 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 SiliconANGLE's exclusive coverage with theCUBE here at Amazon re-invent 2017, it's our fifth year covering Amazon explosive growth. I'm John Furrier, the founder of SiliconANGLE Media. I'm here with Justin Warren, my co-host here, our next guest on set one is TopSiebel who is the founder and CEO of C3 IoT, industry legend, knows the software business, been around the block a few times, now part of the new wave of innovation. Welcome to theCUBE. Thank you. You just got in from San Francisco. What a world we're living in. You're at the front end, you're coming that you founded and are running. And IoT big day to 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 that point where there's converge, I think it's something you call 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 2000 are gone, right, they disappeared. And it's estimated as many as 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 the 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, that are trying to do cloud, but they're winning. Well, I got to 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. Customers have changed. What's the difference? So this is my fourth 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 many computers to personal computers to the internet, all of that. And I was there when in all those generations of technology, when we brought these 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 going to use a mini computer or we're never going to use relational database technology or we're never going to use a PC. And so you'd wait for that CIO to be fired then you come back two years later, right? Now, so meanwhile, we've built a two trillion dollar information technology business globally. Now what's happening in this space, the 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 and 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 court of the offsite, the chief digital officer reports to the CEO every week. So, and virtually every one of our customers, Kat, John Deere, UnitedHealthcare, you name it, NG, and now it's a CEO-driven initiative. Bring up a good point I want to get your thoughts on because the old way, and you mentioned it 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 relationships to 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 of the, to the consumer. So the developer renaissance, we see software now changing where the developers now an influencer in this transformation. 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 on a software renaissance, that means whole new creativity is going to unleash with software. With that role of the CDO, with a blank check, there's no dogma anymore. It's results. So what's your, what's your perspective on this? Well I think that there's enabling technologies that include the elastic cloud. That include, I mean, computation and storage is basically free, right, okay? Everything is a computer. So IoT, I used to think about IoT being devices, is that IoT is about the change in the form factor of computers. In the future, everything's a computer. Your eyeglasses, your watch, your heart monitor, your refrigerator, your pull pump, they're all computers, right? And then we have the network effect of Metcalfe's Law. Say we have 50 billion of these devices fully connected, 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 so software and data is key, right? Data trains the AI. Data is the fundamental new lifeblood. And big data, because now what big data is about, people think 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 do the limitations of storage and processing. We used to basically take samples and infer results from those samples and deal with whatever the level of confidence error that was there. With big data, there's no sampling error. It's all there. It's a whole different game. Yeah. 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, a 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 system failure well in advance of failure. So the advantage is some pretty substantial percentages, say, of F-16s will not deploy, of F-18s will not deploy, because 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 got to 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? Were you 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 Allison. Turned out to be a pretty good idea. And then a decade later, we started Siebel Systems and I think we always did invent the CRM market and that 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 isn't a complete replacement market. And I thought, there's an opportunity to play a significant role in the game and this is what I do. 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 hanging tent and then big waves. What are the waves? Because we're seeing this inflection point, a lot of things coming together. What are the ways that you're riding on right now? I'll see the ones you mentioned. What's the set look like? If it'll lose the surfing analogy. What's coming in? What are the big waves? The biggest is, well, the two bigs was our IoT and AI. I mean, we deployed, 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 going to do things that were unthinkable in terms of serving customers, building products, cost efficiencies, what we're going to do. We're going to 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 the IT industry hasn't had a great track record of security. And now we're putting computers everywhere. As you say, they're going to be in watches, they're going to be in eyeglasses. What do you see as the trend in the way that security is going to be addressed for these computers everywhere? Well, I think that it is not clearly not yet solved, okay? And it's going to, and it is a solvable problem. And we're just going to, I believe that it's easier to secure data in cyberspace than it is in your own data room. I mean, maybe you could secure data in the room, in your data room when it took a forklift to move a storage device. It doesn't take a forklift anymore, right? Takes one of these little flash drives, you know, to move, you know, take a little bit. So I think, you know, the easiest place we can secure it is going to be in cyberspace. 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. Okay, so I got to ask you about the way you got a new, you're sticking your teeth into a new venture. Exciting, it's on the cutting edge in the front lines of the innovation. There are other companies that are trying to retool. IBM, Microsoft, Oracle. If you were back then, probably not as exciting as what you're doing, because you 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? You were there at the helm of those companies. What would you do? Well, number one, I would not bet against Larry. I mean, 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 survive in the long run, I mean, Oracle'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, Jesse, there's Barb's going back and forth. You got to be careful there. Well, I mean, Andy Jassy is extraordinarily competent. I think, you know, as it relates to this cloud, elastic cloud, I think he's kind of kind of a lock on that. Yeah. But, you know, IBM is hard to explain. I mean, IBM is a sad story. I think IBM is, yeah, there's some risk that IBM is the next Hewlett Packard. I mean, they might be selling this thing off for peace parts. This, I mean, if we look at the last 23 quarters, I mean, it's not good. And Microsoft's done a great job recently when the Satya Nutella. Kill it. 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? And, I mean, hello. So, 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, and a more positive upbeat. What's next for you? Obviously, you're doing great. The numbers are good. Again, the rumors and the hallways here we're hearing you guys 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 coming around the corner for a 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 dollar business. We're engaged in very, very large transactions. In the last 18 months, we've done a lot of work in deep learning. In the next 18 months, we'll do a lot of work in NLP. I think those technologies are hugely important. So 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 lot of the work that Jensen Wang is doing at NVIDIA. And now NLP, I think, is the next frontier for us. Final question for your advice to other entrepreneurs. Your serial entrepreneur been very successful, invented categories. You look 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 in whatever domain you're proposing and what field you're going to 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've 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. 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. I'm Tom Siebel, here inside theCUBE. I'm John Furrier, 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.