 Live from Atlanta, Georgia, it's theCUBE. Covering IFS World Conference 2018, brought to you by IFS. Welcome back to theCUBE's live coverage of IFS World Conference here in Atlanta, Georgia. I'm Rebecca Knight, your host along with my co-host, Jeff Frick. It is late in the day here. The reception is about to start. The drinks are flowing, but we are still, we're still interviewing guests and we've got a great panel right now. Joining me is, joining us is Scott Helmer. He is the Senior Vice President at the Aviation and Business Defense Unit at IFS, and Henry Cannaday, who is a contributing editor at Aviation Week. Thank you both so much for joining us. Thanks for having us. I wonder if you could walk our viewers a little bit through the idea of where does aviation and defense sit within the IFS business strategy? That's, I'm happy to answer that. I think our new CEO of IFS, Sharon Roos, has been very clear that there are three things that IFS will be best at. Number one, we will be best at mid-market ERP in those vertical markets that we care about. We will be number one in field service management, and we will be number one in maintenance management solutions in aviation and defense. So aviation and defense is one of the pillars on which IFS's strategy is currently based, and we have formed a global business unit inside of IFS that is specifically responsible. It's a 300-person strong team that is responsible for distributing a comprehensive portfolio of A&D solutions to the A&D market globally. What are some of the biggest challenges that you're setting out to solve for your customers? Also a good question. We address the full range of maintenance, management solution capability across A&D. So whether you're an operator in the commercial or defense sector, or whether you're an in-service support provider, we provide solutions that support all of your MRO capabilities, some of your performance-based logistics requirements, some of your supply chain requirements, basically leveraging the core processes that IFS is differentiated around those being manufacturing, asset and service management, supply chain and project management. And what's special about aviation and defense that's not mid-market ERP or service delivery, which captures a lot of industry verticals, but the fact that you guys got carved out as a separate vertical, what are some of those unique challenges? What is chiefly unique about aviation and defense is the overall complexity in the marketplace. You're talking about very, very complex, capital-intensive mobile assets where managing the maintenance obligations in order to maintain the availability of the aircraft is under the scrutiny of compliance and is required to be done efficiently without compromising safety. Not to mention the fact your assets are flying all over the world, so they might not necessarily be able just to roll into the maintenance yard at the end of a bad day. And they're large and expensive assets, for sure. Henry, you've been covering the aviation industry for more than 20 years now. I mean, what do you see as sort of the biggest trends, biggest concerns that a company like IFS is trying to grapple with right now in terms of surfacing its clients? Well, the interesting thing about the airline industry is that technically, in many areas, it's an extremely advanced and very fast-moving industry. In selling tickets, the industry has been going through a continual IT revolution for the next 20 years and things like giving you notices about when your plane's arriving, stuff like that. Very fast-moving, change it all the time, but this is stuff, it's just money. There's no safety involved. So they can kind of take chances that they get it 99% right, they make enough money they can solve the 1% errors. The problem with maintenance is it's messy, it's complex, as Scott says. It's also safety-critical. They can't screw it up one-tenth of 1% of the time. So the big deal, they've been very, very cautious and very, very slow and they look sluggish and stagnant on the maintenance side. But fortunately now, especially the US airlines are making some good money. So there's actually an opportunity for companies like IFS to come in here and really kind of reform the maintenance program. And we've covered a lot of autonomous vehicles shows, autonomous vehicles are coming and obviously a big element of autonomous vehicles will ultimately be safety. And one of the things that comes up over and over again is if you look at the number of accidents and fatalities that happen on our streets compared to what happens in aviation. If you ever, if a week on the streets happened in a week in the aviation industry, the planes would be shut down. So the threshold that you guys have to achieve in terms of safety is second to none. I don't know if there's anything even close, especially times of volumes of people. And then oh, by the way, everyone globally is getting richer so the amount of passenger flow. And I don't know if you could speak to Henry in terms of the growth of passenger miles, I imagine is the metric is continues to explode. You've had basically 18 straight years without a fatal crash by a major American airline. And that's unheard of. That's unheard of. We used to have one crash a year up to around 2000. This is the US industry. Every time somebody annoys me with customer service and an airline, I think of this, they're doing the important stuff right. So I don't care. Very well. Right. And then you think of just the efficiency, right? The one, at least here domestically, you always think of a Southwest because they were the first ones that really have fast turns and they race to the gate. They race back out of the gate in terms of really trying to get maximum efficiency out of those assets. So the pressure there and then translating to the other airlines pretty significant to make sure you're really getting a high ROI. That's absolutely right. That's again, one of the levels of complexity that we were discussing. Certainly, airlines are being forced to finally introduce some change into their maintenance operations as the increasingly complex assets are part of the refleading as those pad, that passenger traffic continues to grow. And so it's about both achieving greater efficiency in maintenance operations, not only without compromising safety but ensuring the availability of that asset because revenue dollars still matter greatly and those assets are your greatest revenue producing assets that an airline has. Can you describe your approach in terms of how you work together with your clients, the airlines, in terms of developing new products and new features? Well, one of the unique characteristics about aviation and defense is not only the size of the client but the length and duration of the relationships. So we have a long and rich history both at IFS and through the acquired MXI technologies of working with our partners in their programs over the very, very long term. And as much as we have domain expertise and a sizable team of domain experts inside of our business, we are able to recognize our partners that are visionaries in the industry and we have established multiple levels of collaboration to involve them in the shaping of solution capability to support their businesses going forward. We are just launching today two new planning applications that were not only being launched with American Airlines and Latama Airlines respectively but were co-developed with subject matter experts at each. So they are tremendously valuable inputs into shaping our vision of what solutions are going to best strive business value for our customers over a very long relationship horizon. So what if you can unpack the MXI acquisition? Kind of what did that give you that you didn't have before and what's the total solution now? Certainly, I joined IFS through the MXI acquisition. I was previously as Chief Operating Officer. MXI was focused on best-to-breed MRO capability for both defense and service providers as well as commercial airlines. In combining with IFS that had a rich history in A&D, we now have the most comprehensive solution portfolio available on the market today. We are the only vendor that can provide best-to-breed capability integrated into an end-to-end enterprise landscape and we've got the team of subject matter experts or joint experts that are capable of delivering that value, not just the product, but the solution to the customers across all the segments of A&D. And you guys, just to be clear, your defense is more than aviation. I just saw a military truck over on the Expo Hall so it's assets beyond just airplanes when it comes to defense. Correct, we support on the defense side the things we support in multiple platforms whether they are fighter jets, whether they're cargo carriers, whether they're tanks, whether they're ships. We support for the operators, the asset optimization, performance-based logistics, security, et cetera. And for the in-service support providers, we similarly support supply chain requirements, MRO requirements, et cetera. So, Henry, as you look forward, you've been covering the space for a while. What are some big new things coming down the road, just kind of in the aviation industry that we should be looking for? Because we haven't seen a lot of kind of big things from the outside looking in. I guess we had the next-generation fighter planes and then we had obviously the A380 and the 787 on the commercial side. What's kind of new and coming that you're excited about? Well, technology changes slowly in commercial aviation because of the safety aspect. The big new things are the new aircraft, the 787 and the A350. They are really new-generation aircraft, a lot more composites, plastics, if you will. They're using that instead of aluminum. And the other thing that's happening is additive manufacturing, this whole printing parts. That's real big. And I was just, I've been telling everybody, the new Boeing 787 has two printed parts, one made by GE, $120 billion a year, and the other made by a company called North Titanium with 140 people coming out of Norway, which is not exactly the center of innovation in aerospace for the last- There's a printed part, so like a 3D printed part. Yeah, a printed part. And those are the two big changes in the aircraft. I mean, customers aren't going to see it, but these planes are now made of largely of plastics and the metal parts are going to be more and more printed. Much more efficient way, lighter aircraft, less fuel use, more efficient, less environmental effects, et cetera. That's a big deal, more important than a huge airplane. Right, right. I can imagine the opportunity, I mean, we hear about the impacts of 3D printing. Haven't really seen it yet, but kind of this vision where your ability to print parts on demand will have significant impacts on supply chain and inventory and huge, huge impacts on the road. And the airline industry is the most demanding. They've got to really go through massive proofs of concept and proof of materials, and it's starting to happen. Henry, what would you say is the most important area that IFS should focus on? If they can solve one problem in the airline industry, what do you think it should be? Availability be one, just aircraft availability. That's what the airlines concern about two things, dollar cost per flight hour to maintain and what they call technical dispatch reliability. I want to get that plane launched 99.99% of the time. So, get rid of the unpredicted maintenance problems, schedule everything, make it quick. I want to get the planes off on time. It's amazing that unscheduled maintenance, regardless of industry, is still continues to be such a bugaboo to productivity and profitability. It just is one of these things that's just huge impact. I would completely agree with Henry. I think asset availability is the number one focus for commercial operators. And our focus has certainly been around trying to remove the impacts of unscheduled maintenance. One of the applications that we launched today allows you to react very, very quickly to unplanned or unscheduled maintenance events and to do some what if modeling so that you can implement the best plan for your fleet in order to maximize the availability of that asset. And not just in terms of bolstering or producing a better plan. We're attempting to do that even with line planning where we're changing or we're adjusting the traditional planning parameters away from what must be done to what should be done in order to maximize the availability of that aircraft. And of course, as Henry said, everybody's focused on faster, tighter turnaround times. And all of our software is designed to try and drive tighter turnaround times and greater efficiency. So what percentage is the scheduled versus predictive versus prescriptive maintenance? I think it varies by airline. The great majority of maintenance is scheduled. I mean, there's no doubt about that. They put these aircraft down for a week or a month. It's a massive amount of water. It's not the amount of maintenance. It's when unscheduled maintenance happens, it really throws things off. It may be only one or 2% of the maintenance tasks are unscheduled, but that's what throws the aircraft off the schedule. That's what these passengers sitting in the departure lounges ticked off. Not getting there till the next day or the next week or whenever. So it's a very, very small percentage these unscheduled maintenance events, but it's crucial to the airline's economics. Exactly, crucial to our itineraries as well as to the economics. Exactly. Making sure that the airlines continue to do what they do best, which is get us from place A to place B. Precisely. Well, Scott Henry, thank you so much. It's been a really fun conversation. I enjoyed being here. Thank you. Thank you. Thanks, Henry. We will have more from the Cube's live coverage of IFS World Conference just after this.