 Good morning. Welcome everyone. I think this is the first panel at Davos. So welcome to the 2014 World Economic Forum We have a great panel today on the new digital context You know technology remains a very mysterious force in the economy you all know the story but in 1992 Bill Clinton called all the top economists academics and business people to the White House to talk about the future economy and And in that three-day meeting at the White House the word internet was never mentioned in 2001 everyone said Silicon Valley was a backwater the companies like Apple were has been So it's a very difficult to predict marketplace Technology and digital in general so it's hard to see the future of digital, but we're gonna try and do that this morning I have I am George Colony. I'm the CEO of Forrester Research based in Cambridge, Massachusetts We have a terrific panel with us today to my left is Randall Stevenson the chairman CEO of AT&T the US carrier Next to Randall is John Chambers Chairman CEO of Cisco the US Network Equipment Vendor Marissa Meyer chairman CEO of yahoo.com one of the original web media sites Mark Benioff chairman CEO of salesforce.com the US based software company and then finally number five on my list Gavin Patterson, thank you for being here that the only non US person on our panel CEO British telecom the UK carrier So before we get started is there other microphones in the room or actually the room is small I'm so we can hear you I want to ask the audience just to for a few notes What do you want to learn this morning? Couple of ideas out there. What do you want to learn this morning? There's a microphone here is just one mic in the room. Yeah Jeff, okay Snowden so NSA etc. Yep. Good. Got it other ones What people want to know this morning? Yeah, okay, what is what is a connected device? What do you mean by that? Okay? You happy John? Yes, okay good Yes Okay, I don't promise we're gonna get to all these we'll take one more. Yeah, how governments we manage the internet Okay, good Okay, excellent. Thank you for the for the ideas Let's start off on a personal note And I want all of you guys to answer this question What technology do you personally use? That has in some way changed your life and it cannot be a technology that you guys make No advertising well, I'll think about it for a start. So well, I don't know what Randall. Do you want to start? I wasn't ready for that question. He said we don't carry it. We don't make this story provide either I mean it's kind of limiting. All right, so let me start. Okay. Good job. Thank you I love Blackberry, but I switched over to the iPhone because the apps I use it tremendously a lot of video capability But never miss an opportunity. It's gonna be a video world two-thirds the applications on the mobile phones will be video We'll talk largely virtually for the future. I believe in CEOs leading the way So how does video change videos a changer for you personally John? Well, personally, it's it's how I do my business. I do more meetings with my customers virtually I do physically and it allows me to watch everything from my grandchild what she did yesterday I want my grandson did yesterday to business and interpret how good a sales forecast is as a person really believe the sales Forecaster that he hasn't it on it. So I think video is the primary way that you learn. Okay, good one So he cheated it's something he makes Started off with the iPhone That's how he pretended it didn't make it. Okay, other one I was gonna jump in definitely the the iPhone and I think that you know The recent statistic is that the average person checks their smartphone a hundred and fifty times a day And I think I'm probably on the high end of that And so I think that mobile is is definitely one of the trends that is setting the pace for our business but for almost everyone good, okay, I I think that the most important piece of technology that Changed my life this year is this band. I'm wearing on my wrist, which is called Fitbit and how much have you lost it? What's that how much have you lost? I've lost 30 pounds wearing a and I do about 10,000 steps a day with it, but I have a really good story actually George. I want to tell you that You know it's communicating constantly with my phone and it uses something called Bluetooth 4 which kind of is updated and then in my phone it's got all the You know all my analytics and dashboards and and then I my scale is connected on to here, too but the cool thing is is This story and this is gonna I think help to kind of open your discussion a little bit is last week I got a phone call from someone who probably should be on this panel But isn't but here at the conference Michael Dell and I caught you know, I got my cell phone number He's customer. Hey, what's happening the sort of problem? No, no, Mark. Are you feeling okay? Are you feeling okay, Mark? I'm like, what what do you mean Michael? Well, I'm very worried about you. I'm like you are yeah Because I'm your friend on the Fitbit network and I noticed in the last three days you haven't worked out and This is a true story and oh, you know because we're competing who can have the most steps every day And he's like just completely blowing by me and then all of a sudden he had a realization. Wait a minute Something's not right. It was Mark. Okay, and I said well actually Michael I have a cold everyone in San Francisco had a cold last week and I Decided not to work out for three days. So I'm ready for Davos, but that was very interesting to me because Suddenly occurred to me that here I am. I'm living in the Internet of Things. I'm on the board of Cisco We call it the Internet of everything. I'm connected, you know super connected. I've opted in my friends Probably ready to opt in my insurance provider if they will lower my rates based on my activity levels and But then I noticed that well, what does it mean that you know here? I am I'm a public company CEO that somebody realizes that my I have a cold or I have a problem Or I'm not in the office for three days or that I'm not working out that you actually know Where I am soon what my heart rate is what my blood pressure is what my glucose level is You're gonna know does this make you feel good or bad? Well, I'm just putting it out There's a question for you. Okay, which is it's really interesting I mean I think for me the personal enlightenment that you get through new technology today is so awesome that You know, I know more about myself than ever and others are starting to know more about me, too but what does it mean when Everybody knows everything and what is that gonna do and that really was yet last week And so when I got that call that really changed my view because you know Behind every one of these devices and behind every one of these tweets and everything we forget or every device you know as a person and You know in business we know that because there are customers So we always remember it's our customer, but it's gonna fundamentally change Our relationship with people with others with organizations and that is this kind of huge breakthrough That's really going how many people here wear a fitness band actually a Fitbit or a Nike fuel band? Yeah, I mean look at that's about a third I would say to the half of the audience and We don't really think about it yet But we're gonna be thinking a lot about it and it's an exciting time There's never been a more exciting time as evidence of this panel is usually the Nobel laureates at the World Economic Forum doing the economic review and we took their spot this year because We're smarter damn right because technology is really important and there's never been a more exciting more fun more Energetic time in our industry, but we don't know if this is good or bad We may bloop back to this well that absolutely we're gonna leave this for other technologies people using personally They're changing your life. I'll just uh It's interesting. I was last year in 2009 this always conflicts with my board meeting And so I'm just sitting here watching this versus 2009 and all of these iPads up Videoing and taking pictures of smartphones that did not exist in just two thought they weren't here in 2009 by and large and last night John and I've been comparing stories. We're both grandfathers now and we're really gross about this We compare grandkids stories and last night my grandson is sick and I have my iPad up And I'm conversing he's one years old. We're not conversing but he kissed he kissed my wife's iPad Right and you just think to Mark's point it just it personalized the technology is personalizing things like we've not experienced before and A video you said video is changing how you think about business But also how you think about at a personal level how you interact with family and so forth And so mobile video I think it's just really a huge change in terms of how we all behave and interact Yeah force should be called as the mobile mind shift that the consumers are shifting over to be dependent at all times on mobile Let's widen this out now. We've talked about personal technology. Let's talk in your laboratories or in your travels You guys see a lot of technologies What are you exposed to which you think is going to be very critical in the future that many people in this audience may not even know about Not personal but could be could be corporate Gavin go ahead. Well, I think it's the for us It's the explosion of bandwidth and the capability that's going to provide consumers and businesses a few years ago Certainly even in BT people didn't expect to need more than eight meg and these days the Ambition the appetite of customers to use a lot more bandwidth and use it throughout the day 24-7 is just exploding And so every time you feel as though you've reached a cap on what people want to to buy It's clear that that it doesn't last for long So certainly in our labs seeing how far the technology can go how fast you can get Speeds across the internet has been extremely exciting. We've been we've been testing something called G fast That allows you to get Over over a gig into into a premise and I think in a few years ago. Nobody would have thought that would have been possible And even there'd be any appetite for it But it's it's certainly the case it is possible now, and I think there will be demand so you'll be careful Are you promising a lot more bandwidth to come quickly? I'm promising a lot more bands like capital And it's there if people want to pay for it, but I think this it's you know The desire and the appetite for and and the ideas And how people use it. We're just beginning. We know we all have an appetite for much higher bandwidth But when are we going to get it maybe talk to You know Randall didn't comment on this as well when it's it's growing at an unbelievable pace You're doing in the UK the investment. We're doing in the United States I mean examples start on the fixed line side in Austin We are putting fiber throughout the city of Austin one gig to it to the home in Austin That's on the fixed line side We're putting fiber to a million new business locations in the United States over the next three years We did 220,000 of them this year But then go to the mobility side LTE deployment in the US is at a hyper pace Horizons at 300 million pops past we're closing in on 300 million pops past the other two carriers are doing the same thing You're seeing LTE. I mean you have LTE here now, right? so bandwidth is exploding and John is involved in this also that probably the biggest fiber deployment initiative on the globe is Fibered all these cell sites. You're involved in fiber to cell sites. And so there's just this massive literally multi-billion dollar investment going on around the globe to deliver this bandwidth and it's and it's impressive what it's doing because We all you know have kind of lived over the last five or six years with this smartphone era maturing and Everybody's saying well, what's next everybody's got a smartphone and and mark was talking this a moment ago And that is the smartphone has become the remote control for everybody's life It's dictating and driving virtually everything we do behaviorally in our in our work life and in our home life It's driving the automation of the home. It's driving the automation of how I interact with my my Customer information systems and so forth. It's it's it's actually amen the connected car Right the connected car is coming at hyper speed We've got deals done with General Motors and Tesla and Ford where the car is all connected to this this wireless Bandwidth around the globe. And so this is just really an exciting. Let me let me dumb this way down for us in this discussion of bandwidth When will our cell phones run at twice the speed that they run today? What's yours running today here? Just imagine LTE right so eight mag is what I tested last night in my hotel room on the Swisscom LTE network in the US for getting 15, right? Okay, so and it's it's getting better. All right, and that was just When does it double? I just in the US. It's double what it is here now I think Europe is going to see it doubling literally in the next 12 to 18 months I'll be surprised and disappointed if it doesn't so two two X 18 months here that yeah, you agree with that Yeah, but the bandwidth is important all that does is the connectivity you watch the key trend We're all seeing 10 billion devices connected to the internet 1984 1000 those devices will move to all video out of those 10 billion devices There'll be 77 billion application downloads this next year. You play this out three to five years You'll see us making routers that can download the entire next Flix library in one second Bandwidth will not be a problem. It's how do we apply it and that really leads to this gentleman's question over here You're the biggest transition that's about occur ever in IT is when you connect everything in this world And I mean anything and everything it will drive productivity of countries it will change business models will change our everyday lives and The number we put on that is 19 trillion an economic value over the next 10 years That will make the progress we did on the internet since its inception Dwarf it'll be five to ten times more the impact on society So all these come together to really enable that and that's that's can lead what I get excited so just to clarify here So Gavin Reynolds saying bandwidth is the big technology you see out there John. You're saying it's the internet of things Now you need all these together you got to have applications with band with fixed and mobiles with processes with cloud with security with Collaboration and only when you bring them together Do you begin to get the environment that really drives business and regates the consumer? Just take this real farewell in the room internet of things means that in this room in five years There will be between You give me your number 50 to 100 internet internet connected devices in this room not on our bodies But in these lights that sensors etc. That's what you're talking. I think it'll be many many times On your body is going to be four or five one trillion connected sensors all on this new bandwidth that that's the amazing thing Mark Andreessen has this great thing he says These new sensors are the peace dividend of the cell foreign wars because of all the innovation because of all the change all the Investment that they're talking about the stuff that's dropping out the technology that's coming out at these remarkably low costs It is amazing and another one that you know that Randall really mentioned is the cell phone I have how many everyone here raise your hand if you have your set smartphone with you in the room every hand is Going to go up, but there's one and a half billion of these smartphones In the world today, but there's five billion cell phones and over the next 48 months That'll be five billion of these smartphones and that is a game-changer on education communication commerce Productivity everything all these cool apps that everyone in the world that starts to get them that it's a tree You know that it's broad-based that is amazing and that these apps Provide this much more direct relationship with Your as I said your friend your customer your vendor one of the cool Customers that we have is a company in the Netherlands called Phillips and they make it They have at this toothbrush that I buy at Costco called a sonic hair. I never seen this you use it Randall Yeah, I have a lot in common Anyway, the new Yeah, but the new the new the new sonic hair is Wi-Fi based and GPS located Okay, and it's kind of keep track of where I am and how I'm brushing my teeth And what's the first thing the Dennis always asks us when we're coming to see him or her in the office? Have you brushed right? You know what I mean that you go in the dentist. Have you brushed mark? Have you been brushing? Oh, yeah, I've been brushed. Have you been flossing? Oh? It's now the Dennis say what's your Phillips login ID? Because I need to friend you on the Phillips network because I want to see he's not gonna ask me if I brush The Dennis is gonna see oh you haven't been holding it, right? You need to hold it more like this look at this These are your brushing patterns and mark. Why did you not brush? You know two days last week? It's welcome to the mark Benioff health and I Give you an example George, but I don't want to interrupt you, but what I want to say is But what I would say is that on that toothbrush is also a help button And you can have a help button and then up on my smartphone come somebody from Phillips You know I'm having a problem with my toothbrush with my Oral health with my you know this or I need a new dentist and you know what they're connected to me in an incredible new way and That's amazing, and that's kind of you know it opens the door and all the Trust issues, and I know I'm gonna take the conversation a little bit different way if you watch the impact George You're gonna love this panel We're talking about transactions. This is how it changes everybody's life in this room I had the chance to meet with president Park last night from Korea She's an engineer by background, but she understood immediately what connectivity meant to the future of our country Job creation the ability to do a new generation of entrepreneurs The ability to suddenly change their competitiveness and global base spring health care and education If you talk to the leaders in Israel, I think both Shimon Perez and Prime Minister that Nyahu were here They get how that changes their country forever if you talk to the key businesses They know this is going to change their top line and bottom line and the way does not occur before and to the point that all of us Are making on this panel it would change our health care in a better way. It will change our lives It will be really fun now Marissa. I'm gonna give you the ball, but if you wait for that Okay, 20 2014 I think is really interesting because it is a tipping point when you look at mobile when you look at the bandwidth when you look At the Internet of Things It's gonna change everyone's daily routines really fundamentally and I think that really comes down to the apps Because it's not just how you connect how it inspires you how it entertains you, but there's really fundamental things happening For example on a recent Friday night 150,000 people let strangers stay in their homes Through Airbnb and the sharing economy their teenagers Some of them More than 1.5 million people have hired strangers to do daily errands for them on task rabbit 56% of people would consider renting out their car to a stranger because when you've got the Internet of Things and you know Where your car is or you know exactly what's happening in your home and you can verify who the person is Who's going to be renting it and sharing it with you, you know It makes connecting and trusting those people that much easier and it's gonna change everything really very fundamentally What do you what do you call that change? I think that part of that is the sharing economy But part of it is just this tipping point that's being reached by mobile by the Internet of Things by the bandwidth available And the fact that it can just allow us all to connect and inspire and entertain each other in a way that that has never happened before 2014 will be the tipping point what Marissa said you'll look back five years from now This will be the year when you see it Okay, let's change the topic last night. I was at the tech pioneers dinner, which was fantastic This is the the startups that come to Davos There are about 25 terrific companies there Disruption is our everyone's favorite word Usually coupled with the other word digital. Why is it so hard for large companies? Back up here a little bit. I don't think any of you can be accused of being a diss of running disruptive companies Maybe mark is an exception here Thank You George for that Why is it so hard for for large companies to be why is it so hard for large companies to be disruptive? It's a fascinating Observation I probably would suggest that it may be as inaccurate as anything I've heard since I've been here And I've not only been here a short time, but I why I started with AT&T Southwestern Bell You know back in the mid 80s and it's interesting that seems like a long time ago But in the mid 80s we had zero cell phone customers. We had zero broadband customers It was technologies that didn't even exist at that time in between cell phone Or mobile telephony broadband and now cloud it makes up 80% of our 127 billion dollar revenue stream and so these are industries every one and by the way, you know I don't get there without you I don't get there on broadband without you and you're the same way and in the cloud you know you were going to be the main driver of the cloud and Companies that aren't moving and driving the new technologies are companies that don't stay alive and and so It's you know, maybe we're not disruptive to You know other industries or whatnot But in terms of being disruptive in terms of what its facility you think about what Marissa just went through and how the world Is changing what you talked about was we're driving inefficiencies out of every single facet of life All right, meaning if you have spare capacity in your home That inefficiency is being driven out by virtue of the mobile internet if you have inefficiency in your automobile Utilization that is being driven out by all of this So all of this bandwidth all these capabilities connected devices are as disruptive as anything I think that we as a society have seen and so I think anybody sitting on this stage is obviously thrived in that and has Been somewhat disruptive Radle you're saying that you feel ATT is a disruptive company and that you lead it to be disruptive Yeah, without a doubt, you know, I I Go back to but it but T-Mobile it feels like the disruptive force in your business, right? At least in the U. I mean it's look it's just a hyper competitive industry You know, I go back to I'll say what I said a moment ago 2007 not five six years ago None of you had a smartphone none of you owned a smartphone the tablet didn't exist There was no such thing as a mobile application and somebody had to step out and build mobile internet capability Somebody had to step out and change their business model to do an iPhone into the United States first Those are all very disruptive things and they changed industries and facilitated a lot of what you've seen here And every one of us up here have gone through these kind of things alright I'm not saying AT&T is unique, but if you know if you're not disruptive, you don't live So my question is why are big companies not disruptive do you all feel like you were Direct if you if you look at big companies only a third of us exist in a meaningful way in two decades My industry my competitors from 15 to 20 years ago None of them exist or they've exited from 10 to 15 years ago only one exists from five to 10 years ago only a few Randall what he's done in his industry is disrupted again and again and again as a company We weren't even a player in the data center now You could argue with the number one cloud player infrastructure and data center wise how if you don't disrupt you get left How do you lead disruption? How do you lead your company to be disruptive? You catch market transitions you listen to customers and then something I believe in you tie these together in a way That gives you architectural vanges to move fast, but you have to build that into your DNA You have to tell your teams you want to take risk and by definition You're occasionally going to fail and you got to create that culture to do it But I would argue these companies up here across the board I will bet you all five of us will be major players ten years from now And I bet you two-thirds of our peers won't be there. There's no way of business So I was just gonna say it's either change or be changed Yeah, but I think for us You know we have really sophisticated models that look at what's gonna happen with our traffic this year and for yahoo 2014 Is the year of crossover by the end of this year? We will have more mobile users and more mobile traffic than we have PC traffic And so you know you have to be prepared for that and we pride ourselves on running the world's largest startup You know can you actually be a big company and be flat be transparent give lots of autonomy and really enable people to think about How should we be changing and what are the new disruptive things should be getting into how have you led the yahoo to beat it? I would agree. It's been a much more disruptive force in the last 12 months It's you since you've been there Marissa. How have you led it to be disruptive? Well, I think a lot of it comes with the people So it's a matter of hiring the right people and making sure that those people are really informed So you know we try and run things really flat very transparent We do you know things are considered kind of crazy like the company actually writes the board slides They see the board slides They are participating really actively in all the different decisions that we're making and all the observations from your toothbrush to the Fitbit to Airbnb they're seeing all that and they're bringing their best ideas forward and saying this is the next application that we should build So when you arrived yahoo you felt the I'm not gonna speak to the entire workforce But many were not did we're not did not have disrupt disruptive DNA. Well, I think I mean every company is unique What happened there is that there was you know five years of turbulence leading up to it And when I got there I was really blessed because there were fantastic people with amazing ideas That all this pent up energy and they were like, okay, you know Can we go now right like if you want to run like we actually really want to make something happen And we've been waiting for that moment And you know I really think that you know the best thing you can do as an executive is play defense Not offense get everybody out of the way and set up an environment where they can really run and ultimately make it Harnessing that energy was you unleash disruption. Yeah. Well, I mean, I think they did but I tried to enable it Harness it a bit. I actually think that you know the your premise is not as true as it used to be And I'll tell you why because everything is going so much faster that companies have to change faster I was just outside with Before I walked in here. I was walking in I was talking to The CEO of a large unit of General Electric I look at what General Electric is doing, which is one of the largest companies in the world and it's a broad a fundamental Disruption of their business and their technology model They listen to all of us and they say well We make aircraft engines and locomotives and we make turbines and CT scanners and what they've done is they've said All of these things they call the machines all of the machines that we make they make machines that matter They call it will have apis and we'll provide analytics out of every machine And all of these things will have predictive capabilities All of them will be collaborative so that engineers that run these machines can share between our engineers and the customers engineers and Every machine will have a help button on it so that immediately I can get connected back To the customer can talk to us all in real time And then they said and the customer is never going to buy a machine from us again Instead we're going to go to the model that the cloud providers are providing which is pay-as-you-go service And we're going to be a huge service company and we're going to provide all of our machines pay-as-you-go coupled with all the professional services and collaboration services and Analytics services and everything you need to run the machines and make them successful now That in my view is not just a new technology model But a new business model and when you look at what Jeff is doing versus what Jack had before there's no comparison And it's a broad adaption of the network in this point You can let go industry by industry and I can probably give you examples of the largest company in each and every industry Completely transforming themselves because the technology that we have been given over the last decade is so unbelievable that That the transformation that the ability transform today is just much easier You can make this change you can make this shift and you can do it right now And you can see that it's a new world driven by the cloud by social by mobile and buy all these connected things and these sensors and you can bring that in it doesn't matter if you're a car company or if you're an industrial manufacturer or a health care provider or Whatever a bcdef Every company is changing and transforming and I don't think your premise of your question is true anymore I think it might have been true a decade ago because the technology there with the speed of change was not high enough So companies didn't have to react to their customers But today if you're not listening to your customers more deeply than ever before and reacting to them more Rapidly than ever before then you are probably making a mistake You've got to really start adapting and I have found that Companies are doing this and that's also why you see I think actually relatively good performance by very large companies right now You know you look at some of these large companies. They're doing what I think there's gonna be You know I'm a huge bull but I really think that we're gonna see huge growth over the next decade that's driven by all of these things not only is the US gonna have a great year this year and I Think Japan is gonna have a great year and China is gonna have a great year But I think the world is gonna have a great year and a lot of it is enabled by because we have this banking crisis behind us and the Economists are not on this stage anymore. And this is about new ideas, you know, you might just call this session It's not about the new digital context. It's the new ideas context So so to interpret mark if I were to tell you in the future every company will be a software company and To live into market Software George, I don't know if you know my thought on that but I think it's you know when we talk about software Traditionally, you know, you that word kind of brings forth complexity and risk up front and caught But I think every company is gonna look a lot more like BT and AT&T actually, you know, they're gonna be service providers They're gonna be readable companies. They're gonna be customer They're gonna be companies who are driven by the customer because the customer is gonna have choice Randall's talks. He said well, it's hyper competitive. It's just a direct customer driven industry That's all it is to it and he has to deliver to the customer every day All of us are gonna have to deliver our customers and I'll tell you why that is Because of one basic simple point and that is we're connected to them. Yeah constantly So so the customers like what I can't talk to them right now. Well, who else can provide this thing to me Oh, we'll switch over download boom. Oh, and now I'm using that company Yeah, and that's but it takes software to be able to do that and software In a big term yeah, yeah, but you've been waiting Gavin to go. Yeah, no, I would just echo what's been said so far I challenge the premise Any big company that isn't innovating isn't disrupting their business model isn't challenging the the the status quo Will not survive. There's no question about that and we've as a company managed to survive since 1869 by Continuing to to change and so what's the one way that you lead BT to be disrupt? I think the key is You've got to invest in R&D, but you've got to be clear where your competitors Advantage lies and then outside of that you've got to be open and you've got to look to partner with with companies and And not look to try and do it all yourself So we keep a team Who scour the world the base in Silicon Valley? But they look all around the world for the latest trends the latest ideas the companies that are Looking at things from a different perspective and and try to work with them Sometimes partnering sometimes buying a stake an investment in them Sometimes finding a way of going to market to involve them in our business model And I think that's the key it's knowing where you've got a competitive advantage But being open to to being able to collaborate to ensure that you know Where you can get the best from them from the modest about what these guys have done at BT Because here was a a big iron fixed-line company that had no mobility business and These guys just went and changed their model made a huge commitment to invest in fiber They also said no we have no mobility business went and bought some spectrum You've been doing a really impressive job of Wi-Fi enabling a lot of buildings and capabilities around UK and they they're becoming a bit of a mobility company and then they go out and do something that few other What I call true kind of broadband companies around the globe have done You had the courage to go do content deals and you have disrupted the model in the UK by doing some very unique and Disruptive things I think it's it's like I commend what BT has done. It's been impressive and fun to watch We will get to the audience questions in a moment, but I want to get into this question that Jeff Jarvis asked So Obama President Obama last week came out and he said that the NSA will There will be more restrictions on the NSA, but he did he said nothing about how Tech vendors would be protected from the NSA. I may not be using the right terms here if Obama was sitting Right in front of us. What one request would you make of him President Obama if he was sitting right here And in your case Gavin you can say Prime Minister Cameron. What one request would you make to President Obama or Cameron? Transparency yeah, the ability to one understand so we can help our users Understand exactly how many requests we're getting And or at least the range of types of requests we're getting and how that data is going to be used because we need to be able To rebuild trust with our users Do you feel the trust has been as fallen because of this Marisa? Yeah, I definitely think so I think that and not only within the US, but also internationally certainly there are other countries That that really have concerns about what the NSA is looking at and and I think that Transparency is something that would really ultimately help this so when you say transparency Do you mean that you want Yahoo to be able to divulge to the public exactly what the requests are? Do you want the NSA to to divulge before they make them to you? Well, we already have something called a transparency report where for example for local Government requests we can we can devolved how many we get and how and ultimately the nature of those requests How many are criminal etc? And we really want to be able to do the same thing On the NSA level and today we're prohibited from doing that. Okay, we're affected in a different way We are not a service provider or a content owner, so we don't get any government orders We don't share our code with anyone In the world and so we we come it up from a different perspective We need some rules of the road that everybody can live with especially among countries that are very closely allied and It's been the wild wild west around the world and we need all countries to come up with here Some general guidelines that we're going to do starting with transparency Within that arena so your request to to President Obama would be That you want to know what the guidelines for Cisco in dealing with other countries No What the cow countries will work together to solve this issue because it's a connector world on a global basis I don't have the same issues my colleagues do who are service providers or in the content We don't get any orders along that line We don't give anybody our code, but it is the ability to move fast in these markets Spaced to what we talked about on the Internet of everything to really have some guidelines that we can all live by and Countries learn to trust each other and businesses are free to do this in a very open way So your request to President Obama would be that he should cooperate with his fellow leaders I think every government leader to work together on this would be the request okay other guy It's gonna say the legislation and the regulation has to catch up and I mean this is a challenge I think for the Many different parts of our business models at the moment. It's it's often several years behind and And and certainly in this sphere. It's it's not fit for a purpose today. I think everybody recognizes the The internet plays a role in protecting us, but we've got to make sure that it's it's not intrusive And it also protects the rights of the individual and at the moment I don't think the legislation is has managed to keep up with the way the technology is There's really brought us forward over the last few your request is for more laws in Parliament to to clarify this exactly Making it clear. I mean it's to Marissa's point is It's just too murky at the moment. It needs to be transparent There needs to be clear guidelines of what's acceptable and what isn't acceptable. Okay, I think this is a very number one is This was a very healthy discussion that's happened over the last six months. It's way overdue number Two only through this concept of transparency will we get back to trust but number three It's gonna really drive customer choice That is we're getting to a customer centric world and the customer has to be able to choose Exactly where they want their data and have be able to see it Monitor it and manage it and it cannot be anonymous like it is with some providers So I think that the most important thing and I think our model is probably the closest To kind of where things need to move to the customer chooses our service They can choose what country they want it run out of they can go into the data centers They can audit it they can go and look at it. They can understand exactly what's happening They can have it exactly as they want it to The precision that they know that this is their data and this is where it is it cannot be anonymous It cannot be a anonymous world that and I think that too much of it the way that it's been run up to this point Transparency is not just about the government Transparency is also about vendors vendors have to provide complete and total transparency themselves Okay, and they also can't pin it all on the government It in that will provide, you know trust because ultimately the customer whether it's a consumer or a business Wants to know everything, you know, and I think we're moving into a world of Opt-in transparency, you know go back to my first story with Fitbit There's more information available to me than ever before on this Fitbit network And it's gonna only increase over the next ten years Are you saying Mark that this is gonna be a big dial at Salesforce or you can dial, you know I don't care if the NSA can hack on the customer hack me or I don't want to be hacked You see I don't think that that is I don't think I want all my sales first data in some other country I think that that's kind of a sense a sensationalist look at it Okay, because you could just plug in you could change those words with a lot of different things that I won't use But I think that it's more about The customer needs to be able to choose so that they have complete comfort with how it's being handled So they could choose they could push the dial all the way in one direction if they wanted they can do exactly what they want So that's what you want to be able to provide. That's what we are we provide that in And we'll provide that in spades going forward But I think ultimately the customer has to have total transparency and I think you know One example is if a consumer is using a consumer mail service, okay, you may not know. Where is your mail? I think you have to know I think you have to know what country and what laws are governing your data And I think that the Germans actually have a habit right in a lot of cases where they look at look This is your data. You need to own it for our customers. We already know that it's not our data It's our customers. We don't can't see we can't see our customers data nor do we want to you know I think every company who's on the stage here is one of our customers We don't want to see their data We only want to help them manage it at a lower cost more efficient way and give them choice of exactly how they want it And I think that that is what bring that back to the consumer as well Not just the business, okay I want to just respond because mark is hitting on something that to me is foundational for all of this and that is we've all been up here and when we talk we start leaning forward and We get really excited because of what all of this the hope that all this brings Not just our businesses, but to society and and what this connected world means and you talked about the economic growth multipliers from all of this and I would suggest The customers don't have a high high degree of confidence that the data that is traversing these devices these networks and so forth is Secure and that you're controlling to determining the the origin and the and the use of that data and so President Obama made a speech Friday since I've been here in Europe some people have said they found it unfulfilling and didn't go far enough The debate has begun. All right, and I think it is really good that the debate has begun You know, we came out of 9-11, you know 2001 and the pendulum really swung towards security and now people are saying wait security versus privacy You know, there's a balance here And I think at the end of the day the customer needs to be able to have a lot of say and where that pendulum sits The beginning of a very important discussion that is not going to end exactly right and that's that's very important but ultimately you have to remember this data is yours and You have rights assisted with that data and and you know for you know, like I said for our model We obviously get that but I think in the consumer world that model needs to take hold So I think I know the answer to this question, but in the future how much privacy? Do you think users of technology can expect? To a court to have how much can they I think the users need to dictate it themselves. Could it be one hundred percent privacy? I think that's unlikely Why? Because I think that means zero security and I'm not sure in that national security Yeah, national security and I think when it comes down to it. I think people recognize that They have to give up some of their privacy in order to to be protected So I don't think it let would be zero. I think you can give user choice though I certainly we believe that our users own the data and they should have a lot of rights that said when you look at various governmental programs Usually when you're making a try to trade off with privacy It's very clear what's being looked for and how the information is being used when you go through Security at the airport when you sign up for a driver's license, you know exactly what you're disclosing to the government You know what you get in exchange. I think that what's murky about some of what's happening today People don't necessarily know what information is being collected and how it's being used and that's the transparency That we're really asking for and trying to awaken a debate on Everybody saw the detail. They would probably be completely comfortable. Yeah, but I think that because we don't know what the detail is That's what causes the concern. How can you trust something? You don't know. It's the end. Nobody likes the unknown So that's why it needs to get opened up, but I think you're on government issues. This is gonna apply to bad guys It's gonna apply to rogue nation states. It's gonna apply to terrorists, etc And after the internet of everything which is going to be explosive growth for everyone in this room Security will be the fastest growing segment. We spent three billion dollars the other day buying a security company It is the ability to give the user the confidence where you can come as close to a hundred percent Confidentiality if that's what you want and you manage it yourself, which is where I should be done Now then you'll have consumer choice on what you want to share with friends and others So this is where you've got to think about it from architectures And you got to think about it in total as opposed to just one element of security, but it will change the industry Networks will be self-learning on this you'll see security everywhere in terms of privacy and the capability to enforce it But to come back to my question. Okay, well can anyone expect a hundred percent privacy in the future? No, Gavin. You said no Right, of course. They'll be transparency, but not a hundred percent privacy. Yeah, I'd say it's gonna be much higher than people think I'd put it at 90% less I think it has to be now the consumer can decide exactly what choice they want They'll die my kids will share everything right as they get older. They'll probably cut back on that but the highest better Highest better privacy is probably 90% is that the number we're making a face mark I mean for example Law enforcement, I mean there are serious law enforcement implications to say and you want 100% privacy That means if somebody is being shot at and and you have their Mobile phone and you can triangulate where they are that means law enforcement knows where you are they know something about you That's not a hundred percent privacy. All right, so I don't think we as a society want a hundred percent privacy But I think the debate is right. Where should the pendulum be and where should the dial be? Okay? Let's take a question from the audience It's one back here Hi, I'm Naveen Manin from AT Connie I have a question because I see that we live in this world of extremities and what you've talked about is primarily developed market situations and issues I Cover APAC and we see smartphone penetrations around 20% or less We see bandwidth in the in the region of two Mbps if you're lucky We don't see a local app development market at all in a local in-country context But on the other hand, you know, how far is too far and we talked about you talked about one trillion connected sensors You know talked about connect connecting your toothbrush and speaking to a Phillips Agent while you're brushing your teeth in the morning. So my question on the first hand on one hand is What more can we do basically for developing countries because clearly what we're doing is not enough and on the other hand You know, where is where is how where have we gone too far? Can you envisage a scenario where we've taken connectivity too far? I'll take a crack at it You mean the emerging markets, there are two equalizers of life first is education second was the internet now It's the internet of everything Almost every government leader I talked to and I talked to them all in the emerging markets the bricks the next 15 Understand this technology can change their whole country and they aren't going to follow the develop world In fact many emerging markets will skip a generation or two. What's what China is doing on the health care says one province They already take people that have never seen a doctor and connect it with the best doctors Video conferencing wise into the given cities, etc on it. You see this understood in India You see it clearly understood in Brazil. You see it clearly understood in Russia I actually think emerging countries will use this as a chance not to catch up But to skip a generation I get pretty optimistic But that's where you've got to have service providers working with government with business to reskip that generation But I'm much more optimistic than you are about how quickly emerging countries who move here and Competition will not be between countries would be more between cities which has a whole separate implication Another question. Yeah over here. Yeah, my name is Peter Nota. I lead the Global Consumer Division at Phillips and mark. I make your Phillips sunny-card toothbrush. So thank you I'm here to help out. What can I say? So it's a great example of how Connected devices can really also empower people to take care of their own health So I think one of the areas that wasn't talked about At great lengths today yet is that also the digital content can really revolutionize The health care and of course give more people access to health care Can maybe a few of the panelists talk how you see that? Well, I think one thing is first of all to come back to your point, you know the The this revolution the costs are just coming down dramatically and so your region is going to benefit and I think more or far more than the developed world especially in regards to education number one and Communication just broad enlightenment for individuals who are going to have one of these devices They're going to be able to have knowledge of the world that has been kind of locked up in developing countries and that's happening now And it's going to just be a tidal wave number two I think health care is probably one of the most exciting areas of Transformation that we will see and I think this is a great, you know example the very first sensor ever War was the Phillips direct life product and I probably have one of every single one of these things But the next generation of these devices as I was kind of alluding to when you you know The thing that's amazing about health care is you know We go to the doctor maybe once a year or maybe twice a year to get our labs done look at our biomarkers You know our cholesterol a level maybe if we're eating fish now in the ocean We're checking our mercury level which is super important because Mercury is on the rise in the ocean because of the huge amount of coal that this planet is burning especially in in emerging economies and You know, so we're getting these biomarkers done You know once a year and maybe get our blood pressure taken getting our heart rate check really that's not what you want What you really want is to see it over a period of time, you know, let's see how mark is doing under stress up here on the panel I'm sure my biomarkers right now look very different, you know, then when I'm in my doctor's office all kind of chilled out and That is going to be dramatic, but that's not the most exciting thing It's not just connecting the patient in a more detailed more dynamic way It's also the ability to connect to the doctors, you know that the doctors are number one going to be able to share and collaborate much more intelligently With with each other and the patients are going to be able to collaborate with their doctor now on a regular basis I will send my doctor information coming off my smartphone based on devices that I have on me And I think that's Really really exciting. So I think that this is going to be dramatically changing now To that point we'll kind of get back to the economic side. I was with a president of a large insurance customer of ours in France yesterday and Look, they're going to give me a discount if they can if I'm going to opt in to their network because they're going to know Oh, okay, you know that all these numbers are going in the right direction Or if I'm a car manufacturer and I'm building the new smart car Working with Toyota on a car concept called Toyota friend like if I have 5,000 friends on Facebook Why is my car not my friend a collaborative car a car that can talk to Toyota the dealer other drivers? To the driver themselves through the smartphone But the cool thing about the smart car is also I want the insurance company to know I'm a safe driver I drive in the speed limit. Here's what I'm doing, but I'm going to opt in certain information I want to know obviously everything that I'm opting in That that concept that I'm gonna I'm gonna have a more dynamic relationship with those core providers It's gonna it's gonna dramatically change, you know, my my lifestyle. It's awesome in health care is the best example John do you have a comment? Yeah, I think we're missing the point on the health care discussion Health care has been the only industry in the world that has negative productivity for the last 20 years and merely odd education is close and If you watch if all you're doing is it doing with health care in silos, you're not going to accomplish the goal It's about getting the right information To the right device at the right time to the right person who can make the right decision Which means you've got to change the health care process to get the productivity the mayor of Barcelona is here He's the example of the first truly smart city in the world He'll tell you doing street lighting separate from crime separate from traffic control Separate from health care separate from garbage disposal, etc. Doesn't get the job done It's when you integrate them together and you change the whole process behind it is where the leverage occurs So as we think about what these technologies can do and using health care as a prime example You can't think in silos You've got to go across those silos and change the paradigm in the process that goes with it Otherwise you're going to spend a lot of money and you'll be very disappointed the result is as many countries around the world have Already been and it's going to go all the way down to and this is a metaphor for everything then in health care precision medicine You know where you're going to get the right drug for your genome for your you know microbiome for you know for you, you know and This is amazing what's happening I mean that the generation of this data will have broad implications on our ability to be just much much healthier But also to be able to treat ourselves and to know exactly You know what what's happening and how to do that? We have we've talked about wearables We haven't talked about ingestibles which are little computers or implantables. Yeah, we're gonna be swallowing these little computers And they're gonna be reading out on our smartphone. Well, here's your recurrent bacteria counting in your gut And you know and then you're gonna be like, well, that doesn't seem exactly right Maybe you check with my gastroenterologist on that and maybe I need to be changing my probiotic formula and change my microbiome Phenomenal studies this year on how you're changing your microbiome can dramatically improve your health But we don't know how and it's gonna require that level of precision medicine We're all these things are coming together in this really interesting way to John to John's point I just wanted to emphasize one thing and mark is nailing it But I would suggest there are three areas that have escaped the productivity miracle the last 30 years health care Which you know, you've heard talked extensively up here government services, which we've no surprise and education has escaped the productivity miracle the last 30 years and This technology and everything we're talking about I think can do as much on Education as what you're hearing discussed on health care and I I can just give one really small example of where you're seeing this play out we at AT&T are competing for computer science capability and specialists and Getting the numbers we need is really really hard. So we partnered with Georgia Tech and Georgia Tech if you want a master's a computer science degree accredited by the state of Georgia top five engineering school $40,000 to get that at Georgia Tech We launched and started this January a Master's a computer science degree fully accredited from the state of Georgia from Georgia Tech for $6,700 and we don't think we're scratching the surface here and the numbers that we're going to be able to generate out of this So what's really impressive not that just the cost is coming down the productivity You're going to see that materialized But the numbers that we can actually put through a Georgia Tech Master's computer science program is really really impressive So I just think a lot of industries that have escaped productivity are not going to escape the next five years How are you doing that? We only how can you I'm using technology in this particular example? We're partnering with Udacity and so Sebastian Throon all you guys know Sebastian We're working with him to deliver the technology and a lot of the devices that you're seeing right here and developing curriculum that is rendered and curated for that delivery mechanism and so it's it's really exciting and we have high high Expectations for this the first class we kept pared down and they haven't given numbers yet But the applications the qualified applications of people to this program was stunning the numbers of qualified applications We got and I have told Georgia Tech I will fund every AT&T person that qualifies to go through there anybody that wants AT&T will pay for it and send them through We've had a great panel. We only have five minutes left. I'm gonna ask the panelists to do something impossible You're gonna give each of you one minute To describe What will be important the next five years and how everyone in this audience can thrive in that world? one minute Go ahead. Yeah. I think it's big data I think the processing power that Is now available through big big data will transform the way we do business We live our lives how we're governed and So if there's one thing to become proficient at is understanding how big data can Can really change any of you're doing in the BT. You're driving this effort. Well, it's one thing Well, I think it's it's much bigger than BT. Obviously, but yeah, it is an area. We're focused on you Okay. Thank you mark You know what my my prescription to our customers is That they have to connect with their customers in a new way I think that the most important thing that people in this room who are kind of decision makers and leaders of organizations Can do is just recognize that as we talk about These devices and these phones these tweets and these posts and these networks That you never forget for a second that behind every single one of them is a customer that it's not an internet of things It's not an internet of everything it's an internet of people an internet of customers of human beings and This is a phenomenal opportunity to connect with them on a much deeper basis We've talked a lot about B to C some companies would say we're B to C companies It's kind of codeword for we don't know who our customers actually are We have to do focus groups because to break through the anonymity of our customers. That's going to completely go away We're going to be moving to this one-to-one Relationship with them and it's a phenomenal time and the companies who get there the fastest who have that deep one-to-one Relationship with each and every customer whether you're a B to C or B to B company or companies that are going to be the fast Growers of the future so force if we say we're entering the age of the customer and that's not overstated Yeah, I think the word that's top of mind for me is context and we've talked about it in a lot of different ways Between big data the internet of things knowing your customer all these different pieces But what's really happening is through all these advances were we're assembling Unprecedented amounts of context for each individual and when you look at the types of efficiency that you can gain from that Right either because you're being more efficient how use your car your home or even just in terms of how you conduct your daily life When you look at these services, you know for example, you know Are you standing outside of a restaurant as a result like you might need a reservation at another restaurant? Are you somewhere in the developing world and you're a hundred miles away from the nearest doctor? And you need a video conference to actually have a consultation and when you actually bring all those elements of context There the way it's going to change everyone's daily habits and what they do each day and how they approach it is really fundamental And I would say that you're to the question of privacy people certainly need to be informed of it They need to understand how that contact is is process and how it's being used But I would I would encourage everyone to think about you know, how much information are you comfortable? Sharing because I think that sharing with the right with the right vendors and in the right way can actually be incredibly life-changing Obviously for the better. Okay, you do 30 seconds run out of time Okay, I think it's going to be the time when everything comes together the Internet of everything cloud mobility process change and It's a combination of these changes that really change our lives uniquely It won't be siloed anymore and that's why I think 2014 will be the tipping point for how IT changes the world Okay, last five years. We're really impressive in terms of how it changed Gavin and my industries cloud Hyperfast mobile networks virtualization big data. There is not an industry that will not be radically Impacted over the next one will be radically unimpacted over the next five years. Okay, so just a sub very quickly From our panel been fantastic by the way, so number one mark is clean and fit Thank You George and apparently there's a big shareholder in Phillips Personal tech very critical mark talks about it extensively big technology bandwidth Internet of things apps President Obama Please give more transparency to the tech vendors, but also to to this to the citizens to and all leaders All leaders should be giving more transparency Prime Minister Cameron better legislation in the Parliament to clarify these issues and Respecting 90% privacy in the future as a maximum And so I want to thank our fantastic Randall John Ressa mark. Yeah, fantastic. Thank you guys You