 Live from Las Vegas, Nevada, it's theCUBE. Covering IBM World of Watson 2016. Brought to you by IBM. Now, here are your hosts, John Furrier and Dave Vellante. Okay, welcome back everyone. We are here live at the Mandalay Bay in Las Vegas for the IBM World of Watson. World with Watson, as Jeanne Ramy was saying, because they're sharing Watson with the world. It's all about cognition, cog, cognitive computing, whatever you want to call it. Artificial intelligence, of course, we are theCUBE. We are bringing you AI right here in the date. I'm John Furrier with Dave Vellante. Our next guest, Nancy Pierce, the Vice President of Marketing with the Cognitive Business Unit at IBM. Welcome back, great to see you. Great to see you too. Last year we were talking cognition and cognition and cognitive, whatever. Cognition, I think that's more of a sports analogy. Patrons, nation, cognition. Anyway, you're one year in the job. Yes. Give us the updates. It's been a smashing year. A lot of changes, momentum, the energies, like, it's crazy. Well, I mean, I bet you can see just from being at this event and being broadcasting from this event that it's dramatically different than what we were able to do last year. Not only taking insight and moving it into World of Watson, but even from a World of Watson perspective that was much smaller and more compact, right, as an emerging space. So, what a difference a year makes. Last year, when I was talking to you, we were doing some of the basics. Nancy, what is cognitive? So, you know, doing the 101, I think that's what I focused on. But I would tell you, today, we've gone from defining it to delivering it and delivering it with a lot more clients. It's real. It's real. And that's the effect you get from being here at World of Watson. You walk around into the transforming industry space and what do you see? You see a metronic. You see 1-800 flowers. You see the Ali self-driving bus. All of those are cognitive examples leveraging Watson. And we've got a lot more. And there's also a new dynamic going on. Not because it's a pro-election year. It's just more of IBM's things. It's coming together as a company. Is that it's not just technology intersecting with business value, which is not boring. It's great if you're into the enterprise business, business value, outcomes. We've been hearing that all every single conference. So, intersection with technology and business value, that's what used to be. But now you have social change. Now, a new dimension that's kind of in this, as we heard it from Ginny Romney, change the world, we're on a journey, you have a different vibe going on. That's what's different in the cognitive space because it becomes, really, it's not just about technology. It's about fundamentally changing people's behavior, engaging with people very differently, understanding them much more personally and that personalization creates a level of trust and understanding and learning. So, you're really engaging, I think, a different. At an individual level. At an individual level, not just the industry you're in anymore. Right. It's like you as a person. Exactly. Your profession, your job, your career. We're impacting professions, we're transforming industries and we're starting to talk about the specific outcomes. But we start with also, too, with cognitive, the art of the possible. And that's what gets people engaged kind of on both sides of their brain. What can we do with this? And it's a really important discussion. What kinds of problems are you wanting to solve with cognitive? And half the time they don't know how to answer that because they're trying to understand and absorb it themselves. What are the headwinds when you go into a client? Because there really isn't any competition for cognitive. I mean, you know, Ginny said today we don't have a search legacy. Okay, yeah, Google's got some cognitive in Facebook. You know, it's your data. Okay, that's fine. But they're not selling really directly into the enterprise. So it's not like, oh, it's IBM versus Vendor, BC or D. Is it that they just don't know how to apply it? They haven't thought about their business as a cognitive business? I wonder if you could talk about that and how you're addressing that challenge. So I would say a couple of things. First of all, a year ago when Ginny made this announcement this month that we were driving towards this cognitive error and becoming a cognitive business solutions company and we were obviously on a journey for a cloud platform company. We did not have as much noise in the market from all the other vendors. Once we declared, we now see there's a lot of noise out there and whether people are talking about consumer-oriented, quote-unquote, cognitive devices, I'll call them, they're out there and they are confusing the individual and buyers and clients on, well, you know what's the difference between Siri and Watson? Those types of discussions. You have Alexa, you have Amelia, you have Holmes, you have Watson and even when the industry talks about it, they put all those things together and we are significantly different in the problems we're solving, the way we're applying cognitive and augmented intelligence and we're helping clients move from being digital businesses, which they're still working on, to infusing their digital business with intelligence and its digital business plus digital intelligence is what cognitive business is. We're talking about it on a different level and from a different approach, but I will tell you that there's a lot of discussion in the market and that didn't exist a year ago. Well, that's right, you lay down the gauntlet and the business, so when you see ours, we're going to have that too, but so examples are obviously a key way to show proof points and demonstrate your differentiation, so you rattled off a few, can we challenge this a little bit? Yeah, let's talk about a couple of them. We have a big space here on transforming industries and I'll just give you a couple of examples, so one is metronic, in the news and with 60 Minutes recently and I think we've started leveraging cognitive and medical even a year ago, but in the particular case of metronic, we have a great example there where they are leveraging Watson to really identify the right patients for their type one diabetes application and so we have storytelling, we have three patients, they told their stories about how their application IBM Watson with metronic fundamentally changed their life from a life and death situation to being able to manage the disease because the majority of care for diabetes happens between doctors visits. It's not something that occurs while you're in the doctor's office and you want to prevent going into a critical situation, so these are life changing and in human assistance type applications and we're going to be seeing more and more of them. The announcement that we made with metronic recently was their sugar IQ application and that actually is for type two diabetes which is a huge population not only in the United States but a growing population in India as well. So the influence that this application has with Watson on the world at large is significant. It's going to teach people through personal care with their application and their device, it's going to teach people how to fundamentally change their life and the way they feel and their energy and prevent chronic illnesses that are a byproduct of diabetes. So you mentioned that's, go ahead, sorry. So that's pretty significant. So you mentioned that 60 minutes spot with Charlie Rose and John Kelly stole the show. You did a phenomenal job. I mean, they're going to come out of the woodworks now. You know that after you, right? That was, that was a huge win for you guys from a PR perspective. And so when I said they're going to come out of the woods, you, when you said that when Ginny announced last year, you started to hear a lot of noise. Now it's going to be holy cow. How did you guys like pull that off? I mean, you must have been so excited to see that come to fruition on a Sunday evening, right after the football games, I mean. Well, I mean the team, you know, has a really strong plan to take the progress that we're making and really get it out into the market. I mean, and especially a year into declaring this as our strategic direction, you know, that was an important critical interview to have. And it gives us a platform now to springboard off of that and talk about all the other great clients that we have and how we can apply what we're doing there in other industries. And that's what's really important. Takes it mainstream. So what have you learned? Ginny mentioned, you know, the study that you guys did. Yes. Maybe we could explore that a little bit more. What have you learned in the last, you know, 12 months, 18 months of adoption? Right, so we get asked all the time, what are other clients doing? You know, talk to us about the cognitive journey. We have the six steps of becoming a cognitive business in the, you know, the consulting space and the transforming industries on the show floor. And we really want to help clients to understand what are the important things that they have to either have in place and also then to explore and ideate about the opportunities that are to the possible. So to get more insight, we went to 700 clients and partners. And again, large, small, individual businesses, startup type businesses, and we did a study. And we learned that, so again, they're already on their cognitive journey. So we're exploring specifically the issues, the outcomes. And what we're finding is that 62% of the participants were pleasantly surprised with the outcomes that they received. And those outcomes really exceeded the expectations that they have. Again, this is a journey and we're at the beginning of a journey. So people expect certain things, but with cognitive, the fantastic thing is it really does enable you to look at whatever problem you're looking to solve so fundamentally differently. It's surprising and that it feeds itself. And that's how you're able to get more of the business focused on moving to more of these types of projects and applications. How many people thought cloud was relevant? Because I think cloud is the engine. I mean, the weather company is powering the cloud. I mean, I'm blown away by how good their cloud is. The weather. You can't really do cognitive without cloud, right? So you have to have a cloud environment in place, a strong cloud platform. A lot of the applications we're talking about have been built to help you mix. So majority all like one cloud. All cloud, 100%? Explain why. Explain why, I mean, maybe it's obvious, but explain why you can't do cognitive without cloud. Well, if you're on the application building side, you access the APIs, Watson APIs, through either Watson Developer Cloud or Bluemix, IBM Bluemix, that's how you get access. You can be, it is a sass cloud for them. The customer can be on-prem. Well, yeah. I think he's saying, are you saying, oh, but so you're, yeah. So that's if you're building an app. But if you're looking to put a cognitive system in place, Watson is only available through the cloud. Right. So you can't build a cognitive system without leveraging cloud. And I thought that was because- You can't crunch the kind of- I just checked, nine out of 10 said cloud computing, data analytics, mobile security will play an important role in cognitive-intimidation within- Yes. Within two years. So I thought you were going to say because you're constantly updating the- Consuming lots of data, information. And so there's no way you could do that in a distributed, I mean, it just wouldn't work. You'd either be missing all the new function. I mean, it would just be a nightmare. So, okay. Well, that's what prevented people from, that's why we see the acceleration starting. Because before cloud you really couldn't, you couldn't go into that space. You didn't have the right foundation to being able to consume that much information and data that quickly. It would have taken a long time in it. And that's why people didn't do it. So what's the go-to market right now for you guys? Because obviously this show is like a bounce. You're going to get a big bounce of attention. We saw the numbers on social have been fantastic. Just the conversation buzz has been, obviously Watson's Watson, people who know Jeopardy know he or she beat Jeopardy. It was a Watson that was in an academic setting. Jill Watson was a TA for a class that didn't even know. And actually no one complained. We have a lot of really great and surprising examples. This is an interesting year for you guys. So what do you do next? I mean, what's the game plan? Just continue to educate. Developers are going to be a focus. What's the- Developers are a huge focus. So we're continue to build out the APIs and the cognitive technologies that we have. Definitely working hard the whole development community. We have a huge developer event early November. I don't know if anybody- November 9th? Yeah, November 9th. World of Watson. We just found out that we're trying to get there. CubeCon is going on the 8th. I'm going to try to get back to the 9th. We're trying to- That would be great. We're trying to get theCUBE there. So I saw Meg Swanson, we're like, hey, come on, forget theCUBE. Come on, get theCUBE there. We'll be there. Good. We'll be there either way. We hope theCUBE will be there. Yeah, that'd be, that's fantastic. So- And that's just pure developer though. That is pure developer. That's not marketing. This is our business event. This is our technology and line of business event. And that's the developer community. And so we continue to talk to clients. And so we have strong sales teams, consultancy, workshops. Again, for some people, we're talking about the art of the possible. And with others, they're coming to us with ideas and they want help with where they get started. The clients that I met with a couple of weeks ago at one of the big vendor events, with everything from universities to judges in a state. I won't mention which state it is or trying to use cognitive to really understand how to even determine which type of cases should be tried and in which types of cases shouldn't be. Based on Watson leveraging all the way- Sounds like an ethical issue. The FX is big. We had Shannon on earlier. Well, Jenny mentioned something today about how cognitive will help actually drive greater, you know, more fairness. And I do really believe that's true after talking to the judges. Because the way things work today, there's so much opportunity for error and human error in what happens in terms of, you know, if you have criminal cases that I really do think cognitive can really help us make a much fairer process, whether it's jury selection and doing that more fairly. Could be applied in many ways. There's definitely that side of the coin where it increases transparency. And then the flip side is some people could just use it. And confidence level based on data. So the great thing about Watson is it gives you options of, you know, confidence against, you know, actions or insight. So. So we heard some other examples through either cube interviews or just around the show. So Geico, Jenny was talking about Geico when it presents offers. That's Watson's powering that, right? Schaeffler, we had this chief digital officer of Schaeffler on, basically instrumenting all these components in automobiles. Totally different use case. We had staples on. The chief digital offers of staples. That's a retail example, e-commerce example. My favorite is Alphamodus. Yes. Which, I mean, it's a small shop. Yes. I'm very familiar with them, right? Trying to understand the imbalances and supply and demand. So really dramatically different use cases. Right. That's what I'm saying. Transforming industries. It's wonderful, the array of different industries and client issues, buying agendas and use cases are phenomenal. And what's your priority this year? Got the event in the ninth. What are the marketing activities you got going on? Are there events that you're going to be at? Besides the big tent events here at IBM? Any external events you're targeting? Well, I mean, we're targeting all of the first quarter events. A lot of hymns, cybos, all of the industry events because it's a really important line of business conversation. Having a presence there. Absolutely having a presence there. And then, of course, the IT events that we've done in the past. We're also exploring and experimenting with a lot of the artificial intelligence type of events, as you can imagine. And we have been doing that this year, but we'll probably do more of that next year as well. So events are a big part of it, but you have full on demand generation campaigns. We had some great seller breakfast today with a lot of clients. So the client solutions team or the cognitive solutions team. So. How's your relationship going with the Blue Mix team? It's, of course, fantastic. Of course, that's where the developer action is. That's where I started, right? I started. That's where the action is. Go to Blue Mix. Right. That's where, that's the environment where you're going to get access to the APIs and all that you need to build a cognitive application. I was just tongue in cheek. I know it's going well. And of course, Meg's a friend of mine, so. Yeah, Meg's just phenomenal. We love her. I saw her at the analyst dinner that we didn't go to, but it's a different story. The thing is, is that to me, the cloud is critical. I agree. But you don't want to get too bound into it. You're decoupled right now. Cognitive is here. Cloud is over here. You can work with, they work together. I wouldn't say they're decoupled at all. We happen to be different organizations within the company. Well, different organizations. But I would say they're two sides of the same, you know, they're different sides of the same coin. But it's the massive component of your cloud differentiation strategy. It's huge. I can't go get. It's really difficult for me. I heard 24,000 developers a day are coming on board. Or is that a week? And there's only one place to get it. Right. See, to me, you can't talk about cognitive without talking about cloud. But again, oftentimes you're entering the cognitive conversation through a business or societal type of a problem that you're trying to solve. And from a cloud perspective, you oftentimes have the conversation from a technology lens. But it's the combination of these two things. It's just a great point. It's the entry point. You get geeky with the cloud and you're talking business with cognitive. Exactly. I mean, when we're talking to the judges, they're coming at it from their, I wouldn't call it line of business, but I mean they're coming at it from a different perspective than if we were just talking to another company in a CIO. They're deep in their discipline. Both sides of the same coin. One technical, one business. Well said. And the power of that together, I'm seeing in conversations to be just enlightening in terms of what people really want to do once they see the possibilities, which is why the examples are so important. Well, we're super excited to get our developers rocking with Watson. Yes. I think she had a ring to it. Rockin' with Watson. We'll be rocking tonight with Watson. And get on the developers. We just ported all of the IBM Go code to soft wet layer, now blue mix. So we're all on IBM cloud on that product. And I'm excited about the ID conversation we had. IBM ID. IBM ID. Integrated in, single sign on. Nancy Pearson, thanks so much. Final word, share with the folks. What is this conference about this time? Give some color to it. People aren't here. Give a kind of, paint a picture. There's an energy here. And I think the way I would summarize it is, people are really getting the idea that we're at a really pivotal point. Tom Friedman mentioned it in his presentation. This is the beginning of a very exciting era. People can see the possibilities and the opportunity, but they have no idea where it's really going to take them. But they know it's going to be incredibly different from where we are today. And it's this confluence of technology that's giving us this opportunity. So to me, I don't think there's been, and there'll be an exciting point in time exactly like this, even though we've been through some very interesting things. You know there's massive things that are happening, but you don't really know, but you know you got to be ready. Right, you have to be ready and you have to also open your mind. Yeah, Nancy Pearson, Vice President of Marketing, Cognitive Business, open your mind. Be ready. A lot of good stuff's happening. Hopefully it'll be good. I mean, AI is good. Good for people. Mr. Cube, we're absolutely good for you with the content today. I'm John Furrier, Dave Vellante. We'll be right back with more after this short break.