 Live from Las Vegas, extracting the signal from the noise. It's the Cube, covering IBM Insight 2015, brought to you by IBM. Now your host, Dave Vellante and Paul Gillan. Hi, welcome back to IBM Insight everybody. This has been two days of coverage, wall-to-wall coverage, this is the Cube, we go out to the events, we extract the signal from the noise, Jim Harris is here, he's an international best-selling author, focus on disruption, speaker, sustainable, the whole energy field, welcome to the Cube, Jim. It's great to be on. So, what's happening here at Insight? You're here as one of the influencers, so what do you see, what's influential in this new world? We're really looking at how do we change in our society and how do we use big data analytics to enable better decision-making by business leaders and by even whole industries. Yeah, so, let's talk about disruptive innovation and maybe even, if we can, maybe we can narrow the context and then widen it. In the context of, you know, the computer industry, we've seen a lot of disruptive innovation at IBM at the mainframe and then it sort of seeded its monopoly to Intel and Microsoft, but the mini was slightly disruptive. And then we had the Spark server and then we had the PC era and then the tablets and the smartphones are disrupting PC sales or declining. Yeah, so you're certainly seeing that. And then so, now you've got all these disruptions happening. Where does big data and analytics fit into that disruption? Is it disruptive or is it more of an opportunity for organizations? Well, it's both. I mean, the amount of data that this thing throws off is huge and it's constant. And I like to look at things from the end user perspective. So I'm not, I don't walk around Las Vegas all the time. So, you know, a big data analytics would go to my Facebook and say, there's that photo of you and your wife and she loves Starbucks. So we know we like Starbucks or at least his wife does. And from the GPS and the device, we know he's a half block away. So we're going to push out a coupon for 50 cents off a latte because we know he likes lattes and show him a map of how to get to our Starbucks. Now, as an end user, I don't think, oh, I hate big brother. I think, wow, that's great. It knows I like a latte and off I go and I get one. So from an end user's perspective, when these tools are applied appropriately, it adds tremendous value. So we were talking off camera about this sort of, you know, Dell acquisition of EMC, big company, IBM has weathered many storms, right? So do you see things like Watson as disruptive innovation or like who wins and who loses with that? So it depends on the industry. So yes and no, we were talking about IBM weathering a storm and Watson has been able to be used to better predict weather patterns for airlines so they avoid turbulence. It's decreased turbulence by 50%. So you might think, well, that's nice for the end user, but it's also good for airlines because if you just increase fuel efficiency by 1%, you double the profitability of the airline industry. They work on these razor thin margins. So analytics can really be a profit driver. You could also begin looking at from an end user's point of view. If I was able to, you know, the plane lands and then they announce in half hour increments, we're delayed, we're delayed and 10 hours later, I've been delayed 20 half hour times, right? But as an end user, if I could have an analytical package that just say, look, rent a car, get out of there. No planes are taking off for the rest of the day. You know, I might get home in half the time or if I'm a diabetic, you know, and I'm pricking myself 10 times a day, imagine instead I take a picture of what I'm about to eat and it goes up to a database and then predicts what my blood sugar level was because it gets to know me on a personal basis. And then it says, you have the flu and are taking some medication for that and cross references it and said, hey, we have some people who on that type one who've eaten that ice cream have had a weird reaction. So it would be making combinations or associations as an individual you'd never make out of this big data universe. So you mentioned combinations, there's been a lot written and talked about a combinatorial innovation. You know, our industry has marched to the cadence of Moore's law for decades, right? But it seems now that innovation, you know, look at things like ways, right? It's combining geolocation and social data with mobile and it's sort of disrupting, I don't know if it's disrupting, I don't consider it disruptive, I guess it is disrupting, it's disrupting GPS. You never use your GPS in your car anymore in these ways. These devices have sucked the value out of so many different consumer electronics categories. So standalone point and click cameras decline except for SLR, GPS decline because this is a GPS. So it has sucked so much value into this and this has really become the center of life for so many people. So if businesses aren't focusing around the smartphone and how to reach the customer on a personalized basis, it's a matter of time until their toes. Have you found that there are any, disruption is such a hot topic these days, I hear executives are all afraid that they're going to be disrupted. Have you found that there are any patterns to industries that become disrupted? Yes. How do you know if you're a candidate? Well, first off, if there is classic fear and frustration. So here in Vegas, I come to the consumer electronics show every year, 140,000 people, largest electronics show in the world and you can wait four hours for a taxi cab. And that creates a lot of frustration. There's nobody at the front of the line saying, hey, anybody going to MGM? Let's pack you all into one and off you go. Not only do you get a quarter of the price of the cab, you get there faster, right? And the line isn't going to be four hours, it's only going to be one hour long. That's a classic fear and frustration. Another one, I get in a cab here and they charge me an extra 350 for using my credit card. Well, not only is Uber cheaper, they don't charge me and they give me an invoice all at once, right? So what are the classic problems that customers don't like about dealing with your industry? And if there are a lot of those, you're right for disruption. So it's that old line protecting the past from the future, right, you see a lot of organizations doing that. But do you see, Jim, an awareness from executives that you speak to that this idea of protecting the past from the future is risky or do you still see that endemic problem? Well, it depends on the organization, it depends on the industry. So many industries figure they're immune to these forces like the taxi cab industry until Uber has rolled over them. And on a valuation basis, Uber is worth half as much as all the taxi companies in the world combined. Like they have the wake up call now, they're all busy getting on apps but they're not working cooperatively, right? Uber using its analytics can actually look at weather patterns and have predictive models from prior years of service. And they can actually, we just had the games, the North America and the, anyways, the sports games for all of North America, Latin America, US and Canada. And so it was just packed, a lot of people came up and so on. Uber just began shifting to say, hey, we're gonna introduce a ride sharing service. Can you just highlight where you are? We'll pick up a couple people together and we had HOV, high occupancy, vehicle lanes. The only way you could use it is if you had three people. So by using an Uber ride share, I get to get there faster than if I were to use a taxi because it gets to go 110 kilometers an hour, 60, 70 miles an hour translating here. When everyone else is crawling at zero. So you can do analytics and say, hey, traffic is terrible, but if we put two, three riders together, we're going to get downtown in one quarter of the time of a regular taxi cab. So they created a new service on the fly. Exactly. Using data. And let me tell you, it's immensely popular. Because we have these analytics, we can use them in new ways to add value for our customer. We hear, I mean Uber is such a commonly used example, but I wonder if, I mean, does there have to be frustration in order for an industry to be disrupted or can disruption occur simply because you provide some convenience? And I think of, you know, grocery delivery, which was seen as one, as an early disruptive potential, the internet never really took off. It did not play to a basic human emotion. People liked to shop. So is there a question here somewhere, Paul? The question is, do we understand the potential for disruption? Have we seen what happened in the recording industry, what's happening in the taxi cab industry? Have we seen so many cases of disruption now, photography industry, that businesses are pretty savvy about it, that they're not likely to get disrupted now? Well, so let's take the music industry. First off, all the music I'd loved, if I had looked it around with me as CDs, I'd have this 150 pound pack I'd be dragging around. So it's not how do we make more efficient CDs, it's how do we add radical new value? So all of a sudden I can carry all music I've ever loved with me in a single device and listen to it anywhere. But it's more than just that. Shazam, I had all this music, but there's some music I never knew who the artist was or what the lyrics were. And Shazam, I just pushed this and wow, I get, what is that? Who sings that song? Frankie Valley. And the Four Seasons. So I mean, it changes my relationship to music. So it's not just about being more efficient, it's actually changing that relationship in a profound way that literally amazes people. I mean, how many people go out and talk at parties about this new app? Well, it's adding radical new value for people. How about IoT? Is IoT disruptive or are the incumbents with the physical assets going to just sort of digitize them and win? Or is it both? What are your thoughts on IoT? Well, it is always both. It's disruptive to the incumbents who won't change or try and use regulation as a way of preventing change. I'm gonna buy a Tesla Powerwall. I'm on the list for it. I mean, I'm gonna take it and I'm gonna put it in our, either our utility room or the garage. It's gonna download power at base price and I'm gonna turn everything off at mid and peak pricing and I'll have 10 years of arbitrage. And not only that, I'll have for the same price a backup power supply, a UPS for my whole house, right? So when we get a brownout or a blackout and everybody else's food is going bad in their freezer, I just say, hey, keep the freezer, the fridge on and the forced air and boom, I love it. You don't want to just take 20 cans of gas and just line them up and get the generator out. The diesel generator. We actually had a blackout during the winter in Toronto and some people unfortunately brought their barbecues in and they died from carbon monoxide poisoning. So like this is for 3,500 bucks, I can have this Tesla Powerwall or imagine my car is my backup for my home. I want both, I want both a Tesla and a Powerwall but this really changes the nature of electric utilities. So utilities that are trying to maintain the way things have been are gonna be blindsided and those that are innovative moving to different models, time of use, pricing, you know, incenting their customers to become partners with them in shaving peak, they will do well and those that resist won't. I know energy efficiency is one of your interests. The United States and I think by definition North America are close to being energy independent right now. Don't need imported energy anymore and at that point could essentially cut ourselves off from much of the rest of the world. Do you see that as a likely scenario where we basically start telling the rest of the world we don't need your energy and we're not relying on you? I mean, how does things change when we achieve energy independence? Well, we could have energy independence right now. Like in North America lighting is 27% of our electricity use and we're still using incandescent light bulbs which should really be called heat bulbs because 80% of the electricity generates heat, not light. I just switched, unfortunately, they weren't incandescent in my home, they were CFLs. I just bought with coupons from my electric utility, $200 worth of LED lights that over the 23 years of their lifetime of operation will save me $7,000 of electricity. You know, why aren't we doing this everywhere? Like, we don't need to build out any more infrastructure for energy supply. We actually are grossly oversupplied if we focused on efficiency and end-use efficiency, we could cut our energy use by 90%. Well, a lot of the utility companies are aware of this but they get caught up in all kinds of things, right? Regulation and yes. But they don't want to build new power plants because the capital expense is just enormous. It's horrific. But you look at true disruption. I mean, there are buildings in Europe now that are actually net energy positive. They generate more energy than they do. If you get to the point where we have buildings like that, suddenly you can think about taking buildings off the grid, which means you can think about redesigning how we manufacture, how we warehouse, where people live, where people work. It's sort of everything, all the rules change then. Do you see that as, I mean do you foresee that that will happen in the next foreseeable future and how does that change the way we live? Well, it will change everything. All the coal mining goes away. All the coal-fired generation plants go away. Nuclear, horrifically expensive, it goes away. So if you're a coal-fired generation electric utility, you'd better be engaged in transformation or you're going to be blindsided. Like the cost curves on these things, just like Moore's law. There's Haitz's law for LED lights and we're seeing the cost come down by 2020. You're not going to be able to buy anything but an LED light unless you want to pay 20 bucks for that incandescent because you feel it's your bloody right to own one. I actually don't think you can buy. I think they're outlawed. In some jurisdictions. In the U.S. I do not believe you can buy a new incandescent ball. Sure, well people will travel to Canada to buy one. But the point is everything's going to be LED. They're going to be so cheap compared to what they are now. It's anytime you have this exponentially changing, declining cost curve, it's going to drive change. And so it's not a matter of if, it's just when. And they're effective with no heat. Yeah. But I'm thinking beyond just saving money. Paul, I've got to say you look great under LED light. You know. I've always said it's my best side, it's my LED side. Beyond just saving money, I'm talking about redesigning the way processes are done. I mean, are we at the point that corporations should be thinking ahead to going off the grid and changing whole new energy efficiencies like when electricity came into factories and we were able to disconnect the big overhead belts and reorganize the factories. Are we at that point now? Well, yes and no. I say what we're going through is like building a plane while designing and flying it. You know, that's the kind of transformation our society is having to go through. And so yes, companies are becoming energy producers like Walmart has solar on all its rooftops and it has white roofs instead of black roofs. Simple thing like white roofs from black roofs, there's no capital cost difference, but where do we stick all the air handling equipment for air exchange on the roof? And on a hot day like 110 degrees Fahrenheit in Phoenix, the delta between a white and black roof one foot above is more than 90 degrees Fahrenheit. So you're sucking in 90 degree Fahrenheit too hot to chill down, to circulate, to people to breathe, you know, clean air, this insane waste of energy. So there are such simple things and that leads me to another thing. There is no one silver bullet. There's silver buckshot. There's a myriad. There are thousands of solutions that need to be implemented. And we like to think about the one big thing we need to do. No, it's concurrent. It's all sorts of solutions being implemented. All right, Jim, we have to leave it there. Great segment. Thank you very much for coming on theCUBE, sharing your insights. It's been great. It's like we pushed your button on energy. That is fantastic. All right, keep it right there, everybody. We'll be back with our next guest. This is theCUBE, we're live from IBM Insight 2015. Right back.