 From Boston, Massachusetts, it's theCUBE. Covering LiveWorks 18, brought to you by PTC. Welcome back to Bean Town, everybody. This is theCUBE, the leader in live tech coverage and we're covering LiveWorks, the three-day conference hosted by PTC. We're at the BCEC, which is kind of the Starship Enterprise. I'm Dave Vellante with my co-host, Stu Miniman. As I say, theCUBE, one-day coverage of this three-day conference. Matt Check Kranz is here. He's the Vice President of Strategic Innovations at Cisco. Matt Check, thanks for coming on theCUBE. Thank you so much for having me. It really looks like a cube. Yeah, right, right. You know, usually we're out in the open, but they've put us here in a cube, which is great. Of course, we were at Cisco Live last week. You were there, it was an awesome show, 27, 28,000 people. A lot of the innovations that we're talking about here, you guys are, you know, we're at Cisco, we're obviously touching upon, whether it was blockchain or the edge, but let's, let me ask you, innovations in your title, what are you doing here at this conference? Yeah, basically we're on the mission to make sure that every company, large and small, whatever the industry you're in, gets started on the IoT journey. So all of us here, we were talking about last week at Cisco Live, we are sort of on the mission to make sure that everybody knows how to do it, how to get started, how to go through the journey. So I'm here to promote the cause. So you had posted a blog a little bit ago on LinkedIn, check it out, if you go to Mach-X's LinkedIn profile, you'll see it, five myths around IoT, and I thought it was quite instructive, and I'm going to start with middle, which is IoT is this one big market, and we've been talking about how it's a trillion dollar market, I mean, it's almost impossible to size. It's so fragmented in bringing together the operations technology and the information technology world, and there's the edge, there's the core, there's hardware, there's software, there's services. How should we think about the IoT? Obviously not as one big market, as you pointed out in your blog. Right, and you actually nailed it. You know, when you think about sort of a traditional way that technology companies think about the markets, it was sort of the model of, just get the billion people to get on your platform and the good things will happen. Well, in the IoT space, as you pointed out, it's a very fragmented market. So you're basically here to have two strategies. You either become a horizontal specialist, and then you integrate with a vertical specialist to develop a joint solution, or you focus on one use case and you focus on one market and you go deep and focus with customers. So from that perspective, the approach is different, but in a nutshell, to be successful in this space, it's not only about technology, it's about ecosystem. It's about building the coalition of a willing because at the end of the day, the customers want solutions to their problems and they don't want to just buy your technology. They want to work with you on developing solutions that drive business outcomes. Yeah, Machik, one of the things that's been interesting to watch is that people want to try and they want to try faster. So one of the big benefits of public cloud was that I have this sandbox that I could throw some people at, have a little bit of money and try things and fail and try again. One of the concerns I have when I hear things like PTC and Microsoft get up on stage and say, it's going to take 20 to 25 partners to put this together. When I hear that it's fragmented, it's going to take time, it's going to take money. Help us, are there ways I can start playing with things to understand what will and won't work for my environment or is this something that I have to throw a million dollars in a group of people for a year and a half on? It's actually, it's a great point and it's another, I would say misconception, which is I need to go deep, have a big strategy. One of the things that I talk about with the customers is yes, dream big, but start small. So yes, have a sort of a big vision, big architecture, but then focus on a first project because it's a multi-year, multi-phased journey, right? So from that perspective, at Cisco, we have roughly 14,000 customers that already got started on this IoT journey. And the use cases that we've seen sort of are in four different categories. First one is connect things, so connecting your operations. The second one is remote operations. The third one is the predictive analytics, the fourth one is preventive maintenance. So don't be a hero, pick one of these four use cases, try it out, then do a ROI on this and if your ROI is positive, then do a next, maybe more sophisticated, maybe more adventurous kind of a project down the road. So pace yourself. So this is our ninth year of doing theCUBE and the one thing we've learned about information technology, operations technologies, it all comes back to data. And you pointed that out again, you pointed it out in your piece, it's not just about connecting, it's about the data. So let's talk about the data, the data model. You've got edge, you've got core, you've got this really increasingly complex and elongating data pipeline. You've got physics, latency. So what's your perspective on the data, how that's evolving and how organizations need to take advantage of the data? Dave, I think you nailed it. I think it may come across funny because I work for Cisco and we connect things, right? But if you think about the first wave of internet, the main purpose of the devices and the way we were connecting them was basically for you and I to get access to each other, to get access to the online data, to the online processes. The main purpose we're connecting IoT devices so that they can generate the data and then we can analyze the data, turn the systems into solutions to drive business outcomes. So from that perspective, we are actually seeing a big shift in the sort of data model and requires flexibility. Traditionally, we talked about cloud, right? In the cloud, we usually see sort of the use cases that require processing a lot of data sort of in the batch processing mode. Or for example, if you want to connect a bunch of vending machines, you can connect them directly to the cloud because these machines actually send only very few packets and they send them very infrequently. And basically saying, hey, come on over and replenish a bunch of supplies. But if you look at connected vehicle, if you look at an ORIG, in the case of ORIG, there's let's say a large one that has 100,000 sensors. These sensors generate couple of terabytes of data per day. You can just send this data directly to the cloud through the satellite connection, right? You have to process the data on the ORIG based on the policy coming from the cloud. So from their perspective, we're seeing that there's a need for a more flexible architecture. We call it fog computing, which basically allows you to have flexibility of extending the cloud to the edge so you can process the data at the edge. You can execute on the AI functions at the edge as well. So that's one of the big architectural shifts that we're seeing with IoT as well. Yeah, Montec, one of the opportunities of new architectures has been to redo for security. When it comes to IoT though, there's a lot of concern around that because just the surface area that we're going to have, the devices, talk to us about how security fits into IoT. Yeah, it's hard to talk about IoT without mentioning security, right? And we've obviously seen over the last two years a lot of press around IoT denial, service attacks and so forth. And for me, I think the silver lining out of all of this news is that first of all, that we have seen the vendor community finally taking IoT security seriously. So all the security vendors are actually investing in IoT security now appropriately. We're now working together as an industry on standards, on interoperability on common architectures, even with the device vendors, right? Who traditionally didn't pay much attention to security as well. Sort of like what we did with Wi-Fi, you remember about 15 years ago, but at a much greater scale. So the vendor community is focusing on it. But more importantly, also the businesses are moving sort of from what I would consider sort of a, I would say that kind of a denial, like hoping that their plant is not connected to the outside world and thus it's secure, right? So moving now to the much more modern model, which is basically a comprehensive architecture working with their CSOs across the enterprise focusing on before, during and after. So IoT now is being integrated into a broader security architecture and IT and OT are working together. So yes, there is a concern. Yes, there are a lot of sort of events hitting the news, but I also think that as an industry, we're making progress. Just to follow up on that. I mean, Cisco obviously has an advantage in security because you can end to end, you guys make everything. And you can do deep packet inspection and that seems to be a real advantage to you. But then there's this thing called blockchain, right? And everybody talks about how blockchain can be applied and where do you see blockchain fitting in to the security equation? Yeah, I think that's a good question. Maybe I'm with a broader story. I actually believe that there are sort of four legs to this sort of a digital transformations tool. There's IoT generating the data and sort of acting on the decisions. There's AI, there is a fog computing we talked about. And the fourth tool is blockchain, which basically allows us to make sure that the data we're using, we can actually trust. At the high level, blockchain, people often confuse sort of blockchain and Bitcoin and cryptocurrencies, but blockchain is an underlying technology behind sort of the crypto that allows basically multiple parties to write their transactions in a sort of fast and permanent way. But in the enterprise context, in the IoT context, blockchain allows us to actually come up with a very new use cases by looking at the provenance and looking at the data across multiple parties and the data we can trust. So for example, the use cases such as counterfeiting, the use cases like food safety, like patient records, like provenance of materials. So now we can enable these use cases because we have a single source of truth. I want to ask you about disruption. I like the sort of mental model and picture that you created before of horizontal technologies and you kind of get vertical industries. And it seems like, again, I'm bringing it back to data. We heard Super Mario at the host of the conference say this is the largest digital transformation conference, which we laughed, like every conference is a digital transformation conference. But to us, digital transformation, digital means data. And that picture you drew of horizontal technology and vertical industries, it's all data. And data enables disruption. So it used to be a vertical stack of talent and manufacturing and supply chain within an industry. And now data seems to be blowing that to pieces in digital. You see Amazon getting into buying whole foods and grocery. You see Apple and financial services. Others, Silicon Valley type companies disrupting healthcare, which we all know needs disruption. What do you make of disruption? It seems like no industry is safe. It seems like Silicon Valley has this dual disruption agenda, horizontal technology, and then partnering within industries and everything is getting turned up on its side. What do you make of it all? David, I think you nailed it. It is about and versus or, right? When you think about companies, you mentioned Microsoft, Cisco, Amazon versus PTC or Rockwell or Emerson and others. 10 years ago, we sort of lived on a different planet, right? And like rarely these companies actually even talk to each other, right? And now even at this show, these companies are actually showing joint solutions. So that's precisely I think what we're seeing, which is that technology competence coming from the valley and from the traditional technology industry and then the vertical and market expertise coming from these more traditional vendors. And the end of the day, it is about technology, but it is also about talent. It is about skill sets. It's about all of us pulling our resources together to develop solutions to drive business outcomes. So cloud obviously was a very disruptive force in our industry. But when you think about IoT, just based on what you just said, it seems to me given the assets, the resources, the people, the plants, the equipment, seems like IoT is maybe somewhat evolutionary. Not a completely, it's a disruptive force in that it's new and it's different. But it seems like the incumbents, I mean look at PTC, their resurgence, it seems like the incumbents have an advantage here. What are your thoughts? I think if they play it right, they absolutely do. But it requires also a sort of a shift in mindset and I think we're seeing it already, which is moving from sort of a vertical, one company does it all kind of mentality into the let's build the ecosystem based on open systems, open standards, interoperability. And that's sort of a shift I think we are seeing. So for me, I think that the incumbents, if they embrace this kind of a model, they absolutely have a critical role to play. On the flip side, the technology company is realizing that they need to, it's not only about technology, but it's also about partnering, it's about integrating with the legacy ecosystems and the legacy infrastructure. So each of the sides of the coin need to learn new tricks. Okay, last question is your initial thoughts anyway on this event, some initial takeaways. I know it's early day one, but you've been here, you've heard the key notes, final thoughts. I think so far it's actually a great start to the event. I have to say what we've talked about already, my biggest sort of takeaway is to see, and actually joy is to see companies from different walks of life working together. You have robotics companies, you have AI companies, you have industrial companies. All of them are coming up with solutions together, and that's basically what we want to see, is breaking the barriers and multiple companies working together to move the industry forward. And you're also seeing the big SIs are here, I can see Accenture, I can see Deloitte, I know Infosys is here, et cetera, et cetera. So if they're here, you know there's a lot of money to be made, so Machik, thanks very much. Thank you so much. It's really a pleasure having you. All right, keep it right there everybody. This is theCUBE from LiveWorks in Boston. We'll be right back after this short break.