 From London, England, it's the Cube. Covering Discover 2016 London. Brought to you by Hewlett Packard Enterprise. Now, here's your host, Dave Vellante and Paul Gillis. The London Everybody HPE Discover 2016, it's been a glorious week, or should I say it lovely week in London. It really has been fantastic. Dr. Tom is back, Dr. Tom Brattiches. Tom, I'm going to call you the, would you be a godfather of IoT at HPE Maybe the dean of IoT. Well, maybe the mother is a better strategy, having to give birth to a few things and helping Shepherd's growth, but clearly other people are great thinkers, even better. Mama bear, okay. And Howard Heppelman is here, he's the divisional GM for IoT at PTC, Boston based company, great to see you in London. Thanks for coming on the Cube. Great, thanks to be here. So, give us the background on PTC. It's a company that has been around for many, many years, but give us the, bring us back to 2016. Yeah, it's actually, it's pretty interesting because we started roughly 23 years ago as a company that helped companies for the first time digitize their product data. And today that whole cycle has come full circle in that that digital information is now being used to enable feedback loops from the product that can be tested back against their original designs and the information used to design those products can be used in servicing other products out in the field. It's really sort of a special relationship. We use this logo, it signifies a P and a D. We've come out of the digital world, but we're now helping companies take that digital information through IoT into the physical reality of where their products reside. What kind of questions are your customers asking you about IoT? Our customers have a unique opportunity because if you look back a few years ago, most of the products that they created would leave the factory floor and they would essentially be blind until they had a customer call them and talk about a particular issue or problem. They didn't really know what was happening with those products. The world of IoT where you can censor up products and you can have an instant and continuous conversation with those products from the moment they leave the dock in the factory for perpetuity in the hands of the customers unveils entirely new transformational opportunities. How they design, manufacture, service and operate the products will completely change in the coming years. So Dr. Tom, we talked earlier about the importance of an ecosystem. And how did you come about this partnership? Maybe you can give us some color on that. Oh sure, the PTC company represented here by Howard has been a great partner for many years and we've used their technologies in the IT domain in very, very productive ways. We've been able to forge a new relationship because of their appreciation for the world of OT or operational technology, where the things are on the factory floor, perhaps out at an oil rig or maybe in a power plant, et cetera. So the fact that they have an appreciation of bridging those gaps, we have an appreciation of bridging the gaps as manifested by our edge line converged edge systems made it a real natural relationship to take the relationship forward. How do you go to market? We have multiple routes. We help each other with respect to drawing the attention on the other half of the solution. For example, we have PTC thing works running on edge line converged edge systems, the EO1000, EO4000, and then vice versa. We have a very distinct way of going into the operations technology with our OEM ecosystem that also PTC shares parts of it and enjoys. So the OEM part of the ecosystem is big as well. So I really break up these partnerships into three categories. There's technology solution element partners in our ecosystem of which PTC is one. The second is the OEM or the reseller, let me just group them together, that would take the product to market as a third party channel. And then the fourth one is also provocative is the system integrator. And the system integrator partnerships and collaborations now in this world of converged OT and IT must have the skill to integrate both as opposed to silos, as Howard was pointing out. Dr. Thomas is saying earlier about how HP getting into the controls business really partnering with these controls makers, are you seeing that the need to embed intelligence at the edge is going to change the way all kinds of products are made? We're going to be redesigning many of these sensors and endpoint products? Yeah, I think absolutely. I mean, we see that in the OEM products that our customers deliver to the market, whether it be tractors or computers or whatever that might be. There is, I think the opportunity that Tom was just describing, and it relates to also the go to market is that this world of IT and OT have been separate. And now there's an opportunity to unify those worlds, create more value by bringing these disparate sources and structures of information together and enabling real time monitoring and action called real time operational intelligence in the factory so that people can react in time or I think as Tom mentioned earlier, react ahead of time because they know something's happening down the road. And so it's not just the business processes that will transform but to enable this converged world. You also have to have a transformation of the infrastructure and the underlying capabilities. And I think that's where this partner network, it's comprised of HP and many other companies, the sensor companies, the gateway companies all coming together to enable this infrastructure transformation that will sort of power the next generation of IoT. What are you guys seeing in terms of the linguistics? The lingua franca of OT is different than IT. Does, and the personas are different. Is those personas blend? Do they come together? Do they each learn to speak each other's language? What are you seeing? Yeah, maybe I can start there. Go ahead. We're definitely seeing in the bigger companies that have been out ahead and are researching this that organizationally today those organizations are different. I think you're alluding to that. And organizationally they're starting to blend. So the big companies that really understand what this opportunity means and are pursuing it in a big way are starting to bring together the OT folks and the IT folks. And then that's setting the table really for this kind of transformation to happen. You had an interesting demo yesterday of augmented reality as it applied to the manufacturing line. Is this, how is this automation, I guess instrumentation of manufacturing devices going to change the way people maintain those devices, see them, control them, manage them? I think the opportunity around the visual delivery of information is cognitively so powerful that it's again, it's going to change any place where you see manuals today. And this will happen both from the OEMs who are building that equipment and placing it in the factory as well as the factory operators themselves who are maintaining that equipment. They are going to be looking at, and by the way that's the perfect example of IoT when we talk about the convergence of digital and physical because here you've got digital information that's been designed in some computer system being physically married up in a digital twin kind of fashion with whatever that asset is in the factory. And you're now able to deliver cognitively visual work instructions or quality procedures to the floor that require much less training that expose much less opportunity for error in an operational environment. I mean, I'm thinking looking out over manufacturing floor you're seeing different colors, this is in a red state, this is in a yellow state and being able to anticipate when maybe something is going to go wrong far in advance. Yeah. I see you have an augmented reality section of your website, so. Yeah. May I say real quickly, if the picture's worth a thousand words as they say, well, a motion graphic video imputed on a real image is worth a million words. And that's the efficiency in keeping the maintenance costs down because you don't want to spend more time than you have to and you also, and sometimes these are high risk environments. You don't want people to be there when they don't have to longer. One of the things I've been grokking since we spoke in Las Vegas in June is just the amount of analog data. Yes. Digital means data. And so, let's talk about the data and the data flows. We know from the seven principles that there are many reasons why data should stay at the edge, but can we, can you talk about what you're seeing with the data, the data flows, the economics of the data flows? Yeah. You go first. You know, I think there is so much data generated by industrial machines in a factory and the response times required, particularly in a factory setting, sometimes need to be near instantaneous. And that data, simply from an execution point of view, needs to reside at the edge, be processed at the edge for certain use cases to be enabled. But you cannot afford to move all that data to the cloud. Economically, the technology is there. I believe that the compute curve in terms of power that's driving compute is moving much faster today than the ability to transport data. And so that's leaving this sort of value gap open. Let me underscore that's a good point. The demand of big data growing and growing and the networking capacity to handle its transfer to the cloud, that is outstripping that ability. So therefore, processing it and capturing it at the edge makes a lot of sense, because again, the pipe's not big enough or it's not economical enough to take it all the way back to the cloud. Hence, we shift left with the edge line systems out to the point of data capture. You've seen, I think, our data. We've quantified various use cases, but on average, we're seeing one-third the cost of doing edge to cloud versus going directly to the cloud. So that's led us to the conclusion that 95% of the data is actually going to stay at the edge. Now, people have debated that. I've seen some IDC data. It says, no, it's only going to be 50% of the data. So you were still working that and obviously it's use case dependent, but the more people I talk to, the more I'm leaning toward that scenario of it stays at the edge. Am I missing something there? I don't think it's one or the other. I don't think it will stay at the edge. I think there's a simple equation that will guide people to process certain data at the edge, where it needs to be processed for the use cases that it needs to enable. If it's a quality process on a machine, you don't want to send the data to the cloud and wait for a certain response to tell you that something's wrong with that. On the other hand, if you have thousands of machines of the same type, there's a lot of value that you get by sending a subset of all of that data once it's been sort of processed and analyzed up to the cloud so you can look at the fleet of products and start to improve the overall performance of that fleet. And the weather data, the weather guy send it all back. I've noticed so. It has to be. Well, this is one of the values we have. We can keep it all at the edge and it doesn't quite matter if we debate how much we keep it. It's appropriate. We could send it all to the cloud. That's the other extreme. And we can do that. We have great cloud technology and networking talent. Or we could do a hybrid approach of both. And that's what Howard and I agree on. It's going to be both. So we help the customers determine that. What should we do? Lots of reasons to keep it here. Lots of reasons to send it. Lots of reasons to do both. And by the way, I think both of our companies share deeply that vision. You know, our software can be deployed on premise. And sometimes that is a great advantage we have over the emergence of new software technologies that are only available in the cloud. Alternatively, our software can also be deployed in the cloud if someone wants to do that. So although we're coming at it from really a different perspective, we share a very, I think common belief that this is a continuum that starts way out at the intelligent edge. And yes, also has value that gets generated. Are there engineering collaborations as well? I mean, we talked about making a hybrid IT simple. Maybe a part of your mission is going to be eventually to make IoT simple because it's a complicated matter that we're talking about. Are there engineering collaborations that you guys foresee? Oh, certainly. Yeah, and we're in each other's laboratories and you have other partners, Howard, that I don't have advice or versa to do. It must be collaborative because if we thought the data center was complicated with all the 12, the 15 vendors in a solution, the data center is only one part now or the cloud, right? Of the end solution, only back to the things, to the data aggregation, to the IT edge technology. So I would not be exaggerating if I say the solutions can be in order of magnitude more complicated. Therefore, cooperation is absolutely needed. Yeah, and I mean, we started collaborating early on with HP because they really are the first to introduce this sort of new way of thinking about these convergent IT and OT systems. And thus it makes total sense. Now, PTC is a leader in product lifecycle management software as a standard by which products are developed. This is going to have an impact on your products, right? I mean, you're going to have to rethink PLM as a whole. Absolutely, absolutely. Talk about that. In fact, we kind of sit around sometimes and talk about a little bit of disingenuity that we and all of our competitors have had when we've talked about PLM for years. What does product lifecycle management mean? It means that there's a lifecycle. And as back to what I said earlier, if your lifecycle starts in engineering and then ends when the product leaves the dock and you're waiting for the customer to call you up and talk about it, that's not much of a lifecycle. IoT changes that 100%. And it changes how we think about those solutions. A PLM solution is no longer just about defining the information and passing it down to some downstream system. It now has to have the ability to have open channels of communication coming back to tell the engineers, well, you thought you were designing it for this requirement, but the way your customer is actually using it is something quite different. No, by the way, you don't even need to talk to them that you get that data, right? So this idea that it truly, IoT enables a closed loop, true product lifecycle management capability. And for us, we are so excited to be sitting in the middle of that because it's a promise that everybody's wanted to execute on, but until you had smart connected products and you had IoT and you had all the infrastructure that was out there, companies simply weren't living that reality. I mean, it's coming and it's coming fast right now. It's hard to think that IoT is not disruptive, but it's an overused sort of term, but I have a question around the disruption. It seems to me that there are a lot of incumbent suppliers that would be crazy to be ignoring this trend. We'd see it as an opportunity for them, and I would think they have an incumbent advantage here. So from that standpoint, is IoT from a vendor perspective, you know, new ones coming in, old ones dying, maybe less disruptive than we're used to in the technology industry, or is it going to create a whole new set of players? I would think there'd be two dimensions of the disruption. One is the one where attempting to do is fuse these two worlds of OT and IT together. And that creates, because it's never been done before, right, effectively, I mean, in mass quantities, it's never been done before, friction. The second one is then the silos in disrupting. What do I do to work better with IT if you're an OT company? In fact, I've worked for an OT company effectively called National Instruments, and my question was how do we work with that other company who's an IT? Now I'm in the IT company going back, you know, the other way. So that level of disruption is interesting, and the fact that there's so much IT being built into things now, like everything's smart, you know, you buy clothing in the future, will be IP enabled or some sort of network enabled, right? It means that the products and the markets fusing them together, and the question's about vendors, as vendors and suppliers have to respond to that, as do users. Thoughts on the disruptive nature in the ecosystem? Yeah, I mean, I can only say from the many customer visits that I sit in, I think in two years' time, we've gone from sort of a standstill to a hyper state of alertness right now that this will be disruptive. If you're a manufacturing company, and today you're not thinking about the sensors that you place in your products, by the way, even the virtual sensors that can be derived from the physical sensors by running algorithms between them. If you're not thinking about how you're going to censor up your product, if you're not thinking about the value that that brings back to your engineering innovation, and the value that affords your service and organization so that they can better track the health and avoid truck rolls, and if you're not thinking about what it does to light up your factory and take it from a static operational environment to a real-time environment, I think the companies that don't get on that bandwagon are going to find themselves at a disadvantage and it's disruptive. Chalk up another disruption that we're tracking in theCUBE. All right, Gents, we're out of time, but Howard, I'll start with you, just sort of vibe on the show. Particularly, we're seeing some IoT demos, they seem to be some of the more trafficked on the show floor, but what's the vibe like? Yeah, hey, for us it's been really awesome. As Tom said, we've been a partner with HP for a while, but being part of the show, for me personally, what an honor to be on stage with Tom and Meg Whitman doing the demonstration that we did, showing sort of what we were just talking about a little bit in real time. The show's been awesome, our collaboration is awesome, I'm just really glad to be here, thank you. And Dr. Tom, so first of all, thank you for coming on theCUBE, a couple of segments, you're always one of our favorite guests, because we've learned so much, but we love the fact that you're a person who likes to have an impact on organizations, you know, we all want to change the world in some way. Maybe someday it will. So yeah, well, it looks like it's already had an impact, certainly on HPE, but we'll give you the final word on Discover 2016. Well, thanks, this Discover in particular, I'm excited, and this is part of our theme is the other centeredness, meaning partners like Howard being with us on stage, the customers of course being on stage. So we have a lot of cool stuff, we can talk about all our cool stuff, but that's a little bit like my mother calling me handsome, but when we have others and we can help their stuff get moved and appreciated and then vice versa, that's exciting to me, so I love it that it's a community here of a big ecosystem that we're building. Excellent, all right, well thank you gentlemen, I really appreciate it. All right, keep it right there, everyone. We'll be back to wrap Discover 2016 from London, right back.