 From San Francisco, it's theCUBE. Covering OSISoft, Pie World 2018. Brought to you by OSISoft. Hey, welcome back everybody. Jeff Frick here with theCUBE. We're at Downtown San Francisco at OSISoft's PI World. It's been going on for 28 years, I think. I saw some 15-year pins. It's my first-year pin, but I just heard that 28 years. 68 people, this year, 3,000 people talking about the industrial internet, and the internet of things, and it's happening here. A lot of places talk about it's coming, it's happening here. We're really excited to have two guests on from OSISoft, Richard Beeson, he's a CTO. Richard, great to see you. Yeah, thank you. And Michael Vandervik and his senior developer, welcome. So first off, impressions on this year's PI World compared to, or Pie World, excuse me, compared to when you started out 28 years ago. Yeah, so yeah, you said it. We started in San Francisco in 1990 at a small hotel down by Fisherman's Wharf, and we had 68 of our closest friends, and it's just been an amazing journey. An amazing journey to see the customer base just continue to appreciate the message, to appreciate the value and the consistency that we've been bringing. And most recently, just seeing this incredible explosion around the value of information in operations, in IoT, and in the time space. It's funny, because we usually cover it from the IT side, and a lot of the IT players are excited now to be bringing IT and connecting it with OT, and in fact, I can show you very formal handshakes and exchanges of pleasantries around that. But you guys have been coming at it from the OT side for a very long time, before there was IP sensors on all these machines, before there was 5G, before there was Hadoop, before there was all these kind of enabling technologies for what people are talking about now for the industrial internet, but you guys have been doing it for a very long time with the existing infrastructure that was already in place at these places. Yeah, I mean, it is kind of funny. Sometimes we'll say, hey, we've been doing this IoT, or industrial IoT stuff for the last 30 years. It's actually, it's what process control engineers have been doing. You need to get the data from the sensors, from the operation to be able to control it. So the active control, the active optimization, the active of running a plant, of running any kind of operation requires that. The big shift has just been fundamentally in the scale, the cost point, and just the general availability of that kind of information. It's really changing the game. Right. And a lot of the same principles still apply. And we've had experience here for 30 years now. And with the whole IoT boom, a lot of the same principles still apply to streaming data, to real-time data. Yeah, and the Pi system is able to support that. Right. But it's interesting because now you have a whole new level of compute horsepower that you didn't have that many years ago. You have a whole new level of networking speed, which is you're going to go up again with 5G on the mobile side shortly, which is going to give massive amounts of more data. And then of course the store and everything else just keeps cheaper and cheaper and cheaper. So you're kind of enabling technologies under the cover or probably just allowing you to explore and expand dramatically the value that you guys are able to generate. Yeah, I mean, on one hand it changes how we do what we do, but fundamentally you go back to the original proposition. It's all about, for our customers, it's all about getting all of the information into the system, no matter where it's coming from. Traditionally DCS is now IoT devices and beyond. And it then becomes all about making that data available in the way, in the place, in the form that they will value it. And there's a myriad that one of the beautiful things about this conference is we see our partners, we see our customers, we see hundreds and thousands of different technologies and applications built around this information. That hasn't changed. I think that's one of the things Michael was alluding to. Yeah, and you mentioned more available computing power and things like that. But what we see is that using that, people can get much more actionable information out of their data, things or types of analyses that were previously, we were unable to do that because we didn't have the right technology or the right computing power. But now we do, and especially if you can combine different sources of data and people are starting to share that data, then you can get way more value out of that raw data that comes from those sensors. Right. But now, we're going to talk about kind of the next thing, one of the next things, it's always the next thing, and that's blockchain. A lot of talk about blockchains, talk about Bitcoin and cryptocurrencies, we're going to just put that on the side for now and really talk about the fundamental technology under the covers, which is blockchain, we see IBM making big investments in it, we hear about it all the time. What are you guys doing in blockchain and what do you kind of see as an opportunity that you hope that eventually you'll be able to execute on using blockchain technology? Right, so we've been researching blockchain for a little while now, and we're still kind of an exploration phase. We first wanted to really get a good understanding of the technology, mainly to be able to separate the hype from the hope. I mean, there's a big hype around everything that is blockchain, but we really want to start looking at where does it actually make sense? Where does it actually add value? Are there situations where a centralized system might make much more sense? Or are there actually situations where this decentralized shared ecosystem makes more sense? So, I think we have a decent understanding of the technology now, and we're starting to have those conversations with customers. Where should this make sense to you? So, and this week at PyWorld, we had our first conversations around that. We had our first session. The session was very well attended. It was very, very good feedback. We all have a more of a deep dive session this Thursday. And yeah, we're really looking for those different use cases and to identify patterns within those different use cases across all our different industries, basically. And are you getting pulled from the industries? Are they asking for you guys to do this? Do they see either the curiosity or the opportunity or, I don't want to say hope, that's not a good word, to use blockchain in this distributed, trusted, non-centralized transaction engine to take care of some big issues that are out there right now? Yeah, so when I get out and I talk to executives around our customer base, I'm hearing at least three things multiple times. It's a bit of a pattern. One is, how could we use, or would it be possible to use blockchain or some other technology in protecting or verifying the consumption or the use or the sharing of data? So kind of the outbound view. Another thing that I'm hearing frequently is most of our customers have very complex supply chains, very complex distribution chains. And as materials that they either depend on or create flow through these supply chains, there's often data around the conditions or the volumes or the paths that they take. And as that information transitions across various ownerships, various boundaries, how do they guarantee the authenticity, the availability and where that information can go in conjunction with that product? And then another one I've been hearing recently which was a little, I guess not surprising, but it was novel when I first heard it, is one of the activities and operations that every operator goes through is they send instructions or commands or settings or operational conditions down into their factoring. How do you know if you can trust the instruction that has been delegated down? How do you know who did it? How do you know how long that instruction is valid for? All different aspects around that. So those are just three very, very significant challenges that our customers are surfacing for which this may be a solution. And that's some of the fun, I think in going through this research path that we're going down. Yeah, and I want to add to that the whole concept of the exchange of value within a blockchain network also makes the monetization of data very possible. People are starting to realize that the data they're collecting or the information they collected out of that data actually has value to other people. So can we find an easy way for them to monetize in that data? So see the data as an asset. And that's something that, there are a number of startup projects that focus around that. And we're really looking into that, okay, would that make sense for our customers and how could we potentially tie into that or make that available to our customers? Right. The balance sheet value of data is an interesting topic because before data was just expensive because we had to store it and we had to keep it and we threw most of it away because we had to buy servers and machines to store it. Now obviously on the consumer side you see the valuation of the data with companies like Google and Facebook whose valuation is a function of the value of that data even though it's not reflected on their balance sheet. And it's an interesting concept. How do you not only monetize it but eventually get it on the balance sheet so that there's all the benefits that come by having that on the balance sheet with the value of that data. And that's the first time I've ever heard of using blockchain potentially as a way to capture, track and extract that value from that data. Exactly. And there are many different applications. It could be for instance a renewable company that has a wind farm that is monitoring the environment or monitoring the weather. That data is something that they use but that data could potentially be very interesting to other companies or maybe to local governments as well. So is that data that they can monetize on? Another aspect could be for instance in autonomous vehicles where you're driving past somewhere and you want to get information about what are the gas prices or where can I get something to eat or things like that. So those could be really quick, even microsecond transactions or interactions between a vehicle and whatever is in its environment but maybe there's some way to do quick micropayments off that data because that is valuable to that vehicle and in turn that vehicle could also sell some of the data that it is collecting about the weather, about the road conditions, about traffic. So in general, potentially we could see this whole economy around data arising. Yeah. And there's also a lot of cost in validating the trust now. I mean, we talked to some of the shipping lines and like 50% of the cost of shipping is the processing of the paperwork that basically does the validation that you just kind of outlined. Is it what is it supposed to be? Did it come from where it's supposed to be coming from? Is it going to where it's supposed to be going to? And literally it's like 50% of the cost of ship goods is processing this paper. So not only does it provide value but it unlocks another whole set of value that currently is just getting eaten up by super inefficient, still paper-based, not even Excel, right? They probably still have top of the machine. Yeah, transportation is one of the worst. But you look at that scenario and a number of these others, immediately you go to this notion of data ownership. I mean, you alluded to it philosophically. Well, and practically OSI is firmly committed to all of the information that we manage for our customers is our customer's data. It's they own that. But even as they get into these complex landscapes, then there really is that question as materials loaded through these supply chains. Who owns the data associated with that? So this is going to be an interesting frontier where these things have to get resolved and understood. And most of our customers consider the 10, 20, 30 years of operational data that they've preserved, one of the more valuable IP assets. So it's both an amazing frontier and an amazing opportunity and something that's going to stir up some emotions as well. Right. And then you get the geopolitics of it as well because of the disparate laws all over the place about data, data treatment, and exactly where was the data generated? I mean, that's always one of my favorite things when you really dig down as to where was that data actually generated? And it's not necessarily an easy thing to determine. So here we are, 2018. What are you guys working on this year? If we come back a year from now, what are we going to be talking about? So right now, we are starting the conversation. We're starting to have this discussion. We have some assumptions of where blockchain might make sense to us as a company, but especially to our customers. So this year, we really want to use this year to validate some of those assumptions to really work with our customers, but also with academia to find out, okay, where does this actually make sense? How can we get the most value out of this amazing new technology that has a lot of promise? And maybe we'll see us starting prototyping some of these solutions together with our customers. Yeah, nope. You're going with that? Yeah, I'm going with that. All right, Richard's going with Michael. All right, so we're going to leave it there and thanks for taking a few minutes and congratulations. I don't know if you've been here for all 28 years, Michael. Seven years. Seven years, pretty good. You know, what a great story, what a great success and really happy to come here and learn some of this story. Yeah, I'm honored every year. It blows me away what I get to see and listen to and the people I get to meet, so thank you. Thank you, all right, he's Richard. He's Michael, I'm Jeff. You're watching theCUBE from OSI Soft Pyrrule 2018 in downtown San Francisco. Thanks for watching.