 Live from Madrid, Spain. It's theCUBE, covering HPE Discover Madrid 2017. Brought to you by Hewlett Packard Enterprise. Welcome back to Madrid, everybody. This is theCUBE, the leader in live tech coverage. My name is Dave Vellante. I'm here with Peter Verst. This is day one of HPE Discover Madrid. Olivier Frank is here as the Worldwide Senior Sales Director for Alliances for IoT at HPE and Kurt Bayer, otherwise known as Bagger in English in America. He's Vice President of IoT Solutions for Amia, PTC. Did I get that right? Yeah, you did it. Bayer, all right, well thank you for sharing that with me. Welcome to theCUBE, gentlemen. Thank you. Olivier, let me start with you. The relationship between PTC and HPE is not brand new. You guys got together a while back. What catalyzed that getting together? Yeah, it's a great question and thank you for inviting us. It's a great pleasure to be on theCUBE and for me the first time, so thank you for that. Yeah, you know, the partnership is all about action and doing things together. So we did start about a year ago with, you may remember FlowServe and Industrial Pump that we showcased. And since then we've been working very closely together to actually allow our customers to go and test the technology themselves. So I would say the partnership has matured. We now have two live environments that customers can visit, one in Europe, in Germany, in Aachen, with the RWTH University, and one in the US, near Houston, with a text mark who you know because they also came to the show. Right, okay, Kirk, give us the update on PTC. Company's been in business for a long time. IoT is like a tailwind for you. That's right, PTC is mostly known for CAD and PLM. So for 30 years they have made the 3D CAD software for when you design and make an aircraft or a car engine. But over the last five years, PTC have moved heavily into IoT, spend a billion on acquiring and designing software, a software platform that can connect and calculate and show in augmented reality. So let me build on that because PTC, as a CAD company, as a PLM company, has done a phenomenal job of using software and technology to be able to design things to a level of specificity and tolerance that just wasn't able to be done before, and it's revolutionized how people build products. But now because technology's advanced, you can leverage that information in your drawings, in your systems to create a new kind of an artifact, a digital twin that allows a business that's working closely with you to actually render that in an IoT sense and add intelligence to it. Have I got that right? You got it exactly right. So making the copy, we can draw it and we can design the physical part and we can make the digital twin of the physical part with sensors. So in that way you can look back and see if the calculation, the design, the engineering you have made is the right fit or you need to change things. So you can optimize product with having the live digital twin of the things that you design physically. So it's like a model, except it's not a model. It's a real world instantiation. The model is an estimate, right? The digital twin is actual, it's real data. It's feeded by live data, so you have a real copy of what's going on. And we use it for not only closing the loop of designing products, but also to optimize in the industrial 40 to optimize operation and creating manufacturing of things. And we use it to connect things so you can do predictive maintenance or you can turn products to be a service. Instead of selling an asset, the company can buy, by click, by use because the product are connected. I want to really amplify this, Dave, because it's really important. I want to test this with you. Because the whole concept of using technology, IoT technology, to improve the operational efficiency, to improve the service ability to evolve your business models, your ability to do that is tied back to the fidelity of the models you're using for things that are delivering the services. And I don't think the world fully understands the degree to which it's a natural leap from CAD and related technologies into building the digital artifacts that are going to be necessary to make that all work. Have I got that right? You got it completely right. So it is moving from having live informations from the physical object. So if you go to augmented reality, so you have the opportunity to look at things and get live information about temperature, power, streaming of water and all these things that goes on inside the product. You also have the opportunity to understand if there's something wrong with the product, you can click on it and you can be directed on how to change and survey things live when the augmented reality is more built by the cat drawing in the beginning that is combined with sensor information. And simulate and test and all the other things that are hard, but obviously to do that, you need a whole bunch of other technology and I guess that's where HPE comes in. Exactly. In fact, to bounce on that thought, we talk a lot about connected operation where we are showing the digital twin, but one of the new use case that we're showing on the floor here is what we call smart product engineering. So we're basically using the cat environment of Creo, running on that edge line with edge compute, enterprise compute capability, manageability and security and running on that same platform then simulation from companies like Ansys, right? And then doing 3D printing, quick prototyping and basically instrumenting the prototype we're using a bike, the saddle stem of a bike to showcase and then we get able to connect and collect the data, we're partnering with national instruments who also well known and re-inject the real data into the digital model. So again, the engineers can compare their thought and their design assumptions with the real physical prototype and accelerate time to market. PTC has been a leader in starting with the cat and then pulling it through product lifecycle management, PLM. So talk about how this is going to alter the way PLM becomes a design tool for digital business. If I'm right. You're right. It becomes an industrial innovation platform from creating the product to the full lifecycle of it. All the way out to the business model. All the way to the business model and talking about analytics. So if you have a lot of data and you want to make sure you get some decision made fast about predictive maintenance, that's an area where we are partnering with HP. So we have a lot of power close in the edge, close to the products that can do the calculations from the devices from the product and do some fast results in order to do predictive maintenance and only send the results away from the location. So what are some of the things you guys are most excited about, Olivier? Well, really excited about making those use cases, being the smart product engineering or the predictive maintenance, work for our customers. So behind, let's say we have great solutions. Now we're partnering on the sales front to kind of go together to customers. We have huge install base on both sides and picking the right customers interesting this digital transformation and make it real for them, right? Because we know it's a journey. We know it's kind of the crawl, walk, run. And it's really about accelerating, turning insights into information and into actions. And that's really where we are, you know, very much excited to work together. And so it's not just, so the collaboration is extending to go to market is what I'm hearing. And so what's the uptake been like? What are customers, our customers must be asking you, where do I start? What do you tell them? Before you start, it's important that you have a business case or business value. You understand what you want to achieve by integrating an IoT solution. That's important. Then you need to figure out what is the data? What is the fast solution I need to take? And then you can start deciding on the planning of your implementation of the IoT. Can I go back one step further? Tell me if I got that. And that one step further is, look, every innovation and adoption happens faster when you can take an existing asset and create new value. Exactly. So isn't PTC actually starting by saying, hey, you've already got these designs. You've already got these models. Reuse them, create new life, give them new life, create new value with them. Do things in ways that now you can work with your customers totally differently. And isn't that kind of where it starts? It does. And you already have a good portion of what you need. So in order to make a fast value out of your new product or the new thing you can do with the product, connecting the products, then PTC and HP is a good platform to move on. The pre-tested, pre-certified packaging, the software with the hardware is allowing our customer to go faster to proof of concept and then to production. So we have a number of workshops, customers can come. Again, as I mentioned at the beginning, in Germany, in Aachen or in Houston at our TextMark facility, where we can basically walk the talk with customers and start those early POCs, defining the business success factors, the business value they want to take out of it and basically get the ball rolling. But it's really exciting because we're touching really some of the key transformation of our enterprise system. And don't forget that you need a partner that can do a good job in service because you need an organization that can help you get it through and HP are a strong service organization too. Well, this idea of the Intelligent Edge has a lot of obviously executive support at Hewlett Packard Enterprise. The kid's buzzing at the Cube today. Meg Whitman's in the house where she's right next door and we're going to do a quick cutaway to Meg. Give her a shout out, trying to get her over here to talk about her six year tenure here. But that top down executive support has been so critical in terms of HPE getting early into the Edge IoT, Intelligent Edge, you call it. Tom Bradovich, obviously a leader who's coming on. You mentioned national instruments, PTC. You guys were first really from a traditional IT business to really get into that space. We're also the first to converge OT and IT. So we're showing on the floor what we're doing in end of line quality testing for automotive, for example, taking PXI standard, which is like instrumentation and real time data acquisition into our converge at system. So what I found is really amazing. You take the same architecture and we can do it Edge to core to cloud, right? That's very powerful. One software framework, one IT architecture that's spun out. Not some time in the future, but right now. So we're talking about a three, maybe even a three A, it's four tier data model, where you've got data at the Edge, real time. Maybe you don't persist all of it or a lot of it. We call it experience data or primary data at the Edge, event data or secondary data, and then business optimization data at the top level. So let's unpack that a little bit and get your perspective. So the Edge, obviously you talk about real time, decision-making, autonomous cars, you're not going to go back to the cloud to make that decision. That what you call a core, that's, what did you call it? The hybrid IT, that's an aggregation point, right? To collect a lot of the data from the Edge. And then the cloud maybe is where you do the deep analysis and do the deep modeling. And that cloud can be on-prem or it can be in the public cloud. Is that a reasonable data model for the flow of data for Edge and IoT? I believe it is, because some of these products generate a lot of data, and you need to be able to handle that data. And honestly, connectivity is not for free. And sometimes it's difficult if it's in the industry floor, manufacturing floor, you need good connectivity, but you still have limitations. So if you can do the local analytics and then you only send the results to the core, then it's a perfect model. And then there's a lot of regulations around data. So for many countries and especially in Europe, there's boundaries around the data. It's not all that you can move to a cloud, and especially if it's out of the country. So the model makes a good hybrid in-between speed, connectivity, analytics, and the legislation around it. And you both have solutions at each layer? Absolutely, so in fact, so PTC can run at the Edge, at the core, or in the cloud. And of course, we are powering the three pillars. And I think what's also interesting to know is that with the advance in artificial intelligence, as was exposed during the main session, data is pivotal. You need to keep a lot of data in order to learn from those data, right? So I think it's quite fascinating that we're going to store more and more data and probably make some useful right away, but maybe store some that we will come back to. That's why we're working also with companies like OSIsoft, an historian, which is collecting these timestamp data for later utilization. But I wanted also to say that what's great working with PTC is that it's kind of a workflow, a media, in terms of collecting the data, contextualizing them, and then visualization and then analytics. But we're developing a rich ecosystem because in this complex world of IoT, again, it's kind of an art and a science. And the ability to partner ourselves, but also our, let's say, friendly partners is very, very quickly. Guys, oh good, last word. I would say we started with a digital twin. And for some companies, they might be late to get the digital twin. The longer you have had collecting data from a live product, the stronger you will be. The better model you can do because you have the bigger data. So it's a matter of getting the data in to the twin. That's exactly what our research suggests. We've got a lot of examples of this. It's a difference between sampling and having an entire corpus of data. Thank you. Kurt, Olivier, thanks very much for coming here with you. Thank you so much. Great segment, guys, sorry. Thank you. Okay, keep it right there, everybody. Dave Vellante for Peter Burris. We'll be back in Madrid right after this short break.