 Live from Washington, D.C., it's theCUBE. Covering Dotnext Conference, brought to you by Nutanix. Welcome back to Dotnext, everybody. This is theCUBE, the leader in live tech coverage. We go out to the events and extract the signal from the noise. My name is Dave Vellante and I'm with my co-host, Stu Miniman. This is day two of Dotnext. Dr. John Bates is here, he's the CEO of Test Plant and the author of Thingalytics. Sir, welcome to theCUBE. Thanks for coming on. Nice to be here. Thingalytics, everybody's talking about things. Yeah. This thing, that thing, the refrigerator, the IO things. What's Thingalytics? Well, things, i.e. connected devices, sensors on, they're not very interesting unless you actually do something with them. So you search through all that data that's coming out for the opportunities and threats to your business, for example, and then you act on it while you've got time and perhaps beat your competitors. So Thingalytics is about smart big data analytics and the internet of things coming together. Okay, and what's the premise of the book? Well, the premise of the book is, everybody thinks, I mean, if there's one message from it, it's IOT is not so hard to get into. So get started, start small and here's some lessons of how you can do it. And here's some stories from different industries of how thought leaders, like Coca-Cola, or G, you know, or many different companies, Medtronic in different industries, have actually got started and really been extremely disruptive in what they've done. And is this getting started, is this all for companies or are you seeing individuals that can also participate? You know, I do have a chapter in there about the smart home. So obviously that's the aspect where the individual is going to come. But you know, I think it's really the real winner in this will be the industrial and the enterprise internet of things. So I guess the key message is for business leaders. Do you think that given that the internet of things requires things and there's so many things that are installed by these big industrial companies that the whole IOT thing will be maybe less of a disruption than it will be an evolution of companies like GE and Siemens and Hitachi and guys like that, is that a reasonable premise or will we see a whole new wave of companies? Certainly we'll see startups come in. But will they attack these big industrial giants that have been around for a hundred years? You know, this is a really great question and I think that, you know, at the moment the opportunity is in the hands of the big player. So, you know, keynoting at .next, Bill McDermott coming in to do his presentation. I sold my IOT platform company to SAP. And why, for example, is SAP got an amazing opportunity because they've got all these applications, they've done an amazing job of, you know, taking ERP and adding a whole load of applications, financial planning, you know, supply chain, business networks. But those applications model the real world, but they're not connected to the real world. So what happens when you take a model of, you know, a financial model about the value of a factory or a mine and connect it to the real world? Suddenly, it's not theoretical. It actually is calculating in real time the value of those assets. The supply chain is really about that. So SAP has an unbelievable opportunity. IBM has an unbelievable opportunity. GE has an unbelievable opportunity. But it's going to be how they execute and is someone going to come in and do something unbelievably disruptive we haven't even thought about. So those guys need to make all the running right now to really protect themselves. And I wonder if you could comment on this. I mean, I see some of the execution risks as what Geoffrey Emelt said. I went to bed and Josh Gilgian and woke up a software company. Wow, it's hard to be a successful software company. So is that one of the many execution risks? Are there others? I think that's, I think you're absolutely right. So I mean, if you take GE, for example, my friend Bill Rue, he's the Chief Digital Officer as you see of GE Digital. We know him, yeah, sure. Yeah, he's awesome. A completely new business. But it's really hard. I think that's taken longer than they expected to build at that Predix platform. And are they going to be the people, it depends what business you're in. If you're in the business of buying aircraft engines, then rather than buying an aircraft engine, you want to buy engine as a service. So that's the kind of thing that maybe you'll buy from GE or maybe it's one of GE's partners and GE provides the infrastructure. But I think they've learned that's really much harder than they thought. And I think everybody's sort of discovering that. It's not so much the thingolytics, I've realized. It's the thingonomics, the economics of the internet of things. That's the really important thing to get right. Yeah, so we actually worked with GE when they were coming out with the industrial internet. And we did a lot of interviews. There's some of these barriers that we're going to hit along the way. As a matter of fact, at Wikibon, our team that works at it, they call it the internet of things and people because there's so much that needs to happen to be able to move forward. Some of them are just old industrial things. Some of them are regulations. Some of them are the mindsets. How do you see some of these, what do you see some of the major barriers and how do we knock them down to be able to accelerate this even more? Absolutely, well, firstly, you're absolutely right. One of the key barriers is, I think, a cultural barrier or a, oh, that's just too hard, getting back to why did our right thing elitist. And I think it's a question of, people have just got to get started, not try and boil the ocean and try and get some successful projects going. But definitely there's a cultural thing and you just have to get those people together that think differently. And there's a reason why this new role of the Chief Digital Officer was created. But you can have many Chief Digital Officers throughout your company, sort of get them together with that thought. And one of the other things I could bring up that's really, really hard and why I went from being in the core of the IoT platform world into a company that's a software testing company, is that when you're going to launch this stuff, how do you make de-risk it? How do you make sure in this world where there's all these sensors at the edge, all these strange mobile devices on the front end and the cloud in the middle? How do you make shiny test that? It's a really complicated, distributed architecture that requires completely new technology. You don't even own the code, so how do you test that? So there's a whole load of issues there but I think you have to put at the heart of it, think differently, think digitally. So what was the company you sold to SAP? Tell us about that. So the company's called Plat1 and it was one of the leaders in platforms, software platforms to enable internet things applications. So the idea is that you're going to build an internet things application. You could start in hard wire, start writing some code in hard wire against all these devices and sensors, but then you start shipping your applications. What about if you made the wrong decisions? You know, what about if you spent years just writing all the integrations to your factory floor or your logistics network? So there's a whole load of common protocols out there in machine to machine and the call it a new internet things protocols. So Plat1 knew and could talk all those protocols and make machines talk to each other. It could virtualize that so that you disconnect those protocols from the application you write so you're modeling things like in a smart city, trucks and street lamps rather than bits and bytes. So then when you change the implementation from one city to another, you're future proof. And then graphical tools to model and plug them together and a platform that manages microservices at the edge and the cloud so you're managing an adaptive platform where you can place logic depending on what it is. And that enabled SAP to rapidly roll that IT out. In the company, your company had customers? Yeah, a lot of customers, people like, you know, great customer, Pirelli. So Pirelli, obviously a tire manufacturer as you know them, but what they can do if they plug sensors into their tires and have telematics boxes on top of, you know, trucks or vehicles, suddenly they can go to the fleet management market and sell them big data analytics because they know where the trucks are. They know how they're being driven. And what's more, rather than selling you a tire, they could lease you a tire as a service because they can track it and how much use you've got out of it. Unbelievable new thingonomic models. So that's an example, you know, Flex, Tronix, T systems. We had a whole lot of interesting smart cities using it, you know, logistics manufacturers. So yeah, it was a great but early stage company. And you have to ask yourself the question, can you as a small company win or would you be better off partnering with an SAP with that unbelievable reason? One of the things, I've got a networking background. We hear all these new protocols and the maturity there. There's the security risk there. I hear the fleet of trucks that was like, oh wait, you know, I might turn off these sensors or do something malicious. You know, the surface area is just grown by orders of magnitude. You know, how do we address this as the industry? You know, what's some of the advice that you're giving for this? You know, you're absolutely right. Because when we were talking about the issues earlier, that's a corker, isn't it? You know, the security of it. And as a, you know, as a Tesla owner, you know, it was great when hackers tried to hack into the Tesla and they couldn't, all they could do is make the horn go bee, you know, which you can do from your app on your, anything that was, you know, publicly available, but they couldn't take control of the car. That was great. So that was nice, but, you know, with all this highly distributed model, you've got to be able to have end-to-end security. So in Plat One, for example, we had the ability to have, you know, role-based end-to-end security right from the application to the device. And that was part of the platform. So you got that for free, but you've got to make sure that's the case in your applications. Okay. What about, what's the opportunity for jobs in the kind of growing IoT economy? Well, you know, IoT Giveth and IoT Taketh Away, because, you know, I mean, we're all, we're all thinking, you know, let's bring more jobs back to America, which is a political theme at the moment, but are those jobs going to be replaced by robots? I mean, is there a global issue, which is, are these jobs going to be replaced by robots and by algorithms? The answer is yes, and I, but on the other hand, are more jobs going to be created? Are people going to become much more productive? So I think humans are going to become more productive, for sure, for things like smart factories, smart cities, and life's going to get better in smart cities, but, you know, yeah, we're also going to lose jobs. I draw an analogy to trading, you know, financial markets trading, where you used to have traders in the pits waving pieces of paper, then it went to Bloomberg terminals, where people entered their trades automatically, then it went to algorithmic trading and high-frequency trading, where algorithms run it. Still humans involved, but less and less, but the humans are more productive and more a coordinator. Hey, what if we put a 30% tax on all IoT-related initiatives? That would help preserve jobs. So, tell us. Wouldn't slow down innovation or corporate profit or anything like that. Since we're in Washington, I thought I'd throw out some good ideas. Yes, exactly, very topical. Tell us about your software testing company, Test Plant. So, the reason I was really excited to join Test Plant is, there's this new world. You'd put IoT together with, you know, the mobile world and the cloud world and you have the world of digital. And how do you make sure that in this new digital enterprise that everybody's got to compete in, that you're, how do you make sure you're doing well and how do you make sure your stuff works and how do you make sure you're beating your competitors? So, Test Plant's all about end-to-end testing of the digital experience. It's taking testing to a new level, because if you think about testing, it used to be about, does your code work? Now, it's about, are you offering an unbelievable, delightful digital experience to your customers? Because testing now has become a profit center. It's the differentiator between you doing an amazing job and launching an app and getting five stars in the app store or crashing and burning because something's gone down or there's a usability issue or there's a problem. So, that's what we do. We test applications using artificial intelligence through the eye of the user. We actually, our algorithms actually use the applications and connect to the APIs and can take control and automate the testing process and discover these business metrics and show customers what good really is. So, John, you were the founder of Plat1. Is that right? So, I was an early joiner of Plat1. I was the CEO. I wasn't the founder. We had two amazing fanners. Okay. But you helped do the initial raise? Exactly. Oh, yes, exactly. Okay. And I took it from an early interesting technology to the company that got bought by us. Made it viable and sellable. Yeah. Okay, you're an investor, I heard you say. Yes. Okay, now you're an author. You're a CEO now of a more established company, right? Yes. Jack of all trades here. Well, maybe that's not a fair term, but you do a lot of different things. What are your thoughts on which things you enjoy the most? You know, where you see all this headed? Well, it's... Polymath is the word I was looking for. There you go. Well, I started off actually as a professor, a university professor, and I took some of my research and started my first company. So, I loved building a startup from scratch and taking that out. There's a first streaming analytics or real-time analytics company. And, you know, I then spent over a decade as a C-level executive in public software companies. But, you know, I haven't had so much fun as what I'm doing right now. It's beautiful. It's sort of mid-sized, really great private equity, back as the Carlisle Group. So, I love what I'm doing right now. It's definitely my favorite gig so far. I think that's the nice sweet spot for me. Yeah, that's great. Well, John, we love having big brains in theCUBE. You know, Stu and I rubbs off a little bit. At least we think it does. So, thanks very much for coming on. Thank you, gentlemen. You're welcome. All right, keep it right there, buddy. We'll be back with our next guest. We're live from Nutanix, NextConf. This is theCUBE.