 the special Wednesday edition of our Tuesday lunch speaker series at the Berkman Center, which we're pleased to put on along with the Trap Hagan Distinguished Alumni Speaker Series. We are live streaming this as we often do with Berkman events and it's being recorded, which I just flag for you to say we'll do Q&A at the end and I hope you ask lots of great questions. Just be mindful you'll be on the camera at that point. We have with us today Alan Weinberger, an LLM from the class of 1973 who has done many things that he's going to talk to us about is the founder and now runs an organization called ASCII, which is the premier North American sort of organization of IT services professionals and others involved in resale of computers and provision of IT services and is going to tell us about the evolution of that marketplace over the last 30 years and with that I'm going to turn it over to you Alan. Thanks so much for being here. It's great to be here. I want to thank of course the Berkman Center for Internet and Society. Out of the group I actually was here in 73. I can't believe it's been those many years and of course Roe was very different at that time. Who is here not from the law school, any other schools that are represented people in the college business school. Everybody's affiliated with the law school here. But maybe some people taking some courses in other schools at Harvard. Is anybody doing that? Cross-registering. Okay. Where? Education. Okay. All right. Well, I'm going to just talk about more experiences and possibly some of this may resonate with you as you look back years later and quiet time and might see that this might help you in your own careers. My talk is not going to be about philosophy or psychology, the power of positive thinking or do the best you can and whatever you're going to do. I'm just going to recount a couple of my experiences and maybe you can learn from being in the industry for 30 years. I did start out as a typical law student. Actually I got my JD at NYU. I really love law school so much. I went to Wall Street for a while, a major firm, and I went to Harvard, got an LM. I cross-registered at the medical school. I liked sciences a lot. Took a course with the dean of the medical school. I did my thesis of on mirror and conflict of laws. I really like conflicts, sort of dry area, but it was published. That's what you had to do. I took some other courses and I really found Harvard open my eyes, the way of thinking, being curious about the world. I luckily met Harold Berman, who was a professor at Harvard at that time, and he was the founding trustee of New Law School in Vermont. He said, Alan, do you want to help start a school? Be a teacher. I was my 20s and since I like law school and I like talking about issues, I said sure, where is it? He said, oh, it's in South Royalton. I said, where is that? He said, well, is it near Hanover, a suburb of Hanover? Does Hanover have a suburb? He said, well, it's sort of a suburb, maybe 50 people there, but I started and was the first professor hired and taught for a couple years. School got accredited and it's done its thing and it's done, obviously, very well in the environmental area and other areas. I was curious and I liked the academic world and my interest, I think, was in entrepreneur helping start a school and helping with the curricula and teaching that summer with the students. Actually, that summer was a very robust summer. One reason it started, a lot of professors from Harvard wanted to be in Vermont in the summer, so that's a nice place to be and that's why the school got going. Then I, well, came to Washington and thought I'd become a lawyer again and make a living and I created a, in the early 80s, when IBM came out with the PC and obviously Microsoft was the operating system and Intel was the chipset, so the Microsoft Intel duopoly, as it was called in those days, had the hegemony over the industry and IBM said, well, why don't we make our brand, a very exclusive brand and we'll charge $8,000 for PC that was not much more than the typewriter, but it can only go through certain chains, only certain franchise chains. They control distribution, IBM. As when Acres was chairman, obviously, he made the deal with Microsoft a couple years before the early 80s, so they had a couple franchise chains, Entrez, Computerland, Micro-Agees and Names of Old and only these chains would sell the IBM PC and since it was so restricted, we could charge $8,000 for a computer and the deal was selling at that time a 40% margin on the PC and that's all they did. They said, here's the PC, it's $8,000, we make 40% and everybody's happy, like selling in a car. Well, the dealers came to me as a lawyer and said let's create a co-op, I mean, a franchise, the way the franchise system worked and still works any place in the world, the franchise will charge is a royalty of 6% on sales and it can be other things and why don't we do, we'll have a job buying power, a group, we're a community of franchisees, we've only done with a franchise or we're selling this product of PC into all sorts of offices and law firms and banks and doctors offices, let's get our group together, let's leverage our power, we got our own power, so I created a co-op for them and we tried to make some deals. Then there were three big software companies in the early 80s, it was Ash and Tate, Lotus and Microsoft, actually the biggest one was Lotus, Lotus123 and then Ash and Tate and DBase, database software product and Microsoft just had the operating system and a small company and obviously some applications. But the largest chain of software stores selling box software was owned by Ash and Tate and George Tate was a professor of computer science, I think in Berkeley, he died and the franchise chain provided no service to the franchisees. So they came to me really as a lawyer and I said, well, you created a co-op for this entree chain, we only sell software, we're agnostic, we'll sell anybody's software but we're owned by Ash and Tate and the founder died of Ash and Tate, George Tate was his name and why don't we leverage our buying power like you've done for this chain? So we had a series of meetings around the country and we came up with a new concept, a for-profit group of like-minded technical companies that were selling software, which is a little more hard to sell than the hardware in the early 80s. But let's make it a for-profit company because then it'll really be real and we can get more leverage with the vendors because the vendors are all for-profit. Now, co-ops come and go, not the Harvard Coupe, but co-ops come and go and you never know who's running it, who's owning it. It's not really capitalism and obviously all the companies are part of the capitalistic system and co-op is somewhat in the middle between, these words socialism, that was used in the political campaigns, co-op as opposed to capitalism, so ASCII is in the middle, it's a for-profit co-op like that, real stockholders. So they said, well, you should run it because we have to run our stores, so I'll be the majority stockholder in these 40 founding stores with the minority stockholders. So we created a real company and as soon as we created that, there was a giant lawsuit. Now, why is there a lawsuit? Well, the franchise was bankrupt. All these franchisees are not paying royalties to the franchise or and one of the big assets of the bankrupt estate and Chapter 11 proceeding in LA was the franchisees not paying the royalties. And they immediately sued the franchise that was suing all the franchise back royalties and they sued us, the ASCII group, for interfering with traction, interference with, it's a tort, intentional interference with contractual relationships. So and other torts and other wrongs, whatever you want to put in the lawsuit in the bankruptcy court because this entity was in bankruptcy. Well, the 40 dealers in us, we were all sued and we hired Wyton Case, which was the firm I was originally at years ago, and they said, well, what's the strategy here? We're sued in bankruptcy court, but under the First Amendment and other defenses, you can create any group you want. You don't have to be in their group. You can create your own group. And if they don't want to be in your group, independent business people can be any group they want to be. So we formed our group and Wyton Case immediately sued them in federal court. So we're dueling lawsuits. The bankruptcy court sued. They were suing us in the federal court we were suing them in. And as you know, bankruptcy courts are generally helping the creditors. So they're going to be more, more favorably on their suit. But on the federal court suit, hopefully the judge is going to look at the First Amendment in the right way. And they did. And we started winning our suit. He tried to consolidate the two. It didn't work. They collapsed. And they all went bankrupt. The guy who brought the suit went bankrupt. The whole chain went bankrupt. And ASCII went on its way. The other cute thing about the birth of ASCII, this gestation, was that they were all technical people who said, well, we're also associated software independence Inc., which also spells ASCII, the ASCII code. And now there's Unicode, but you know, ASCII code is still part of Unicode. So it's still probably everything the world uses the ASCII code pretty much. So this is a cute thing. So we got a trademark with the word ASCII, because we couldn't trademark ASCII because it's American National Standards Institute's worldwide standard. But you could put a group behind it. It's like General Electric General Motors. So we trademark the word ASCII. And we have a website ASCII.com. So that's sort of how ASCII started, the baptism of my fire. But I sort of saw it at that time, after all these meetings, that the smartest people in this industry were these people, were independent trusted advisors that end users were coming to and say, could you help me with my computer needs? This is many years ago. And what's the computer needs? Everybody had a different need. IBM or AT&T or the big players in that time, even Microsoft, only did part of a solution. Even those days, you know, if you were doctors, this is before HIPAA, before the latest requirements, but doctors office had special needs that were different than a law firm, than a bank, than any other entity out there. So these people knew those special needs. And they had to be agnostic, like a medical doctor, they were trusted advisors, even then, you came to them with your problem. And they said, well, we'll help you out. People didn't say, I saw this brand on television, I want this. In those days, or other brands leading edge and K pro and ALR, these are brands that are not around anymore. Or IBM, why should you get the IBM, I can spend 30% less and get a K pro product. Does it do as well? And these guys had to give them that advice, the same thing like a generic or a branded drug. They have a fiduciary duty, like a lawyer, like a doctor, to do what's best for their customer fiduciary duty. It's pretty high duty. So they have to be agnostic. And they're not getting bought out to sell a particular product by money under the table didn't exist in this industry. I don't know anything about the medical industry. I know this industry does not exist. It doesn't exist today. So it's a free market. This market's unregulated. The the IT industry is unregulated by the government. It's not the telecom sector. It's a completely free market. And it worked. It really did work. And the linchpin of this market was these smaller IT guys putting the solution together for the needs of an end user without any government regulation. So one lesson, the first lesson on this little talk I'm giving today is nothing appears the way it appears in a way. Starting a Facebook was a lawsuit. And you probably know the history of Microsoft. There was a lawsuit on the operating system. ASCII had this big lawsuit. And all these ASCII is very small compared obviously Facebook and Microsoft, but all three were starting out with some new paradigm. And there was a lawsuit about the business lawsuit for all of them. If we would have lost ASCII wouldn't have lived. So the second lesson here is smart legal minds make a difference. And they really required almost before the gestation period of anything. So it's obviously Bill Gates had his father. Zuckerberg had top legal advice. And we had Whiten case. So the legal process is involved in day one for anything that's important. And if you don't get good legal advice, you probably can lose. Well, what is ASCII's business model today and as it's evolved? It's a simple concept. Obviously, Microsoft's model was the operating system and then applications and leverage that with the IBM deal. ASCII is is a leverage of we have about 2000 of these independent businesses all throughout North America. Alicia Vedder is here from Ottawa. She does all communications. And we have a staff in Ottawa. We have staff of ASCII group corporate staff in different places. We're all throughout North America about 2000 independent stores, resellers independent, they have multi not store fronts, they're called solution providers, managed service providers. There are a lot of names, but they're independent IT companies that will mostly provide a product or service and both for end users business, not that they're at home. This is not going to staples and getting a PC for your home. It's people having serious business needs. And ASCII is the largest single player in the channel. And this is a term of what that's used in the industry around the world. And what is the channel? In the United States, about a trillion dollars goes through the channel, the U.S. dollars in products and services to all sorts of non home users. Around the world, it's about 3.7 trillion. We're about 33% of the world's IT products and services. And these these statistics come from CompTIA, which is a trade association based in Chicago. And we have some handouts here and you can you can see the statistics out of the one trillion in the United States. The majority, well, not the majority, not 50%, but large component is nail services. It's not a particular product. And the biggest margin or the value add is in the services because the products, a lot of them become commoditized. That's why as you see HP is even divided into two and a lot of changes. Obviously IBM sold its PC company to Lenovo, the Chinese company. They sold the server division to Lenovo, the Chinese company. And Yahoo is being sold and the biggest distributor in the world is Ingram Micro is possibly being sold to another Chinese company. So a lot of changes are taking place. But the biggest change is it's become more of a service industry. So in a lot of ways it's looking to be similar to the medical industry where again the value is in the service, the doctor's service. That's who you go to. You don't go to a hospital. You don't see an ad in television and say, this looks good to me. You got to get somebody that knows what they're doing. So after the industry started with the PC sector, then in the 90s obviously internet revolution took place with custom software verticalization, virtualization and the channel played a big role in that. And then the last five or six years what's happened is this merger between the Telcom industry regulated by the FCC and the IT industry which is unregulated. So these solution providers now have to have knowledge in all sectors because when somebody wants to integrate their phone system is not PBX anymore, it's integrated digital. So everything's digital. So you got to go to these solution providers to get the answer. Now with ASCII they do specialize. Some people do one thing or another. So they really bring another expert in to co-joint venture with them like a big law firm will have specials coming in together. That's the way they work. Of course in 215 after we've had the PC revolution, the internet revolution, all the IT revolution, that's the umbrella, but originally it was PCs and custom software, then internet, now it's the IoT. The IoT is the internet of things and Gaudner, a major research house says that by 2020 there'll be 20 billion endpoint for devices connected to the internet, 20 billion. And what's going to happen when there's problems. I mean one vendor is not going to know what to do. Again these people are going to even be more important than they were in the beginning of the IT revolution. ASCII started with a very simple community, several principles, a principle of community. It leveraged the power of these independent experts, small businesses for their mutual benefit. And it's a leverage but think about it, it's the same principle of small towns, states, countries, all such geographic distributions. And ASCII started before the internet, so it was not a virtual community, it was a real community. And as we know the world even wants more real communities with the internet, it didn't take away the fact we have a community right now. There's the Berkman community, there's the Harvard Law School community and everything's a community. It's gone back almost to the roots of face-to-face communities. ASCII's programs specifically, what it does for its members, we have about 80 different programs. We have the world's largest IT forum, which only members can have. It's equivalent to say you're a law firm and you have a trial and you talk back and forth what happened after the trial or you're a bunch of surgeons around the United States and you had a very difficult surgery, you maybe get an online forum and talk about how the surgery went. These people 24-7, 365 are posting what they did in the field or they want to team with somebody else or they have an office, they have a client in LA and they got to do something in New York. So this brain is going back and forth and it's the world's largest brain for the IT experts. It's called the ASCII forum. This wasn't developed in the beginning and it just sort of happened because the world change couldn't have happened if the internet wasn't what it is. But once we had this brain trust together, this is an extrapolation from the brain trust of these people to add more synergies than they could get just in a room because they're all over North America. The other thing ASCII does is group pricing. The way this industry works is there's two tier distribution for the most part. The resellers or integrators or solution providers can either buy directly from a manufacturer and Microsoft does that and others do it. Or you buy through a major wholesaler like the big one's names are Ingram, Micro, and TechDate and Cinex. Ingram, Micro's a $48 billion wholesaler, New York Stock Exchange Company. Very thin margins, margins less than one half or one percent because they're a wholesaler. But a lot of these people buy from a wholesaler because you can go one stop and you can buy all your products. The end users don't buy from the wholesalers. They buy from these solution providers and integrators. But the industry sells through the wholesalers because the big players, the HPs and Lenovo's will ship millions of dollars a product and say, okay, now you get rid of it. And Amazon's a wholesaler too. So people use Amazon because Amazon's doing everything. We also have errors and omissions, a group plan with Lloyds of London, similar to a mal practice policy that doctors would want, boys have to have, doctors have to have. And it's called E&O because when they make an install of the data and whether they got to do for any end user, they're supposing all of a sudden they didn't do it right or the data's wiped away or there's a terrorist attack, something happens. Didn't they back up the data? Back it up twice? Where's the security? You're my expert. I lost all my data, all my patient records, all my legal records on the HIPAA. There's all sorts of government regulations and all this stuff. So they have to know that and if they're sued they need mal practice. So that's where again it's becoming similar to the medical and the legal industry. But the biggest industry of all is the IT. It's about four trillion. So but it's replicating the original industries that are around much longer in I mean legal industry, it's an industry but it's a service sector of society. One other thing we've done is we another complicated thing in the industry is when you sell across state lines a product or service and now these solutions are integrated services. They could be some software, some hardware, some services. How do you tax them? How do you collect state tax? You know there's a lot of debate on states taxing on the internet. Well every state has a rule and has a law and there's a service that educates well Fortune 100 companies, Walmots and the rest on this. We actually pay for that and help have our members use this service where they can if they're making a sale over state lines they'll know exactly which states require tax and these this bundle service because every state's different. So we've made that available to them. That's a valuable asset. I mean they're running businesses so it's not easy. In this political year I'm going to make one interesting observation. Nothing to do with politics but this is interesting. Aske is really collective. It's almost like socialist thinking. Collective it's a group, we're getting together, Walmots rise together, everybody's treated equally. But it's a collective of for-profit business people. In other words they pay by the rules of capitalism, there's no government handouts, they have to pay rent, they pay salaries, they pay overhead, there's no freebies, they have to earn their keep every day and they have to add value to their customer, they're not going to get paid if they don't get paid they're out of business. So in a way the Aske's community incorporates much of the advocacy and the philosophy of both parties today. An interesting way of looking at it. Of course but nothing to do politics but everything's in the world out there and that's the Aske model. Well I'll talk about a failure when you've been around for a while, everything doesn't go your way. And this is in let's see the mid 90s General Motors appeared on our door step. General Motors owned EDS at that time which was a major integrator based in Plano, Texas outside of Dallas. He started at Ross Perot, you know ran for president one time and but he sold it to General Motors and they had it and they said why don't we at the beginning of the internet create a B2B market space. A dot com. Hey dot coms are great. Everybody's creating dot coms. Aske's such an interesting player. Let's do one website where the whole IT industry can connect more efficiently than it is now. And end users could find the industry, could find the local reseller and you know specialize and sort of verticalize the whole industry for to be more efficient. That's what the internet does. So we raised venture capital, we raised 20 million dollars and more in the 90s and we created technology net which was going to be one website called a B2B market space. And I actually went to Microsoft's canvas and met with Satya Nadala. Anybody know who he is? Satya Nadala. He had a small little inside office, very nice man, very quiet, sort of academic. He was running B central in MSN at that time. And I said you know we have this joint bandwidth EDS and we have something called the IT locator, which is it be a locator that can show anybody in the world where the local Microsoft var is, that was the word used in those days, integrators. And it's a more efficient way of finding where you can get Microsoft product because Microsoft sells and still sells about 70% or 80% of all its products through the channel. It does not sell direct. I mean it sells direct but the vast majority is through the channel even today. So Satya said well this is a good idea. He put two clicks off MSNBC all located, the IT technology locator. Microsoft anointed it. Of course now he's the CEO of Microsoft. So this is a little bit of history. But technology that didn't make it, it didn't make it because it was a little too early. And it all the dot coms, dot bombs after 9-11 and they were all most of them too early. It just was too early. But he was it takes his loss in the first mover advantage and all the buzzwords were part of that time that the Kool-Aid was big and it's probably still around. It's coming back again, maybe the IPOs are lower than they used to be but the way in a nutshell, if some of you guys don't know, the way the VC community works, most of it is OPM, other people's money. The venture capitalists are getting investors to come in and they have big funds, billions of dollars. And they generally take a carry of 2% of the fund. So if you have 100 million dollar fund, you have 2 million dollars to pay your overhead. No matter what happens, even if you don't invest a penny in some hot new startup, you got 2 million dollars because you got to live and you got other staff and you got overhead. And then if you have a winner, again it varies but generally it's that you maybe get 20% of the winnings. And generally you want to get a 20 bagger, meaning 20 times your original investment. So you get 20 dollars your investment. And if you have 19 go out of business and one makes it, you're leased even. So that's the game. You got a 1 out of 20 of 20 bagger or even and short of that you lose and then your investors might not come back to you anymore because you lost. But you do better, like some of the big guys, they keep coming back. Well, we had some investment, we had some of that, but it didn't work. We were just too early and it just didn't work. Let me give you one example of before I get towards my end and then we'll ask some questions. Of what are the ASCII guys and we're about 2,000 North American and they're probably about 100,000 totally in North America. They're these solution providers integrators and maybe about 400,000 total people selling IT products and solutions when you add single guys the same guys and ladies together as sort of organizations that but people can be experts one person like it's sole doctor. I mean, you don't need a big organization to be an expert. We have one of we had a little member meeting of some of our members in the Baltimore Boston area in Baltimore within a couple of weeks and one guy is a fellow by name of Richard Trehan of Land Computers in Peabody and he just finished installing in Logan Airport for all of American Airlines and US Air about 250 of the most advanced cameras that are made today. I mean, I don't know a thousand feet you can see almost a thumbnail and it was now installed all throughout Logan in areas where people on the field not where the baggage is but what's going on the planes what's going on underneath the planes what's going where the baggage is going in and all sorts of stuff. So this is it American did not do it itself. It went to one of our guys to do it there's a big two or four thousand dollar contract and more contracts are coming his way. So the point is I was even a microsource campus once when they had a problem with the AV. This is years ago so it's not as good as this AV but they had to call a var and to help them out. They didn't have somebody on microsource campus to do it. So they these smaller stores really stores and integrators and bars really make what makes this world go around today without them the promise in the future would not be there. So they're going to become more and more important and this is one example of some large products. They work for Boeing they lecture the biggest companies in the world. These people are called in to do all sorts of things. I'm going to conclude with this and then we'll have some questions. Some of you are going to graduate this year some of you are still on the campus. But I think my big lesson is everything is a community one way or another. You learn from people you learn from professors you learn from your peers ASCII's community has ever been learned from each other and we have nine meetings around North America where we bring on 150 solution providers and the vendors like the Microsofts and others come and spend two days talking about technology. So you know they're like almost like the drug companies. That's not the solution. Everybody's DNA is different. Everybody's needs are different in IT. No one has the same need even more firms of different needs. So you have to have an expert that understands those needs but can talk the talk and work with the lawyers in the legal world and doctors in the medical world and others so they can integrate an intelligent solution. There's an old Indian expression and sort of says where you stand depends on where you sit. As law students you're sitting here but you're curious you're at Harvard and that's part of the education is to open your eyes to the world that's going to change rapidly in the next five, ten and twenty years because who could predict what happened last five years or ten years. But with the education you have the professors you've had especially the peers and a lot of people think this education is the peers you're going to be able to maintain and advance in any way you want and maybe some of the discussion we've had here is my 32 years starting ASCII and then running it with great people and teamwork is everything and I don't do as much as I used to because staff does a lot but I think you maybe remember some of this it's all a community the world's changing rapidly but the IT revolution is going to bring things on that we can't even think of right now so I'm going to end with that and thank you very much and we'll have a couple questions. Thank you so much Alan that's great. I'm going to play the Phil Donahue role and hand the microphone around just so we can pick it up on the webcast of people who have questions maybe I'll start with one just about the community point that you were mentioning and just noting that I assume that many of the members of ASCII are themselves in some way sort of competing with each other for business yet are also driving the benefits from being part of this community how do you strike that balance between encouraging them to share resources and information while recognizing there? That's an excellent question normally you'd think everybody's competitive well as a cliche if you had one lawyer in a small town there's not much business also you have two lawyers you have more business it's not quite that but they really are not competitive they work well together because they have to work together so if you're too competitive you're not going to be in the community you're ostracized we have not had one lawsuit by one member in 32 years against another member nothing because they're a community and you work it out if not you're ousted from the community this is all true and that doesn't add to government regulation but there's no government regulation with these guys ladies I'm guys into it generically I'm not 22 so I don't even know whether the words right anymore probably is but there's no it's not what you would think competitiveness and it's the same thing like being a law student I mean you're competitive in law school but you're with your peers you're learning from your peers and maybe some guys ladies more competitive than you might learn from that person or you find anyway so the competition isn't there that way other questions thoughts I want to share thank you very much for your talk my name is Adam Holland I'm a staff member at the Berkman Center and I wanted to follow up on some of the comments you were making about what you first saw coming soon with the explosion of the Internet of Things and its effects on your group what I was specifically wondering is if you as an organization have ever tried in the past or have any plans in the future for what I suppose I would describe as managing up it sounds like you're in a an almost unique position to make policy suggestions about interoperability or standardization around whether it's physical or software formats and I think that that's probably the top three issues people are discussing regarding the Internet of Things which is that if we have a hundred or a thousand different formats its security will be almost impossible to guarantee and you all are saying hey why don't we figure this out ahead of time it sounds like you've done that in the past that's absolutely a very good question and that's a different formats and obviously the big manufacturers are trying to get together right and they're trying to standardize formats we have taken positions we well I'll tell you when the Microsoft antitrust suits were taking place well there were four op-eds in the Wall Street Journal and Gates wrote one and it came to me I wrote the other one on the Microsoft side saying we're independent experts we don't think there's necessarily a monopoly in this industry because you create a better operating system and sure and this was in the late 90s before Google was out and Apple was doing what it's doing and before open source was where it is today and we took that position that we don't think the government should regulate something that's working and then Bork and Dole wrote the two on the side of the government let's bust up Microsoft so the four op-eds so Microsoft came to us to do that we can do that and our interest is in making it work for the consumer in the most efficient way we have no interest of a particular vendor wanting a particular format because it's going to make more money on it or everybody every vendor wants to do that they want to have proprietary formats we could be involved but we're not a trade association we don't lobby we don't throw our weight around in that regard we want to be as neutral as possible and leverage just really a pure bread a neutral organization in that regard Are there questions? thoughts? Hi, I'm Vett Krishnamurti I teach in the Cyber Lock Clinic with Chris my question is about sort of the nature of the community and what benefits people get from from being in it so you spoke a bit about the information sharing that's happening oh you know I did this install here or ran to this problem heads up here you know here's a way to do it but is there sort of a beyond just you know being part of an association where you could share information is there innovation happening within or between the members so for example I'm an expert on System X or you take your Logan Airport example right you have this Mender and Peabody who's an expert at installing these cameras and someone and gets together with someone else who knows as an expert on something else and you create a new product out of that is it just sort of I mean is the organization really targeted at people who do the customization or is there actual like you know product innovation happening? That's a very good question too and there's another sector called the ISVs independent software vendors which is you know this is where there are silos these guys are generally not developing software to sell they're not they're doing the installs they're making it all happen but they do develop some software and they do customize and they could do it and they share that among themselves but the one thing I didn't get into in the talk which is very important is the RMM remote monitoring and management the industry is moving towards a managed service industry which is it's like take a jet airplane there's a I think a hundred there's a hundred million lines of code on the big jets today I mean everything's monitored the panel knows exactly what's going on every all over the place that's what these solution partners are doing to their customers and this is very important the we have about 2,000 members about a thousand are doing mostly managed services meaning they have remote monitoring management tools in all the devices of their clients so they can look on a screen the bandwidth IT is everything working and the patches and the bugs and they do the patches and they do scripts how's it doing they can tell well the average member has a hundred customers because of managed services you don't have to be visiting anybody so we have a thousand members and managers with a hundred customers each that's a hundred thousand say we take 10 PCs pre-average customer so we have a million PCs that these guys are managing daily a million PCs that a thousand people are managing because of R&M tools that they have and they've worked with the R&M ISVs to make the tools better but they're not their business is not to make the tools it's for Microsoft and then a lot of hundreds of smaller players to make tools and serve and products but they'll share what works but that's not their role I was going to follow up with a similar question about the move of products and services to the cloud how does that impact the kinds of work you're remembering that's another interesting thing you thought with the cloud oh Amazon and Microsoft and Google do everything you don't need anything just click there it's like electricity another analogy is well in the beginning of the electricity when electricity came out they were everybody had small little power plants it was localized electric then the big power companies came and you don't have any little power plants anymore so why isn't the internet going to do that to IT? originally you had small PCs nearly a big cloud the Amazons and Google and Microsoft Azure you don't need anything else it just downloaded like electricity but electricity is not IT and that's where it hasn't happened that way so what's happened is the complicated it's even more complicated because you have the cloud and you have on-service on-site servers and you have mostly hybrids but some people have on-site doctors always want to have some on-site hospitals they'll put some in the cloud but they some that's so strategic they don't want to have it in the cloud so only these solution providers these experts knows what goes where when and how and how they coordinate together that's a complicated thing Amazon doesn't have to do that Microsoft doesn't have to do that so that's why these people are even more important than before so I'm saying in the next five or ten years they are really more significant as a group than any particular manufacturer even Microsoft so what to say but they probably the whole solution and when issues like the cloud where it should go what should go on obviously is it HIPAA and how do you do all these things these people know it they have a lot on their plate and then the cloud makes it even more complicated it's not a single solution now which people thought five or ten years ago when the cloud was getting buzzed and everything's on the cloud was going to do away with these are not the middlemen they're not dealers they integrate the solution okay when they started they were dealers because when it started a couple of manufacturers selling like autos it was like an auto I mean it'd be interesting to have with Tesla and some of the autos is the internet of things takes place in the auto industry what's going to happen too when things go bad and then no place to go so this is the future but the cloud makes it even more valuable than before yeah great other questions or thoughts if not I think we will oh one more here hold on one second hi I'm Julianne I just had a question in light of the drop justice department lawsuit against Apple over unlocking the San Bernardino shooter's iPhone has your company or companies in your co-op run into similar security or privacy issues and if faced with a similar request from the FBI would your company have complied or would they try to have your subsidiary companies would you kind of twisted their arm a little bit into complying how would you have handled that situation yeah that's interesting actually when that happened there was stuff in the forum our guys knew how to have the FBI do it without going to anybody there's a way of doing it they knew it there were five four or five things and you know for representation of 10,000 you could so they knew it before it went into the press they know all this stuff they're again they're fiduciary so whatever the law is they have to comply with it they're gonna disclose it they're like lawyers to their clients I mean it's a similar fiduciary duty so they're not gonna make the laws they're not gonna totally do anything unethical and say the law shouldn't be you know what it is but it is what it is so you gotta comply with what it is you change it but that's it so we don't get directly involved but they they have to be involved day to day again they have an average heart of customers they have all sorts of customers with different needs but obviously this is one of the big issues of our time from a legal perspective and a government perspective is privacy rights and Microsoft has a lawsuit right now with the government on privacy rights right so these are major important issues we have to deal with day to day but we're not gonna make law and we just have to follow what's the law great maybe a good place to wrap it up I just want to thank again Alan and Alicia for coming over and we really appreciate the talk thanks Alan thank you very much thank you