 Live from Las Vegas, it's theCUBE. Covering IBM Think 2018, brought to you by IBM. Welcome back to IBM Think 2018. You're watching theCUBE, the leader in live tech coverage. My name is Dave Vellante, I'm here with my co-host, Peter Burris. Gene Chow is here as the global VP of IBM Automation and Jason Kelly, Cube alum is the GM of Blockchain Services, gentlemen, welcome back to theCUBE. Thank you so much. You guys, I call you heat-seeking inefficiency missiles. So, Jason, that's the setup, take it from there. What are you guys up to, what are you doing? How are you helping businesses? Well, we're driving trust into transactions. It's elusive things that we've been trying. Whoops, there goes heat-seeking. Ha ha ha ha. Exactly, or yeah, we're seeking the heat. It's coming after us as soon as we say trust. Someone wants to attack you. And so what we're bringing into business is that thought that if I can add trust into transactions, I don't need a third party to validate it. I can now say, look, you are who you are. We both know each other, although we do, we go way back. We know each other and what we're about to exchange is known as well. So if I can keep that validation from happening, I'm going to remove cost, labor, time out of it. And I'm also going to then maybe avail new market opportunities of those who could not enter the system before because we didn't trust their identities or we didn't trust that their goods were their goods and they were trying to exchange it. So think of that heat-seeking missile. We're trying to bring that capability and that heat is the energy in the system now going bigger, better, faster because there's trust. And your role is to bring those blockchain services to market. Is that right? That's correct, bringing the services as a whole. Because see, blockchain isn't a product. Blockchain, I don't have under the table a bucket of blockchain. I promise, no blockchains here. So if in fact we're bringing this capability to the market, there's all types of services from what's the business value design? First, what's your outcome? Why say blockchain? Believe it or not, it says it on my chest so it means I get paid to do it but maybe you don't need this. And so quite simply maybe you need to do something else. So the first thing is let's understand the outcome that your business is running toward and then let's understand if it's a blockchain and then can we bring some automation with Gene and T. Okay, that's the center for you, Gene. So you're the automation piece of the puzzle, explain. So I love the commentary around the better, faster but we're also bringing more scale. So automation at scale, what does that mean? We're really focused on two things guys. The first thing is around taking advantage of the new technologies to enable what I'll call software-based labor. So there's a new concept of the digital workforce model that enables how transaction or how work gets done. Coupled with that is how that workflow or process, business process, IT process, whatever it is, how does that workflow fundamentally change through these technologies? Why that's important is as we look at blockchain as an example, as a pivot point for trusted transactions, I need to build trusted automation around it. Trusted ways to leverage these technologies in that workflow so those transactions are easily scalable, works at machine time and runs through very quickly. This is fascinating stuff because look, so the way that we like to characterize the big change in the industry is we say for the first 50 years of computing, it was known process, accounting, HR, et cetera. Unknown technology, how do we implement? What technology do we choose to implement? The implementation choices are becoming clear, cloud, et cetera. What's less known is the process. So it's unknown process, known technology. Now it's unknown process, known technology. And what you guys are talking about is one of the challenges we think about process is who does what? Can we verify that we've done it? Did they do it right? Did they mean to do what they said they were doing, et cetera, there's a whole range of issues. And the contracting process is extremely complex for that. But if you can set it up in a blockchain form, you've got a simple contract, a simple definition of who's trusted, simple definitions of roles, and now we can dramatically accelerate new process creation and then automate. Did I got that right? I think you got it. When you think about dramatically, dramatically accelerated, you can say that it means something different to everyone. But let's think about my friend Frank Yanas at Walmart, for example, where they're working on food trust. They're trying to make sure that from farm to fork, we know where that food came from. One third of all food that's processed goes to waste because we lack food trust. Food is guilty until proven innocent, right? So to keep that from being- It's spoiled. It's spoiled, I'm, the humor is killing me. So, no pun intended, food trust, right? So, Frank and team wanted to understand how fast they could move this thought of tracking, tracing with transparency this food through the system. Just so you said, there's certain contracts. Think of the handshakes from getting in their case, a mango from the farm all the way to your home. Well, it used to take them seven days, actually six days, 20 some hours in order to figure out that process. Putting it on the blockchain, 12 seconds. And then once they cured the lag in the technology, 2.2 seconds. So, think of that. Now you're shrinking this to seconds versus days. What does that do to the process? What do you do when you say, now my system can go that fast. My people can go that fast. What do you do? Think of the automation that you're bringing in now and things you will now have to automate out of not just necessity but things you will say, wow, we've opened up a whole new ecosystem of possibilities in order to do business in a different way. Well, so let me build on that for a second. Because one of the things that potentially means is that because you can handle more complex, newly designed process, better, faster, more automated, that you can start to expand the scope of participants in a transaction, the range of characteristics of the transactions or the type of work. That's how you build up to new businesses and new business models, right? Sure, if I can jump in on that one. There's a concept, and this is where Jason and I are connected at the hip. We think in terms of a smarter product, we think in terms of a smarter contract or transaction. The guiding principle that we're using is the old way of thinking, and I carry this narrative all over with me, is the old way of thinking is you have people following your creating process supported by that technology. So the things that you talked about, unknown technology, unknown process, continuously sourced by people, fundamentally changed. We're now working in a world where the process is run by the technology and supported by the people. It's not that the people are going away, it's a fundamental retooling of the skills and understanding of how to support it, but that scalability, the ability to get to that exponential growth is because the process is the king at the top of the food chain now, and that technology lets it expand. But we can do levels of complexity in that process and the number of participants in that process that we unheard of. So it's scale and scope. But doesn't that force, look, we've had some conversations, Dave and I have had some conversations with a number of big user organizations about this stuff, and we keep coming back to the issue of that they can't just look at the technology, they have to focus on the design, that one of the most crucial features of this process is the design of the blockchain. We got that right? So you're hitting on it, you heard me use a phrase at the very beginning, if you didn't, I'll say it again, as a business value design. Because in fact, that design is not just a UI, UX, but let's make sure that the business and technology are doing the right thing to get to the outcome. As we say, design doesn't stop until the problem is solved and guess what, the problem's never solved. So design happens, many people say, oh well we're going to do some design thinking at the beginning, we did that, they project the block and then they run off and do something else. For us, design's like an infinity loop. You continue to do it from the beginning all the way through the end, and then what you're able to do, and hint, hint, this is something that we do in our services, is that we start with our clients, we get them started so they understand, then we help them accelerate and then innovate. Three steps, start, accelerate, innovate, and that's a design process in and of itself. So if you start it, the days of blockchain tourism were a couple years ago, everybody wanted to kick the tires and then last year was POC, POV, this year's the year of production and people are quickly saying, how do I quickly start production and keep moving? So let's talk about some other examples. You mentioned Walmart, we heard Plastic Bank this morning, I interviewed somebody, I think it was Evercore, was the name of the company, Diamond Providence, others that you're excited about that have made a business impact. Well I'd be remiss if I didn't mention Mike White and others at our JV with MERSC and you think of, you think of that where you have the classic thought of a supply chain, this linear steps in the process, just these handshakes that have to happen. Now what we have is we have this process of thinking how we can bring transparency into all of that and it's not just a supply chain but a value chain. So you have 80% of whatever you all are touching or have on right now went through a shipping line but not only through a shipping line but then there was also ground, air and then ultimately to a retail location. Then you consumed it. Well think of all of those processes now having the transparency where you can see from point of consumption all the way back to origin. Think of the supply chain visibility that's a lucid thing called supply chain optimization. Now you can do that but not only the supply chain but the value chain. Someone's paying invoices under that big thing called a value chain. Someone's doing trade promotion management in that value chain. Now if you have that visibility, what do you enable? How many more packages can go through the system? How much more shipping? And the estimate is 5% increase in GDP if we're able to get all of this shipping into the blockchain. You start talking GDP, it opens eyes. Right now you're talking growth, right? Yes. But then yesterday I said it was 20% of the 4 trillion associated with shipping is bound up in paperwork. So we're talking about an $800 billion change. And returning capital into the system. Returning capital, you think of this sort of opening up new opportunity and I'll throw another example, another client so we're not just talking but you think of what's happening with WeTrade, nine banks in Europe who compete. You think of a Santander and a Deutsche Bank and they're all coming together saying how do we now share data and information so that we can let small to medium-sized enterprises into the system. So now you're getting not just savings of cost and time but now you're opening up markets, getting greater throughput, high waters raise all boats and that's what we're seeing in a lot of these examples. It's not just taking out those old things, you're thinking of new processes running the business a different way. Jason's a great lead guy. You asked for an example our friends at DBS Bank. They are fundamentally looking at changing the business models within the bank across all different divisions of the bank whether it's credit transactions, mortgages, personal wealth and the way they approached it was we know these new technologies are going to allow us to fundamentally look at the workflow and change it. But here's the question, who will be looking at changing these things? What's going to enable these model changes, the workflow changes, may not be human capital. It may be working alongside this or the man plus machine element or formula. Patterns, right? So allow the technology to tell you where your efficiencies could be gained. Allow the technologies to make the correlations in those disparate business models to fundamentally change how you do business. So that's happening today. So phase one was what is this phase two POC? Now you're sort of in real production but you obviously do a lot more POCs, you're scaling out, where do you see this going over the next three or four years? Well, I think last year was the year of the POC POV. I think this year is the year of production. And when you think of some of the examples that we've given we talked about consumer trade with Walmart. We talked about shipping trade with Merce. We talked about trade finance with We.Trade. Each of those individual networks, where do we see it going? We see these networks becoming a network of networks where each one of them have their own ecosystems and they come together. And they come together with trusted data, with trusted information, access that's unparalleled. So that's where we see it heading. And you have to say then, okay, it sounds really simple in the way you've just described it. So where's the challenge? The challenge is going to be doing this from a business and technology perspective. There's a lot of things that have to be figured out here. How are you going to make those processes work at that speed? What do you rightfully automate and what things don't you automate? That's more than just a technology. You can't plug a technology in and solve this. It takes an end-to-end capability. And that's what we're seeing is becoming more of a differentiating capability for our teams where they can say, Gene, Jason, can your teams talk to us together? Because of course, because they work together. That's a differentiating effect of moving at scale and at speed. And that's where we see it going, scale and speed. So what Jason in the blockchain frame does for us is it's an accelerant. We talk about knowledge worker automation. We talk about different areas of software-based labor. But that accelerant is doing one big thing, is it's forcing us into what I'll call vertically integrated processes or workflow. Gone are the days of segmentation of, oh, that's back office or that's front office. We now have to take that workflow and pivot that to vertical integration. Why? That accelerant is moving at the speed of light for trusted transactions. I have to make the system supporting that, the process, the people, I have to keep up with that pace of change. If I don't vertically integrate those processes, enter an intra-company, this doesn't work. It just, it falls down. So that's our marriage. Talk, go to market. How do you go to market? How do we go to market? We go to market as fast as we can and we go joined at the hip with clear and simple understanding. Where's the blockchain going to market? Yeah, right. Is it a partner ecosystem? Absolutely, so we talk about blockchain, blockchain's a team sport and it is a true demonstration of Metcalfe law. The network drives the value and so we do. We go to market with this thought of who's going to play in that network and we have networks where it's obvious value may have a founder network like a Walmart where they say, look, we see the ecosystem, we have the ecosystem, we're the founding partner or you have a consortium such as WeTrade where they come in and they say, hey, look, let's pull all this together because we see the value. So we go to market with that ecosystem knowing that, look, they have to partner, they have to work together. How's standing? So fine, fine, there's three distinct chapters in our go-to-market strategy. One is the services architecture. The second one is around the software ecosystem and the third is around platforms like a blockchain. So when we start thinking, sorry, say it. There is no design. No, there is absolutely design, absolutely design. But from a go-to-market perspective, right? So at a service architecture perspective there is fundamental workflow design happening. At a platform level, that's an even further advancement of design because of the frameworks and the blueprints being happening inside a blockchain, inside the different next-gen technologies happening. So I have to be two things. I have to be an automation-led environment where I'm providing the way to do these things, differences in RPA versus other technologies, but I also have to be an automation-attached. I have to be attached into the blockchain framework to make sure we're coupled in the different elements of that framework. So that's how we jointly go about it. And it's RPAs, I'm sorry, RPAs. I'm sorry, robotic process automation companies. So these are the relatively new technologies that enable software-based labor components. They're replicating human activities. Software robots. Software robots. Do you like half automation? Exactly right, exactly right. And it's funny when you ask, you know, no design. Design's in there. I mean, this is the way we work at IBM. I mean, we're past that calling it out. So if someone's calling it out, it's like, you're going to buy a phone, they're going to say, oh yeah, we included the battery. Like, it's there now, right? So that's how we run. So is it in there? You mentioned IBM, anything that you're going to consume from us includes IBM design by practice. Well, you guys, today was blockchain day. I mean, you must have been thrilled to see that. I mean, all the main 10s. You mean every day is not blockchain day? Well, at IBM, things every day, you know, is typically not blockchain day. Just checking. You guys sucked all the air out of the morning. And we heard, we heard. And by the way, I certainly hope not. You hope not what? That every day is blockchain day. I hope so, actually. I'm Jason here. Makes me not have to buy a new wardrobe, but he's got it. Every day is blockchain day, it ain't working. This is going to be one of those technologies. The less we know about it, the more successful it's been. I agree. I agree. Well, gentlemen, thanks very much for coming on theCUBE. Always a pleasure. Thank you. Thank you guys. Appreciate it. All right, keep it right there, buddy. We'll be back with our next guest. Right to this short break, you watch theCUBE live from IBM Think 2018. We'll be right back.