>> Narrator: Live, from Las Vegas,
it's theCUBE, covering AWS re:Invent 2017,
presented by AWS, intel, and our ecosystem of partners.
Hello, everyone, welcome back to theCUBE.
This is Silicon Angle's exclusive coverage with theCUBE,
here at Amazon, re:Invent 2017.
It's our 5th year covering Amazon's explosive growth.
I'm John Furrier, the founder of Silicon Angle media.
I'm here with Justin Warren, my cohost here,
our next guest on set one is Tom Siebel,
who is the founder and CEO of C3 IOT,
industry legend, knows the software business,
been around the block a few times,
and now part of the new wave of innovation.
Welcome to theCUBE.
>> Thank you.
>> I hear you just got in from San Francisco.
What a world we're living in.
You're at the front-end
of your company that you founded and are running,
an IOT big data play, doing extremely well.
Even last year, the whisper in the hallway was
C3 IOT is absolutely doing great,
in the industrial side,
certainly in the federal government side,
and on commercial, congratulations!
>> Thank you.
>> What's the update, what's the secret formula?
>> Well, we live at the convergence
of elastic cloud computing, big data, AI, and IOT,
and at the point where those converge,
I think, is something called digital transformation,
where you have these CEOs that, candidly, I think,
they're concerned that companies are going through
a mass-extinction event.
I mean, companies are being,
52% of the Fortune 500 companies,
as of 2000 are gone, right, they've disappeared
and it's estimated as many 70%
might disappear in the next 10 years,
and we have this new species of companies
with new DNA that look like Tesla and Uber,
and Amazon, and, they have no drivers, no cars,
and yet they own transportation,
and I think that these CEOs are convinced that,
unless they take advantage of this new class of technologies
that they might be extinct.
>> And it's certainly, we're seeing it, too,
in a lot of the old guard, as Andy Jassy calls it,
really talking about Oracle, IBM,
and some of the other folks that are
trying to do cloud, but they're winning.
I gotta ask you, what's the main difference,
from your perspective, that's different now that the culture
of a company that's trying to transform,
what's the big difference between the old way
and new way now, that has to be implemented quickly,
or extinction is a possibility?
I mean, it's not just suppliers,
it's the customers themselves.
>> The customers have changed.
>> What's the difference?
>> So, this is my 4th decade
in the information technology business
and I've seen the business grow
from a couple hundred billion to, say,
two trillion worldwide,
and I've seen it go from mainframe to mini-computers,
to personal computers to the internet, all of that,
and I was there when,
in all of those generations of technology,
when we brought those products to market,
would come up in the organization,
through the IT organization, to the CIO,
and the CIO would say,
"well, we're never gonna use a mini computer."
or, "we're never gonna use relations database technology."
or, "we're never gonna use a PC."
And so, you'd wait for that CIO to be fired,
then he'd come back two years later, right?
Now, so meanwhile we build a two trillion dollar
information technology business, globally.
Now, what's happening in this space
of big data, predictive analytics, IOT,
is all of a sudden, it's the CEO at the table.
CEO was never there before,
and the CEO is mandating this thing
called digital transformation,
and he or she is appointing somebody
in the person of a Chief Digital Officer,
who has a mandate and basically a blank check
to transform this company and get it done,
and whereas it used to be the CIO would report to the CEO
once a quarter at the quarterly off-site,
the Chief Digital Officer reports to the CEO every week,
so, and virtually everyone of our customers,
CAT, John Deere, United Healthcare, you name,
ENGIE, Enel, it's a CEO-driven initiative.
>> You bring up a good point I wanna get your thoughts on,
because the old way, and you mentioned, was IT
reporting to the CIO.
They ran things, they ran the business,
they ran the plumbing, software was part of that,
now software is the business.
No one goes to the teller.
The bank relationship's the software,
or whatever vertical you're in there's now software,
whether it's at the edge, whether it's data analytics,
is the product to the consumer.
So, the developer renaissance, we see software now changing,
where the developer's now an influencer
in this transformation.
>> True.
>> Not just, hey, go do it, and here's some tools,
they're in part of that.
Can you share your perspective on this
because, if we're in a software renaissance,
that means a whole new creativity's gonna unleash
with software.
With that role of the CDO, with the blank check,
there's no dogma anymore.
It's results.
So, what's your perspective on this?
>> Well, I think that
there's enabling technologies that include the elastic cloud
that include, computation and storage
is basically free, right?
Everything is a computer, so IOT,
I used to think about IOT being devices,
it's that IOT is a change in the form-factor of computers.
In the future, everything's a computer,
your eyeglasses, your watch, your heart monitor,
your refrigerator, your pool pump,
they're all computers, right,
and then we have the network effect of Metcalfe's law,
say we have 50 billion of theses devices fully connected
and well, that's a pretty powerful network.
Now, these technologies, in turn, enable AI,
they enable machine learning and deep learning.
Hey, that's a whole new ball game.
Okay, we're able to solve classes of problems
with predictive analytics and prescriptive analytics
that were simply unsolvable before in history
and this changes everything
about the way we design products,
the way we service customers, the way we manage companies.
So, I think this AI thing is not to be underestimated.
I think the cloud, IOT, big data, devices,
those are just enablers, and I think AI is--
>> So, software and data's key, right?
Data trains the AI, data is the fundamental new lifeblood.
>> Big data, because now we're doing,
what big data is about, people think that big data
is the fact that an exabyte is more than a gigabyte,
that's not it.
Big data is about the fact that there is no sampling error.
We have all the data.
So, we used to, due to limitations to storage and processing
we used to, you know, basically, take samples
and infer results from those samples,
and deal with it on the level of confidence
error that was there.
With big data, there's no sampling error.
>> It's all there.
>> It is a whole different game.
>> We were talking before, and John,
you mentioned before about the results
that you need to show.
Now, I know that you picked up a big new customer
that I hope you can talk about publicly,
which is a public-sector company,
but that sounds like something
where you're doing predictive maintenance
for the Air Force, for the U.S. Air Force,
so that's a big customer, good win there,
but what is the result that they're actually getting
from the use of big data
and this machine learning analytics that you're doing?
By aggregating all the telemetry
and aggregating all their maintenance records,
and aggregating all their pilot records,
and then building machine learning class of ours,
we can look at all the signals,
and we can predict device failure or systems failure
well in advance of failure, so the advantage is
some pretty substantial percentages,
say of F16s, will not deploy, of F18s will not deploy
because, you know, they go to push the button
and there's a system failure.
Well, if we can predict system failure,
I mean, the cost of maintenance goes down dramatically
and, basically, it doubles the size of your fleet
and, so the economic benefit is staggering.
>> Tom, I gotta ask you a personal question.
I mean, you've been through four decades,
you're a legend in the industry,
what was the itch that got you back with this company.
Why did you found and run C3 IOT?
What was the reason?
Was it an itch you were scratching,
like, damn, I want the action?
I mean, what was the reason why you started the company?
>> Well, I'm a computer scientist
and out of graduate school, I went to work with a
young entrepreneur by the name of Larry Ellison,
turned out to be a pretty good idea,
and then a decade later, we started Siebel Sytems,
and I think, well, we did invent the CRM market
and then it turned out to be a pretty good idea
and I just see, at this intersection
of these vectors we talked about,
everything changes about computing.
This has been a complete replacement market
and I though, you know,
there's opportunity to play a significant role in the game,
and this what I do, you know.
I collect talented people and try to build great companies
and make customers satisfied.
This is my idea of a good time.
You're on the beach,
you're on your board hangin' 10 on the big waves.
What are the waves?
We're seeing this inflection point,
a lotta things comin' together,
what are the waves that you're ridin' on right now?
Obviously, the ones you mentioned,
what's the set look like, if I can use a surfing analogy.
What's coming in, what are the big waves?
The two biggest ones are IOT and AI.
I mean, since 2000 we've deployed
19 billion IOT sensors around the world.
The next five years, we'll deploy 50 billion more.
Everything will be a computer,
and you connect all these things that they're all computing
and apply AI, I mean we're gonna do things that were,
you know, unthinkable, in terms of serving customers,
building products, cost efficiencies,
we're gonna revolutionize healthcare with precision health.
Processes like energy extraction and power delivery
will be much safer, much more reliable,
much more environmentally-friendly, this is good stuff.
So, what's your take on the security aspect
of putting a computer in everything,
because, I mean, the IT industry hasn't had a great
track record of security,
and now we're putting computers everywhere.
As you say, they're gonna be in watches,
they're gonna be in eyeglasses,
what do you see as the trend in the way that security
is gonna be addressed for this, computers everywhere?
Well, I think that it is clearly not yet solved, okay,
and it is a solvable problem.
I believe that it's easier to secure data
in cyber space than it is in your own data room.
Maybe you could secure data in your data room
when it took a forklift to move a storage device.
It doesn't take a forklift anymore, right?
It takes one of these little flash drives,
you know, to move, to take all the data.
So, I think the easiest place we can secure it
is gonna be in cyber space.
I think we'll use encryption,
I think we'll be computing on encrypted data,
and we haven't figured out algorithms to do that yet.
I think blockchain will play an important role,
but there's some invention that needs to happen
and this is what we do.
>> So, you like blockchain?
>> I think blockchain plays a role in security.
>> It does.
So, I gotta ask you about the way,
you're sinking your teeth into a new venture,
exciting, it's on the cutting-edge,
on the front lines of the innovation.
There are a lotta other companies that are trying to retool.
IBM, Microsoft, Oracle, if you were back them,
probably not as exciting as what you're doing
because you've got a new clean sheet of paper,
but if you're Oracle, if you're Larry,
and he went to be CTO, he's trying to transform,
he's getting into the action,
they got a lot to do there, IBM same thing,
same with Microsoft, what's their strategy in your mind?
If you were there, at the helm of those companies,
what would you do?
>> Well, number one, I would not bet against Larry.
I know Larry pretty well
and Larry is a formidable player
in the information technology industry,
and if you have to identify
one of four companies that's surviving the long-run,
it'll be Oracle that's in that consideration,
in that set, so I think betting against Larry is a bad idea.
>> He'll go to the mat big time, won't he?
I mean, Jassy, there's barbs going back and forth,
you gotta be careful there.
>> Well, I mean, Andy Jassy is extraordinarily competent,
I think, as it relates to this elastic cloud
I think he's kinda got a lock on that,
but, you know, IBM is hard to explain.
I mean, IBM is a sad story.
I think IBM is,
there's some risk that IBM is the next Hewlett-Packard.
I mean, they might be selling this thing off for piece parts
this, you mean, if we look at the last 23 quarters,
I mean, it's not good.
>> And Microsoft's done a great job recently
with Satya Nadella, and they're retooling fast.
You can see them beavering away.
>> But IBM, I mean, how do you bet against the cloud.
I mean, are you kidding me?
I mean, hello!
IBM's a sad story.
It's one of the world's great companies, it's an icon.
If it fails, and companies like IBM's size do fail,
I mean let's look at GE,
that would be a sad state for America.
>> Okay, on a more positive upbeat, what's next for you?
Obviously, you're doing great, the numbers are good.
Again, the rumors in the hallways
we're hearing that you guys are doing great financially.
Not sure if you can share any color on that,
big wins, obviously, these are not little deals you're on,
but what's next?
What's the big innovation that you got
comin' around the corner for C3 IOT.
Well, so our business grew last year about 600%,
this year it'll grow about 300%.
We're a profitable, cash-positive business.
Our average customer is, say, 20 to $200 billion business.
We're engaged in very, very large transactions.
In the last 18 months, we've done a lotta work
in deep learning, okay.
In the next 18 months, we'll do a lotta work in NLP.
I think those technologies are hugely important.
Technologically, this is where we'll be going.
I think machine learning, traditional ML,
we have that nailed, now we're exploiting deep learning
in a big way using GPUs, and
a lotta the work that Jensen Wang's doing at Nvidia,
and now NLP, I think, is the next frontier for us.
>> Final question for you, advice to other entrepreneurs.
You're a serial entrepreneur.
you've been very successful, inventive categories.
You're looking at Amazon,
how do you work with the Amazons of the world.
What should entrepreneurs be thinking about
in terms of how to enter the market,
funding, just strategy in general.
The rules have changed a little bit.
What advice would you give
the young entrepreneurs out there?
>> Okay, become a domain expert
at whatever domain you're proposing
and whatever field you're gonna enter,
and then surround yourself with people,
whatever job they're doing,
engineering, marketing, sales, F&A,
who are better than you at what they do
and, to the extent that I have succeeded,
this is why I've succeeded.
Now this might be easier for me than for others,
but I try to surround myself with people
who are better than me and,
to the extent that I've been successful, that's why.
>> We really appreciate you taking the time coming on.
You're an inspiration, a serial entrepreneur,
founder and CEO Tom Siebel of C3 IOT,
hot company, big part of the Amazon Web Services ecosystem.
Doing great stuff, again, serial entrepreneur.
Great four-decade career.
Thanks for coming on theCUBE, Tom Siebel.
Here inside theCUBE, I'm John Furrier and Justin Warren,
here in Las Vegas for AWS re:Invent.
We'll be back with more live coverage
after this short break.
>> Thanks guys, good job.