• Interview
  • Tom Siebel Interviews with theCUBE at AWS re:Invent

Transcript:
Voice-over:
Live from Las Vegas it's the Cube, covering AWS Reinvent 2017, presented by AWS, Intel, and our ecosystem of partners.

John:
Hello and welcome back to the Cube this is Silicon Angle's exclusive coverage with the CUBE here at Amazon reinvent. It's our 50th year covering Amazon, explosive growth, I'm john Furrier, founder of Silicon Angle media I'm here with Justin Warren, my co-host here. Our next guest on set one is Tom Siebel who is the founder and CEO of c3iot. Industry legend, knows the software business, been around the block a few times, now part of the new wave of innovation. Welcome to the Cube

Tom Siebel:
Thank you.

John:
I hear you just got in from San Francisco, what a world we're living in, you're at the front end, you've founded and now are running an IOT, big day to play, you're doing extremely well, even last year the whisper in the hall way was 'c3iot is absolutely doing great.' in the industrial side, certainly in the federal government side, and on commercial. Congratulations.

Tom Siebel:
Thank you.

John:
What's the update? What's the secret formula?

Tom Siebel:
Well, we live at the convergence of elastic cloud computing, big data, ai and IOT. At that point where there's convergence, I think its something called digital transformation, where you have these CEO's that candidly, I think, they're concerned that companies are going through a mass extinction event. The companies are being 52% of the fortune 500 companies, 2,000 are gone, right? They've disappeared and its estimated that as many as 70% might disappear in the next 10 years. We have this new species of companies with new DNA that look like Tesla and Uber and Amazon and you know, you'll have no drivers, no cars, and they have their own transportation. And I think that these CEO's are convinced that unless they take advantage of this new class of technologies, they might be extinct.

John:
And certainly we're seeing it, too in a lot of the old guards, as Andy Chassie calls it, really talking about oracle and IBN and some of the folks that are trying to do cloud, but they're winning, I gotta ask you, what's your main perspective that's different now that the culture, of a company that's trying to transform, what's the big difference between the old way and the new way now, that has to be implemented quickly, or extinction is a possibility, I mean its not just suppliers, it's the customers themselves.

Tom Siebel:
Customers have changed.

John:
What's the difference?

Tom Siebel:
So this is my fourth decade in the information technology business and I've seen the business grow from a couple hundred billion, to say, two trillion worldwide and I've seen it go from mainframe to mini computers to personal computers to the internet, all over that. I was there in all those generation of technology, when we brought these products to market, would come up with the organization, through the IT organization, to the CIO. And the CIO would say we're never going to use a mini computer, we're never going to use relative database technology, or we're never going to use a PC. So you'd wait for the CIO to be fired then you come back two years later, right? So, meanwhile we've built a two trillion dollar information technology business globally, now what's happening in this space, a big day of predictive analytics IOT, is all of a sudden it's the CEO at the table, the CEO was never there before, and the CEO is mandating this thing called digital transformation and he or she is appointing somebody in the person of a chief digital officer who has a mandate and basically a blank check to transform this company and get it done. And where it used to be, the CIO would report to the CEO once the quarterly offsite, the chief digital officer reverts to the CEO every week, so virtually, everyone of our customers, KAT, John Deer, United Healthcare, you name it, Engie, now it's a CEO driven initiative.

John:
You bring up a good point I wanna get your thoughts on, because the old way, and you mentioned was it, reporting to the CIO, they ran things, they ran the business, they ran the plumbing, the software was part of that, now software is the business, nobody goes to the teller, the bank relationships, the software or whatever vertical you're in, there's now software whether its at the edge or its date analytics, is the product to the consumer. So the developer renaissance, we see software now, changing. Were the developers now an influencer in this transformation? Now its just 'hey go do it and heres some tools, in part of that' can you share your perspective on this because if we're in a software renaissance, that means whole new creativity is gonna unleash with software. With that role of the CDO, with that blank check, there's no dogma anymore, it's results. So, what's your perspective on this?

Tom Siebel:
Well, I think that there's enabling technologies that include the elastic cloud, computation in storage is basically free, right? Everything is a computer, heres the thing about IOT being devices, is that IOT is about the change form factor of computers, in the future, everything's a computer, your eye glasses, your watch, your heart monitor, your refrigerator, your pool pump, they're all computers right? And then we have the network [inaudible 00:05:24] law, say we have 50 billion of theses devices fully connected, well that's some pretty powerful network, now these technologies in turn, enable ai, they enable machine learning and deep learning, hey, that's a whole new ballgame, okay? We're able to solve classes of problems with predictive analytics and prescriptive analytics that were simply unsolvable before in history and this changes everything. In the way we design products, the way we service customers, the way we manage companies so I think this ai thing is not to be underestimated, I think the cloud, IOT, big data, devices, those are just enablers.

John:
And data's key, right, data trains the A.I, data is the fundamental new lifeblood.

Tom Siebel:
And big data because now, big data is about, people think big data is the fact an exabyte is more than a gigabyte, that's not it. Big data is about the fact that there's no sampling error, we have all the data, so we used, due to limitations of storage and processing, we used to basically take samples and infer results from those samples and deal with it with the level of confidence that was there. With big data, there's no sampling error, it's all there. It's a whole different game.

Justin:
You were talking before and John you mentioned before about the results that you need to show, I know that you picked up a big new customer that I hope you can talk about publicly, which is a public sector company, but that sounds like something. You were doing predictive maintenance for the air force, the US air force, so that's a big customer, so good win there, but what is the result that they're actually getting from big data, and these machine analytics that you're actually doing?

Tom Siebel:
Okay, by aggregating all the telemetry and aggregating all their maintenance records and aggregating all their pilot records and building a machine learning class of ours, we can look at all the signals and we can predict device failure or system failure well in advance of the failure, so the advantage is some pretty substantial percentages, say of F-16's will not deploy, because they go to push the button and there's a system failure, well if we can predict system failure, I mean, the cost of maintenance goes down dramatically, and basically, it doubles the size of your fleet. And so, you know, the economic benefit is staggering.

John:
Tom, I gotta ask you a personal question, I mean you've gone through for decades, you're a legend in the industry, what was the itch that got you back with this company, why did you found and run c3iot? What was the reason? Was it an itch you were scratching? Were you like 'damn I want the action'? I mean, what was the reason why you started the company?

Tom Siebel:
Well, I'm a computer scientist, and out of graduate school, I went to work with a young entrepreneur by the name of Larry Allinson, turned out to be a pretty good idea, and then a decade later, we started [inaudible 00:08:11] and I think we did invent the CRI market and that turned out to be a pretty good idea, and I just see at this intersection of these vectors we talked about, everything changes about computing, this is a complete replacement market and I thought 'there's opportunity to play significant role in the game' and this is what I do, you know, I collect talented people and I try to build great companies and make customers satisfied, this is my idea of a good time.

John:
You're on the beach, you're on your board hanging ten on big waves, what are the waves? Cos we're seeing this inflection point, a lot of things coming together, what are the waves that you're riding on right now? I'll see the ones you mentioned, what's the set look like? If I lose the surfing analogy, what's coming in? What are the big waves?

Tom Siebel:
The biggest, the two biggest were the IOT and ai, since 2000, we've deployed 19 billion IOT sensors around the world and the next five years, were deploying 50 billion more, everything will be a computer and you connect all these things if they're all computing and apply ai, we're gonna do things that were unthinkable in terms of serving customers and building products, cost efficiencies, we're revolutionize healthcare with precision health, processes like, energy extraction and power delivery will be much safer, much more reliable, much more environmentally friendly, this is good stuff.

Justin:
What's your take on the security aspect of putting a computer in everything? Because I mean, the IT industry hasn't had a great trach record as security and now we're putting computers everywhere as you say, they're gonna be in watches, they're gonna be in eye glasses, what do you see as the trend in the way security is going to be addressed in computers everywhere?

Tom Siebel:
Well I think that its clearly not solved and it's a solvable problem. I believe that its easier to secure data in cyber space than it is in your own data room, maybe you could secure data in your room if you took a forklift to move a storage device, it doesn't take a forklift anymore, right? It takes one of these little flash drives to move. I think the easiest place we can secure it is gonna be in cyberspace, I think we'll use encryption, I think we'll be computing on encrypted data and we haven't figured out algorithms to do that yet. I think block chain will play an important role but I think some sort of invention has to happen.

John:
So you like block chain?

Tom Siebel:
I think block chain plays a role in security.

John:
It does. So I gotta ask you, you're sinking your teeth into a new venture, exciting, its on the front lines of innovation, there are other companies that are trying to retool, IBM, Microsoft, oracle, if you were back then, not as exciting as what you're doing because you have a new, clean sheet of paper, but if you're oracle, if you're Larry and he's trying to get into the action, they got a lot to do there, IBM same thing, same with Microsoft, what's their strategy, you were there at the helm of those companies, what would you do?

Tom Siebel:
Well number one, I would not bet against Larry. I know Larry pretty well and he is a forma table player in the information [inaudible 00:11:20] if you have to identify one in four companies that's surviving the long run, oracle is in the set, betting against Larry is a bad idea.

John:
Barbs going back and forth, gotta be careful there.

Tom Siebel:
Andy Chassie is competent, I think as it relates to this elastic cloud, I think got a lock on that, but IBM is hard to explain, IBM is a sad story, there's some risk that IBM is the next [inaudible 00:11:56] they might be selling this thing off for peace parts, if we look at the last 23 quarters, its not good.

John:
And Microsoft's done a great job recently [inaudible 00:12:04] and they're retooling fast, you can see them beavering away.

Tom Siebel:
IBM how do you bet against the cloud, are you kidding me? It's a sad story, its one of the world's sad companies, it's an icon, and companies like IBM's size do fail, lets look at GE, that would be a sad state for america.

John:
On a more positive upbeat, what's next for you? You're doing great, the numbers are good [inaudible 00:12:34] great financially, I'm not sure if you can share any color on that, big wins, these are not little deals that you're on but what's next, what's the bug innovation that you've got coming around the corner for c3iot?

Tom Siebel:
Our business grew last year about 600 percent, this year it will grow about 300% we're a profitable [inaudible 00:12:48] our average customer is say, 20 to 200 billion business, we're engaged in very, very large transaction, in the last 18 months, we've done a lot of work in deep learning, okay, the next 18 months, we'll do a lot of work in NLP, technologies are hugely important, so technologically, this is where we'll be going, I think machine learning, traditional NL, we have that nailed, now we're exploiting deep learning in a big way, using GPU's and a lot of the work Jensen Wang is doing at NVIDIA. And now, I think NLP is the next frontier for us.

John:
Final question for you, your advice to other entrepreneurs, you are a serial entrepreneur, very successful, invented categories, you're looking at Amazon, how do you work with the Amazons of the world, what should entrepreneurs be thinking about in terms of how to enter the market, funding and just strategy in general, the rules have changes a little bit. What advice would you give the young entrepreneurs out there?

Tom Siebel:
Okay, become a domain expert in whatever domain you're proposing in what field you're gonna enter then surround yourself with people, whatever job they're doing, engineering, marketing, sales, FNA, who are better than you at what they do, to the extent that I've succeeded, this is why I've succeeded, this might be more easier for me than for others, but I try to surround myself with people who are better than me and to the extent that I've been successful, that why.

John:
I really appreciate you taking the time to come on here, you're an inspiration, serial entrepreneur, founder and CEO, Tom Siebel, of c3iot, hot company, big part of the amazon web series, eco system, are doing great stuff again, serial entrepreneur, great four decade career, thanks for coming on the cube Tom Siebel, here inside the cube I'm John Furrier, Justin warren, here in Los Vegas for AWS reinvent, we'll be back with more live coverage after the break.

Tom Siebel:
Thanks guys, good job.