 Live from San Francisco, it's theCUBE, covering Samsung Developer Conference 2017. Brought to you by Samsung. Okay, welcome back everyone. Live here in San Francisco, this is theCUBE's exclusive coverage of Samsung Developer Conference, SDC 2017. I'm John Ferry, the co-founder of SiliconANGLE Media, co-host of theCUBE. My next guest is James Stansberry, SVP, Senior Vice President General Manager of Arctic IoT of Samsung, ARKit, ArcKit. Whatever you want to call it, is the IoT piece keynote presenter today. Thanks for spending the time. Thanks for coming on. It's my pleasure John, thanks for having us. So we love the IoT story, we cover it heavily across all of our other shows we come to, but now as the edge of the network becomes human and machines, you guys have the devices, you have the home, you have the smart thing strategy, everything's a device, it's everything to everything now. You know, most people think of Samsung as a consumer electronics company. What Arctic actually is, is a enabling platform to enable other devices. So we build an end-to-end IoT platform, which includes the cloud. And today, we rebranded it to the smart things cloud down into network devices, gateways, and in-nodes. So we actually enable not just Samsung products, but we enable other companies' products to be connected to the internet. Almost regardless of the market, not even consumers. Thomas Coe was on earlier talking about this open strategy, which is great, and he was very humble. He said, look, we're going to be honest and transparent. This is the new Samsung way. We're going to be called to developers. We're going to be completely open. We're not going to try to lock you in the Samsung, although we have some intelligence and the tips and whatnot, which is cool. And I think that's going to play well with the developer. But you introduced something that was pretty compelling on stage, and this is to me the key observation from the CUBE team is the security module. Take us through specifically what you announced and what does it mean to the developer community and what is the impact? Okay, and before I do that, let me just talk about what's happening to security. We all know about Mariah and WannaCry, and these things just keep happening. And in order for us to be able to stop these threats, we have to up the level in security. And what we announced today was an end-to-end security platform that utilizes the hardware that we supply connected to our cloud and overlaying it on top of this hardware cloud platform and abstracting it in such a way that it's easy to implement, but it's an end-to-end security and it contains all the major components you need to be able to secure an IoT network and from basically down network. And I can explain it more if you'd like. Yeah, well, so down network means from the device. From the cloud, actually. Or from the device through the cloud. Question that people will ask is, and this is what I'd love to get you explanation on is, they don't want silos. They want to have the horizontally scalable nature of the cloud. They want the specialism of the IoT device. So some software could be an AR application that could be a virtual interface into a cell tower or whatever, but being done, we've seen those all the time. But I don't want, I want a full stack, but I don't want to be locked in. So I want to move to something smart thing over there. How do you guys enable that security answer? Yeah, it's really important. You know, you, with the security, you don't, we don't create any proprietary solutions. As a matter of fact, if you look at how we've implemented it, we use third-party partners and we use standards. For example, how we do a secure over-the-air update to an Inno device. We actually use a standard piece of software that's specified by a standard called LWM2M. Most people embedded designers will know what this is. We use a public key infrastructure. We use a well-known code-signing capability. We use... FPG&A kind of thing, field programmable gate arrays. No, no, no, no. In terms of the code-signing I'm talking about, if I write a piece of code, and I want to authenticate that it's the code that I wrote that's on the device a year from now, I'll create a hash, store the hash, when I boot it, I compare that hash and make sure it's, no one has modified it. By the way, it's a known hack. You're inserting bad malicious code on a device. That's one of the things you want to avoid. And then the other thing we use is very standardized encryption. We use TLS, part of the HTTPS standard, and in that we use very well-known cryptography. The other thing we do is we create a hardware root of trust using a secure element. These are the same devices that are used in smart cards today. It's not new science. It's just a smart way to actually create a root of trust. What would you say if someone who's new to Samsung may be watching here today, Ozzie knows that's saying some brand, because you guys now are expanding the brand across the platform and fabric of Samsung, you're seeing it here in the smart home, kitchen examples, smart TVs, it's all over the place. There's no doubt what Samsung has. Explain the premise of the IoT strategy and what the goals are, what the objectives, and how does that relate to maybe someone's impression of Samsung that they know? So, you know, I'll maybe give some insight into Samsung. Maybe people don't realize that we really are an IoT company in many ways, because inside our factories, we use IoT to run our smart factories. So we actually are a consumer. We set the goal of connecting all of our devices by 2020, our consumer products. So in order to be, you know, IoT is connected devices. What Arctic does is it's actually a platform that is not necessarily consumer focused, but brings IoT to markets like smart factories, commercial buildings, healthcare, home appliances. It's actually multifaceted and not just Samsung products. We enable devices that are non-Samsung to create their own ecosystem or connect to our ecosystem. So headline on siliconangle.com today is timely for you. And I want to put it in context, because it might have a little bit more range on the IoT side, but one of our managing editors, Paul Gilin writes, story, who owns the data from the Internet of Things? Question mark, that's about to become a very big deal. So it's kind of provocative, who owns the IoT data? That's about to become a big deal. Like I've read the article, what he's basically saying to us, you got vehicles out there that connected, you got smart things everywhere now. So, and there's also, what do you do with the data? Do you move compute to the data? Do you move data across the network? These are physics questions, these are architectural questions that's in the bigger scheme, maybe outside the scope of STC, but lend a pointer to what's happening at the edge. Oh, okay. So, first of all, you have to define the data, right? I mean, there's personally identified data and there's data that's been extracted from that. And I think that you're going to see some regulation around it, especially in Europe, defining exactly what that is. From a Samsung perspective, I think it's pretty clear we believe that the consumer owns the data. If we ever use it, it's being done with the consumer's permission. And then that's pretty clear. That's a very key word, permission-based. Oh, of course. And I think that that's where most regulation's going to go and I think that's where the industry will generally go. And that's personally identified. Personally identified. Yeah, their information. But you also got to balance out the openness of data. This is the GPRS kind of debate, right? Which is you want to have a strict policy to protect the person's data at the same time offer organic ways to provide a great user experience with the data. And fuel the experience with data, but the protection, it's a hard problem. And it's even more complicated because individually, some people are more open about the consumption of their data than other people. And what that actually means is the individuals have to start to manage their data. And so what does that mean? Everybody has a web portal and says, I have this, I give this level? I mean, I don't know. And so that's actually one of the unanswered questions is how does a consumer manage their own data and other people's access to it? Well, we think in our indications, we're kind of directionally looking at the future, we think this is where blockchain is relevant. Not so much the cryptocurrencies like Bitcoin or Ethereum, but blockchain is in the mutable to decentralize. That's just distributed, decentralize. It's one way to actually keep track of what they're allowing, but at some point they have to specify. And I think that there's the trick. Yeah, this is the fun part about tech is it looks a lot of promise, looks good off the tee as they say in golf, but there's off-chain and on-chain dynamics in terms of mining Bitcoin. In the meantime, I think people are just going to opt in. That's how they begin permission. Well, where society isn't impacting, we're seeing this big time with IoT. These are norms that are coming. This is yet to be written chapter. Well, we're going to see, you mentioned GPRS and they are going to regulate it. There will be the people who have to manage it. We'll see how that works. And we'll probably evolve from that. It's the Y2K problem of our generation. Yes, it is. There's consequences to that regulation. Yeah, it'll probably go as well as Y2K. It didn't go bad. It's going to be a disaster. It's going to be a disaster. I'll say it, it's going to be a disaster. I mean, it puts extra pressure on companies, especially ones that are using cloud. So I think this would be an example where Samsung smart things cloud might be helpful. I mean, this is the big security. Do we need to do over? Probably yes. Well, you know, what we will do is we will do everything we can to secure their data. And again, going back to, you know, if they choose to allow us or to provide the data to someone to use it, then that's up to them. But we will do everything we can to secure it on the device, in the network, and in our cloud. I mean, people are things. We're walking around with things like this. That's a device that's a Samsung, it's a J-Phone. I got to get the better phone. So working on that today, we'll get the Samsung great new phones. Yeah. I mean, that's entertainment. That's e-commerce. That's web services kind of rolled into one. That's essentially what the smart things is about pretty much, right? Absolutely is. Absolutely is. On the consumer side, I would say. But I would say IoT is more than just consumer. It's healthcare. You know, it's in hospitals, it's in factories. It's going to be in your car. It's in autonomous vehicles. You know, it's going to be in your streets. Well, we coined the term here in theCUBE. I think I did. E to E, everything to everything. B to B is boring to boring. Consumer to consumer is old. And so you bring them together. It's everything to everything. Exciting to exciting. I just, you know, we describe our business model as B to B, so I guess I'll take it. Well, I mean, if you look at B to B marketing, I'm particular about marketing. Nobody puts tech. Boring is, I mean, look at Facebook. Their slogan was move fast, break stuff, too. Move fast, make sure it's secure. I mean, boring is secure, right? So, but B to B is exciting. You got augmented reality. You got cloud computing. I mean, literally unlimited potential compute power that's available through cloud. In the data center, sure. I mean, it's certainly transformative for enterprises. So we think it's going to be pretty exciting. I personally, I mean, I just think, I just don't like the B to B thing, but that's us. All right, anything else you'd like to share with the audience here on the event here? It's observations. What's your thoughts? I think, by the way, again, I appreciate the opportunity. I think the really important thing here, and maybe Thomas mentioned this, is, you know, Samsung's integrating basically five clouds together. And these are coming from mobile, from visual display, from digital appliances, to smart things, to Arctic. And being a maker of devices, and then having this open Arctic platform, really, I believe, is going to position Samsung in a very unique way in IoT. Not just for our own products, but for people to interact with our products and create new services. So I'm really excited about it. I think the ecosystem opportunity is big too. I mean, one of the things we're seeing with in the cloud community here in North America, and starting to see it in China with Alibaba is hardware configurations are now being dictated by the workload. Yeah. What's happening is hardware stacks, technology and hardware are being configured. So a version of storage might be configured differently based upon the latency requirements. Absolutely. So now you have hardware stacks that haven't been tested at scale. This is a huge issue in enterprise. Because if they have multiple clusters, for say a data lake, and then a real-time and memory cluster, who tested that? Yeah. This is where I think the opportunity to the hardware side is interesting. Okay. Your thoughts on that? Not certainly on the data center side. I was actually thinking about on the network side with compute moving to the edge. You know, what we ended up having to do is we actually created Arctic zeros, which are these low compute single protocol devices for in-node devices like lights. And then in RT357, which are dual processing core, quad-quad processing core, and octoprocessing core. Just because of this, the variations in the type of computation that has to be done actually in the network. Because the application for IoT are from extremely low power to extremely high compute. And in some cases, we see AI machine learning coming to the edge. And that's just totally off the scale to do inference. You can put the data center at the edge. I mean, at some point. It's coming. It's coming. It's the tide. It's the tide. It's moving, it's going to move up the cloud. It's going to come back down. No virtual machines, non-volatile memory at the edge. Fabrics are going to be out there. It's the queue bringing you all the data here at SDC 2017 with James Stansberry, who's the Senior Vice President General Manager of Samsung IoT. I'm John Furrier. More CUBE coverage after the short break.