 From around the globe, it's theCUBE with digital coverage of IBM Think 2021, brought to you by IBM. Welcome back everyone to theCUBE's coverage of IBM Think 2021. I'm your host, John Furrier with theCUBE. Our next guest is Ms. Shalwa, who's the industry general manager of energy, resources and manufacturing. A great guest to break down this next generation of infrastructure, modern applications and changing the business in super important areas. Regulated verticals, nice, great to see you. Thank you for coming back on theCUBE. Thank you, John, good to meet you. You know, this is the area where I've been saying for years the cloud brings great scale horizontally, scalable data, but at the end of the day AI and automation really has to be specialized in the verticals. And this we're going to see the action, the ecosystems for connecting. This is a big deal here at Think this year. Transformation is the innovation, innovation at scale. It seems to be the underlying theme that we've been reporting on. So I'd love to get your thoughts on how you see this fourth industrial revolution, as you say, coming about. Can you define for us what that means? And when you say that, what does it mean for customers? Yeah, sure, sure. So in sort of simple terms, all the technologies that we see around us, whether it's AI, we talk about AI, we talk about 5G, we talk about Edge, cloud, robotics. So the application of those to the physical world in some sense, in the industrial world is what we define as the fourth industrial revolution. Essentially it's the convergence between the humans, the physical aspect by the machines and the cyber, the digital aspects, bringing that together. So companies can unlock the value from the terabytes and petabytes of data that our connected world is now able to produce. How does the IoT world come in? We've been, again, I did a panel, I think two years ago called the industrial IoT Armageddon. And it was really kind of pointing, it was kind of provocative title. But the point was, the industrial connections are all devices now and they're connected to the network, security super important. This industrial revolution includes this new Edge. It's got to be smarter and intelligent. What's your take on that? Yeah, absolutely. It is about the Edge, it's about devices, it's about delivering, capturing the data from the umpteen devices. We've recently heard about the chip shortage, which gives you an idea that there is so much utilization of compute power everywhere in the world. And the world is becoming very software defined. So whether it's software defined machines, software defined products, the washing machines that we use at home, the cars we use at home, they are gradually, everything is gradually becoming, not gradually, I'd say rapidly becoming intelligent. And so that Edge or IoT is the foundation stone of everything we're talking about here. Well, you mentioned software and a chip, SOC, that's a huge mega wave coming. That's going to bring so much more compute on into smaller form factors, which leads me to my next question, which kind of I'm kind of answering for myself, but I'm not a manufacturing company, but why should they care about this trend from a business perspective, besides the obvious new connection points? What's really in it for them? Yes, so big topic right now is this topic of resilience, right? So that's one aspect of this. The pandemic has taught us that resilience is a core objective. The second objective, which is front and center of all CEOs or CEOs is outperformance. And so what we're seeing is outperformance are investing in technology for many goals, right? So it's either sustainability, which is a big topic these days and huge priority. It's about efficiency, it's about productivity. It's also now more and more about delivering a much stronger customer experience, right? Making your products easier to use, much easily consumable as well. So if you when you pull it all together, it's an end-to-end thinking about using data to drive those objectives of outperformance as well as resilience. What's the progress being made so far on the manufacturing industry on this front? I mean, is it moving faster? Are you mentioning accelerating, but where is the progress bar right now? So I think as we came into 2020, I would have described it as we were starting to enter the chapter to companies moving from experimentation to really thinking of scaling this. And what we've found is the pandemic really caused a big focus on these. As Winston Churchill has been attributed, the court never waste a good crisis. So a lot of CEOs, a lot of executives and leadership really put their energy into accelerating digital transformation. I think we believe two-thirds have been able to accelerate their digital transformation. So the good news is, companies don't have to be convinced about this anymore. They have clearly their focus is on, where should I start? Where should I focus? And what should I do next, right? Is really the focus. And their investing is sort of two types of technologies is the way we see it. What I would call foundational technologies because there's a recognition that to apply the differentiating technologies like AI and capture and taking value of the data, you need a strong architectural foundation. So whether it's cyber security, it's what we call IDOT integration, connecting the devices back to the mothership. And it's also applying cloud. But cloud in this context is not about typically what we think is public cloud or a central spot. It's really bringing cloud like technologies also to the edge, IE to the plant or to the device itself, whether it's a mobile device or a physical device. And that foundation is that recognition that you've got to have the foundation that you can build your capabilities on top, whether it's for customers or clients or colleagues. That's a great insight on the architecture. I think that's a successful playbook. It sounds so easy. I do agree with you. I think people have said, this is a standard now, hybrid cloud, the edge, pretty clear visibility on the architecture of what to do or what needs to be done, how to do it, almost the story. So I have to ask you, we hear of this barrier. This is always blockers. I think COVID's released some of those, relieved some of those blockers because people have to force their way into the transformation. But what are those barriers that are stopping the acceleration for customers to achieve the benefits that they need to see? Yes. So I think one key barrier is a recognition that most of our plants or manufacturing facilities or supply chains really run in a brownfield manner. There's so many machines, so many facilities that have been built over decades. So there's a proliferation of different ages of devices, machines, et cetera. So making sure that there is a focus on laying out a foundation, that's a key barrier. There is also a concern that the companies have around cybersecurity. The more you connect, the more you increase the attack surface. And we know that acts and so on are a dominant issue whether it's for ransomware or for other malicious reasons. And so modernizing the foundation and making sure you're doing it in a secure way, those are the key concerns that executives have. And then another key barrier I see is making sure that you have a key core objective and not making sure making too many different varied experimentation beds. So keeping a focus on what's the core use case of benefit you're after and then what's the foundation to make sure that you're going after it. Like I said, whether it's quality or productivity or such like. So the key success if I get this right is you're going to have the right framework for this, as you say, industry 4.0. You got to understand the collaborative dynamics and then have an ecosystem. Can you unpack those three things? Because take me through that. You got to the framework, the collaboration and the ecosystem. What does that mean specifically? So the way I think the simplest way to think of it is the amount of work and effort that all companies have to put in is so great in front of them. The opportunities are so great as well that nobody can hire all the smart people that are needed to achieve the goals. Everybody has their own specific, I would say focus and capabilities they bring to bear. So the collaboration between manufacturers, the collaboration between operational technology companies like the Siemens, ABB, Schlumberges, et cetera and IT technology companies like ourselves, that three part collaboration is sort of the heart of what I see as ecosystems coming together. The other dimensionality of ecosystems is also looking at it from a supply chain or a value chain perspective because how something becomes more intelligent or smarter or more effective is also being able to work across a supply chain or a value chain. So those are key focus areas. Make sure we are collaborating across value chains and supply chains as well as collaborating with manufacturers and OT operational technology companies to be able to bring these digital capabilities with the right capabilities of operational technology companies into the manufacturers. If I ask you, how is you doing that? What specifically would you say? I mean, how are you collaborating? What's some examples? Give some examples of this in action. Certainly. So we recently announced over the last, say, nine months or so, three strategic, very transformative partnerships. The first one I'll share with you is with Schlumberger. Schlumberger is the world's largest oil feed services company and now also the world's largest digital technology company for the oil and gas industry. So we've collaborated with them to bring hybrid cloud to the digital platform so they now can deploy their capabilities to any customer regardless of whether they want it in country or on a public cloud. Another example is we've established a data platform with Schlumberger for the oil and gas industry to be able to bring again that data platform to any location around the world. The advantage of hybrid, the advantage of AI. With ABB, what we've done is we've taken our smarts in IT security connected with their products and capabilities for operational systems. And now are delivering an end to end solution that you can get cyber alerts or issues coming from manufacturing systems, right down to, right up to an IT command center where you're seeing all the events and alerts so that they can be acted upon right away. So that's a great example of collaborating with IT and OT from a security point of view. The third one is industrial IoT with Siemens and we've partnered with Siemens to deliver their MindSphere Private Cloud Edition or delivered on our Red Hat Hybrid Cloud. So this is an example where we are able to take our horizontal technologies, apply it with their vertical smarts and deep industry context, put our services capabilities on top of it so they can deliver their innovations anymore. It is just an expert on this, such a great leader on this area. And I have to ask you, you know, you've been in this mode of evangelizing and leading teams and building solutions around digital, replatforming or whatever you want to call it, innovation. What's the big deal now if you had to, I mean, it seems like it's all coming together with Red Hat under the covers, get distributed networks with the Edge. It's all kind of coming together now for the verticals because you get the best of both worlds, programmable, scalable infrastructure with modern software applications on top. I mean, you've been in the industry for many, many waves. Why is this wave so big and important? So I think there is no longer a, the big reason why it's important is I think there's no reason why companies have to be convinced now. The clarity is there that this needs to happen. So that's one. The second is I think there's a high degree of expectation among consumers, among employees and among customers as well that everything that we touch will be intelligent. So these technologies really unlock the value, unlock the value and they can be deployed at scale. That's really I think what we're seeing as the focus now and being able to deliver the innovation anywhere whether someone wants it at the edge next to a machine that's operating or be able to look at how a manufacturing facility or different product portfolios doing in the boardroom, it's all available. And so that shop floor to top floor connection is what everybody's aiming for. But we also now call edge to enterprise. And everything works better. The employees are happy. People are happy. The stakeholders are happy. I mean, it's great insight. Thank you for sharing here on theCUBE for Think 2021. Thanks for coming on theCUBE. Absolutely, thanks John for having me. Okay, I'm John Furrier, host of theCUBE for IBM Think 2021. Thanks for watching.