 Okay, we're back here live at Dell World. Day two of wall-to-wall cover at SiliconAngle.com. This is our TV program, The Cube. We go out to the events. They strike a signal from the noise. I'm John Furrier, the founder of SiliconAngle.com. Join with my co-host. I'm Dave Vellante of Wikibon.org, and we have a repeat guest, The Cube alum, Kim Stevenson, the CIO of Intel. Kim, welcome back. Thanks. We saw you this summer. We were at HB Discover. You came on, and unfortunately we missed your keynote because we were doing The Cube, but so maybe you could tell us a little bit about what you said, what's going on here. But you didn't miss it, because my keynote is at 2.30, is there for you? Oh, somebody said, come on in and see the, I think Intel is presenting. I was just assuming. Tell us what you're going to say. We had a couple, we had a couple. I will give a couple previews. So what are you going to talk about in your keynote? So the title of my keynote is Delivering Value in the Connected Economy, and I'm going to be bold in posture that IT organizations, enterprise IT organizations have to fundamentally transform the way we deliver IT with a focus on velocity, business velocity, creating that velocity for our business. And I think that between foundation of a cloud, social, big data, and the consumerization of IT, that enables those changes to happen. But if we don't make the changes for our organizations, I think the business will do it without IT. So summarize the difference. How has IT delivered today, and historically, and what's got to change? So I think we've, historically, we built sort of from the bottoms up, and we set service level agreements and prioritizations based on what IT is capable of doing. And we look at our organizational resources to do that. I think in the future, you've got to have that foundation of a cloud, and you're going to build from the top down. Business needs first, and you need to look at the resources available in the industry, whether you do it in-house or through a service provider or a software as a service. I think delivery models are really challenged in terms of delivering at speed. And so software as a service and some of the new delivery models enable you to deliver faster. Yeah, because that's always been the objective of a CIO, is to deliver business needs first, but the technology infrastructure just didn't allow for that, right? Right, right, right. So when we were at the HB Discover, we had a great chat about what you guys are doing at Intel, obviously Intel, pioneering, eating their own dog for whatever the expression goes. You guys were talking about big data. We like drinking our own champagne. You drink your own champagne, old wine, new bottle, all that good stuff. But you guys are leading the charge. You're on the bleeding edge. The lunatic fringe, as we always say, but Intel is process driven, so you don't just do these things for the sake of doing them. You guys have to really put them into practice. So one of the messages Michael Dell's saying here today is obviously transformation, building blocks. He's an example in his keynote where Tulane University had all these IT projects and the Katrina hit and they in essence had a clean sheet of paper. So my question is, you know, the message of protecting the legacy versus protecting the future. A lot of IT professionals and CIOs and chief innovation officers have to look at, I have legacy, I wish I had a clean sheet of paper in order to re-architect. So in this time of rebuild or reconstruction or value creation, business velocity, what are you seeing out there, Juan, in the landscape of dealing with the legacy and bringing in the new era, modern era and what can CIOs do to think about that? Yeah, so that is a challenge. I think there's, you have to pick the most impactful business areas. What's really where the business is going and those are the ones you need to really clean sheet. There's going to be a whole slew of other components of your business that you might just live for now with the legacy and where you've decided to clean sheet, you have to take the hard decision of freezing the past and inventing the future. You can't continue to make incremental upgrades to the past or you'll never have the resources or the time to invent that future. And so that has to be a negotiation with your business unit partners that we're going to go through this freeze in order to deliver. And then if you deliver with the velocity the business unit needs, generally they care more about their future than the tactics of today. And so I think we speak more of their language when we help architect that future. What are some of the table stakes for the business velocity value creation that you're referring to and you'll talk about in your keynote because you got to make those hard core decisions almost like a capital budgeting exercise around IT services. But what are the things that you're seeing that our must has right now that are the table stakes for IT? Is it fixed and storage stuff? Is it network? Where are the areas that you're seeing that, hey, that room's on fire, we got to take care of that first or shore up certain areas. So you know, probably last even last summer but it's certainly a year ago I would have said cloud is a trend, people should be looking at it. And now I say it's here, start delivering. And when I say cloud, it's that full, complete converged infrastructure that the idea that you have a complete environment to work from and then start landing your applications on top has tremendous, it reduces QA time, it reduces provisioning time. And that helps enable the business but you have to build these converged environments to be able to do that at speed. And what are some of the things that you're seeing that customers are fumbling with and getting their arms around or I shouldn't say fumbling but like really critical attention on. Is it the app side of the equations and infrastructure? I mean, because the same model exists, infrastructure, middleware apps. Now it's okay, converged infrastructure, data, virtualization layers and then apps which are highly diverse, bring your own device, consumer edges. So you know, consumer device at the edge. So is it the apps coming down from the top? Is it coming up from the bottom? So I'd say both and the infrastructure side, I think software defined networks are a big inflection point for us and different way to manage the network. You know, manage it more like a software push versus having to send someone physically there to check a configuration or change a configuration. That hell have enormous benefits for us. But it's just emerging. It's just emerging and we're trying out a couple different ones but I don't think we've got something yet that we would say we've bet Intel's entire network on just yet. That's coming I think in 2013. On the apps side, I think the big challenge is shifting of the service delivery model, shifting to software as a service when you have this legacy base of monolithic applications. And so as we put in an enterprise service bus, we've started to make that enablement available so that we can land software as a service applications on there and still do that back into integration which you ultimately are going to have to do. Do those two trends go hand in glove, the software defined piece and the service level architecture and how important is it that they're aligned so you can align with your business? Yeah, I think that most people would say they're not. I disagree with that. That the more you put into thinking about how does this business operate, the more you know you need the flexibility to do things from central location at the time that you need with the velocity that you need. And so more and more of that software flexibility is needed. And so I think they're the same premise that manifests itself in different environments. So whether it's the network environment or a software enterprise application environment. And does that concept of software defined networking, does it need to extend into, well I guess it's in servers already with virtualization, but does it need to extend into for example the storage layer and to those three, we talked about convergence, those three pieces have to sort of come together as software defined to really enable that vision. Yeah, and you've seen storage pools before whether it's a sand environment. Today we're getting a lot of great benefits out of SSDs moving into the data center. So we've had them on the PC for a few years and we're getting a lot of performance benefit. But now taking that flash environment and making it a big storage resource pool, you need the management layer to go along with that. So I think that's evolving quite nicely and we're seeing benefit. And I think that'll continue to evolve also. So you guys are taking advantage obviously of flash, you just mentioned that. Do you see sort of all your active data at some point being serviced out of flash? I don't know yet, I don't know yet. So certainly a large percentage of it. Our data, I think a lot of companies experience this, but our data is growing in excess of 30% every year and all different size in my manufacturing and my design environment and my sales and marketing environment, all of it's growing. We can't afford to keep it with things like flash, which makes it easy to use. We're putting in some Hadoop clusters to take our unstructured data and make that usable. That's proving to be a good way to keep data for us. So I don't know. So I guess what I really want to get to is for the last 10 years it's been about doing more. I mean ever since Nick Karp produced the XIT Matter. Doing more with less, cutting cost, IT spend as a percentage of revenue has come down. Obviously industries continue to do well, but the perception of IT as an investment vehicle to drive business value, really drive business value and productivity and revenue generation hasn't really been the main focus in the last 10 years. Do you see that changing with big data analytics and big data insights and new architectures like flash that can totally change the application development paradigm? Yeah, so I think the last decade's been about IT productivity, data center consolidation, app rationalization, virtualization, et cetera. And we've done a great job as a profession to get that IT efficiency done. The next decade is about business productivity. We get the most profitable, every dollar of revenue is the most profitable it can be. You're getting the most revenue you can get. And IT will enable that. I mean IT information technology, the organization that provides that, I think may change over time, whether it's your internal IT organization or a external organization that provides that capability. Well, the other thing is that you're seeing with, especially in the big data world, the meme is about CMOs are going to have more money than CIOs to spend. So some of the stuff's going to be difficult to count. I think it is going to be difficult to count. So I think that's another indication that what's really important is the business getting productive with what the business needs to do. And realistically, what business operation can you think of today that can run without information technology? Kim, I have a question. I'll think about that. I'll get back to you. Okay. So obviously IT's transforming, when you mentioned services and services delivery, obviously the services business is changing from the classic service providers, the consultants, the big house is outsourcing. So IT services has been on this outsourcing trend for many, for a decade. And now they got to retrench and provide more, invent the future, as you say. But also IT as a service is critical. Can you talk about what's changing in those areas, personnel wise, in terms of the players, the participants, both inside IT and outside delivering services and the kinds of IT services that we will see in the next five to 10 years. Yeah, so skills are a big deal. Always have been for IT, but again, I believe we're at this inflection point. And there are skills that we need that are very, very scarce today. So in data, that's the data scientist. In BI architects, not reporting architects, but visualization and predictive modeling, machine learning, those types of things. It's a combination of statisticians, computer scientists, and business rules, people that really understand the business rules. So today we solved that problem with several people. Generally four or five people. Tomorrow, I think what you're going to see is a maturing and a blending of that real data scientist. And that, I would tell you, that would be a very good investment for every enterprise IT organization to make is find that career path that grows people into becoming data scientists. So the business productivity you mentioned has the focus. That data scientist doesn't have to be some PhD math jock or some geek who's programming math and doing machine learning. It's also the business analyst, right? So if IT's evolving in that direction, what does that role look like? Is it someone with an MBA? Is it just someone multidisciplinary? What are you seeing that skill set at? I think it's primarily the business process. So whatever the business process, so you might be from manufacturing, you might be from sales, from engineering, but understanding the process that you're trying to execute is going to be really important because then they can apply that ideal state and help the computer scientists to program the environment. But without, the most important is to really understand the business process that you're trying to execute, right? And then we'll figure it out. The other public secret that's out there is that there's been a big disruption in the delivery on the outsourcing side, as the big firms like the Capgemini's and the Ascensions have made a nice little franchise building from ERP, CRMs, the old days of client server establishes massive practices. So what do you see changing on the landscape side of the new school delivery of, IT always goes outside for help, whether it's cloud, a lot of big data, there's always consultancies out there. What are you seeing out there for these new school firms that are successful? What are the characteristics of these new added value service providers? So I think there's sort of commercial terms, significant differences, and then there's the technology differences. On the commercial terms, the traditional agreements were three, five, seven, 10 year contracts. And I saw a lot of them, right? They're two, four, 600 pages long with lots of limits of liability. The new commercial terms are maybe oversimplified. A credit card. Give me a credit card and you'll run. Come in when you need, leave when you need. Three sheet SLA. Yeah, three sheet SLA, this is what we're going to do. Boom, you know, no limits of liability in some cases. So the commercial terms are fundamentally different. The technology- And that's driven by what forces? Just market forces, cloud? So it's a technology force because the technology, the idea that you can create these rich resource pools that can be dynamically reassigned allows you to create more flexible commercial terms. And so that's effectively what's happened in the cloud providers, that they have these rich resource pools and many people can come in and you can stay, you know, it's like a hotel. Stay as long as you like. You know, pay me for when you stay and when you leave, I'll bring somebody else in. There's enough demand that allows them to match the supply-demand problem, I guess. Supply-demand. And in the traditional service delivery models when we've gone out for us, it was my mess for less, right? Take my mess, you run it and you run it. You make it more efficient. And I just think that model is, seeing it's better days. Seeing it's, that's a play way of saying it. Heading for a cliff in 19 days with the- Another cliff. Another cliff we're seeing. Can we talk about security a little bit? I mean, obviously it's a topic that's been on CIO's minds a lot. It seems like increasingly it's on the minds of CEOs, which means it's going to be more on CIO's minds. At the end of every year, I look back and say, okay, are we more secure or less secure? And I can't remember a year where I've said, oh, I feel more secure this year. That's the way the world is. President Clinton said it, that the barriers that we put up seem more like nets than walls these days. And it seems like the holes in those nets get larger and larger, at least more fragile. So I wanted to get your take on security. Where are we going with this thing? Is it the case that the business value of the, outweigh the risks? So we just have to keep charging forward. Can technology help solve the problem that technology got us into? What's your angle on this? So I agree with you that in our attacks are getting more and more sophisticated and more pervasive. So the amount that we deflect every year grows 25% in terms of malicious code that's out there. The amount of malicious code that's embedded into apps that we download is shocking. So what do you do? In our view is we've taken, what was the walled garden approach? Keep the bad guys out with the good guys in. And we're now moving to this protect the data. And we protect the data at rest in transit, in process the whole way. And I think that's the only way you can fight that. So you have to, you can't tell good guys from bad guys. So don't try to keep anybody out. Just protect your data and make sure your data at every state is protected. So that's the path we're heading down. We've created a number of trust zones. So I trust that device and the user more if they're inside an Intel facility than if they're on VPN. Or if they're in, some countries are less trust worthy from a cybersecurity perspective. So when you're in that country, we don't give you access to certain applications. And so, we granularize our trust model based on the data that you're trying to access and what you're trying to do. And that I think is probably the right approach. It's hard to do, it's hard to do. So we compliment that with some advanced BI security that with processing power today, I can get billions of events codified and isolated in a very short amount of time. And so I think you need both. So a lot of the big problems in this industry are solved. Obviously most of the big problems are solved, not by one company, but an ecosystem. But frequently that ecosystem is led by one company. It might be Intel, I know you guys are working on the speed of light problem, if we can solve that. But you know what I mean? There's usually, you're a leader and you build an ecosystem around it and you lead that charge. How do you think the security problem gets solved? Is it more of a level playing field in terms of the leadership? Or can a company like Intel actually lead to solve that problem? Or is it just too big? So I think it will take a whole ecosystem and the Intel model and approach has been to enable the entire ecosystem. We're taking some of the security from our, we acquired McAfee, coming up on two years now. And we're taking some of their code and putting it down into the firmware, so below the root kit. But that's one layer, you still have to protect your data. And that's where the ecosystem comes in. So we're sponsoring hackathons and we're sponsoring secure code practices. And that's eco-industry enabling, right? Okay, Kim, we're getting the hook here, but I want to ask you one last question to leave off the interview. For the folks out there watching, we're here at Dell World 2012. This is their second Dell World event. I mean, they used to go to the consumer shows and they had the PCs. Michael Dell's still so proud. He's pushing the clients, he's behind it, which is great. Share with the folks out there, what's happening at Dell World? What is the Dell transformation about? And what does it mean for the enterprise, IT Pro or CIO? What is, share with the folks what you're extracting out of the signal here from Dell World. What is Dell all about right now? Yeah, you know, so Dell's expanded as a company. Their portfolio's expanded. When you just walk around the floor here, you see industry orientation, healthcare, education, government. And I think that that's a big move for Dell, that they have industry specialization that, as a CIO, you really do purchase based on what's relevant for the business you're in and the industry does matter. And so I think that they've done a great job here showing some of that. I think their open message is still great. I mean, they have violin servers up there in their main rack, which is not a Dell product. They're showing off whatever kind of building blocks that will work for the customer. I think that's a fresh approach and a little bit unique. Okay, Kim Stevenson, CIO of Intel, back on theCUBE, CUBE alumni, tech athlete as we say, here in our tech center, sports center, ESPN of Tech, as we like to say. Thanks for coming on theCUBE. Thanks for your time. You're super busy. Thank you. And thanks for taking the time. This is theCUBE, our flagship program. Without the events extracted from the noise, I'm John Furrier with Dave Vellante. We'll be right back with our next guest after this short break.