 Live from Las Vegas, Nevada, it's theCUBE. Covering IBM World of Watson 2016, brought to you by IBM. Now, here are your hosts, John Furrier and Dave Vellante. Hey, welcome back everyone. We are here live at the Mandalay Bay for IBM World of Watson. It's the SiliconANGLE Media's theCUBE. It's our flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier, the co-founder of SiliconANGLE with Dave Vellante. I'm also co-founder of wikibon.com, head of research. Our next guest is Bob Lord, chief digital officer of IBM, digital business group. Welcome to theCUBE. Thanks for having me. Congratulations, you're new to IBM. So let's get right into the chief digital office. We kind of know what that is. We've talked to some, but there's now a digital business group. So tell us about your role. Can you clarify kind of what's your job? What's your objective? Yeah, so actually, so if you really look at sort of the core business that IBM has, IBM has traditionally been very focused sort of in the enterprise space. And my job basically is to open up the digital storefront so that we actually bring cognitive and cloud computing basically to the masses to bring it down to startups, to entrepreneurs, to developers. So we can actually take all of the great work that we've done with Watson, what we've done with IoT, what we've now done with cloud and actually bring those services down to the developer and embed it into sort of the new startups and the entrepreneurs that are in the world. So most people have a chief digital officer to kind of make things work on the website, making sure they push the stuff out. Is this a different thing in the sense that you're actually going to bring solutions to market? Or is it a partnership integration with developers? Yeah, so look, I think when everyone, chief digital officer is a pretty broad term. The way we've defined it is very much in three phases. The first is it drives innovation at IBM. That's the first thing. The second is it's actually helping to actually improve the performance of IBM and improve the performance of our clients. And the last is that we keep the customer journey at the center of our solution base that we're driving. So think about the experience now that we have at IBM is going to be digitally enabled, whether it's on a mobile phone or whether it's on your desktop. There's not going to be a face-to-face seller to actually explain to you what IBM products and services can do for you. And the IBM products and services are pretty complex, right? They're solving really, really difficult problems in the world, whether it's in healthcare or cybersecurity. But how do you actually take the essence of what those solutions are and bring them down to solve marketing problems? How do you bring them down to solve, you know, human resource problems? And we think we have an ability to do that. So my job is to package it up and make it and give it out to clients. You know, Dave and I kind of, we're old-timers and so we, you know, you've seen the movies before all the different cycles of innovation, but one thing we were talking last time with Kevin Egan was when he was on theCUBE at Interconnect, he was also in the digital group, was the role of the agency, how the agencies used to do all this stuff for clients. But now there's much more of a developer focus, you mentioned packaging stuff up, the actual software development with data sets and data science, it's not as easy as throwing some HTML and some coded URLs and then design, although that does work in some cases, it's much more of a platform-like vibe going on with digital. What's your thoughts on that? And as customers try to figure out, you know, if they hire developers, if they hire data scientists, the design role, how does that all fit into the journey? Well look, I think the great news is, I think the tools that, it's beyond developers, it's almost like builders. We're starting to track builders to come in and actually create new business units, new business and solve problems that way. So the great thing about the component of codes that are coming out, they're very user-friendly and they're very easy to use. So the next generation of kids that are growing up, they know HTML5, they know how all this component stuff works, so it's sort of like that's their second language. So we actually can just sort of advance how we present ourselves to this new builder society and embed IBM solutions within that builder society. So it's a very different sort of approach that we've ever, ever taken before. So you have to now think of what's a developer journey? The developer journey is they want to be fun, they want to have fun, they want to interact, they want to play with code, they want to develop something, they want to have an impact on the world. So we have to present our solutions in a way that is playful. And I think you see a lot of the successful sort of development revolutions that are going on, is sort of motivating kids and young developers to really go after game-like experiences. And I think that that's how to sort of keep. Make an IBM playful, that's, I love it. So you're the third chief digital officer we've had on today with the CDO from Staples, and then an IoT case from Sheffler Group, an automotive company, and now you. There are some similarities, but three dramatically different sort of agendas, but you laid it out nicely with your three pieces. I mean, I think similar, but the routes to market really were different. So talk about your sort of routes to market and how that's evolving. Yeah, so look, I think the idea that we have to expose IBM in a digital way where it's self-consuming. So taking a lot of the principles that have been applied to the B2C world and bring them to the B2B world, that's basically what we're doing, okay? So we go and we shop on Amazon, it's very intuitive, right? It works for us, it recommends things to us that we normally wouldn't be thinking about based on other people's buying behaviors. Taking a lot of those principles and applying it to the B2B world experience, right? So what are you trying to solve? Use cognitive computing to help us in that discovery process because the biggest problem we have in the B2B world is it's messy, it's confusing. One data path doesn't look like another data path, another data set doesn't look like another data set. So my job and my team's job is to figure out how do we actually make this in a simplified fashion? It's funny, we were just talking about the quote that Jeff ML, the CEO of GE, said last week and talking about IoT earlier. He said I went to bed as an industrial company and woke up as a software company. Similar thing going on here with content, but I want to twist that around and ask you a question on that. If I had rephrased that and said, hey, I went to bed a content company provider, now I'm a full-blown media business as companies are becoming more and more media companies themselves, similar analog of being software driven. So companies see this social and they see this new democratization platform going on where they have to actually build their own media capabilities, which means a lot of those operational things that they use to outsource to agencies or have to come in-house. So how do companies become a media company? Yes, so look, I think we've done, we've launched something called Think Marketing and we actually got it out very quickly and what we did was we consolidated all of our thought capital into one property. The great news about Think Marketing was we shut down all the other little marketing silos that we had and whether they were websites or interaction sites and we funneled everyone through this one site. We've not only put IBM content on that, but we've also put third-party content and we put guest sort of content on it. Okay, so if I can think about it, it's almost like the mini Huffington post for the marketer because there's one reason, two reasons why people come to IBM, they come for intelligence to learn something or they come surgically to look for a particular product on us. So we wanted to sort of get that first pillar and say, okay, let me really make the marketer, have the marketer educated. Now, the cool thing is, as somebody's consuming that content, we're just taking principles from the B2C world and we're now changing the content, we're learning more about that potential user and we're serving up then Watson is actually making recommendations about what products they should look at and then once you click on a product then it's actually adding more products to it. So you're helping to guide through the discovery that a marketer would want to have and we're helping it- You're making it engaging. You're making it engaging and then providing a progression option for them to breadcrumble their way to value. And honestly, you and I, we all have that expectation when we go online that something is going to help us with that from our B2C world. So all we're really doing is taking the B2C and we're trying to apply it to B2B. Well, IBM is a lot of good content. I mean, that's an advantage, you got to manage it and it's going to find it, but there have been efforts throughout history and certainly within our industry, entities, organizations trying to sort of become a content company for marketing purposes. So you got to walk that balance, you mentioned third party content. What are your thoughts on that sort of hybrid approach? Yeah, so look, I think I feel pretty strongly that the new world of marketing is all about content and it's content distribution. So in the legacy, what we've had is we've had campaign marketing managers that would send out a campaign and let that campaign just hang out there and hope that someone would interact with that campaign. It's got to be tied with intellectual capital so that you're giving value exchange back to that potential user. So through a marketing hub and sort of this ecosystem, we have this anchor of published content. That published content then serves as our marketing arm and our marketing campaigns. So when someone actually goes to look at another piece of content, it comes back in. My digital sellers, then after we... It's your arsenal of content, you fire it to where you need to fire it. And then the digital sellers come on board and they have context, they're using that content again and they're used, so it's this viral ecosystem that sets together. This is how it reinforces our brand. And how are you enabling that ecosystem? Yeah, so we have partners that we were launching at somewhere between 20 and 23 pieces of new content every day on the site. And based on those contributors and what's out there, there's enough rich content there. And if you come back and visit me again, I know you've been there before, so I repurposed that content. So we're using IBM content, third-party content, and then we have sort of guests. I think you have some cute content on there too, if I believe. I think you guys have some content in there. Well, I want to bring this up. Of course. I think. It's all free. It's great, it's great discovery. You'll get a nice progression off these great provocative videos. But I want to bring up something that you said, because this is interesting, Dave and I riff on this all the time, and that as the world shifts to a much more different horizontal fabric, you're talking about discovery in a whole new non-linear way, if you will. The old way was trap users, get SEO optimization. So you're seeing companies tried things like SEO gamification on Google search. You're seeing, oh, we'll just hire a journalist to be and win the audience. But the audience understood that, well, once you go to the vendor supplier side, you're really not an independent journalist. So those have been failed kind of tracks because there was no authenticity to it. Your strategy is a little bit different. You're saying, hey, we're going to be IBM fully disclosed, but we're also going to understand your needs and give you aggregated content, not trying to head fake you. Is that kind of, did I get that right? No, that's a strategy too. And look, I think we have the permission as a brand. People believe that IBM has a very definite point of view in the world. So there's a bit of a trust factor there that the information I'm going to get from IBM, there's a trust relationship with IBM. I'm not sure every brand could actually try to claim that. So we're sort of, I'm trying to leverage the best of the IBM brand as we go out and launch it to digital space. The notion of trust, I mean, you can aggregate content as long as they understand. You're not trying to say, this is important, read it from a third party because a head fake, the trust issue on social is no one really talks about it, but the transparency levels are highly friction communication among peer groups. Once you lose that trust. Yeah, look, I think, in the way that sites, it's got trending, it's like one of the most popular articles, the typical stuff that you would normally see what the experts recommend. And then it's the Watson engine underneath. So there's no bias there. It's about volume and people sort of picking that up. So, you know, we're taking a page from the New York Times and the Huffington Post and what's been successful. So that's how you maintain your stewardship of that trust. Yes. I got to get. And if you violate it, they're going to come back. Exactly. And it's the wild west of. So Bob, I want to ask you kind of, take a little walk down memory lane and kind of project kind of the situation now. Obviously you go back to the web, you saw the first generation, the yahoo's of the world, you involved in the AOL. But, you know, Akamai came on the scene with great caching of images for yahoo's dial up websites. And then you've just seen the URL, the search, all that stuff's happening, email marketing. But now you have a whole new infrastructure developing. So I want to ask you any new innovations that you see that you guys are betting on. I mean, you know, you saw the DNS hack this past week in IoT, it's basically a DDoS hack, old school technique. But you're seeing infrastructure needs to up its game a little bit because the user experience is expecting push notifications. They're expecting mobile. What's your thoughts on this new fabric, this new environment that's out there? Yeah, so look, I think the great news about the new fabric that's out there is we're going into this API economy, right? So what you're going to do is you're going to have startups and entrepreneurs, start businesses by snacking APIs and basically figuring out how the Lego blocks come together to actually move their business forward. So they're not going to be building content management systems, they're going to be snacking APIs around that. You know, you look at some great startups in the commerce space and you go online, you can basically take a piece of code and you have a shopping cart in five minutes, right? That's a snackable piece of API. So you're going to be building in this API timing. That's so they can leverage, you don't have to build it. The point is they're slinging APIs around rather than... Right, and then you're basically, so if you're a smart entrepreneur at this point, what you'd be doing is you'd be going out getting the best APIs that you could to actually support your business and then overlaying the important piece, which is the cognitive computing piece, which is the intelligence on the data so you can outmaneuver your competition. So Buffett Shion was just talking about Watson ads, new system, and he's turning it from an impression-based concept to an endpoint that was usually a banner ad or call-to-action hero area, whatever you want to call it, into a transactional interface for relationship to a dialogue. Is that part of your group in getting that kind of stuff going on? Is this where the digital fits in? Is that where different products? So listen, there's six different business groups at IBM. We're sort of the digital storefront, right? So I would take Bob's product and put it out on my storefront. But the cool thing about what Bob has talked about, we have talked about interactive ads and using the damn HTML format for advertising for the last 10 years, and we're finally at that point where that ad is going to provide value to consumer in a very different way. Whether it's about recipes on soup, whether it's about flu season, but we're actually using intelligence with the ads so the cognitive ads is all about that interface and again, the value piece, the value exchange piece. And you're dog-fooding that in your own, sorry, dog-fooding, you're eating it in your own digital properties, right? You're embedding Watson, Watson, and more. We've actually done cognitive targeting. We've sort of seen about a 15% lift in the effectiveness of the ads because we're very targeted on who the user is and what that experience is that we're delivering to them and we see a lift on that. Now we're going to expand that further but it's all about the insight that we can get on somebody and understand their behavior before we actually get them in. That's why, you know, all this talk about ad blocking and everything else that's out there on the web, it's because the value exchange has been so bad that nobody wants to sell it, right? I mean, I don't mind ads coming to me as long as they give me some kind of value and I do something wrong with it. Well, even re-targeting, although it produces great numbers, it can be an annoyance because I go to a website, Hilton's, no rooms available. Next thing I'm seeing Hilton as, I already know there's no rooms available. It's like, don't show me that anymore, you know. We should know that. We should know that. We should know that. That's a Watson innovation. So I want to ask you about the innovation because when you talk about what you're saying, APIs, you're assuming an ecosystem because the key to success in that market is access to open APIs or open source in general. What's the start-up strategy? How are you guys building the ecosystem? How do people engage with IBM? Any new information? What's your thoughts? Do you have a vision on that? Yeah, no, look, I think, look, we're starting with the core developer. That's really where it all is all starting. And I think IBM's had a very long history of working with developers in the enterprise space, in the ISV world. And I think now we're sort of getting, as I said before, at this builder. Who is that builder? And we now have work to do to show developers how simple it is to use IBM technology, the way it's componentized, the way that you actually build a Watson conversation app. It's very simple to use. That's our job right now that we need to be on. So the first step is to get at the core developer. The second step then is the start-ups will start to come because those developers are normally within those start-ups and they start to embed the technology within it. The other place we're going to go is universities, right? Get to those computer science engineers, have them understand what Watson is. Some of them don't remember Watson being on Jeopardy because they weren't even born. So some of those kids need to understand what Watson can do. Yeah. So I think it's an education piece, but it's also our ability of putting a fabric out there and a set of APIs that interlock together that show how they can actually have an impact. Well, it comes back to that comment you made. I mean, it sounds tongue-in-cheek, but to make IBM playful. Yes, exactly. That's what that world wants. I mean, the Alphamotus is a great example. Yeah, yeah, yeah. I don't know if for me you are with them, but even on a couple times. I think you did his talk with them on the innovation stage. Yeah, no, no, Alphamotus is a great example of where he really took Watson and he sort of created it to help him predict alpha at the end of the day and he's seen a 500% improvement in his predictability of how the market's going to flow. I mean, that's phenomenal, right? Yeah, you want it. But to think about that, that's a really hard application to sort of take Watson to do, right? Watson can solve the mundane task on a day. Like you see staples actually embedding Watson in their easy button, right? That's just a conversation app, but the efficiency that staples gets from that and the ordering, the volume of ordering increase they get from that is very, very powerful. So that's applying Watson in a very simple sort of application, which is where we have to show the world. We have to show the world not only is Watson simple to use, but it's better than any other other AI solution because it goes after dark data. It brings in data that you normally wouldn't be able to index before, whether that's imagery, whether that's video, whether that's conversation. And Watson can get at that data like other AI solutions can't and it's simple to use. So you take this look, we've solved these really big problems in healthcare. We've solved these really big problems in cybersecurity with Watson. Now we want to do is take those learnings and apply it to the simple solutions in life. A lot of our competitors are coming up the other way. They're trying to solve simple problems and they really haven't solved the big, hard problems yet. So it's a pretty exciting spot to be in. And if they're in an ecosystem too, they get comradery, they get social, they get peers and that's called distribution for their solution that you guys are offering. I know it's going to go to market opportunities. I'll give you the final word for the folks watching. Where can people learn more? Are you guys going to be on the road? Is there other events you're doing? How do people out there get with you guys? We have a big developer conference coming up first week in November in San Francisco. So it asks folks to join us there. It's going to be a very show me hands-on developer conference. The world of Watson November 9th. November 9th, yeah. You guys are welcome to join us there. And then we actually have a follow-up event that's going to be happening up in India, another developer conference in India. And then we're probably coming back in North America. So we've got a lot of activity in the development space coming up in 2017. And you guys have always been progressive. IBM's always been on the web. You guys were there early, always innovating. Same truth for digital. Can you share for folks that are watching? You're new to IBM, so share what's inside the curtain there. Yeah, so look, I think we are from an inside review. Think marketing is our first launch to go after the marketer. You're going to see a bunch of digital hubs being launched around our ecosystem to get at particular buyers, leading with content first and then product discovery after. So you're going to see a lot of that. The marketplace will also be available for startups. So if you have an IBM certified product, your product would be able to get on our marketplace for distribution. So we're also giving that also to a startups community. It's pretty exciting. And giving them the consumer feel, that's the new goodness. All right, Bob Lord, Chief Digital Officer at IBM. You're watching theCUBE, bringing the digital coverage here, non-linear TV on the ground floor here at Mandalay Bay for World of Watson. We'll be right back with more. I'm John Furrier, Dave Vellante. We'll be right back.