 from Las Vegas, it's theCUBE. Covering IBM Think 2018, brought to you by IBM. Welcome back to theCUBE. We are live at the inaugural IBM Think 2018 event. I'm Lisa Martin with Dave Vellante and our first guest on day one of our coverage is Jerry Thompson, the Chief Revenue Officer of Identity Guard. Hey Jerry, welcome to theCUBE. Thank you, well, it's a pleasure to be here. So tell us about Identity Guard. What are you guys, what do you do and how are you working with IBM? Yeah, Identity Guard is a subsidiary of Intersections. We're a publicly traded company and we're only in the identity and privacy space. So we today protect about 1.4 million people's identities. It's a subscription-based service and two and a half years ago, we made the decision to basically invent Identity 2.0 and the only way to do that was to use artificial intelligence technology. So we went to Watson to do that. This was a giant leap that you mentioned. So let's kind of maybe break that down a little bit and really talk about what you're doing here that was really transformative. Yeah, so Identity Protection companies today only look at structured data and basically we look at structured data and we look at it in arrears. So we can't do anything proactive or preventive. We knew if we used Watson in an AI technology we could monitor unstructured data which is probably 90% of all the data out there about any of us and in doing so we could do preventive and predictive analysis of your personal information, privacy and your identity. So there was a quantum leap to go from just reacting to actually proactively protecting people's identity and privacy. So could you take us through sort of the journey that you went on to go from sort of where you were to where you are now and where you're headed? Yeah, so I mean it starts like every other company with Watson. We took the tour of the Watson building, went upstairs to the Glass conference rooms and in that conference room waiting for us was the CIO of Watson. When was this? Two and a half years ago. Yeah. And we explained the problem we were trying to solve and from that day forward IBM has been an amazing partner for us. Amazing partner. So we did all of the things. We went through a scrum, we wrote some product code, we did proof of concept and when we were convinced that we could actually reinvent this industry we went all in. But keep going. And that was two and a half years ago. So a lot of people will say, okay, Watson's a heavy lift. You got to have a lot of services. It sounds like you did. But the outcome is really what you're driving towards. So what was the outcome you were looking for and what did you have to do to get there? Yeah, so I mean at the highest level we wanted to protect not only your financial and credit data but all of the data that's out there about you and your partner, spouse, wife, and kids. And in order to do that you need a processing engine that actually is intelligent. So that was the journey in Watson. We have found it to be not a big heavy lift. We had the right kind of data scientists and we knew the problems we were trying to solve not in the abstract, in the particular. We defined the stories and the categories that we wanted to play in. We defined the product as we wanted to launch it. We knew it was going to be a one to two year run because you have to invent it, create it. Then you have to play with it, right? You have to run it through the machine. So right, and iterate. So in order to do that we knew the timeframe so we were never frustrated. And along that journey we came up with other things that we thought would be amazing to include in the service. So like cyberbullying technology, geolocation technology, all kinds of other things where only Watson would help us do that. And the data scientists were on your team or IBM brought those to the table? No, IBM always let us reference there that we have a handful in Virginia and some more in California in our development center. So you're one of the lucky ones who had a team, a bunch of data scientists at your disposal to go. Is that right? Yeah, I wouldn't say deep bench, but we've added to it over time as you get into the way you want to solve this problem. And how specifically are you using Watson? Can you give us, add some color on the APIs that you're using and how you're applying them? So we use natural language processing because we pour an amazing amount of data through the Watson funnel. Social media data, geolocation, alchemy news, and we need the natural language to actually jump and search for keywords and key elements. We use Emotion Analysis API, Sentiment Analysis API for context. So we're reading social media posts, your kid's post. Your kid might say, boy, I killed it on the soccer field today. That's not a threat, right? That's just a statement. You have to add context to a statement. In order to do that, we use Emotion and Sentiment APIs. We use visual image recognition for inappropriate things that might be coming through. We use alchemy news, which I believe is discovery today. We're in the process with the help of IBM to create a library, a language around emojis. Some emojis can be very threatening in the way they're used and the context they're used. You have to be able to read it, intelligently read it, and then put it in context to the string of texts or Instagram posts or whatever that are going back and forth. So we've really taken this holistic view of what Watson can help us do for unstructured data. And in that process, it made our ability to monitor structured data better. We learned a lot. So we actually got benefits on both sides of our business. So you talked about this quantum leap that you made to Identity 2.0. Also what you're doing in your space is quite pioneering in that. You're the only, first and only company in the space that's using AI. Cyberbullying is such a hot, very challenging topic and sadly one that's very much needed in terms of identity. But why do you think it is that Identity Guard is so pioneering in this space? You know, we've always been, we, first of all, Identity Guard invented the identity business 23 years ago. We're the first ones that ever do it, first ones that do credit scores, reports. So we've always innovated in this space. The challenge for us as a public company, our biggest competitor is the credit bureaus, right? And the credit bureaus are low cost providers and candidly I think they stamp out innovation in our field because they just want it to be about credit data. They don't want it to be about other things. So it was time for somebody to take this leap to predictive and preventive technologies not just reactive. The rear view mirror can tell you a lot but it can't help you protect today. And that's what we've been doing in our space. Well, the dossier from a credit bureau is so limited. It doesn't provide context. Your score goes up or down for weird reasons because people are doing credit polls or whatever it is. You really have a context of what's going on there. So my question to you Jerry is where do you see innovation going in this space? Obviously data is involved and the credit bureaus have data but where's innovation going to come from in the next five to 10 years? Yeah, you know, I think it's the, we're going to figure out how to harvest data that's out there and then score that data so that we can help you and your family stay safe. Nobody today wants to have no internet, right? The internet's opened up an amazing amount of capability for people but you have to have a way to play in it without it being too dangerous. And I believe we can use Watson. That's our, it's been our theory from day one. We can use Watson to level the playing field, right? Not really get an advantage but to level the playing field especially for families where not everybody is aware of all of the malfeasance that's out there on the internet, right? There's people are always looking to harvest our data and to use it in a malicious way. Especially kids and minors, right? They're at risk for cyber predation and stalking and cyber bullying and parents today know it's a big issue. Okay, go ahead, please. In terms of expectations, you're saying it's to level the playing field with the cyber criminals, the stalkers, in the next, can we look at timeframe? Think that you'll ever get ahead of that to start actually preventing some of this cyber. You know, that's a good question. I will tell you right now, our ambition is to level the playing field. It's tilted this way today. I think what will happen is technologies like geolocation, it seems, first of all, geolocation is not really relevant without Watson discovery, right? You need all of this massive data going on in the locations that you're relevant in to help us protect you. But I believe, based on the early science that we're doing with IBM, that we can actually help a kid, somebody stalking them from four states away, but it says it's the little boy across town. We can actually stop things like that happening using the processing and the algorithms that we're doing using Watson. So there are relevant areas that I think we can have a massive impact on the privacy and the protection of peoples and their families. I want to go back to innovation. So data is clearly a key component of that. You're extending the data model into unstructured data. I'm hearing that, correct? Also, AI, machine intelligence is another part of that. What about scale? Scale and network effects, that sort of component of innovation. That comes from cloud, is it worth it? That had to be part of this. So we, along with all of our competitors in the existing 1.0 business, we use a hard-coded platform, right? I mean, if you want to change something, you have to get out of sledgehammer and a chisel and it takes a year. We built Watson using AWS, so we've used all the best tools, the fastest tools. We've run scale testing, you know, and the beautiful thing about our business we're in a digital business, right? So our factories open 24 hours a day, 365 days a year, our shopping cart's never closed. You can always, you know, subscribe to the Identity Guard with Watson Service. So we needed the cloud to give us the scale. We also needed the platform to be able to plug in and unplug the APIs. Some partners may not want social media monitoring. Some partners may not want this. So we didn't have to hard-code our product. We actually built three services and we can unplug any of the services. When you say you're a digital business, it strikes me that your data model is not in a bunch of silos. You've got a data model that's accessible maybe through sets of APIs, et cetera, that your human experts can go attack. Is that a fair assertion? One other thing about Watson, we were going to use Watson from day one, I was convinced and I was the one that took the company on this journey. But the other thing I like about Watson is that you don't, Watson doesn't keep the data, right? We talked to the other big players in this field and one of their mandates is they always keep the data, all of it. And Watson shreds the data and we don't keep all the data. So think of all the social media and other data that flows through this funnel. People out there want to keep it so then they can reverse profile consumers or cohorts or Watson shreds the data. You're not in the spoofing or spying business, nor are we. So that was also a really important consideration. Yeah, I said that at the top, that you're going to hear this from Jenny tomorrow. I can almost guarantee you she's going to say that we're not in the business of trying to remind your data and retarget. But so that was, I was going to ask you, why Watson? That was one reason. What about the quality of the machine intelligence? You're like, you hang around Silicon Valley, oh yeah, Watson, how does it compare in your view? Here's a practitioner who's, you know, familiar. So they have more refined, first of all, more APIs, right? More, some of them not relevant to us, the medical ones which are amazing and fascinating. But they had more structured APIs and a better roadmap on where they were going. And what we found from day one is that if we define something, they would say we'll jump in and help, right? It's really important when you're the first one, you know, the tip of the spear, you don't know what you don't know. And we found from day one, the IBM team has treated us like we're General Electric, right? Or General Motors, right? We're just, you know, a couple hundred million dollar company trying to make a big difference in a important space. And they have treated us like a fortune 100 company from day one and really appreciate it. Their science is so good. Sorry there, as the CRO, going from identity 1.0, the 2.0 of this journey that you're on, you mentioned competition, how many, talk to us about the actual financial impact of the company that you can say, that you've been able to achieve on this journey to identity 2.0, presuming believing some of your competition back in the 1.0 land. Yeah, yeah, actually our competition will be behind us for at least a couple of years because it takes a couple of years. You know, you don't do this quickly. So, we are out, we launched, we launched Watson in December, we actually launched, we distributed our product through partners. Most of it, 90%. 10% people come to our site and sign up online but we launched 21 partners in January, 11 in February, 13 in March we'll launch. So, by the end of the year, we predict we'll have about 200 Watson partners distributing our product which would give us a huge head start advantage over anybody else. Once you see what we're doing and you see what else, the 1.0 version, it's almost impossible to pick 1.0. It's impossible, right? So, our job is to create more awareness in the distribution channels so that people understand that Watson is out there and available. And this is a subscription service, I think you set up a fund and you got different tiers, et cetera, yeah, awesome. You guys have a couple of sessions that you're participating in at the event? We do, yeah, I know we're on tomorrow afternoon and I believe Wednesday morning. So, yeah. Well, Jerry, thanks so much for stopping by theCUBE and then sharing what you guys at Identity Guard are doing with Dave and he's fascinating. Appreciate you talking to us. Thanks for coming on. Yeah, thanks. Pleasure. And we want to thank you for watching theCUBE I'm Lisa Martin with Dave Vellante. And this is day one of theCUBE's three days of coverage at the inaugural IBM Think 2018. Stick around, we'll be right back with our next guest after a short break.