada. “PagerDuty is really about making sure that our users understand that this could be a good thing, being woken up in the middle of the night if it’s for the right problem. It’s a way that can help you deliver a much better experience for your customers.”
It’s Gotten Harder for Human’s to Manage the Entire IT Ecosystem
If you think about the world today, it’s an always-on world. We as consumers expect every experience to be perfect. Every time you wake up in the morning, you order your coffee online, you check Slack to communicate with your team, and maybe you take a Lyft into work. Sitting behind all of that is a lot of complexity, many digital and infrastructure based platforms, that don’t always work together the way you’d expect them to. As that complexity has proliferated over the years and because developers can deploy what they like and can use the tools that they want it’s gotten harder for human beings to really manage the entire ecosystem even as your demands increase.
You want it perfect, you want it right now and you want it the way you’d like it to be. PagerDuty is the platform that brings the right problem to the right person at the right time. We use machine learning, sitting on ten years of data, data on humans behavior and data on all these signals there that are happening through the system, and it really helps the developers that sit behind these great experiences to deliver the right experience all the time.
Machine Learning Should Be Used to Deliver Great Brand Experiences
Going public is the right time for us right now because there’s an opportunity for us to deliver the power of our platform to users all over the world. We are a small company and we weren’t as well-known as we could be and this is a great opportunity to extend our brand and help developers and employees across teams and IT security and customer support to deliver better experiences for their end customers all the time.
At PagerDuty we take customer trust and user trust very seriously. We publish our data policy and we will not use data in a way other than what we describe online. We care deeply about the relationship between our users in our platform. Our belief is that machine learning and data should be used in the service of making people better, helping people do their jobs more effectively, and delivering those great brand experiences every time. PagerDuty is really about making sure that our users understand that this could be a good thing, being woken up in the middle of the night if it’s for the right problem. It’s a way that can help you deliver a much better experience for your customers.
“The applications market is about $125 billion per year,” says Oracle CEO Mark Hurd. “That is spent primarily on applications and most of it today is spent on on-premise applications. That market changes pretty significantly as it moves to cloud. As it moves to cloud, the subscription that you pay for the cloud includes not only the application but includes all of the hardware, the servers, and storage. It becomes a bigger market just by the very nature of the migration of the application to SAAS.”
Recently, Hurd noted that all of their current customers will eventually move to the cloud. “We have a big existing on-premise user base and I believe all of them will move to the cloud,” said Oracle CEO Mark Hurd. “In fact, I was with a large group of our users just last night and they’re all going to move on their time frame. When we get to a certain point you will start to see a geometric move in the market and it will be significant.”
Mark Hurd, CEO of Oracle, discusses their NetSuite acquisition and the growing size of the applications market as it moves to the cloud in an interview on Fox Business. Hurd was in Las Vegas for the Oracle NetSuite SuiteWorld event:
NetSuite Acquisition Has Been an Amazing Success
We’ve invested a lot in the applications market. We’ve invested in big and small segments of the market. Big customers and small customers. We acquired NetSuite about two and a half years ago it’s really been an amazing success. There are roughly 10,000 customers here (in Las Vegas) for our event (Oracle NetSuite SuiteWorld). It is very exciting.
When we bought NetSuite the company was growing about 16 percent in revenue. We’ve invested a lot in R&D and in tailoring the application for more industries. We’ve added sales people as well. It has resulted in incredible growth. Starting about a year ago we began to really grow our booking and that’s now translated to revenue. Last quarter we reported revenue that was almost double the revenue growth we had coming into the acquisition.
Applications Market Changes Significantly As It Moves to Cloud
There is a couple of phenomena going on at the same time. The applications market is about $125 billion per year. That is spent primarily on applications and most of it today is spent on on-premise applications. That market changes pretty significantly as it moves to cloud. As it moves to cloud, the subscription that you pay for the cloud includes not only the application but includes all of the hardware, the servers, and storage. It becomes a bigger market just by the very nature of the migration of the application to SAAS.
Inside that $125 billion about $75 billion is back office. That would be described as things like general ledger, accounting, supply chain, procurement, and HR. The other 30 percent is front office including things like sales automation and marketing automation. NetSuite has played in the mid-market, small customer side of that back office market. It’s had explosive growth. When you ask who’s moving (to the cloud), it’s really everybody from the biggest guys, whether those be as big as an AT&T all the way to your smaller startup.
If you look today, half of the cloud application customers (and revenue) that we have came from our base and half came from outside.
Oracle CEO Mark Hurd – Application Market Changes as it Moves to Cloud
“We have a big existing on-premise user base and I believe all of them will move (to the cloud),” said Oracle CEO Mark Hurd. “In fact, I was with a large group of our users just last night and they’re all going to move on their time frame. We don’t put a time frame on it, but this thing is moving at a pretty good speed. It will not move linearly, it will move geometrically. When we get to a certain point you will start to see a geometric move in the market and it will be significant.”
Mark Hurd, CEO of Oracle, discussed the huge growth in the cloud applications market and he expects Oracle to lead that market in an interview on Bloomberg:
Cloud Applications Will Become a $400 Billion Market
The apps market is about a $125 billion market. It has two pieces to it. First is back office, which is what we call ERP. This is basically your financial systems, procurement, manufacturing, supply chain, and HR. That is really 70 percent of the applications market or around $85 billion. Second is the front office market which includes marketing, sales automation, service, etc. add up to $40 billion. A very interesting phenomenon is that as the on-premise applications market moves into SAAS it actually grows exponentially. Now the applications market is doing all of the server work, all the operating systems, and all the database work. It’s the data center, it’s the people. So the market will actually grow from $125 billion and probably triple just as it moves to SAAS because it’s taking share from the other parts of the IT market. The applications market I predict will actually become more like $400 billion as it goes forward.
We think it is an amazing opportunity. We are growing our applications market over the last 8-12 quarters more than double-digit. The market itself is growing and we are gaining substantive share. We are the leader in ERP. If you go back to Gartner, IDC, and the analysts we are leading in HR now as well. These are very attractive and robust markets. Our customers want to modernize, want to spend less, want someone else doing the work, and they want someone else assuming the risk. We are extremely bullish about our position in the market.
All of Our Customers Will Move to the Cloud
We have rewritten our application base for the cloud, for SAAS. We have been doing this for years and we’ve invested a lot of capital. We are deploying our capabilities all across the globe. We are extremely excited and bullish about not just our current position. There is going to be a leader in this market and there is no one today with more than 50 percent market share. In fact, the highest application percentage of any company in any segment is sort of mid-20s. This generation will see a leader that is much more material than that and I volunteer us to do it. In most segments, the leader has 50 percent plus.
We have a big existing on-premise user base and I believe all of them will move to the cloud. In fact, I was with a large group of our users just last night and they’re all going to move. They are all going to move on their time frame. We don’t actually put an end of life. We have a competitor that does that, but we don’t do that. We want them to move at their pace and we want them to feel good about it. We don’t put a time frame on it, but this thing is moving at a pretty good speed. It will not move linearly, it will move geometrically. When we get to a certain point you will start to see a geometric move in the market and it will be significant.
“It’s still really early days,” says Amazon Web Services CEO Andy Jassy speaking about the cloud. “Sometimes we remind ourselves that even though it’s a $30 billion revenue run rate business growing 45 percent year-over-year, it’s the early stages of enterprise and public sector adoption in the US. Outside the US they’re 12 to 36 months behind depending on the country and industry.”
Jassy says that although price is the conversation starter, speed and agility are the primary reasons that enterprises are moving to the cloud. He says that most startups have built their businesses from scratch on top of AWS. Some of the big examples, he notes, are Lyft, Airbnb, Pinterest, Slack, Tomo, and Robinhood.
Andy Jassy, CEO of Amazon Web Services (AWS), discusses how the cloud is still really in the early days in an interview with Jim Cramer on CNBC:
Cloud is Still Really Early Days
Sometimes we remind ourselves that even though it’s a $30 billion revenue run rate business growing 45 percent year-over-year, it’s the early stages of enterprise and public sector adoption in the US. Outside the US they’re 12 to 36 months behind depending on the country and industry. It’s still really early days. The conversation starter when people move to the cloud is always cost. Instead of laying out all that capital for data centers and servers and instead only spend what you consume that’s usually very advantageous.
Capital expense turns to variable expense and variable expense is much lower than what most companies can do on their own because we have such a large scale that we pass on to customers in the form of lower prices. We’ve lowered our prices on 70 different occasions in the last ten years. You get real elasticity. You provision what you need and if it turns out you need more, you provision more. If you don’t need anymore because you’re at the peak you just give it back and stop paying for it.
Primary Reason Enterprises Move to Cloud is Speed and Agility
Price always is the conversation starter but the number one reason that enterprises are moving is speed and agility. Usually, if you want to try an experiment in your company it takes 10 to 12 weeks to get a server and then you have got to build all the infrastructure software around it. In the cloud, you can provision thousands of servers and minutes. Then because we have 165 services that you can use in whatever combination you want you can get from an idea to implementation in several orders of magnitude faster. You can innovate much quicker.
As an example, what Lyft is doing in the space is pretty amazing and the piece that they’re growing at is really amazing. To be able to scale the way they have, first as a start-up and then a fast growing business, and then what they would tell you is that they’re able to invent and change the customer experience so quickly, several orders of magnitude faster than they could if they were doing on premise that it’s really helped build their business.
The Cloud Encourages Innovation
The vast majority of applications in the next five to ten years will be infused with some sort of machine learning. We are in kind of a golden age of computing. Almost every company that we speak with is interested most importantly in being able to take their own data. Most companies have gobs of data. Even startups today have gobs of data. But it’s so hard to know what’s in there and it’s so hard to know what the gems are and it’s so hard to know what’s going to be the predictive pieces that change the customer experience. Our machine learning capabilities are going to solve that for a lot of customers.
If you are building technology applications and trying to build consumer experiences, you want to do as much as you can for as little money as possible. Then when you have ideas you want to be able to move fast. One of the things that happen at companies that build on the cloud is it used to be so hard to get anything done that none of your employees spent any time outside of work thinking about new ideas, because why bother. It was so demoralizing that you never get to try it.
With the cloud, you can provision instances and servers in minutes so people spend their free time thinking about new customer experiences. They know that if they come up with something over the weekend they can come in Monday and try it for a dollar. It changes how many people in your company think about innovation and where you get new ideas from throughout the company.
Most Startups Have Built Their Businesses on Top of AWS
Most startups have built their businesses from scratch on top of AWS. Some of the big examples are companies like Lyft, Airbnb, Pinterest, Slack, Tomo, and Robinhood. There is a very large number of them. But there are a lot of businesses that either haven’t gotten big yet or are just trying to build a business. One of the interesting things that happened I remember in 2007-2008 when we had the recession. There were all these very gloomy emails sent from a lot of venture capitalists saying don’t expect to get funded, but the number of startups kept growing.
As opposed to having to go raise money to pay for data centers and servers people can try several instantiations of their idea on top of AWS and if it isn’t getting traction you paid something like 80 cents a month or a $1.50 a month, whatever your usage is. We have loads of companies that are trying to build businesses on top of us that really only pay anything meaningful when they have traction.
Amazon More Focused on Long Term Than Most Companies
It’s always hard for me to measure the impact we have on the overall world. The way we think about it at Amazon is that in every single one of our businesses we have never met customers who don’t want prices to go down. If the center of your gravity is customers, which it is in every single one of Amazon’s businesses, you’re always working relentlessly to find ways to take cost out of your structure so you can give it back to customers in the form of lower prices. It’s actually really easy to lower prices. It’s much harder to be able to afford to lower prices.
We’re much more focused on the long term than most companies. We are trying to build a business and a set of customer relationships that outlasts all of us. As such, we think if we help our customers get more done and are successful on their own, even if it means lower margin percentages, over time we’ll drive more absolute margin dollars. They’ll be more successful and we will ultimately be more relevant.
It Takes Work to Actually Move Away From Oracle
I think Larry (Ellison of Oracle) has a certain view of the world that isn’t always steeped in what the facts are. If you look at Amazon, we started the company at a very early stage and we had Oracle. It takes work to actually move away from Oracle. Lots of customers are learning this as so many people are trying to move away from the commercial-grade legacy database providers like Oracle or SQL server to newer engines like Aurora.
We now are 88 percent of the way through moving all of our Oracle databases and will be at 100 percent by mid this year. We turned off our Oracle data warehouse in November of last year and moved it to Redshift. We learned some very interesting patterns that customers are very excited about copying. We don’t really meet a lot of customers who aren’t looking to move away from those databases to Aurora.
Qualcomm President Cristiano Amon sees enormous potential for 5G to change the form factor of devices. “The most important thing is as you change your experience with 5G you’re going to want a different type of device and a different type of screen size and resolution,” says Amon. “The apps are also going to become way more powerful and you will actually have more powerful hardware that goes along with.”
I feel that there’s enormous potential for 5G to change the form factor of devices. We’re very proud of this partnership with Samsung and how they have been a great partner pioneering this new technology with us. We also see a number of different devices being announced and we see a potential for form factors to change. The most important thing is as you change your experience with 5G you’re going to want a different type of device and a different type of screen size and resolution. The apps are also going to become way more powerful and you will actually have more powerful hardware that goes along with.
Bigger screens are here to stay. I think you will see the opportunity for larger screens as you have flexible OLED technology. You’re also going to see devices that are more specialized for more capable gaming because 5G will allow you to have mainstream gaming on 5G devices. You’re going to see devices there are going to converge between productivity. Over time, we expect to see virtual reality or augmented reality devices as well as a companion to your phone that is going to be using 5G technology. We hope that they look like eyeglasses.
Qualcomm 5G PowerSave Technology
One of the big announcements we’ve made at the show (MWC Barcelona 2019), we’re very proud of it, is the Qualcomm 5G PowerSave technology. That is actually a technology that is allowing the first generation of 5G phones to allow you to have all-day battery life. We have a very mature smartphone base today and users won’t settle for any less than we have on your phones currently. I think that’s the bar for those new 5g flagships. We’re happy a number of OEMs announced phones at this show with this technology.
I will do a comparison because I think sometimes we forget about what happened in 4G. When we were about this time launching 4G technology, that was over a decade ago, we had two operators and four devices. Look where we are right now. We have 20 operators and 30 devices. It’s an order of magnitude different. Actually, it’s a proxy about how much faster 5G is going to get deployed.
Our business on the enterprise side is in hyper-growth mode, says SurveyMonkey CEO Zander Lurie. “We grew our new bookings 80 percent year-over-year,” says Lurie. “We booked our first $10 million quarter, our first million-dollar customer, and we signed up 11 percent more customers in the last quarter alone than we had over all these years. We’re a super disruptive survey software for the enterprise.”
Zander Lurie, CEO of SurveyMonkey, discussed the company’s Q4 earnings and their massive growth in enterprise bookings in an interview on CNBC and during their earnings announcement:
Our Enterprise Business is in Hyper-Growth Mode
We were thrilled with our earnings report for Q4. 2018 was a transformational year for the company where we reaccelerated revenue, generated really robust cash flow, and went public. We’re a 19-year-old company. We have had a lot of private shareholders for a long time and the lock-up expiration could well contribute to some of the selling supply today. But I’m super confident in our in our long term focus. If we deliver results, I know shareholders will profit as well.
We have a beloved brand and one of the largest footprints of users around the world with over 17.5 million active users. If you look at our business today, we have over 647,000 paying customers who sit inside of 345,000 different organizations, including paying user in 98% of the Fortune 500. Our business on the enterprise side is in hyper-growth mode. We grew our new bookings 80 percent year-over-year. We booked our first $10 million quarter, our first million-dollar customer, and we signed up 11 percent more customers in the last quarter alone than we had over all these years. We’ve got a lot of traction with a really world-class leadership team.
We’re a Super Disruptive Survey Software for the Enterprise
We’re a super disruptive survey software for the enterprise. We have a large footprint inside of so many companies where we have not been bought at a corporate IT level. These organizations in this environment need that secure collaborative software that we offer. Our open integration strategy has proven to be a winner. It’s a really competitive market, but it’s a huge multi-billion dollar global market.
Critical to Understand the Sentiment of Your Constituents
It’s so critical to understand the sentiment and voices of the people who are your constituents. Whether it’s your employees or your customers or you are doing market research, trying to understand these really dynamic environments, understanding the voices and opinions of the people who matter to your business, is critical.
I too am surprised about Amazon pulling out there. I think the reaction and how quickly that’s changed in several months has been very surprising. Your gut instinct is helpful, but what’s really helpful is actually collecting the opinion data of the people who matter to you if you’re trying to launch a new product or doing a campaign test or to understand where to expand and what the reaction will be like from the community or government.
Organizations need to collect feedback from their most important constituents, so they can drive innovation and growth. In the internet economy, businesses must be data-driven and responsive to their customers. Companies must test campaign messages and pricing to renew customers. In an increasingly competitive war for talent, organizations are investing more in their employee culture. Understanding how to measure, benchmark, and act on the sentiment data define today’s agile and successful companies.
SurveyMonkey CEO: Our Enterprise Business is in Hyper-Growth Mode
New Relic provides deep performance analytics for every part of a business software environment. It enables companies to easily view and analyze massive amounts of data, and gain actionable insights in real-time. Whether it’s for a popular mobile app, an online video game with millions of users, or a huge ecommerce platform, they all rely on critical New Relic insights to keep revenue flowing.
Lew Cirne, founder and CEO of New Relic, talks about how critical real-time insights from New Relic are to a companies revenue stream in an interview with Jim Cramer on CNBC:
When It’s Game Time for Retail New Relic is There
For retail obviously, so much of their business, particularly their web business depends on a very small number of days; Black Friday, Cyber Monday, etc. That’s game time. That’s the moment of truth. That’s when we’re working our hardest to make sure our software is there to make sure our customers can see what’s going on in real-time. Our customers were thrilled with the performance and availability that they delivered which turns into business results.
If your site is slower or down on Cyber Monday, forget it, you’re going to miss your quarter. You may never recover from that because you also have a brand hit. So it’s so vital. This is not nice to have software. Anybody who is competing on their software needs New Relic’s platform in order to succeed.
We’re a Massive Cloud Operation
We’re a massive cloud operation. We’re collecting millions of data points every second from mobile applications and from cloud infrastructure every time somebody’s pressing a button to buy something and every time someone’s watching this video on the CNBC app. We’re measuring the health of that and we do that on a massive scale. That’s one of the things our customers love.
When Fortnite said, “Hey we’ve got this huge app. It’s the biggest in the world and we want to monitor on New Relic.” We’re like great. Your biggest day is just another day for us. We collect so much data and we can do it for you.
New Relic Monitors Fortnite to Keep it Running for Millions of People
Epic Games is the company that created Fortnite and if you have kids or you’re into games this game has taken the world by storm. It’s the most popular game in the world. If that game is not working millions of people know about it and the company is affected.
So they rely on the New Relic platform to see everything in real-time on how that game is performing. It’s a very complex piece of software that has to work flawlessly in real-time. We measure everything going on in that game so that the builders of Fortnite can keep it running for millions of people 24/7.
There are different companies that do different things around observing what’s going on in this space but were the applications-centric company. What does that mean? It means that when you’re playing Fortnite what you’re doing is you’re using software.
We’re measuring the software in real-time. We do it in a cloud platform that integrates what’s going on in the software with the infrastructure and with the end-user experience, like the mobile app. We see all that together and do it in one unified platform and our customers love us for that.
New Relic Helps CNBC Scale Mobile App in Real-Time
At CNBC, you just launched an incredible new revenue app in the fall and it’s amazing. I use it a lot and I love it and again this is an app that’s getting a lot of uptake. I was talking to the team and they said customers love what the app is doing for them and they want to use it more and more. That means they have to scale.
When more and more people are using that app how are you able to handle the scale when people want to see the news in real time and want to see the stock quotes in real time? We provide them the visibility that gives them the confidence to move faster and scale to this amazing demand that the CNBC app is generating.
New Relic Helps Companies Move Fast in a Multi-Cloud World
This is so important to our customers. It’s clear that we’re entering a multi-cloud world. Obviously, Microsoft’s doing well and Amazon doing very well. We had a great show at re:INVENT. And there’s some hybrid cloud as well. What our customers are saying no matter where my software is running I want to see it all in one place. I’m sick of moving from one tool to another to see a complete picture. They turn to the New Relic platform to see it all in one place. That enables them to move fast with confidence.
Anywhere there are systems that need to perform well and scale well, those are systems that need New Relic. What we say to our customers is building great software is not easy, but it is the foundation upon which companies can build great competitive advantage. We want to partner with our customers to deliver amazing software that delights our customers and grows their business.
