Perspectives on Innovation & Disruption

Perspectives on Innovation & Disruption

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Morning. Morning. Everybody I actually. Tried to ride out on one of those drones but, they said that probably wasn't a good idea. We, have an exciting panel for you this morning in all of your industries, I don't need to tell you new technologies, are being developed daily, that have the potential, to transform how. Everybody, in this room does business how you interact, with your customers how everyday transactions. Are conducted, ready, or not disruption. Is coming for everyone in this room including the news business and it's, already here today, we want to focus on how you deal with that disruption how you create. New opportunities how. You make sure you're agile, enough to quickly change. And succeed, it's. My pleasure to introduce a, remarkable, panel tonight or this this morning sorry. I I just flew here so I'm a little, discombobulated. On the time, we. Have with us today some of our country's top CEOs, so please welcome Thaddeus, Arroyo the chief executive, officer of AT&T business. Welcome. Hey, please. Welcome Meg Whitman CEO, of HPE. And. Please. Welcome Doug, Parker the chairman and CEO of American Airlines. Thanks. Good. Morning y'all doing. Since, AT&T, is now hopefully, going to be taking over CNN I'm hoping that Thaddeus will give me a pair of those AT&T, socks. There's. A pair in your. It's. Good branding I want, to just start off I thought we maybe just have a conversation a little bit about, how. Your companies, how you're trying to get your companies transforming. To meet your customers, digital. Excellent expectations. That. Is sure, well let me start off cuz I think it even goes well, beyond just meeting their digital expectations. You know as we look at the digital, disruption that's, taking place across. Many, industries. We. Look beyond, simply, just extending, and ordering and a care capability.

Into, An online application for, a customer to communicate, with us we're, looking really deep at AT&T we're, looking deep in the sense of what. Is it in terms of these the nature of the disruption around us the technological. Evolution that's. Going to change who we are as a company and I'll just give you a simple example of, that so you, know we're moving into a world where we're, software, and platforms. Are replacing. What, was historically. Products. That built up over generations, and so if you look at AT&T and, where we're evolving our network our, network, is becoming software, in the past we. Would buy these Hardware, elements, put them together and, translate, that into a service, a relatively. Inflexible service. And so now as we look at it clearly we're extending, all these capabilities, in a new way such, that you can interact with them and interact, with them in a seamless customer experience, but, now our network. Is software, by 2020. 75%. Of, our network will be software, based and so what's the relevancy, of that not only can we extend a capability to you but because our network is software, we, can now give you the control to go make a change in the past if you wanted to change, the speed of one of your connections, you would have to put in a connect, request, an order we, would have to up speed that through a manual interaction now, that it's software we simply, can, reconfigure. That software, and deliver, it on the fly and in real time so, that has a transformational. Impact the, same thing is true whether even outside of our business services if you look at what we've done in disrupting, ourselves in the consumer, space with. Direct, TV now Direct, TV now is no, longer a physical, instantiation of. A paid TV product, it's software, you download. An application onto. An, Apple TV or your smartphone and you, can now watch linear, and paid TV so, it goes into every aspect of our business I mean disruption, has such a it's, a negative word you. View it as an opportunity it seems like absolutely. I think you have to look at it well beyond just the defensive, capabilities. You, know the nature of competition, between. Industries. Now in a digital world is far more porous, and so, it gives you not only an opportunity to, defend from disruption, of others coming into your space but. To use it to move into logical, adjacencies. If you can tap into a capability, where. Can you extend your products in. Mcdu. Do, you see yourself as driving disruption. Certainly. So, this, the world that we live in today I've been in technology for many years I've never seen anything quite like this this is the fastest. Change in technology, this this change is akin to the mainframe to the client-server, transition. 35 40 years ago but it's happening much faster so. How. We're trying to help our customers is to provide, the technology that will aid them in their digital, transformation.

Allowed Them to be more full more agile and faster, bringing, new applications, and new ways of doing business, the other challenge, for IT organizations. Is budgets, are not going up they. Hate most IT budgets, for big companies are under pressure so. The ability to help customers get. To a hybrid IT environment. So they can do things much faster at, a lower cost we. Think there's tremendous disruption. At the edge of. The network and. We're seeing a huge, move of compute and storage to, the edge and, and. Then finally, we have to have the server is to help our customers do this because this is a, remarkably. Challenging. Thing but. I'll say we had to transform, ourselves in, order to help our customers and so we have gone from one enormous, company, to four smaller. Nimbler, more agile, companies, because I believe, the future is going to belong to the fast it's. It's each and every one of your companies are gonna have to be faster, to market, faster, to get ahead of the disruption faster. To adopt new technologies, and new customer, experiences. And so, we had to get smaller to go faster, and so, we probably undertaken, one of the biggest transformations in, American businesses I've heard you talk about, trying. To instill, founder, DNA, in the company can you just talk about that because I think for everybody's, company its kind of innovative. Idea so I was very fortunate when I came to Hill at Packard because, the core, of this company, is incredible, and I believe, that founder. DNA, is incredibly. Important, to companies even though Bill, Hewlett and Dave Packard had, been gone for, probably. Thirty years when I came to the company I could see that DNA, shining, through and when we Kate when I came to the company I said let's go back to the founding, DNA, which was all about innovation if, we, are not innovating, as Sheila Packard we don't have a reason to be it, was all about customer, service and customer focus, and working with our channel partners and then. Interestingly the, third element of the, DNA was corporate social responsibility. HP. Was all about corporate, social responsibility. Before that was a term HP. Was an environmentally. Aware company, before the term environmentalist. Was even, out there so, what we did is went right back to the founding DNA how about we do more of the.

Things We do well today while. We make our to-do list of things that need to change ok, how do you view, the challenge of disruption, well, first, off you know I, think, airlines are an interesting. Example. Of this of what's happening here because first. Our physical our physical product, can't, be digitized, you. Know the mass transportation. Of people at 550, miles an hour. You know I think you know we're, constrained by physics, unless. Somebody's working on digitizing, that, yeah. The fucking, day seemed pretty advanced ya know if. They're working on that I hope they slow down um, so. I. Got. Some time left um so. The. But. But but having said that I mean and again I mean because. It's it's high-tech of course me but we're constrained by you, know the the engineering, and capabilities, of Boeing and GE and physics so, that product, itself is. You. Know again, can't be digitized but we're but having, said that what meg says people are cutting their IT budgets, are just keeps, expanding because there's so much demand in our business for, improving. Technology. And and you and again, you. Know in an in a business where we're not always you. Know technology leaders, per se in terms of in terms of in. Terms of mobile devices and mobile and use of mobile technology you. Know just, think you know 78. Years ago you, know what you had to do to actually get onto an airplane this is what you do today you. Know in, general, you know today if you're standing in a line outside of, security, it's because you want to check a bag only, you, can you check in online you've been able to make your purchase decision, by looking at every price in the world online, you get your boarding pass online or don't even get a boarding pass rather you leave it on your on. Your phone and. All those things happen and if you check a bag even you know there's a kiosk there you're not really in the only line you get into is TSA. So. We've. Eliminated all that but. We still you know having done that our customers, of course would like more and. In particular, what we what we recognize, is that where. We can do even better and where customers would like more. Capabilities. Is in there is is the times that things don't go right which, unfortunately happens a good bit in our business just because of weather so. You, know you're used to now, getting on an airplane fairly, easily with these technology, but, we still if, if indeed your bag has been miss connected, let's say or it's not on the airplane with you we, know that, and.

You, Know why we don't get that information that you know so this is good for all of us. I don't. Know it I got a couple things I want to bring up again I, don't. Know where your bag those middle seeds. Go. But but but the the that. Information, it is a bit of information exist somewhere right so. The customer but you know up. Until a few months ago you. As a customer would, go wait in line stand in a carousel have this very stressful, event happened I'm watching everyone else getting their bag here's not come off we, can do better than that. We now have put in place what we call proactive baggage, notification, you. If indeed you, know you, as a customer or receive a notice it says your, bag didn't make it however you. Know tell us where you want it delivered you don't even go to the carry great yeah it's almost better right you know always. Then delivered to your hotel yeah that. Makes me almost want to lose, my bag. Don't. Do that. Sometimes. We don't find them. So. So. Anyway. This. Wee, five five hundred thousand people every day four. Hundred ninety nine thousand. Series. So. Anyway. The, my. Point here is we. Can do better we're, getting better this and, there and there's and there's much more we can do things like that also being, able to rebook yourself, again if indeed, you know you've missed your connection, we. Always have the tip we have technology, in place that says that we're gonna react AMA date you here's your RIA commendation, that individual may have preferred something different you you might be able to say look I didn't I didn't really need to go to LAX I can fly into Burbank and and let me it's, what, we call diet and dynamic Korea accommodation, and do it yourself give me a number of options all you decide but. Anyway really, great, use of. Technology. And digital, technology, to make the product even better and simpler, for our customers because it does seem I mean in all your business is customers, expectations whether. It's a, consumer. You, know checking into a plane or, business. Customer, their. Expectations. Are growing exponentially, as well it's. Interesting because I think as you look at this and they, don't measure us anymore, based. On our respective, industries, they're, gonna measure our. Digital, experiences. Based, on the best-in-class. Experience. They've encountered in any, whether its consumer, or business applications. And that's, what we have to step up to me at the end of the day the. Expectations. As of, the past might have been is it an inferential, or, linear. Improvement. From what I did before but, now it's, really more of is this, as good as the whatever, application. I'm using you, know whether it's ride-hailing. With, lyft or uber or. Is, it communicating. With someone in this new way and you, know interestingly then. That raises, the expectations. And it changes, the what the lens of which all of our technologists. Need to approach a problem because we've always approached our problems, as many, industries, here of looking, at how do I make what I've done before better but, that's not enough you've got to raise it to a new level because the measurement, is being raised by, the best-in-class. Innovators, across the world I. Only. Add to that I mean I think you're exactly right if you think about the user interface for, our products, for people who work in the data center who are sitting in a network operation, center they, do not want to be tethered in a network operation, center they want to be able to monitor the site from. A mobile phone maybe in a Starbucks so, think about what that raises, that raises what. Is the UI what's the user interface, look like what's the security because, you don't know where your people are accessing and what, does it mean for the standard, of ease-of-use and it's an entirely different standard, which, puts a lot of challenges, on companies, like ours because frankly, we're, not used to being, in an environment where the consumer, standard, is the one that we have to meet but it's absolutely, the case today, what's. Your, advice for for, folks in in, their respective fields who are here this morning just. In terms of embracing disruption. And trying to lead it in in, their own businesses, sure well let me start with that and I think one of the first and most important, elements to me is when. You begin a process and you begin looking at something is never, start with kind of a linear improvement. Mentality, I think a big part is particularly. In a wireless world where, we can now decouple. Everything, and extend it in various. Wireless, ways you, have to begin thinking, through how do and and really start it with one simple, question how do you want it to work you know in the past and I came out of IT we, would look at how are we going to improve what we have today and that's.

Old Thinking now I everything, we begin and every innovator should really be looking at how do you want it to work not, even, constraining. Yourself by how you're going to do that because, that's how you create transformative. And breakthrough. Experiences. Because, if you look at how you want it to work what, you may realize, is the, solution, to those problems likely. Exists I'll give you a simple example of something we collaborated. On you, know with American, and that is the, flight bag if you guys have seen you, know pilots, walking through the airports in the past with those big black bags you know that sounds like a simple problem and it might have been a hard one to solve years ago but, in collaboration. We've worked together and with the connected, tablet, now not, only can you get real-time updates, you can replace, all that with the tablet application. If that would have started with how, do I make this flight bag a little bit lighter that, would probably not have been breakthrough, things I always wondered what was in those bags I don't, know you'd have to ask Doug. Charts. Charts. But. No so now that's that can be all on a tablet absolutely yeah again I mean literally and, it's required asking as a pilot you have to have you all those updated, that the fa tablets, to show the one go through your your, manual make sure that you have all your updates that you had to put into this them you have this enormous book, or three-ring binder we, can now do all that for. The for our for our team and. Isn't it they carry around on. Do. You have some advice for people, here this, morning just in terms of how. They view disruption. In in their own fields yeah I'll. Try you know we certainly work in a business where we have it feels like we're getting disrupted all the time mostly. Just due to competition. We. Try to just be as flexible as we can and know, that it's. You know change is always going to come and they were in a business is changing all the time and we, need to be able to respond, quickly often. That means technology. You, know what we know is in. Our business if we if we come, up with an, advance, that drive, that moves traffic, particularly premium. Business traffic it's, going to get matched because those because, those travelers are too important, to all of us so. If it's if it's the physical product that can get matched pretty easily where. We know we can really, make a difference is, by going faster, in terms of, getting getting products, to. Market faster and doing that with more, nimble technology, and that's what we're working thank. You, yeah, maybe just some practical advice the. Word digital, transformation. For every company seems, to me awfully. Broad and, you. Know okay, that's great I'm supposed to digitally, transform, my company what am I supposed to actually do here, and my, view is you've got to create a vision of what the future could, look like and, then, you've got to break this down into bite-size pieces because, I think the Big Bang Theory of digital, transformation is. Flawed because by the time you get there much of what you will have done might be out of date so think. About your, you, could an easy place to start is your internal, employee. Experience, how do you make that employee experience, fit. For purpose for Millennials how, do you make it mobile-first. Cloud-first and. So, easy and how can you add fun, features like you, know wayfinding. In a large campus, or conference, room utilization that, is sort of like the uber of conference, rooms you know so you can find conference rooms easily set up you can transform, your employee. Experience. Very. Easily and, then think about your appreciate, it that you looked at me when you said millennial. It's. Just you know you act like that. An. Insult. Then. You can start with your customer experience and, then obviously you, know the technology, that you run but. My view is the other the other thing is, transformations. Are not for everybody and each, of you have to make sure you have the right people on your team the, right people in the right job at the right time who can embrace, this disruption, because humans, don't love change, you know they just don't, and so you've got to get people who can embrace this so, the, element, of of who you have on your team who's gonna drive this I think is paramount, to almost everything else I mean you're all talking about innovation I mean I think Meg would would, you've experienced, that at HPE so fascinating, because, it's.

Easy To say well we're, focusing on innovation but you, had to deal with stabilizing. The core the business and and bring. Shareholder, value which you've done hugely since, the since you've been there well. We had a particularly challenging situation. I think because, we. Had a business that, had been disrupted, and also, I was the third CEO, in, three years and that is very difficult for companies that churn, at the top I mean you to know this it's extremely. Challenging for companies so it, was steady heavy morale or company. Morale we were losing the support of the, investors, of customers. Of partners, and the employees, so. The first thing we had to do was steady hand on the tiller it's, going to be okay we've got a strategy, we're going we're going to be okay and then, quite quickly we had to lay out a turnaround, journey, because we had a cost structure that, could not be supported with the revenue trajectory, our, industry, was being disrupted, at an incredibly, rapid pace so, we had to lay out a five-year, turnaround, journey and the, reason we said five years was. Every. Turnaround, I've ever done probably you've done and you've done they you can fix anything for a quarter, or for a year but if you're fundamentally, gonna rebuild the foundation, it takes time at this sort of scale and so, the reason I said five years is, I had, to give, ourselves a, chance to turn around and, it, was interesting because two. Years into the turnaround I was with some investors who said well why are the results not what I expected, them to be and, I said I did not say five years because I meant two. And. So. That transparency. That ability, to lay out the roadmap was, really, helpful and letting us do, the turnaround, in a way that was sustainable, for the future can you can you turn around a company like that and innovate, at the same time you have to I mean we had to do both we, had to change our innovation. Focus we had to redo our own IT because. We had a legacy, IT system, that was not going to support what we needed to do so, just, to give you a few examples we, went from 86 data centers to 6 we went from 9,500. Applications, to 2,500, applications, we, changed, the focus around innovation and, time to market a lot, of these legacy companies, have, much, longer, innovation. Cycles, than is appropriate, today the innovation, cycles, have shrunk, dramatically, in the old days you know you could take nine.

Months To write an application and, then do another release, nine months later today. That has to happen in days and weeks and, so. We had to we had to fundamentally, change our our innovation. Cycles, and our commercialization. Cycles to bring new, innovation, to the market at a much faster rate. So. Just from. A people. Perspective, and and from an employee perspective. With. Things innovating changing. So quickly. Getting. Employees, to, to, improve. Their skills to change their skills I mean that is AMT has been, focusing, on that and. Sure. And I think and we talked a little bit about this yesterday and one, of our presentations. There's, really two demands for this one is if you look at this. The emerging, skills that we need for the future there's, an imbalance today, between supply and demand and so you can't find enough, people who already have those skills absolutely. And so you have to really look at this in two dimensions, clearly you have to continue, to build the capability, in our educational, system to produce that but, beyond that we all have to look at our own employees, and how we create a transformative. Capability. To create these skills for the future and our approach has been one of leaning heavily into, that across every. Business that we have today and we have two hundred and seventy-five thousand, employees so we have to do this at scale but, it really begins with creating pathways there's. Really no one model. That's going to work for everyone and what a pathway really, is based, on here is creating. A set, of abilities. Here, and capabilities. That employees, when they choose to develop their own personal, learning roadmap, can, develop, these skills for the future and we, take an approach here to, create that demand of showing, and we, begin with showing every, role in the company and every skill, and we show just, with a very simple, view of an, up or down arrow is that a is, that a skill, that's going to be in more, demand, in the future or less and, literally, an employee can go online. Punch. In the, the skills that they feel, they have and get, a sense of what, future job, opportunities are absolutely. Order entry would have a down arrow data. Scientist, would have an up arrow you, can make choices then based. On and obviously, there's pathways, to help develop this just like you have counselors, so you anchor where does that is that up higher is that it down, it depends. Yes it's kind of down I don't know why it's. It's about to be an up arrow in 1800, good all right I want, to apply for that myself okay, but. But it's interesting because the the, the. Employee has to be motivated, to do, this and that's critical, it takes a commitment and I think it's everyone. These days and, when I speak in college campuses, I say the same thing you, know we no longer live, in an era where you're gonna walk out of college and you're gonna have skills that are gonna remain relevant for any period of time so, everyone has to have this commitment, to continuous, and lifelong, learning learning, and and development. Of our skills the, world around us is changing it, paces, that certainly, none of us have seen in our careers, and so, this commitment. To always developing. Is critical, but I think as companies. We have an obligation to. Create those pathways to invest in creating, programs, and it's not like the past it's, not about putting people through specific, training you. Really can't do that but it's about creating if someone, has an interest, in moving, into becoming. A developer if someone has an interest in becoming a security, specialist, but it's creating. A pathway, for, them to invest in themselves to get there Doug, how do you look at sort, of Reese killing people for the future, you. Know I, do. Think you know we you know this and a lot of us talk about technology, and the rate of change we it's. Easy to lose sight and, the most important prop which is the effect on people and what it does to your team you, know we just went through a, merger. When, I say we just went through a we went through close, this thing almost four years ago but we're still going through it as it relates to technology and, the amount of change that that puts on people, just that not to mention the change it would've happened anyway you, just recognize how hard it is for people to change briefly you know people have done their jobs for 20-25, years do. It exceptionally, well know how to do it and all of a sudden you're just you know you just changed the way they check in is. Is. Really, hard on people so you, know I think it's incumbent upon leadership to. Recognize, that we, what, we're working very hard to do is make, sure we have a leadership team in place that.

Is That. Can, lead in today's world and it's different than the prior world it's where you know where, our, job as leaders is just to make sure that we give them the, tools they need to do their jobs train them on those tools make. Sure they understand them but make sure we're putting in place tools that are easy that, are easy for them to use to understand and, give me the tools let me go do their jobs let them know how important, is what they do reward. What they do so. They go home at the end of the day feeling fulfilled because. What what, they do they know is important and they they made a difference, and we can do that technology, helps us do that but, it's really important, that leaders are in place that understand, that's what their role is is. To make sure that, we're just not throwing technology, people and say here here's change but, rather that, we are true we're trying to put in place change that, allows our people to do their job the way that they do so well and make, sure they understand that we're there to support them and, you. Know that's that's bigger that's that's that requires as much innovation and creativity as it. Takes within our IT organization. To go develop code it's. Just it's a new skill set for leaders and it's. Something that we need to keep working on and learning because it's it's it's, it's not it's not the same as the old days just tell me other show up for work push, the airplane out we. Need to be much better than that and. Maybe with the the kind of restructuring, that your company was going through I mean reefs killing people and getting people to kind of adapt to that restructuring has got to be percolating. The. Amount of change that we have taken Hill at Packard through. Is, I think unprecedented. And it, was hard, on our employees it, really was because, just. There was so much change and by the way the change continues, and I think this is part of the new reality, because, a number of employees would say when will we be done with the change, maybe, never unfortunately.

I Mean I wake, up probably like you too every day wondering who's, you know what's gonna happen what competitor, has launched a product or a service that's going to threaten our. Business, so. One. Of the things we did was two things one is we, communicated. Communicated. Communicated. One of the things that I learned, when I ran for governor of California, was. A communication. Style that can enlist very large groups of people think, about it as business people we tend to be quite left brain communicators. Market, share return on invested capital, you know competitive, strategy, when. You aren't trying to enlist large, groups of people in a future vision it is not a left brain communication, it, is all, about the stories, you tell that, inspire, and educate people, as, to what it is that that, we collectively, as a team need to go do and honestly. That it took me two and a half years when I was running for governor to get that skill maybe. I would be governor if I'd gotten it earlier. But I learnt that and it came in it. Was so, essential. In the early days of. What. We were trying to do and enlist, people. In the transition, I will, also say transparency. Today. With social media with, you know more about this than probably, anyone Anderson, people. Have can often have their own version, of the truth and so, you know. And. So it was incumbent on us to be very transparent, about what we were doing because if we were not if what are what we said and our actions, were not aligned this. Was a big, trust factor, for us at the company do, you all agree with that transparency, is critical in all your, industries I think it's critically, important, and I mean even to a certain degree what I just mentioned in terms of showing what skills are going to be in demand, imagine. All of our employees, who are in those that have down arrows on it that's, transparency. That those that demand is going to continue to decline I think we have to do this in every other respect where, we face threats, we, need to communicate those threats because what it really means there is if we can't all step up together we're gonna have to make difficult decisions and the, interesting part with transparency. I see, people lean in much more if they understand, the problem there's. Enormous. Of course and again one of these changes it's happened in, leaders versus versus, the last generation, of leaders and when. I started this business you hear people literally say you know information is power and people. Would hold on to information and. It. Might have worked then there's no way that works now because. The information is everywhere you, know what you need to do is just make sure you're doing everything you can to communicate, as best you can. Beebe's, sure that, we we try really hard to make sure that we are ace a trusted, source of information, when there's so much out there so you have to be really candid and open, you can't put too much corporate spin on it or else people are gonna go look somewhere else for information, we try to be as opening candidates with candidates transparent, as we possibly can so that people trust our information, in, a world where it's hard it where it's hard to find it all invite and we never try, to you know manipulate. The message or hold on to part of the information because. It's going to get out there some other way and then all of a sudden we're gonna lose that trust so, it's. Incredibly, important and again a part of being a leader now is just being able to work in that environment where. You where you have to just know that everything you're that you were doing and talking about you should assume you're gonna be reading about it soon and when. You read about it how do you want it to be how do you want it to be shared so, we, choose to be the ones that share it instead. Of letting somebody else do it for us we, talk about developing. Capabilities, within your respective companies, with. With armor NEADS like AI. Cybersecurity. I mean again. May I come, to you you you've got to deal with that all the time yeah so. The war does AI freak you out. AI freaks me out I don't know why I feel like there's. Elements, that AI, that, are pretty worrisome, in, terms of what it can mean for the future of our society but. A lot of AI is going to create tremendous, opportunities, think about AI for the data center I mean, we can do things now around predictive, analytics, where we can we can predict, when your storage, array may go down and take actions, to keep that from happening, so there's some tremendously, you purchase a company nimble storage yes, and part of that was yes for, some of their AI stay exactly so.

Nimble, Had a product. In their suite called info site which, is what I the sort hand is it's AI for the data center basically, they take all the data from all the arrays that are, coming in across, their entire landscape. And applying. Artificial. Intelligence, and machine learning to that data and they've gotten incredibly, good and we're helping them now, predict. When arrays will go down what, the challenges, are finding, problems much earlier, than we would have ever found them waiting, for customers to have a problem and then figure it out we're, rolling that to our three power storage, business, and we're rolling it to our entire server business and it's gonna change the way we do business it's gonna change I, think the the impact that we can have on AI in the data center so that's not a scary. Thing, to me some, other uses of AI are but. You raise a good point where, do we go to get this technology we, happen to live in Silicon Valley the headquarters, of hewlett-packard is in Palo Alto ground. Zero for the war for talent on the up-arrow skills, and, it's. Very difficult for us to compete there because no sooner do we hire a. Young. Executive or, a mid-career, executive, and we train them up and they're gone and people. In Silicon Valley moved for $10,000. And. $20,000. So. We've, said listen we need to have a, core, of our most. Important innovation, in Silicon, Valley but we've got to expand. To other geographies. Where, we can hire the very best talent from the universities, in that city. Then grow. That talent, because the war is not so tough, so Houston. Dallas. Atlanta. Chicago. Are, all hubs for us where the war for talent is not quite what it is in Silicon Valley and you can go to places. Like Boise, Idaho where. You. Know Boise. State the, top 40, or 50, kids in engineering, at Boise State are just as good as they are at Stanford, or MIT or, Cal Tech the, depth is not as good but when you're the major employer in Boise Idaho you, get the pick of who you want and they stay with you because they want to live there Fort, Collins Colorado we, hire the very best at a Colorado State University, they've got an incredible engineering, group. Engineering. Department, and they, stay with you so we're thinking about geographically. How do we have, a different, hiring strategy, that. That will allow it to be not quite as transient. As it is today in Silicon Valley that is can you talk a little bit about emerging, needs sure and, I think as I look at you know artificial. Intelligence and machine learning you, know I take a very optimistic view of that in terms of I think it's going to have an impact on the, capabilities. That every industry, can, bring to bear and, I, look at this because if you look at this connected. Digital world around us everybody. And everything is connected today and that's going to continue to grow in the future all. Those things and people are generating, this digital, exhaust if, you think about this this is the the just a raw material right it's the crude oil of this mobile world but, now when you apply artificial. Intelligence, and machine learning to, that imagine. The breakthrough, technologies, whether it's healthcare whether, it's our industries, and how we even manage our network we're, really doing this at large, scale, to do very good things that we can look at just the, the, optical. Signal, changes, in cable, and based, on changes, in that we can predict where a bend has occurred we, can look at correlating, events, with, the door opening, or the change, in a humidifier, to know we have a leak and so, those are the types of just simple capabilities, but imagine when you apply that and you build algorithms, to, manage healthcare there's. If you go to the innovation forum we have here there's an interesting. Connected. Medical device, that basically listens, to just the sound waves of, blood moving, through your arteries arteries, and when it moves that up connects, it to, algorithms. Driven, by AI and, the cloud can, detect the blockage, so imagine, the great breakthroughs, that we'll see from this clearly we have to put controls, and constraints, around what we do with these technologies, but, they're going to have a profound, impact on society, as a whole.

At. EC AI. Again. A way, that we can do things faster we hope so much of what we're. Working through at American, for example is such incredible. Demand. For IT. Resources. And. You. Know the projects, I described like this positive, bag notification, you know I'm excited to tell you can do that now but we put that on a list to get done and people started working on it two and a half years ago that's. What it takes in, our business to get something, from the. Approval. Process to actually. Being a market, that's, we'd liked it to go faster, than that it's. By no means the. Best. People in the world working, and and, hitting deadlines, and making sure we ever think of properly prioritized. It's just that's how long it takes in today's world as we can move to things like you, know better more used to the cloud a. Machine. Learning we. Believe, those are ways that we can get we can get things to market much faster and indeed you know when you're talking about a our, machine learning things, that don't actually that you know that are essentially, program this program themselves, so. We don't need to continually do the work so again. Hard. For me sitting here to envision exactly, how that works in our business right now but what I know is every. One of these advances, in that happen in technology, end up having a profound impact on our business and anything can help us go faster, weren't a huge, favor there's really a dumb question but do, you feel like as that. You all have to understand. Everything. That's coming down the pike in terms of new, technology, or is it okay, to just have people around you who understand, it there's, so much stuff I do not understand, and, I imagine a lot of people in this room are concerned, about new. Technologies. That they may not comprehend, to effectively. Run your company do. You have to be completely. Versed in it. I'll. Take the answer, to that is completely, is a relative, term good, but I have to know what, the new technology, is I have to know what our competitors are doing I have to know what's happening, in the. National Laboratories, I have to understand, what's coming out of the universities so you're educating, yourself educating, myself all the time and you. Know it was a challenge for me when I came to Hill at Packard because I tend to be more of a consumer technologist, from my ten years at eBay I will, tell you that enterprise, grade technology is, quite, different than consumer. Technology. And so while. I had bought lots of servers storage and networking and. Things. Like that at eBay, I have, had - this. Has been a really steep learning curve for me I happen. To like that but, it is it takes a good, chunk of my time to stay current and then I obviously use our most. Advanced, technologists. At HP as as, educators. In many ways for, me but it's absolutely, critical that I know exactly, as, best I can what is happening and what the trends are the future so that we can make the right capital, allocation, decisions, we can make the right R&D, investment, decisions we can change our go-to-market if the if the customers.

Are Demanding it so I have to know yeah. I agree I think there's a fundamental level. Of awareness that, you have to have as a leader these, days clearly. The experts, will come from those that we bring on to our teams but. This fundamental, awareness. Is really what will drive not just our curiosity, but knowing where we have gaps in our teams I have. To be able to answer this because we. Have technical people to work for American in the audience and if I don't admit. That I don't know everything. I'm. Not gonna be able to go back to the office so. They're. Not, gonna let you know you know Meg runs a technology, company we run an airline there's there there, I don't I'm, not gonna pretend as though I'm fully. Abreast of what's going on all, the times an IT and. Never. Will be we have phenomenal people, you. Know our chief information officer, as good as they come but. For the same reason you know I don't know how to fly an airplane. And. I can still run the airline I don't, need to know everything, is going on in technology. In order to lead the business you know my jobs to make sure we have the right people that, do know all those things that we're all aligned we're all working together but. I'm by no means I'm, staying abreast of everything, is going on the on to your works we have people that are doing that I think I mean everybody in this room anybody who has a company is concerned about cybersecurity or even in their personal life how do you. Talk. About an emerging, need that's something which is constantly, evolving and, it there's could be nothing more important for your customers and for, your employees, I think, there's you know if you think about this the consequences, are large you can, pick up the paper and and really read about some of those and current issues I would tell you that you know as we look at that I love that you pick up a newspaper very. Well school you know I think I find, that the only refreshing. Way to enjoy, the news is but. Because. I'd rather not see. I'd, rather, not be reading you, know my at, least those I follow on Twitter but but. I would say that though if you look at this and you you know in terms of you know the approach and and, and how we manage this I think it's taken an orthogonal, view but, I don't me just talk a little because, that's important it's embedded and, in the business that we're in you expect that from us so it's embedded in every product and service but. We also are, you know for us it's an opportunity we're building you, know a large, business. Around helping companies secure. This, what's happening now there's, no business here that doesn't have a larger, digital aperture that today than they had yesterday so that's only going to continue to grow but, the simple thing here is that there are things that we can do to protect and manage risk there's always going to be risk the only way to eliminate risk is to turn things off now if you deal with that risk then it's moving from what, people, in this room have spent decades doing, and that's just, protecting.

Detecting, And responding to threats to, now using, all these capabilities, including. Artificial, intelligence. And machine learning to, predict, what's, happening around you because many of the threats that we face today, aren't, known threats they're new and emerging ones but, it's going there's no end state insecurity, I also say that, it's, a manageable, risk that we have out there and the only way to avoid it is to not to have a digital extension. And the reality, is as we all know that's not practical I, would. Just add this, has become, over. The last decade, this is a much, more serious problem than it used to be when I was at eBay we were worried about a teenager, in Red Deer Montana, you, know sitting, in his parents basement hacking. Into our system today this is nation-states, think, everyone knows largely, 90%. Of the intrusions, and there's hundreds, of thousands, of intrusions, a second, across, our company probably, nine thousands, a second, yeah because a lot of this is roboticized. You know this is just people trying to get into your network trying to get into your database all, the time and it's, coming about largely, from three countries and it's. Iran, China and Russia and so. This. Is we. Are we've, got to get better on behalf. Of our customers and ourselves the bad guys get better we get better the bad guys guys get better it's a war and it's, going to continue, my view for the foreseeable, future and, exactly. What Fatih has said you've got to build security, into your. Infrastructure, and into, the, machines and, and your, networks, that, it used to be you could sort of put and think about it like this you you know think about your house you, put a perimeter you put your security system on so there's someone tried to intrude you, would that. The alarm would go off you, need that today but but, the reality, is the bad guys are going to get in and you've, got to find them really fast and you. Know that ease knows more about this than almost anyone which is you, know where they try to go in as the networks so, can you use. Artificial. Intelligence, and behavioral. Analytics to see what. Is a different. What is an, anomalous. Pattern and how packets, are moving through that network and then, frankly some. Security violations, come from your own employees, so can you see that and your own employee is doing something different with that network than they were last, week or, they had in the past year are they downloading files, that they never would have downloaded, is some, of those files headed, out to a country that you would not want those files headed out to and you can't, do this by, inspecting. With, people this has to be done by. Machine. Learning and it has to be automated because the volume, is so enormous so, it's a super scary thing we all work on it very. Diligently. In our new generation, servers we have built trust. Into. The silicon so, it's not a perimeter, anymore. It is actually built into the silicon and we. Know when that silicon, and when the when the machine is being booted by someone, in something, that should not be happening. In. Terms of in. The time a few minutes we have remaining. How. Do you where do you see your industries moving over the next I mean whether it's five ten years whatever, it may be and what sort of what sort of time frame horizon. Do you look at it I'll. Be happy to start I think the because there's some exciting things happening, I mean clearly I've already mentioned one so I won't spend a lot of time on that but you know the software, af-- occation and it's a made-up board but you know as we look at everything that we're doing becoming. The, platform, in terms, of the software and the capabilities, that's, going to continue, but really. Now what's going to really I think transform. And create were nothing short of the fifth Industrial, Revolution is, now, the emergence, of our fifth generation, wireless, technologies, we're, at the very early phase of that standards, will be set next year and we'll begin to see deployments, but what does that mean you, know as we go from 4G, to 5g, you know you think of speeds, now that, start to blur the line between the physical and digital worlds in the past we think about physical connectivity, when we needed speed in a 5g, world when we can get a gigabit, to every user imagine.

What You get to enable behind it but it's more than speed because in the fifth generation technology. That's rolling out with wireless, on a standards-based. Across this globe this. Latency, the time you hit your inner key until you get a response becomes. Immediate, and instantaneous. All of a sudden we will see the emergence here, in this, next iteration, now of the ability to support autonomous, driving remote. Robotics, because the, reality is with anything you're trying to control that, latency. Becomes, important, if you're controlling a car centrally. If, you push the brake it needs to happen right away and so, that latency becomes, relevant the same thing with medical, robotics you, can virtual. Reality, augmented reality. Imagine. This, next, generation of applications that comes as we deploy 5g, technologies. I'll. Just build on what Fatih, has said we, are very interested in what's now gonna happen at the edge and, I described the edge as anything that's not happening in the data center so is it happening in a jet engine is it happening in a hospital bed is happening on a factory floor is it happening in an autonomous driving, vehicle, and the, ability to make real-time decisions. At. The. Point of where that data is being generated and collected, is super interesting because, imagine if you could attach, compute. And storage to, your factory, floor and see, when things were in, trouble or changes, needed to be made and it, just made, them automatically, and you do not have you spoke, about latency, you do not have the time to take the data off your factory floor or out of your jet engine take, it back to the data center or to the cloud process, it and have it come back because, the decisions need to be made real-time, autonomous. Driving vehicle is the perfect, example I don't, know how many of you have had a chance to, be in an autonomous driving vehicle, but I did it five years ago in Berlin for my very first time and at, the end the driver I did have a driver in the autonomous driving, vehicle in case something went wrong but, he. Said at the end do you want to see the data center that powers this car and, I'm like yeah. I guess I did we walked to the back of the trunk and in the back of the trunk is a mini data center that is processing, all that data that that autonomous, driving vehicle, is getting, right, there right now because it, has to process it immediately, otherwise. You could end up in an accident. Over. The, next few years in our business the biggest change it will just be a continued. Improvement. The product I mean our, business gone through this transformation. That I think even people in our business haven't fully figured out yet we're actually instead, of these struggling, companies are trying to figure out just how do I make it to the next winter to. Vibrant. Businesses, that are investing, and those. Of us that understand, that you're seeing it you know are the fight now is. Particularly. For premium travelers, and the product matters so you hopefully. You've noticed enormous, improvements, in the American Airlines product for the last few years it's true of our competitors, as well and. We and, this is going to get more and more important, as we as we fight each other and, what we have left to fight on is the product and connectivity. For. Business travelers is a really important, part of that by the way and people we need to provide people on airplanes now they expect to be able to be connected you. Know. We've. All been on airplanes where you know the Wi-Fi, now you know if it's, if, it's. What. We use a go-go technology, it most of those they shoot down to the ground they're soon to cell towers, people.

Ask Why do you charge so much for that the reason they. Charge so much for it, gogo keeps that out of us but. The reason that's charged so much is because we can't there's nothing to bandwidth to have more than you. Know a handful. Of people ten people or so using that at once and if we give away for free then no one's gonna be able to use it much. Better technology is to use Wi-Fi technologies, satellite technology, and shoot up it, allows complete, streaming, of. You, know CNN. Netflix. Throughout. The airplane and, that's but but, obviously. That technology, to keep, getting better and better and we need to be on the leading edge of it because, our customers expect to be connected, and those, of us that can do that better than others are. Going to do ones that when, the passengers were well, I mean it someone who flies American all the time I do notice, you've invested, in new, planes, it, seems like from what I've read there are more fuel-efficient. They. Are and. And and, a much nicer product, I mean we look we bring. In a new airplane every four days for like three years now and retiring an old one, our average aircraft, age has gone from, something. Like 14 years four years ago to less than 10 years now so as time has progressed, already just got our fleets gotten younger and. That only happens if you're retiring, older, airplanes and bring any ones at a very quick rate and we are doing that we're proud of that and, as we do that again we can we can we're. Making sure that. We have things like power ports, so, people can be connected in and leading-edge. Technology, on the airplanes particularly, as it relates to, Wi-Fi. Usage, just. A few, seconds there any other thing, you want to leave people with this morning no I just just have a question for you as you know as you come on board as we close this transaction, are you going to become a data scientist. I. Don't. Know if that's up or down for me I don't know. Also. I can, guarantee you I'm not smart enough to be a data scientist, so I'm still. Trying to figure out how to use my phone so although. I did just get my mom on Instagram, so she's, 94, so the, fact that I could teach her that means I feel like I could teach anybody anything. Wasn't. Easy anyway, thank you so much thank you, thank. You everybody. You.

2017-12-09 16:23

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