 Live Las Vegas, Nevada, it's theCUBE. Covering IBM World of Watson 2016. Brought to you by IBM. Here's your host, Dave Vellante. Welcome back to the Mandalay Bay, IBM World of Watson, hashtag IBM Wow. This is theCUBE, the worldwide leader in live tech coverage. John McDonnell is here, he's the CEO of Cloud One and an IBM champion. John, welcome to theCUBE. Thanks, great to be here. So let's start with Cloud One, what is Cloud One? Well, basically what we do is help bring IoT platforms to large corporations. It starts with embedded software development. So think car radios or medical devices, things where you embed software in the product and then we also help them collect data from the product which is really important when you're trying to get your thing into the internet of things. So you're a software company, a services company? Yeah, I would say managed services, cloud systems integrator, IoT systems. We kind of defy a lot of categories, quite frankly, as a business partner. And you operate nationwide, globally? Customers all over the world. Headquartered in Indianapolis? Indianapolis, Indiana, yeah. And you started the company? There was a couple of engineers that are smarter than me that started the company. I'm just the doofus CEO that shows up later, tries to make a business out of business stuff. You surround yourself with smart people, that's good, a good CEO does that. Yeah, raise money, hire people smarter than me at everything and then try to keep them. How, what size is your organization? How many people? We have about 60 people. We do about 20 million in revenue on an annual basis. And that's growing at an astonishing rate. We're the fastest growing IT company in Indiana according to Tank Magazine for three years in a row and won a lot of awards that I'm really proud of, particularly being a great place to work as well. And what's driving that growth? Is it IoT? Definitely, IoT and our relationship with IBM. I mean, we're one of the IBM's newer partners. We were founded in 2010 and all of our growth has come as a result of being a partner of IBM, particularly in the Internet of Things space. So anybody doubts that there's an opportunity to do this or that it isn't real, it's real. And we're really careful. When did you start working with IBM? I actually started straight out of school at Purdue University back in Indiana. That was in 1995 and spent a lot of years there doing different jobs in their software group business and then ended up moving in as the CEO of Cloud One when they got off the ground in 2010, so. So 2010 and then, and when did the IoT initiative? Yeah, so we really began with that embedded software, the development tools and putting the software in the product and then also collecting data from products. And we started doing that long before they called it Internet of Things. Okay. And so after doing that for four or so years, suddenly it became very interesting to companies to start talking about these technologies as being very important to making your thing become part of the Internet of Things. And so we're pretty smart in that regard and said, look, that's what we're doing. Let's see if we can help companies do that in that regard. And that led to a lot of cool projects where we became the lead systems integrator bringing those pieces together as well, which has really been a driver of our growth. Okay, and so then the, you're saying the IBM partnership is really what accelerated that growth. You bet. From what? Single digit millions now to the 20 million? Yeah, yeah exactly, exactly. As a result of really building our solutions on these great cloud services that we can get from IBM and then bringing together edge technologies, ideation developers all together on great cloud services that are well managed as a result. You started IBM so you knew how to navigate the IBM maze. Definitely helped. So it had to be a huge advantage to you. Definitely helped. You weren't intimidated. No, no, we're professional students of IBM. And so a friend of mine who runs another IBM business partner says, look, IBM has many flaws. And we love that because we exploit their flaws and we put business models around them. So we don't want them to fix their flaws. Big IBM fans and that's what makes me so proud to be a part of this IBM Champions program, right? What's that all about? Well, it's been around for a few years now and started off fairly small. It was oriented towards different software brands and when IBM had those things. And it's really a group of, I would say evangelists. You know, people that aren't IBMers that are out in the marketplace as partners, as customers, as technologists, as business leaders that are really kind of waving the flag for IBM and its technology in the marketplace. Certainly our business is built around that, but it goes beyond just that. It goes into really helping to help other people understand what IBM is trying to bring and do as undrafted linebackers on the fight for IBM's message in the marketplace. We were talking this week about the various sort of IoT and IoT related use cases and I mean, they really are all over the place. Oh boy. I mean, can you help us identify patterns and sort of just squint through this maze of applications? Yeah, you know, sometimes when I talk about IoT, I listen to myself talk and I start sounding like a lunatic because it's like, this is going to change everything you don't understand, right? And I think the best lens to look through it is that there's in the Midwest where we live and where we're based, one of my favorite politicians, local mayor, says look, in the Midwest we make things, we move things and we grow things, right? That's what we do, right? And if you think about it, that's kind of what America does and has done. Well, also if you look at it this way, the intersection of technologies with those three things results in the internet of things. What are we really doing? We're trying to insert technology in the process of making things, moving things and growing things, right? So the industries that are really being affected most by IoT are those three types of industries. So what does that do? What does that change? Well, it changes it in two fundamental ways. One, by helping make the product smarter, we can help make the users of those products smarter, right? So warranty repairs, extra services that you might have around them, how do you connect them better to other devices, how do you use them in your factory better? So that applies to users, but it also applies to makers of things in the sense of factories and plants and operations and building management and other sorts of things. So we tend to call that second group industrial IoT or things that are focused on makers. And then we tend to call the first group consumer IoT, which is folks that use things. But the old models of B to C or C to B don't really work because you can have companies that are businesses that are also users of things in the process of doing what it is that they do, as well as have people that are consumers of things that make other things with them. So the old lines don't really work. Just think of it as I'm making something or I'm using something that has been enabled and the primary industries that are being done today are making, moving and growing more than anything else. And how do you guys engage? I presume you start with the problem or the outcome that a customer wants to achieve and then work back from there and put together whether the technologies are necessary. But maybe take us through some. Yeah, great question. I would say we come at it from two different angles. One angle of it is that we're very helpful to IBM in the marketplace in helping customers consume their cloud services around the internet of things. Watson IoT, continuous engineering, predictive maintenance and quality and that sort of thing. So oftentimes we actually get engaged by IBM, right? To say, hey, come on, you have some expertise, you have some patterns of knowledge, you know how these things work, come in and help us. And so that's really cool. But also we engage the market directly by saying, hey, look, we have expertise in these areas. Who's got problems that we can work on? And that's more of a systems integration kind of a conversation, whereas it's sort of a vendor channel relationship thing that comes. So either way, it doesn't matter to us. The result is getting involved in customer situations that allow us to weave those pieces together and help them create a successful solution that makes their product ready for IoT. And what parts of IBM's portfolio do you actually integrate? And is it solely IBM? Are there other technologies? Well, yeah, it certainly always begins with something in the IBM portfolio. And then those things are primarily in the development space. So embedding software into the product or the services around the product, that's sometimes called dev ops. It's a buzzword in the industry. And then the other thing is gathering data from the product and trying to make sense of what it means, which is often called analytics. So we have sort of two parts of our business, IoT dev ops and IoT analytics. And those are embodied in a set of cloud services and technologies on the IBM portfolio in the Watson IoT space and in the IBM analytics space that we then use and weave together for those cloud services. There are sometimes other technologies that weave their way in, particularly on edge. IBM doesn't make many sensors. And so you have all of these things out in the marketplace that we can use and leverage in these solutions. And sometimes there's other technologies that sneak in that aren't really things that are on the IBM portfolio that help to make and round out a full solution. But it's primarily IBM oriented. So the dev ops piece is obviously Bluemix and Softlayer. Absolutely, Bluemix, bedded software development, continuous engineering, Softlayer. Yeah, it all kind of weaves back through that exactly. Okay, and then the analytics, I mean IBM's analytics portfolio is mind boggling. Yeah, it's huge. It's primarily streams processing. So being able to take data in in real time, we use both traditional development or traditional analytics environments like Big Insights and DB2 and other sort of Hadoop based models as well as new things like cloud and other things that are delivered through Bluemix. Are you doing all this in the cloud generally or it just depends? Oh no, it's all in the cloud. The things we do are all cloud services. It's a look for the internet of things to be able to deploy and manage and run all of these sophisticated software tools and only then begin to try and build a solution on top of it. It's kind of foolish for a customer these days. They want to begin with what has already been created by others and leverage that point to move forward. Everybody's doing the conversion to internet of things and if I'm sort of bogged down by these bags, hit label old technology and not lack of skills, I'm going to be covering off on that before I can even get started with my new solution and that's going to put me way behind in the marketplace. So cloud delivery of all those things is a critical first component of all of it. I mean, I presume you can answer this, but you're not the technology guy, but I'm going to ask anyway, because maybe you hear the engineers in the hallway, but one of the complaints that I often hear about cloud, and I would say this is more Amazon specific. I can't say I hear it as much about IBM and it's not because it's not the case, but I wonder if I could ask you as a steward of a practitioner, when you're doing things like streaming or you're spinning up servers or you're accessing an object store, these are all separate APIs and it's complicated. So you got this sort of API creep going on. Is that problematic for you or is that good news? Because you're an integrator and you can deal with all this complexity. Well, certainly that complexity is what we try and mask and shield for our customers. The thing that we find most complex though is there are certain industries, most I might even add, that have a unique challenge in regards to leveraging the cloud and the challenge is that they tend to need one of two things sometimes both. Something that we call stack independence and something that we call data independence. And let me explain the two of them. Stack independence is the idea that if I am the maker of clothes washers, let's just say as an application and I wanna embed technology in that clothes washer to gather data from it and do warranty repairs or whatever. I'm sending that data from those clothes washers to some sort of cloud service. The problem is that for me as a manufacturer that clothes washer, I can't have the cloud service change very much. In fact, I can't have it really change at all because I'm in a hard code into all of those clothes washers the existence of a certain number of services. Now if I change those services, I break the connection to maybe millions of clothes washers, right? And no real way to get them reconnected. So I have to own the entire chain of technology from the clothes washer all the way back into the cloud. And some of the problem with cloud services is that you can make a change to a cloud service in the middle of the night. Some engineer could roll a change or a fix and break all of my things. So I have to own the whole stack. The other thing is easier to understand which is the data independence and that is for some industries, I just can't pour my data into a public cloud. Medical devices, regulatory reasons, government reasons. So I need a way to isolate the data away from everything else. And so as a result, we're often in the mode of having to deploy what we like to call the intranet of things. We have to deploy a complete solution in a closed environment that the customer both completely controls every component as well as all of the data in its collection process so that it doesn't fall into enemy hands, if you will. Those are really the complexities of IoT right now more than just the API. And you're defining that latter use case as cloud. Absolutely. So when I said cloud before you said yes, always in the cloud, cloud is to you as an operating model. It's not a place where you put stuff is what you're saying. Exactly. It's more of a model around how I control the access to data as well as the access to the application stack and make sure that that level of control is something that is acceptable to me based on whatever business model that I am either forced into or one to achieve in the marketplace. John, we're out of time but I'll give you the last word, vision. Where do you see this whole thing going? Well, it's very clear what's been said here at World of Watson. It's been said many other places is that it's all about data. Really what we're doing right now is I like to say somewhat of an arms dealer to companies. We're offering them technologies that allow them to start collecting and analyzing data. But really what is the value in it? It's the data itself. And being able to collect it and make sense of it and provide cognitive understanding of it is where the real business lies beyond this phase that we're in right now. All right, John McDonald, the champion of cloud one. Thanks very much for coming on. Hand of IoT and Watson analytics. Thanks for coming on theCUBE. Thanks a lot. Good to meet you. All right, keep it right there everybody. John and I will be back. To wrap up, this is our day two of World of Watson day three of the conference. This is theCUBE. We'll be right back.