 Okay, welcome to Silicon Angles theCUBE, SiliconAngle.com, this is our flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier, the founder of Silicon Angle. We're at the Industrial Cloud event with GE, and I'm joined by my co-host, her mom, Dave Vellante, wikibon.org. Beth Comstock is here. She's the CMO of GE. Beth, welcome to theCUBE. Great, thanks for having me. So, Industrial Cloud, Industrial Internet, big data, some absolute enormous market opportunities. You guys must be really excited. We are excited. I mean, the promise is huge, and the technology is finally there and ready, so it's ready to set go. When did you guys start to realize the potential? I mean, it was probably a couple of years ago, at least, that you started to take action on it, but how long have you been sort of working on this initiative? Well, I think for as long as we're as old as we are, I mean, we're a 130-year-old company, and at our core is this ability to make really great machines, and we've seen them over time get smarter and smarter. So, these brilliant machines put out a lot of data, and you start to say, okay, this data's worth something to our customers. They want more than just reliability of the machine, and increasingly, we get better and better at that. They want the ability to take that machine data and run their business better. And so, a couple of things happen. One, you start to see technology and engineering capability evolve so that your machine, our machines really are brilliant, and then you hear customers saying, wow, it would be great if we could. Might we be able to? And you start to put those two things together, and you go, there's a need, and we have a capability. Pat, one of the things that we've been doing on SiliconANGLE on the news and the publishing side is really talking about big data as a trend, machine data, machine to machine, human to machine, and big data, as we know it. And Wikibon has put that study out on behalf of this event. I wanted to get your question to you about the data-driven business, and that's been talked about in the press. Everyone should be data-driven and predictive analytics and instrument their business. How does GE look at that internally as you guys go forward to the next generation? Being data-driven, you guys always had processes and had process improvement and had excellence in that area. How do you guys, what are you guys doing to change this new era of data-driven? Yeah, it's a great question, and we spend a lot of time thinking about it. It's probably one of the top priorities of the company, certainly of our chairman, Jeff M. Milt. Two things we've had to do. One, we've had to drive the capability to take that data I mentioned off of these great machines. You're gonna be data-driven. What does that mean? Yes, we can create data. So we've had to invest in the right capabilities. So what you've seen us do in the past two to three years is invest a lot in software and technology capabilities. How do you take that data and do something with it? So the ability to analyze it on the technical side. And where I spend a lot of time with the teams that I work with is very much on the commercial side. So okay, you have the data. You know that you can analyze it, but who values it? What questions do you ask to get the right data? And then how do you enable a team to deliver it in the right way to the customer? So it's not enough just to have the data. You have to say, is it even valuable? Does somebody want to pay for it? And can we make money exchanging it? So those are some of the questions we've been going down. We always talk also about disruption and business models and value chains around how data's changed. What internally can you point to, and then how does that relate to the external market where GE's changed their value activities to serve your customers? Because you obviously have an install base and you have a huge business, but the acceleration of change has been so rapid with big data. What specifically are you guys doing in that area? Well, I think if you follow GE, you've seen a big trend for us. We created a service business a couple of decades ago that was about basically maintaining our great assets. What happens with good engineering is after a while the assets are so good they don't break if they ever did. And as I said, now the ability to take that data and do more with it creates new business models. The ability to say, it's not enough to say, okay, this jet engine isn't going to break down, but now we want to say, tell us when it needs to come in for repair early. Or maybe it doesn't need to come in to repair. So this idea of no unplanned downtime, that becomes a new service offering to say, not only are we going to deliver you a jet engine, okay, you know that's going to work, but we're now going to work to deliver you no unplanned downtime. So when you want that engine off, it'll be ready. When it doesn't need to come off, it won't be. So that starts to be a new business model and you need different ways to think about it. Can you talk about some of the cultural headwinds, Beth, that you might be seeing? I saw Ed Dumbill in the audience. He's the first time I heard somebody say that in big data, humans are the last mile. You can't take the humans out of the equation. And certainly you're going to have a lot of old school engineers that don't want necessarily to embrace or are scared about embracing hyper automation. How have you guys dealt with that internally and how have you helped your customers understand the benefits? Well, I think what we're in industry is where there's just a pretty good understanding of deep expertise and you need the people expertise and the machine expertise and they go hand in hand. I think one of the reasons we're so excited about industrial internet is it starts with understanding these assets. It's just this deep history of how they work, these industries we work in. Probably anyone can come in and figure out how to do automation and some really important software applications in running a railroad. But if you've been working in the rail industry for 100 years, you know very closely how it works, what the issues are. So I think it's that combination of the people knowledge with the machine knowledge that's critical. So I wouldn't say people are feeling left out. If anything, I think they're empowered because they're able to take those critical questions that they're thinking, if only I could figure out how to answer that, if only I could predict when that asset's gonna go down, now I maybe can. So there's a real pull in your customer base. We're finding a pull. I mean, yeah, there's always culture change because you're doing something a little differently than you did before. But certainly there's pull from the customer base. They have to be more efficient. The pressures on savings, they have capital expenditure pressures, they have operating expenditure needs. And so the pull is there. They're asking the right questions and they want to be partnered with people who understand their industry. Yeah, you just said it's a great panel with Paul Maritz was on there, Verna Vogels, a number of folks, Jeff Kelly from Wikibon, represented from Accenture, and of course your own Bill Rue. And you got the question, really the competitive question, what if some other big giant comes in? Your response was interesting. You seemed to welcome that, right? I mean, you know you can't do this alone. Talk about that a little bit. Well, the question was what if another big competitor comes along and launches their industrial internet? And I think the answer is a couple of things. One, the industrial internet is just a space. I mean, it's basically saying the internet of things, in this case the internet of really big things, is coming online and we need to make sense of it. And I don't think we're naive enough to think that the only GE is gonna play in that. Certainly we think we have unique capabilities, we're moving fast, but we certainly expect, and are seeing many of our competitors investing in software, investing in data and analytic capabilities. And I think there's a lot of competition to be thought about from places that have no expertise. And I'll give you a good example, or partnerships perhaps, but we launched a competitive challenge, data science challenge a couple of months ago. We teamed with a startup in Silicon Valley called Kaggle, and it basically harnesses the power of data science from data scientists around the world. We teamed with Air Alaska, we said help us figure out better ways to land this plane. Basically, we released the biggest amount of data ever released, and it was data scientists who have nothing to do with the aviation industry, who were able to shave off, at least in this first wave, shave off an amazing amount of time, save fuel, save efficiency, get the plane landed faster, better, cheaper. You're gonna have a lot of interesting players come into this space, and I think that's what we're banking on in some ways, is that all the great capabilities, certainly here in Silicon Valley, that's been put to building the consumer internet, the retail internet, how do you take that capability and apply it to industry? Yeah, we always love to talk about, like in these emerging markets, it's so new, it's like really pioneering some new ground, and we always like to use metaphors. Oh, it's a lot like that those days back, and then, and with the internet of things and the industrial cloud in particular that you guys are putting forth, it's a bigger operational impact as business value. And you see a lot like sensors look like a little bit, like the early days of local area networking, complex event processing. So the question I want to ask you is, what do you guys look internally and saying, our core competency at GE is in X, and that's going to translate into these new things, whether it's data science, event stream processing, or things of that nature. What core competency does GE have that's going to be the real core enabler for this new generation of inter- I think it's a couple of things. I think it's just deep expertise in how brilliant machines work and making them the most advanced machines on earth, and understanding how they apply in industry. And so I think we hopefully know what our customers want, what problems we're good advocates on our customers, and then we'll continue to build out capabilities, but increasingly, we have to partner. I think you heard the message here today, we're here with Pivotal, we're here with Amazon Web Services, we're here with Accenture. It's all about partnerships, because as complicated as these issues are, there's really no one that can solve them alone. How about the cultural human resource issue internally? I mean, honestly, to make that change over, what are some of the things, what's the mindset internally, and in your partnership, you are partnering, which is great, we also have to kind of move the needle internally and get everyone on board. Well, I think a couple of things have to happen. One, it has to be declared this is a priority, and you hear that from your customers saying you have to get there. As I mentioned earlier, our chairman, Jeff Emelt, said this is a priority, this is the future of the company, we're going to put resources against it, you can't say it's a priority without funding it, so we're hiring hundreds of software engineers, new kinds of market development and sales leaders to make that happen. We're calling on different parts of our customer, different, you're now working a lot more closely with the CTO, the CIO of our customer base, so all that is change. And so I think you have to declare it, you have to invest in the priorities, and then partnering I think is just hard, and our company's been on a journey, we're out here in Silicon Valley trying to work a lot more with startups, so I think it's partnering big companies and partnering small to big, and you try them, you show that they work, and then you say if we do it in this industry, why can't we do it here? So you guys have your big news out today, we're in San Francisco, we're in the Bay Area, it's kind of Silicon Valley I guess, it's technically San Francisco, you moderated a panel, you did a great job, it really was one of those panels that was really engaging, great content, and you guys kicked in, business operations was really a thing usually here, it's most about the tech, but I want to ask you, what surprised you about today's panel? You always did, the prep going in, you had to guess the pre-briefing, all that preparation, what surprised you about today's event, today's panel? Well I think what, I knew coming in, obviously it was part of planning for this event, we talked about industrial strength, I think it was blown away what that really means, and I'm not going to get the data right here, so you're going to have to maybe, I don't know, hopefully directly it's right, so Warner Vogels from Amazon was talking about a shell customer and the needs of the cloud that they have, and he said that shell had something like, with their subsea operation, something like one petabyte of data, and they have a need for 10,000 instances of that, and to bring it to the cloud, and you start thinking that's in every industry, and you just, the needs, the challenges for real-time computing, the challenges for security, and then what I get excited about are what are the new business opportunities, what are the applications, we were talking earlier about apps for industry, I mean, think of the people who are going to see things that we can't even begin to imagine once they get their hands on those challenges. What do you think about the bigger trend around, we go outside of the industrial space and look at just the macro trends, the consumerization of IT, which would affect, you know, Moritz and obviously Amazon's going after the enterprise, the media business has changed with social media, it's just seeing how tweets with the sports and on TV and lifestyle, you know, there's cultural changes of consumers, that kind of the blurring, you know, you've seen a lot of that industry evolve over the past decade, and on the media side, and the internet side, now on the industrial side, what's your view of how that's all integrating? Yeah, it is all integrating, and I think it's a good observation. I think what we're seeing in industry, we like to think we're on the wave of maybe it's a second industrial revolution, it's largely fueled by the opening up, the democratization of technology, so software's coming into hardware, the ability to have open collaboration, partnerships, things that started on the consumer side are coming to industry, so I think it's gonna bring in, it's bringing down costs, it's bringing in a whole host of new capabilities, people who previously could never have thought of entering an industry now can do that, so I definitely think what we saw in consumer is coming to industry. Yeah, we heard about software-defined machines today, right? I mean, the tech industry and the industrial industry are just slamming together in a huge positive collision. It's absolutely happening, and we look a lot, even things, everybody gets very breathless these days about 3D printing, but what is that? It is the digitization of hardware, right? I mean, you take a digital image and you can create new geographies in a physical form, those worlds are coming together, and so if you're in industry, you're starting to say, wow, a skill I might have had in visualization or gaming might suddenly apply in an industrial context. So what's next for you guys? Obviously, Big Software Center out here, you've got partnerships with Accenture, the big pivotal investment and announcement, big announcement today, what can we expect going forward? Well, I think you can continue to see more proof points from us. I mean, we need more and more to show this works in industry, so I think you can expect to see us roll out more offerings and more impact from our customers in healthcare. I'm very excited with what our teams are doing. I mean, we talked today, the impact of healthcare, something like the average nurse spends 20 minutes an hour looking for physical products, if you could track that in data. So healthcare, transportation, energy, I think these industries, we've just scratched the surface, so that's very much what's next is let's get real applications into the market, start racking up productivity savings from industry, and I think it's gonna blow people away. We'd like to think there's another wave of productivity happening as well. It's exciting here. We're inside theCUBE. We're at a special event here in San Francisco with GE. Great, Beth, thanks for coming on theCUBE. Real time, actionable data, disruption, innovation, all kind of happening at the same time. It really is a perfect storm, and we do agree with, we think this is a revolution happening, and it's happening on a very accelerated basis, so follow the hashtag industrial cloud for all the conversations. If you want to tweet us, go to that hashtag and leave a comment. We'll address it, we'll answer your question. We'll be right back with our next guest here, live in San Francisco after this short break.