 Okay, we're back here live in Las Vegas for IBM's information on demand exclusive coverage by silicon angle This is the cube our flagship program. We go out to the events and extract the signals. I'm John Furrier the founder of silicon angle We have two guests here today Tom Morris row and Janine Grosso the cube Acquisition IBM you guys closed the your company the now factory just recently Big deal social service providers Mobile we didn't talk much about mobile. We talked about big data analytics yesterday and all the insights today It's kind of social business, but we've been commenting about what's under the hood cloud and mobiles Obviously one of them Tom How did how did you guys get to the point where you guys were acquired by IBM? Because you you're in the mobile area mainly specialized and that's a hot area. Yeah, consumerization Yeah, just a little bit about what what it is we do first. So I guess we're we're experts in um understanding users experience on When they use their mobile devices on the services so we're able to understand the the ones and zeros flown up and down the wire and translate that into a customers experience and and we get insights on those customers and that information then we can use Across the the business the mobile business in the the marketing side of the house in the technical side of the house And in the care side of the house. So you're you're an entrepreneur. You've been found you found the company in 2007 Share at the folks. What was the breakout moment for you guys? I mean what products what market trend really? Catapulted your offering well, we started I guess You know, you don't have to go back very far in Telecoms when you know mobile data wasn't very sophisticated back in 2006 2007 If you remember gprs and all you could get if you were lucky was the weather and it came in text form, you know You know it was Before any of these smartphones. It seems a long long time ago So back then we started working with mobile operations. They had no visibility at all Even if it was working or not working. So it was a very iPhone came out and you know blackberries out there But the iPhone really kind of Yeah, that's when everything changed At that time people were still wondering, you know, was you know, was there enough value in this in this mobile data? So we started in the early days Helping operators understand whether the the service was working or not then with the introductions of the smartphone and the explosion of new applications and services we we got into the whole area of Looking deeper into that understanding what the experience of the customers were what they're what they're Would that the service is working enough from it from a technology perspective and And also working with the customer with our customers, which is the mobile operators to understand, you know What better services they can provide so talk about the big data angle here because obviously, you know We took you know on the other side of the house and in large enterprises big data is in in the data center People are using data to measure all kinds of activity within the data center the physical plant if you will of a company You know service providers they have their customers. They have to be aggressive with big data and they have all kinds of Revenue-driving concerns. Hey, what's preference of my customer to operational efficiencies? Can you go a little bit into detail and some of the things that they do you guys can you talk about this? Well, well, maybe I'll start with why right so obviously big data and analytics is you know one of our four strategic Focus items at the at the corporate level, right? So again, who who more than a telco has a big data problem, right with just an explosion of data How do they capitalize on it? How do they monetize it? How do they find ways to get savings within the organization? So we took a we took a deep look into telco to say where Would it make sense to invest that would really complement what we already offer with big data and our analytics portfolio? And it kind of came to us the now factory came to us through a client who? Got exposed to their technology and it you know We just had our vision was so aligned that it just made sense to Obviously kind of take that next step and take them off the market and take them off the market marry them and you know acquire So what is the driver? Obviously talk about some of the dynamics because you do you've been involved in M&A and business development The service provider market obviously relevant the old days was subscribers subscriber growth That's it now. Welcome to the internet with iPhones and smartphones. You have Revenue threats from other sources of the competitive nature at the edge to growth just physical growth on the operation side What was what do you guys look at an IBM? What's your what's your solution? What do you guys sell to the providers these guys and what are their top concerns? Well, I think all of the concerns that you named basically right It's how can they differentiate themselves from their competitors, right? And how can they keep subscribers? How can they? Keep their clients happy because if they keep their clients happy and Limit the number of calls that they're gonna let's say put in because of quality issues then obviously they'll be able to retain them so The subscriber experience I think is key, you know, definitely one of the you know kind of Big angles that the CSPs are trying to do because of the competitive nature of this business So I think to fill out in that there so that there is the normal business and that's in terms of their current business which is the Money they're making from their subscribers and the services they're providing currently and they need to optimize those businesses and then most In most the world and in especially in the developed world that there's a lot of focus in that area So how do you deliver those services at at more and more efficiently? But then at the same time they need to look to the future and they say well, you know you know, how do we fit into the new ecosystem and We would work with service providers and giving them better insights as to how that has changed in over time What use cases did you did you see most of you pumped into with these guys? Well, this the I guess there's a number of different ways They're trying to generate new revenues and to be to be honest and some of these are very early stage yet There's some other stuff that they're they would try to do in terms of of providing alternatives to say If I look at say what's up for example, which is a free text message I mean They would look at the kind of usage of that within their subscriber base Look at which kind of tariff groups would be taken that up on which wouldn't be and maybe competing against that by offering more free Text to those type of tariff groups So they you know, so they can with the in with the right information Optimize their their business models so that they can compete more effectively With some of these new social medias and new changes in and think they're they're also at the same time as I said There's cannibalization to their revenue, right? That's some kind of cannibalization But there's also new opportunities for them in new revenue streams, which many of them are looking at as well She talked about the the service providers that you talked to in the acquisition You did the due diligence you did the purchase then you got to do the integration just take us through. What was that like? I mean in the strategy and do people get brought in is it full integration? Do they get to work autonomously they get brought into the fold immediately? What's the strategy? How do you guys do your integrations? Well, there's there's no one acquisition alike So they're all very different in this case. It's not a playbook like EMC has a specific playbook They're like, okay, we'll bring them in we'll let them run it for a while and see how they do Give them some rope and see if they hang themselves and some do it on case-by-case. You're saying yeah I mean we do we we do have some area like back office is very structured, right? So we obviously Fold accounting finance legal, you know contracts all of that does get folded into kind of that the the broader IBM In the case of how we go to market the offerings that we create In some cases to your your earlier point, you know, it could be a tuck and fold where maybe you're just Acquiring the technology in this case We yes, we have an industry team that focuses on telco and selling to the CSPs in an overall platform view But what really drew us to the now factory was You know their industry expertise The fact that the products that they are actually offering to their clients are software versus a highly customized Set of services right and therefore the software was a synergy aspect Absolutely, I mean with software you can scale right so obviously software was a big drive The fact that they had a fully integrated stack. That's what clients want. They don't want to buy capabilities. They want to They want to buy value and by use case and so that too I think was a big differentiator from the now factory and and other and other vendors in this space Tom. How was the how was the process for you? Was it painful? What can I say the back-off as integration Serious machinery back there. I mean a lot of average is great great foundation. I think they have a great machine It's big And But I mean the outcome you asked what the outcome was I mean the outcome is I mean we still as the now factory an IBM company I mean we still have revenue targets to make and margin targets to make so things haven't changed that much now we have a much bigger support obviously and reach Into customers than we had before and then we also have the added benefit now have been able to use Technology which has been developed by IBM over many years, which is very scalable Which gives us which means we can instead of building that we can focus on the differentiating stuff Which makes a real difference to the clients. Yes, we can give them more resources We can give them the depth and the breath that they that it's hard to do first in a long time They go to a great big plantation called the world of IBM Which is a huge reach and it can be overkill by the way it works both way cuts both ways Well, that's the balance of the M&A and you brought up that the interesting I always kind of joke about the back office, but the IBM does some good acquisitions But the key is the leverage right so like the level interesting make people worry about the acquisitions is you know The founders come in they get integrated into culture. That's not there as they feel handcuffed And so that's always a concern for for founders I mean, how do you feel about the echo you guys giving them enough room to be creative But yet all that leverage is that is that the philosophy so far? That's how I see yeah, that's what I've seen so far. I mean one of the things that I feel is culturally, I think It wasn't as different as what I might manage to drink in it. Yeah, they seem to be okay I mean giant work with them. So it hasn't hasn't been a huge hasn't been a huge change Absolutely, I mean that was one of the things that for a small company They had such a defined culture and a set of practices that they followed and it's just so rare that you actually see that in a Small company. So what's next for you integration is done now? What do you do? Do you have a next deal or you stay with them? I'm actually staying with them So the integration is not done. So we closed last week close the deal. Yes, but so we'll have the next Eight months and we'll obviously incorporate what we believe we should write and integrate again back office And then obviously continue to help them build out their offerings and you know You see it through you're like project managing the kind of the keeping the ball moving. Yeah Yeah, so I will stay on it for at least a year if not to and you know ensure that again the now factory preserve What we what we obviously bought from a technology perspective But also integrate it with other big data products and that was the other great thing about them Some companies, you know, there has there's a lot of kind of rewrite that has to be done, but the technology was so Compatible with our big data platform already So there's me a lot of natural synergies with that. He's a big data platform with it most Synergistic with in your mind. It's pretty big. Yes. Well, actually, I mean if you think about the core You have Natesa right or pure data for analytics and so there's there's a lot of Great things that we think we're going to do there and then streams which is a Info sphere streams, which is a product that actually was built With an IBM over the last five ten years There's great opportunity there to take that technology which really does mediation for telcos and incorporate it into their offering Yes, dreams is really relevant. I mean the teases track record speaks for itself But you look at real-time brand streaming these kinds of tack is pretty interesting. Yeah I think that's a there's great opportunities there I mean a lot of the value add in this area is is been able to close the loop So where you where you see in where you see an offer you can make to somebody or To be able to do that in real time To give to I guess is that the now part of the now factory and to be able to to make it real So if you're walking past a shop, which is an offer which you're interested in to be able to get a trigger straight away There's a lot of great stuff. I think that we'll be able to do with streams going forward So I got to ask you as a star as an entrepreneur Two questions one has a field of people you nervous to sell. I mean was it like match made in heaven I mean IBM is a big machine Battleship or I have to say yeah, I have to say from from I was like I wasn't looking to sell It wasn't something that I was doing we set it up and you know, we were looking around So it wasn't I guess there is a lot of consolidation in the space we're in at the moment So it wasn't something we were looking to do if it was a different company that approached us I don't think we would have went down the same I think there's when I look at IBM and how it fits with where we wanted to go. It was an obvious fit I mean their their strategy in big days and insights and stuff like that fits It's like I said it's opportunity. Yeah, so the next quote that's that good segue to my next question So startups are hungry, you know Steve jobs that stay hungry and you're always bootstrapping even 170 people You're still you know fearful of oh my god. I could run out of money even though you probably load it It's like okay always always bootstrapping you get to IBM. It's like oh my god. They have all these resources Do you feel like you feel No, I'm just learning I mean what's your mindset now that you're in IBM? I mean because you now have so much more at your disposal and so it's an oasis I think it's yeah I think it's great opportunities in terms of what we can we can invest in things now Which we know would make a difference in the market that before we couldn't do resource wise. Yeah So we were always constrained by we would see opportunity in the area we're working There's loads of opportunities. There's no shortage of opportunities But often you just don't we didn't have the resources to go after those opportunities Now I think with the resources we have It's very exciting. Yeah The one thing actually that they had did differently that we observed is they really built their company around their technology So they built you they built use cases out and then build a sales team around that It doesn't always work that way So it's really kind of the perfect formula for us to come in give them the scale Give them the sales resources the channel to to really drive that value to the client Jean Jean How about the growth mobile growth? Obviously, it's massive You got the entrepreneurs now other eyes get bigger because they have bigger opportunities I mean part of your job is kind of keep them rained in a little bit not overdrive red line Right, so you gotta say hey, we can if we can clone these guys mobile is growing so fast What are some of the numbers or can you share any anecdotal data around the mobile growth? I mean the market, you know If you look at kind of the segments and they cross a few different segments But the market's growing at at least 15% within the you know customer care, you know per analyst Mason So I think there's tremendous growth clearly. We're gonna take more than 15% You know if if all of the opportunities that we're seeing today You know come to fruition. So I think I think it's growth and churn to more Android devices are coming on board You have Aussie iPhones crushing it you know, it's it's funny because you know having just got into this space over The last you know six to nine months It's very dynamic that the the telco industries it's it's almost antiquated, but also very advanced It's it's it's kind of it's all over the place And so that I think is is gonna hopefully just you know Take us places because of the value that we're gonna be able to drive What's your forecast for the for the future in terms of not IBM but from your perspective Getting in this deal getting in with the entrepreneurs who are who have been laying down great foundation No one what you know at IBM. What's the outlook for telcos in your mind? What's the big sweeping change that that most folks don't see out there that you might be able to share with them So I mean from a from an underlying perspective What you know that the vision I think that even they have for themselves is to kind of get out of the siloed business right where they have kind of all of the different network assets and That they have to kind of pull together to actually get some sort of overarching view of the the organization So I think you know being able to really sell them a platform Across that their entire enterprise to give them the insights that they're gonna need to better manage their business Tom will give you the final word. We've got run a break break here coming up For the folks up to just share them, you know, what's what to expect from you guys Maybe talk to your your customers your future customers share with them kind of what's gonna go on for you Guys and your team inside IBM. What's your what's your objective? What are you gonna do? Well first? I mean we've 40 customers around all around the world in Europe US and Asia First thing is I mean there isn't going to be huge amount of change in terms of the value we deliver them the one thing I can say is that In IBM now we will to eggs I mean one of the reasons our customers work with us is because we're innovative and We move very very fast with this industry. I think now Given the capability we have with that in IBM. We're able to even move faster with new propositions To our customers and to our new customers So I think within it's a very exciting time both for our customers and us at the moment I want the feedback we got from our customers who have been very very positive So far well congratulations on the acquisition If the ink is signed it's closed money's transferred all that stuff's happened now that now the hard work That's absolutely right the hard work begins and for the folks to know what goes on It's really a lot of work and you got to get it right. It's like a secret It's like a recipe to a you know, it's nice sauce you want to make sure all the ingredients are in place for scale Obviously a hot market. Congratulations. So we're here live inside the cube exclusive coverage at IBM's information on benefits to Cuba right back