 Live from Berlin, Germany. It's theCUBE, covering NetApp Insight 2017. Brought to you by NetApp. Welcome back to theCUBE's live coverage of NetApp Insight. I'm Rebecca Knight, your host along with my co-host, Peter Burris. We are joined by Brett Roscoe. He is the vice president for solutions and service marketing at NetApp. And Laura Dubois, who is a group vice president at IDC. Thanks so much for coming on the show. Yeah, thanks for having us. Yeah, thank you for having us. So NetApp and IDC partnered together and worked on this big research project, as you were calling it, a thought leadership project, to really tease out what the companies that are thriving and being successful with their data strategies are doing and what separates those from those that are merely just surviving. Do you want to just lay the scene for our viewers and explain why you embarked on this? Well, you know, it's interesting. NetApp has embarked on its own journey, right? Its own transformation. If you look at where the company's been in the, you know, really over the past few years in terms of becoming a traditional storage company to a truly a software, cloud-focused, data-focused company, right? And that means a whole different kind of set of capabilities that we provide to our customers. It's a different, our customers are looking at data in a different way. So this, so what we did was look at that and say, well, we know that we're going through a transformation, so we know our customers are going through a journey themselves. And you know, whatever their business model is, it's being disrupted by this digital economy. And we wanted a way to kind of work with IDC and really help our customers to understand what that journey might look like, where they might be on that path, and what are the tools and what are the engagement models for us to help them along that journey, right? So that was really the goal, was really, it's engagement with our customers. It's looking and being curious about where they are on their journey on digital and how do they move forward in that in doing all kinds of new things like new customer opportunities and new business and cost optimization, all that kind of stuff. So that's what really got us interested in the project to begin with. Yeah, and I would just add to that. Revenue is at risk of disruption across pretty much every industry. And what's different is the amount of revenue that's at risk within one industry to the next. And all of this revenue that's at risk is really as a consequence of new kinds of business models, new kinds of products and services that are getting launched, new ways of engaging with customers. And these are some of the things that we see thrivers doing and outperforming, merely just survivors or even just data resistors. And so we want to understand, I think the characteristics of data thrivers, right? And what are they doing that's uniquely different? What are their attributes versus companies that are just surviving? So let's tease that out a little bit. What are these data thrivers doing differently? What are some of the best practices that have emerged from this study? Well, I mean, I think if you look at, there's a lot of great information that came out of the study for us in terms of what they're doing. I think in a nutshell, it's really, they put a focus on their data and they look at it as an asset to their business, right? Which means a lot of different things. In terms of how is the data able to drive opportunities for them, right? I mean, there's so many companies now that are getting insights from their data and they're able to push that back to their customers. I mean, NetApp is a perfect example of that, right? We actually do that with our customers. All the telemetry data we collect from our own systems, we provide that information back to our customers so they can help plan and optimize their own environments. So I think data is certainly, it's kind of validated kind of our theory, our message of where we're going with data, but I think the data focus, I mean, there's lots of other attributes. I mean, there's a focus of hiring chief data officers within the company. There's certainly lots of other attributes, Laura, that you can comment on. Yeah, I mean, we see new roles emerging around data, right? And so we see the rise of the data management office. We see the emergence of a chief data officer. We see data architects, certainly data scientists. And this data role that's increasingly integrated into sort of the traditional IT organization, enterprise architecture. And so enterprise architecture and these data roles very, very closely aligned is one, I would say, example of a sort of a best practice in terms of the thriver organizations is having these data champions, if you will, or data visionaries. And certainly there's a lot of things that need to be done to have a successful execution or a data strategy as a first place, but then a successful execution around data. And there's a lot of challenges that exist today around data as well. So the survey highlighted that obviously data's distributed, it's dynamic and it's diverse. It's not only in your private cloud, in public cloud, I think they said 34% on average of data is in a public cloud, right? So how to deal with these challenges is I think also one of the things that you guys wanted to sort of highlight. Yeah, and I think the other big revelation was the thrivers, right? One of the aspects, right? So they're data focused, but they're also, they're making business decisions with their data, right? They tend to use that data in terms of their operations and how they drive their business, right? They tend to look for new ways to engage with their customers through a digital or data driven experience. Look at the number of mobile apps coming out of consumer, you know, really a B to C kind of businesses, right? So there's more and more digital focus, there's more and more data focus and there's business decisions made around that data. So I want to push you guys on this a little bit because we've always used data in business. So that's not new. There's always been increasing amounts of data that being used. So while the volume is certainly new, it's very interesting. It's by itself not that new. What is new about this? What is really new about it that's catalyzing this change right now? Have you got some insights into that? Well, I mean, I would just say if you look at some of the largest companies that are no longer here, right? So you've got Blockbuster, you've got Borders Books and Music, you've got Radio Shack. Look at what Amazon has done to the retail industry. You look at what Uber is doing to the transportation industry. You look at every single industry, there's disruption and there's the success of this new innovative company. And I think that's why now. Yes, data has always been an important attribute of any kind of business operation as more data gets digital. Combine that with innovation and APIs that allow you to sort of end a public cloud to be able to use that as a launchpad for innovation. I think those are some of the things about why now. I mean, that would be my take, I don't know. Yeah, I think there's a couple of things. I mean, number one, I think, yes, I mean, you know, businesses have been storing data for years and using data for years. But what you're seeing is new ways to use the data, right? There's analytics now, it is so easy to run analytics compared to what it was just years ago that you can now use data that you've been storing for years and run historical patterns on that and figure out trends and new ways to do business. I think the other piece that is very interesting is the machine learning the artificial intelligence, right? So much of the industry now. I mean, look at the automotive industry, right? They are collecting more information than I bet they ever thought they would because the autonomous driving effort, all of that, is all about collecting information, doing analytics on information and creating AI capabilities within their products, right? So there's a whole new business, there's a whole new revenue streams that are coming up as a result of leveraging insights from data. So let me run something by it because I was looking for something different. It used to be that the data that we were working was what I call stylized data. You can't go out here in Berlin and wander the streets and find accounting. It doesn't exist. It's human-made, it's contrived, HR is contrived. We have historically built these systems based on transactions with highly stylized types of data. There's only so much you could do with it. But because of technology, mobile, IOT, others, we now are utilizing real-world data. So we're collecting an entirely new class of data that has a dramatic impact in how we think about business and operations. Does that comport with what the study said, that the study respondents focusing on new types of data as opposed to just traditional sources of data? I mean, we certainly looked at correlations of what data thrivers are doing by different types of data. I would say, in terms of the new types of data that are emerging, you know, you've got time series data, stream data that's increasingly important. You've got machine-generated data from sensors. And I would say that one thing I would say is that the thrivers do better than merely just survivors, is have processes and procedures in place to action the data, right? To collect it and analyze it as Brett pointed out is accessible, and it's easy. But what's not easy is to action results out of that data, to drive change in business processes, to drive change in how things are brought to market, for example. So I would say those are things that data thrivers are doing, that maybe data survivors aren't. I don't know if you have anything to add to that. Yeah, no, I think that's exactly right. I think, yes, traditional data, but it's interesting, because even those traditional data sets that have been sitting there for years have untapped value. There's, right? We're combined with other types of data. That's right. But we've also been doing data warehousing analytics for a long time. See, it seems as though I would guess that the companies that are leading, many of the two mentioned, are capturing data differently. They're using analytics and turning data into value differently, and then they are taking action based on that data differently. And I'm wondering if across the continuum that you guys have identified, of thrivers all the way down to survivors, and you mentioned one other data. Resistors. Resistors. And there was, anyway, so there's some continuum of data companies. Do they fall into that pattern where I'm good at capturing data, I'm good at generating analytics, but I'm not good at taking action on it? Is that what a data resistor is? Well, so a data resistor is the sort of one extreme, right? Companies that don't have well-aligned processes, the way they're doing digital transformation on a very ad hoc basis. It's not repeatable. They're somewhat resistant to change, right? They're really not embracing kind of that there's disruption going on, that data can be a source of enablement to do the disrupting, not be disrupted. So they're kind of resisting those fundamental constructs, I would say. And they typically tend to be very siloed, right? They're ITs, a very siloed architecture where they're not looking for ways to take advantage of new opportunities across the data that they're generating or the data they're collecting. So that would be they're not as good at creating business value out of the data that they have access to. That's right, that's right. I think the whole thing with a thriver is they are purposeful, right? They set a high level objective, a business level objective that says we're going to leverage data and we're going to use digital to help drive our business forward. We are going to look to disrupt our own business before somebody disrupts it for us, right? So how do you help those data resistors? What's your message to them? Particularly if they may not even operate with the belief that data is this asset. I mean, as we sort of the whole premise of this study. I think the data that comes out, like, hey data thrivers are two times more likely to drive two times more profitability to, there's lots of great statistics that we've pulled out of this that say thrivers have a lot more going for them. There is something, there is a direct correlation that says if you are taking a high business value of your data and high business value of a digital transformation that you are going to be more profitable, you're going to generate more revenue and you're going to be more relevant in the next 10, 20 years. And that's what we kind of want to use that to say, okay, where are you on this journey? Where we're actually giving them tools to measure themselves. They can take an assessment of their own situation and say, okay, we are a survivor. Okay, how do we move closer to being a thriver? And that's where NetApp would love to come in, engage and say, okay, let us show you best practices. Let us show you tools and capabilities that we can bring to bear to your environment to help you go a little bit further down that journey or help you on a path that's going to lead you to a data thriver. Yeah, that's great. I agree with that. What is the thing that keeps you up at night for the data resistor though in the sense of someone who is not, does not have not only not, maybe not even capturing and storing the data but really has no strategy to take whatever insights the data might be giving them to create value. I don't know, that's a hard question. I don't know what keeps you up at night. I don't know. Well, I think, you know, look, I think if I were looking at the data resistor, I think that the stats or the data's against them, right? I mean, if you look at a Fortune 500 company in the 1950s, their average lifespan was something like 40 years. And by the year 2020, the average lifespan of an S&P 500 company is going to be seven years. And that's because of disruption. Now, you know, historically, that may have been industrial disruption in that, but now it's digital disruption, right? And that's, that right there is, you know, if you're kind of feeling like you're just a survivor, that ought to keep a survivor up at night. Right. But I can give you an answer too. It's, for example, it's one of the reasons why so many executives today think they have to hire new millennials is because there's this presumption that millennials have a more natural affinity with data than older people like me. The digital natives, yeah. Now, there's not necessarily a lot of stats that definitely prove that, but I think that's one of the kind of the misperceptions or one of the perceptions that I have to get more young people in because they'll be more likely to help me move forward with an empirical style of management than some older people who are used to have a very, very different type of management practice. But still, there are a lot of things that companies, I would presume, would need to be able to do to move from one who is resisting these kinds of changes to actually taking advantage of it. So can I ask one more question? Is it, is it that you're just, did the research discover that data is the cause of some of these or just it's just correlated with success? In other words, you take a company like Amazon who did not have to build stores like traditional retailers, didn't have to carry that financial burden, didn't have to worry as much about those things. Now that may be starting to change, interestingly enough, is that, so they found a way to use data to alter that business, but they also didn't have to deal with the financial structure of a lot of the companies that they were competing with. They were able to say our business is data, whereas others have said our business is serving the customer with these places in place. So which is it? Do you think it's a combination of cause and effect or is it just that it's correlated? I would say it's probably both, right? I mean, we do see a correlation, but I would say the study included companies whose business was data, as well as companies that were across a variety of industries where they're just leveraging data in new ways. I would say there's probably some aspects of both of that. But that wasn't like a central tenant of the study per se, but maybe that'll be phase two. Maybe we'll mine the data and try and find some insights there. Yeah, there's a lot more information that we can glean from this data. I mean, we think this will be an ongoing effort for us to kind of be a fault leader in this area. I mean, the data proved that there was 11% of those 800 respondents that are thrivers, which means most people are not in that place yet. So I think it's going to be a journey for everyone. And yes, I agree that some companies may have some laws of physics or some previous disruptions, like brick and mortar versus online retail, but it doesn't mean there's not ways that traditional companies can't use technology. I mean, you look at, in the white paper, we use examples like General Electric and John Deere. These are very traditional companies that are using technology to collect data to provide insights into how their customers are using their products. So that's kind of the thought leadership that any company has to have is how do I leverage digital capabilities, online capabilities to my advantage and keep being disruptive in the digital age? I think that's kind of the message that we want them to hear. And I would just add to that, it's not only their data, but it's third party data. So it's enriching their data let's say in the case of Starbucks. So Starbucks is a company that certainly has many physical assets, right? They're taking their customer data, they're taking partner data, whether that be music data or content from the New York Times, and they're combining that all to provide a customer experience on their mobile app that gives them an experience on the digital platform that they might have experienced in the physical store, right? So when they go to order their coffee and their mobile pay app, they don't have to wait in line for their coffee, it's already paid for and ready when they go to pick it up. But while they're in their app, they can listen to music or they can read the New York Times. So there's a company that's using their own data plus third party data to really provide a more enriched experience for their company. And that's a traditional physical company. And they're learning about their customers through that process too. Are there any industries that you think are struggling more with this than others? Is it really a company specific thing? Well, I mean, the research shows that companies in every industry are faced disruption and research shows that companies in every industry are reacting to that disruption. There are some industries that tend to have, obviously by industry, they might have more thrivers or more resistors. But nothing I can per se call out by industry. I think retail is the one that you can point to and say there's an industry that's really struggling to really keep up with the disruption that people like Amazon and others have handed have really leveraged digital well in advance of their thought process. So I think the white paper actually breaks down the data by industry so you can kind of look at that. I think that will provide some details, but I think every, there is no industry immune. So we'll just put it that way. And the whole concept of industry is undergoing change. That's true, everything's being disrupted, great. Well, Brad and Laura, thank you so much for coming on the show. It's been a great conversation. Thank you. Enjoy your time. You're watching theCUBE. We will have more from NetApp Insight after this.