 Well, hello there, my name is Mark Rosenhofkens. Welcome to Cube Conversations. We're broadcasting live out here in Dallas, Texas today and I'm here with Andrew Talbert from Prodia. We're going to talk a little bit about some internet of things today. It's going to be a really interesting conversation, so I hope you stick with us. I wanted to talk about a lot of things. You have an interesting company, a lot of interesting history involved in the company. But I want to talk about your main product you use. We talked broadly about internet of things. We talked a little bit before. But give me kind of like the elevator pitch when you try to describe what it is, where you guys sit in this space. What is it that your company does? What is the product? Well, thank you first. Thanks for having me and happy to do that. So what we've developed is a really a platform approach to the internet of things. Making this internet of things and this connected life a reality today. We recognize it's complex. There's a lot of different offerings out there and devices out there and a lot of complexity for the consumer. So what we did as a company is we took a step back. We said let's take more of a platform approach to the first, the connected home and to the different devices that consumers want to interact with. And then expand that as well to the internet of things. The net result is a very simple way for consumers to start to adopt anything from home automation and e-health and enhanced communications to just the way they interact with media and different types of services across their TV, their iPad, their phone and what have you. Okay, I'm a consumer. I'm a guy that wants to have Nest in my house and control my weather and the lights go on when I come home. What does that mean? Where does your product help me to get to? Where does that get to A to B there? So what we recognize and you even identified a few examples is there's many point solutions out there. There's many devices that you can go out there and purchase Nest being one of them. But that leads to a lot of complexity for the end consumer. Complexity in terms of there tends to be a device and maybe an application for each individual vertical. Just dozens of systems to manage. And so each one is its own device, each one is its own learning curve, each one is its own separate service and experience. So the approach we took is first off, recognize that somebody needs to bring these capability into the home and we choose service providers. Now service providers for us is they have different terminology for what a service provider is. Traditional folks like telecom companies, cable companies, satellite companies, as well as alternative service providers, which are everything from home builders to retailers and over the top content companies. And so what we did is we built a platform that enables both of those types of companies to approach you as a consumer, not with yet another device or not with yet another service vertical like energy management or healthcare, but rather with a bouquet of services that allow you to say, listen, from our bouquet of services, would you like to control your thermostat or be notified when your kid comes home from school and remotely instruct them or be reminded that it's time to exercise or your doctor wants to see you, but approach the home with a set of services and capabilities instead of just the technology. And what Protea built is the platform that enables them to do just that. So we've built the technology to simplify that experience for you and to enable service providers to then deliver those services to you. Okay, so would you, so it kind of sits at the, kind of integrating all these systems, not necessarily trying to be the brains or the sensor, but just a way to a presentation layer? Yeah, well, yes and no. So presentation layer is very important. That's the first thing the consumer sees. So absolutely, whether it be through a portal on an iPad or through my web browser or through my TV, I will have the ability to control these different services in my home. As it relates to the devices that proliferate in our home, yes, we don't want to have to tell the consumer that you must buy this one sensor or this one thermostat. We want to be able to allow the consumer to engage on multiple different types of devices. Now, where we also add value though is really the integration of those things. The enablement so that I can from one portal do something such as start a movie, but while I'm engaging on entertainment, they also have that dim the lights. That requires some coordination behind the scenes, that some complexity we don't put on the consumer's shoulders, but we take care of to enable those use cases. All right, so we were talking about this particular use case just before we rolled cameras. I got the Philips Hue system as a review unit and I found it to be an extraordinary kind of experience to have different color lights and have it be on a schedule and my lights blink if I get tagged on Facebook and kind of fun stuff like that, but the setup process and kind of the maintenance of it and some of the scheduling aspects were just kind of, well, I'm the only one of my family that would have had the patience for it, let alone the know-how, my kids certainly wouldn't have been able to, well, maybe they would, they're kind of smart, but I don't know if they would have had the patience to sit there and kind of figure out how to hack it and get it to work. It was what it felt like, it was hacking. So how is, obviously, being an integrator, your job is to simplify that. So what are the challenges like? What does that process look like if I want to set up geofencing and all these geeky terms? How do you present that in an understandable way to the end consumer? That's a very fair question and I think there's multiple challenges actually in that scenario we need to solve. The first one is exactly as you said, is that setup and the maintenance. Maintenance is a very important piece which is not just how do I get it into my home but who manages it and supports this after that. And this is why we built the technology that enables providers to sell this as a service. So part of our technology is to be the brains behind the setup. So as I take a device out of the box, I don't have to configure it, our platform configures it for them. And all I simply have to do is push a button on that device and push a button on the main unit for my home. But another part of that is at some point I'm gonna have a problem. At some point I'm gonna have a question. And today, typically calling the device manufacturer is not a service experience. But if it's brought into your home or it's part of your home because it is a service, you subscribe to a service and you can call that provider, we have enabled that use case by giving the providers the tools that they can reach into the home, they can configure things for you, they can debug things for you, they can diagnose them. Not too different than your phone service or your TV service or your internet services today. A big component of what we provide to them is the ability that they can then go support this as a service. The other element I might add though as well is it doesn't just start and end with that one light system or that security system or what have you. You as a consumer are going to adopt many of these things and what we see is the true vision of the internet of things is all of these different types of verticals working in concert with each other. And we actually went to your facility to kind of get a picture of what that would look like and that is truly the most interesting thing about when you start to have a cruel of many different sensors and devices, like what the interplay can look like. So why don't you kind of walk through that example? Exactly, I think some of the examples that we showed were one I referenced earlier of I'm enjoying some entertainment, I watch, I order a movie when I'm not even at my home, it cues up in my home, I sit down to watch at the lights dim, the phones forward to voicemail, I even get a notification, a TV saying, would you like a pizza with that and then my phones actually call them. Well, that one scenario just by itself involves many different verticals and even if I were to fill my life with devices and gadgets to do those different things, they're not talking to each other and this is our approach to the home, what we like to describe the home is today it's very much vertically sliced. I can buy a solution around a thermostat for energy management, a completely separate one around a camera for security and a completely separate one around entertainment and those are vertical slices to the home and what we decided to do is spent many number of years architecting a horizontal platform and one that could engage across multiple verticals to not just give the consumer the ability to interact with those things but to enable these scenes where that one we described is entertainment, working with home automation, working with voice, working with advertisement and promotion. That it becomes very easy if they're riding on the same platform, very difficult if you vertically slice the home. One of the things we also saw when we toured your offices last week was the amazing number of patents you guys have. So patents is kind of a touchy subject in general in politics but it's interesting to see, it's kind of a, I see it as a great benchmark of what level of innovation you're doing, not necessarily from a business perspective. How important is the patents to, is it a point of pride or is it actually kind of a business driver for your organization? I mean there's many reasons you get patents or file for patents, we don't have them for offensive reasons, it's more to protect what we've done and what we've done is spent a number of years architecting the approach to the connected home. So the patents aren't really about use cases, they're not really about the fact that scenario of starting a film and the light stemming, but it's rather that the home or this internet of things needs a platform that can do these things and how we architect that platform between the technology we do on the consumer side and the technology we do in the cloud and then architecting that end-to-end approach to this space. And it's also a recognition of the amount of time and engineering effort we've applied towards first creating the platform, which we did almost eight years ago now, and then going and taking that platform to market. The patents really are around that architecture for that platform. So we do think it's fundamentally important because if you don't have the right platform for this internet of things, you're not going to scale with it and the patents are really just our ways to protect that. So with regard to the platform and me being the kind of the geeky, get down and dirty, raspberry pi kind of guy, so what is your approach? I mean you say you're dealing with service providers but what is your approach to people like me? We're probably a small but kind of an early adopter crowd that in your market, in your end consumer market. So what sort of tools do you guys make available to folks that want to that are not necessarily a large service provider or a large device maker but just kind of want to hook into what you've built? So what we've, first of all, you know, Protea is a white-label company. Sure. We're a B2B company. So at the end of the day, we made that decision not to sell directly to the end consumer. Right. So the decision as to who we sell through is or and how that is perceived position to the end consumer is one of our customers. Now that said, we recognize very early on as well that Protea is not the, as the creator of the platform, we're not necessarily the only ones creating apps and services on it. So we've created an open application framework. We give it to our customers and our partners who then they decide how far they want to open the ecosystem. Many of them have visions of creating developer communities that can really take it and run with it. And others have more controlled environments because they're running mission critical services like healthcare on it. But either way, we've created the platform to be open and then they can then open up the community as far as they, as far and as wide as they want to. That's important, right? You know, any major platform company that doesn't have a development, at least hooks for a development community. Exactly. It's got a limited lifespan, right? Exactly. And what I think our customers recognize though is that, and one problem that I think we're solving that we see in this Internet of Things space is in Internet of Things, you see a lot of visions for this future. This future capability where everything's talking in concert. However, there's not a lot of clarity of how I get there. How do I go from a home that I live in today and the services that I consume today to this future vision? And so our approach with all of our customers has been one of don't try to sell the connected home in all of its glory today. It's difficult. There's a few early adopters that will take it, but the mass market isn't necessarily ready for it. Rather, sell what's meaningful to them. Simple use cases like I want to be notified when my daughter comes home from school, get a message on my phone, what have you, and then log into the home and instruct her to do her homework. That's a simple use case that I can solve in one of two ways. One way would be I put a product in there that just does that. And another way, I give them a product that does that but then also expands to something else. And so this is our approach, which is to engage with our customers so that they get into the home with something that makes sense and is kind of bite-sized to the consumer today. But now you're in there with a platform that you can continue to evolve to more and more sophisticated services. I think another interesting, and this is what really kind of started me down the road that I was in, is the kind of the economic incentive approach, right? The Nest, I've mentioned it before. It's actually saved me money, right? It's paid for itself. And there are certain things that you can do with smart home technology, Internet of Things technology that will, that's an interesting hook to use as a sales method. I think it works. You see companies doing it with solar now too, right? If you can make the case, this is gonna save you money, you can do something that's ultimately beneficial and kind of cool at the same time as opposed to dropping a bunch of cash on something that's just gonna look cool but maybe not gonna, right? And that is fundamental to our approach with if you, to our customers, if you engage the consumer with a platform that has many different values, one value is something like save money but another value is to enable them to transact in a new way that generates revenue. By doing that, it helps justify the business case because one challenge that many providers have in this space is that there's just so many different point solutions that consumers are willing to buy and spend money on. However, if you get in there with the same cost as getting in there under a energy management proposition, the platform's now paid for and I can very easily turn up a new entertainment proposition or vertical, now all of a sudden it's a lot easier. Sun cost, yeah. Correct. So you mentioned healthcare and we've been talking a lot about the smart home. So what are some of the kind of the, I guess, commercial smart house or smart systems solutions that you guys are working with? We see healthcare is really just an extension of that internet of things. Whereas in one context, it might be about turning lights on and off or security and those are just devices that I'm interacting with or other parties are interacting with. When you extend that to healthcare, what's difference now is the devices, instead of a light or an appliance, it's now my weight scale or if I happen to be a diabetic, it might be a glucometer or it might be a blood pressure cuff or what have you for somebody with a heart condition. Those are the devices and now the partners that we're engaged with on those, instead of being a content company or a security monitoring company is a healthcare provider or a weight loss program. By bringing these worlds together, the devices that I interact with, those being healthcare and wellness devices with different types of parties who then will deliver services to them over a common user experience, my TV, my PC, my mobile. We create business cases where people can subscribe to health and wellness services or doctors in hospitals can actually use it as a way to monitor patients after they leave the hospital. Those business cases become very available and very realizable because we've taken care of that technology and drawn that bridge between those two worlds. So Christian Nicole, I had a question that wanted me to ask you specifically and so I'm gonna throw that in now. You guys have been working on this and it came to fruition after many years of research and development. So she wants, and this is not your first major success, first major product. So she wants to know if you guys have been working on this for, I think she said close to a decade, is that correct? Eight years. Eight years, yeah. So what's in the pipe for the next decade? At the moment, the internet of things offers I think enough promise to keep us quite busy for quite a while. And not only just because we spent a lot of time building a very powerful platform but because I think consumer adoption is really getting to the point where people are ready to start going from individual gadgets and point solutions to really embrace the internet of things. So for us, the foreseeable future is really the extension of this beyond the home. If you look at the internet of things, it promises to be solutions well outside the home but if you start with the home, I start connecting different devices and entities in my life. The connected school is a logical progression from the home. The connected hospital or healthcare is another logical progression. I get in my car and services start to carry with me to my car. So for now, we have plenty of opportunity just to continue to grow that connected life. We started in the home because it's a meaningful place to start and something real that we can sell to through our customers today but the number of different domains that we see connecting this into is pretty limitless and I think we'll have us busy for quite some time to grow. Okay, cool. Well, I mean, I got a thousand more questions we could probably talk for another couple of hours. We probably should wrap it up though. It's been a great conversation. Thank you for coming in. Thank you for your time. And we'll be right back after, well actually this is the end of the show so we'll see you on the next Cube Conversations. Thanks for joining us.