WEBVTT 00:00:00.000 --> 00:00:02.560 align:middle line:84% The following content is provided under a Creative 00:00:02.560 --> 00:00:03.920 align:middle line:90% Commons license. 00:00:03.920 --> 00:00:06.360 align:middle line:84% Your support will help MIT OpenCourseWare 00:00:06.360 --> 00:00:10.000 align:middle line:84% continue to offer high quality educational resources for free. 00:00:10.000 --> 00:00:13.280 align:middle line:84% To make a donation or view additional materials 00:00:13.280 --> 00:00:17.240 align:middle line:84% from hundreds of MIT courses, visit MIT OpenCourseWare 00:00:17.240 --> 00:00:20.140 align:middle line:90% at ocw.mit.edu. 00:00:20.140 --> 00:00:21.640 align:middle line:84% JOHN PATRICK: OK, thank you, Irving. 00:00:21.640 --> 00:00:23.640 align:middle line:90% Good afternoon. 00:00:23.640 --> 00:00:25.800 align:middle line:90% Nice to meet you all. 00:00:25.800 --> 00:00:28.620 align:middle line:84% We're going to break this in two parts, 00:00:28.620 --> 00:00:32.299 align:middle line:84% a part about management-oriented things, 00:00:32.299 --> 00:00:36.260 align:middle line:84% idea-oriented things, the internet history, so to speak, 00:00:36.260 --> 00:00:40.040 align:middle line:84% at IBM and how that all got going. 00:00:40.040 --> 00:00:43.420 align:middle line:84% And then the second part about where I see the internet headed. 00:00:43.420 --> 00:00:47.900 align:middle line:84% So I don't know if that's going to be 50/50 or 30/70 or 70/30. 00:00:47.900 --> 00:00:50.200 align:middle line:90% We'll play that by ear. 00:00:50.200 --> 00:00:51.860 align:middle line:90% I wasn't sure what to call this. 00:00:51.860 --> 00:00:54.960 align:middle line:84% I named it Launching Potentially Big Ideas. 00:00:54.960 --> 00:00:58.900 align:middle line:84% I don't want to be too presumptuous about the impact. 00:00:58.900 --> 00:01:01.640 align:middle line:90% History will assess that for us. 00:01:01.640 --> 00:01:04.540 align:middle line:84% But these are the topics that I've organized this into 00:01:04.540 --> 00:01:05.600 align:middle line:90% to speak about. 00:01:05.600 --> 00:01:08.698 align:middle line:90% And I'll start with the idea-- 00:01:08.698 --> 00:01:10.240 align:middle line:84% and I guess the most important thing, 00:01:10.240 --> 00:01:13.060 align:middle line:84% as you go out back into the business, 00:01:13.060 --> 00:01:17.800 align:middle line:84% or academic, or government, or public service jobs, 00:01:17.800 --> 00:01:20.920 align:middle line:84% wherever you end up, you're going to have a big impact. 00:01:20.920 --> 00:01:22.020 align:middle line:90% I know you will. 00:01:22.020 --> 00:01:24.580 align:middle line:90% And it starts with an idea. 00:01:24.580 --> 00:01:27.620 align:middle line:90% And where do you get ideas? 00:01:27.620 --> 00:01:33.180 align:middle line:84% And I think it's mostly by looking to the outside. 00:01:33.180 --> 00:01:36.380 align:middle line:84% There certainly are a lot of good ideas at MIT and in IBM 00:01:36.380 --> 00:01:39.460 align:middle line:84% and any organization, but somewhere 00:01:39.460 --> 00:01:42.200 align:middle line:84% along the line, a person I worked with said, 00:01:42.200 --> 00:01:45.500 align:middle line:84% the most important thing you can do is go to a lot of conferences 00:01:45.500 --> 00:01:48.620 align:middle line:90% and see what other people think. 00:01:48.620 --> 00:01:53.300 align:middle line:84% And for me, at least for my 40 years since I joined IBM-- 00:01:53.300 --> 00:01:55.780 align:middle line:84% I retired six years ago from IBM. 00:01:55.780 --> 00:01:58.410 align:middle line:84% But in my career, the conferences 00:01:58.410 --> 00:02:01.810 align:middle line:84% would be the thing, I would say, is where most of my ideas 00:02:01.810 --> 00:02:02.313 align:middle line:90% came from. 00:02:02.313 --> 00:02:03.730 align:middle line:84% And this one particular conference 00:02:03.730 --> 00:02:06.710 align:middle line:90% had to do with the internet. 00:02:06.710 --> 00:02:08.669 align:middle line:84% It was a conference called PC forum. 00:02:08.669 --> 00:02:13.290 align:middle line:84% And there was a guy there named John Gage from Sun Microsystems, 00:02:13.290 --> 00:02:16.890 align:middle line:84% and he showed a demonstration of the web. 00:02:16.890 --> 00:02:18.730 align:middle line:90% And this was in-- 00:02:18.730 --> 00:02:22.050 align:middle line:90% I guess it was the fall of '92. 00:02:22.050 --> 00:02:25.930 align:middle line:84% And I think it's fair to say that 99-point-something percent 00:02:25.930 --> 00:02:28.430 align:middle line:84% of the people in the audience had never seen the web before, 00:02:28.430 --> 00:02:30.410 align:middle line:90% including me. 00:02:30.410 --> 00:02:32.210 align:middle line:84% That's probably hard for you to imagine, 00:02:32.210 --> 00:02:35.890 align:middle line:84% that there were people who have never seen the web. 00:02:35.890 --> 00:02:39.770 align:middle line:84% But at that time, it was really new. 00:02:39.770 --> 00:02:45.210 align:middle line:84% And it really just blew my mind to see this guy on a stage 00:02:45.210 --> 00:02:51.730 align:middle line:84% with a laptop showing some things in a classroom in Japan. 00:02:51.730 --> 00:02:56.130 align:middle line:84% And so I came back to IBM, and I said, 00:02:56.130 --> 00:02:58.510 align:middle line:84% how do we get hooked to the internet? 00:02:58.510 --> 00:03:00.380 align:middle line:90% And nobody knew. 00:03:00.380 --> 00:03:03.482 align:middle line:84% IRVING WLADAWSKY-BERGER: John, was that pre-browser? 00:03:03.482 --> 00:03:05.190 align:middle line:84% JOHN PATRICK: No, it was not pre-browser, 00:03:05.190 --> 00:03:08.010 align:middle line:84% but it was the very early browsers. 00:03:08.010 --> 00:03:13.710 align:middle line:84% It was back in the days when a browser was very complicated 00:03:13.710 --> 00:03:14.570 align:middle line:90% to get it going. 00:03:14.570 --> 00:03:16.690 align:middle line:84% And not only did you have to have a browser, 00:03:16.690 --> 00:03:20.630 align:middle line:84% but you had to have what back then was called Trumpet, 00:03:20.630 --> 00:03:22.410 align:middle line:84% or if some of you were technical, 00:03:22.410 --> 00:03:24.150 align:middle line:90% it was called Winsock. 00:03:24.150 --> 00:03:27.910 align:middle line:84% And this was a software networking interface 00:03:27.910 --> 00:03:31.670 align:middle line:84% that allowed your computer to be connected to a network-- 00:03:31.670 --> 00:03:34.650 align:middle line:84% TCP/IP, if you want to use a technical term. 00:03:34.650 --> 00:03:37.170 align:middle line:84% And of course, today, every computer has that. 00:03:37.170 --> 00:03:38.470 align:middle line:90% My iPhone has that. 00:03:38.470 --> 00:03:40.170 align:middle line:90% It's pretty much ubiquitous. 00:03:40.170 --> 00:03:42.070 align:middle line:90% But then it wasn't. 00:03:42.070 --> 00:03:47.230 align:middle line:84% And of course, we didn't have many PCs at that time 00:03:47.230 --> 00:03:49.210 align:middle line:90% in people's offices, either. 00:03:49.210 --> 00:03:53.610 align:middle line:84% And they were primarily used to connect to the mainframe 00:03:53.610 --> 00:03:54.970 align:middle line:90% applications. 00:03:54.970 --> 00:03:56.430 align:middle line:84% So there was an internal network, 00:03:56.430 --> 00:03:58.590 align:middle line:84% but there wasn't much beyond that. 00:03:58.590 --> 00:04:01.430 align:middle line:84% Well, I said, there has to be a way to do this. 00:04:01.430 --> 00:04:03.930 align:middle line:84% And I kept asking, and eventually somebody 00:04:03.930 --> 00:04:06.050 align:middle line:84% said, oh, there's a guy named Matt Ganis. 00:04:06.050 --> 00:04:08.330 align:middle line:90% He knows how to do this. 00:04:08.330 --> 00:04:11.110 align:middle line:84% And he was a member of IBM Research, 00:04:11.110 --> 00:04:15.890 align:middle line:84% and he had been involved in supercomputing project down in-- 00:04:15.890 --> 00:04:17.410 align:middle line:90% where was that? 00:04:17.410 --> 00:04:19.529 align:middle line:84% Down the Hutch there, where they started 00:04:19.529 --> 00:04:24.290 align:middle line:84% the early high-performance computing center, 00:04:24.290 --> 00:04:25.450 align:middle line:90% I think it was called. 00:04:25.450 --> 00:04:26.550 align:middle line:90% So Matt knew how to do it. 00:04:26.550 --> 00:04:28.510 align:middle line:84% So he came and showed me and hooked it up, 00:04:28.510 --> 00:04:32.970 align:middle line:84% and it was a really exception to be able to do this. 00:04:32.970 --> 00:04:35.490 align:middle line:90% And there was really no GUI. 00:04:35.490 --> 00:04:38.250 align:middle line:84% This was on a black-and-white screen. 00:04:38.250 --> 00:04:40.570 align:middle line:84% And the first application of the internet I ever used 00:04:40.570 --> 00:04:42.650 align:middle line:90% was something called Gopher. 00:04:42.650 --> 00:04:46.990 align:middle line:84% And Gopher pretty much is a dead thing these days, 00:04:46.990 --> 00:04:51.120 align:middle line:84% but it was a big thing here at MIT and at all the universities. 00:04:51.120 --> 00:04:55.240 align:middle line:84% And it was developed, I believe, at the University of Wisconsin. 00:04:55.240 --> 00:04:58.480 align:middle line:84% And with Gopher, you could connect to the internet, 00:04:58.480 --> 00:05:01.480 align:middle line:90% and you'd get a little menu. 00:05:01.480 --> 00:05:02.920 align:middle line:90% And this was all text. 00:05:02.920 --> 00:05:06.585 align:middle line:84% And you could connect to another computer, 00:05:06.585 --> 00:05:08.460 align:middle line:84% and then when you connected to that computer, 00:05:08.460 --> 00:05:12.737 align:middle line:84% there were lists of folders, directories of files. 00:05:12.737 --> 00:05:14.320 align:middle line:84% And you could click on a file, and you 00:05:14.320 --> 00:05:16.440 align:middle line:90% could see what was in the file. 00:05:16.440 --> 00:05:21.300 align:middle line:84% This blew my mind, that you could connect somehow, 00:05:21.300 --> 00:05:23.100 align:middle line:84% sitting in an office in Armonk, New York, 00:05:23.100 --> 00:05:25.720 align:middle line:84% and I could be looking at a file on some computer 00:05:25.720 --> 00:05:27.880 align:middle line:84% at the University of Delaware or somewhere. 00:05:27.880 --> 00:05:29.600 align:middle line:90% This was a mind-blowing concept. 00:05:29.600 --> 00:05:33.320 align:middle line:84% So I concluded that this was going to change the world. 00:05:33.320 --> 00:05:38.700 align:middle line:84% And then this point here about formulating the concept-- 00:05:38.700 --> 00:05:41.940 align:middle line:84% I didn't know, really, beans about the web, 00:05:41.940 --> 00:05:44.560 align:middle line:84% but I could see that this was all 00:05:44.560 --> 00:05:46.520 align:middle line:84% about getting connected, connecting 00:05:46.520 --> 00:05:49.220 align:middle line:90% people and communications. 00:05:49.220 --> 00:05:51.460 align:middle line:84% That was the concept I had in mind. 00:05:51.460 --> 00:05:52.280 align:middle line:90% E-business? 00:05:52.280 --> 00:05:55.700 align:middle line:84% Nobody had thought of that at this point. 00:05:55.700 --> 00:06:00.220 align:middle line:84% Encryption, credit card transactions, e-commerce, eBay-- 00:06:00.220 --> 00:06:02.020 align:middle line:90% I mean, there was none of that. 00:06:02.020 --> 00:06:06.020 align:middle line:84% All I could foresee was, this is going 00:06:06.020 --> 00:06:07.820 align:middle line:84% to be able to change the way we communicate 00:06:07.820 --> 00:06:12.340 align:middle line:84% with our people, our employees and our customers. 00:06:12.340 --> 00:06:15.120 align:middle line:84% So I wrote a paper called "Get Connected." 00:06:15.120 --> 00:06:17.020 align:middle line:84% I'll come back to that in a minute. 00:06:17.020 --> 00:06:20.780 align:middle line:84% So you've got to formulate the concept, have a vision. 00:06:20.780 --> 00:06:24.060 align:middle line:84% And you don't have to be a visionary to have a vision. 00:06:24.060 --> 00:06:26.040 align:middle line:84% Find other visionaries and listen to them. 00:06:26.040 --> 00:06:28.540 align:middle line:84% And we'll get into that in a minute. 00:06:28.540 --> 00:06:31.500 align:middle line:84% So the next thing about having an idea-- 00:06:31.500 --> 00:06:33.360 align:middle line:84% and I think this is universally applicable. 00:06:33.360 --> 00:06:35.402 align:middle line:84% This is just not an internet thing-- is, find out 00:06:35.402 --> 00:06:38.900 align:middle line:90% who knows about this idea. 00:06:38.900 --> 00:06:42.240 align:middle line:84% It's pretty unlikely, unless you're a Nobel Prize-thinking 00:06:42.240 --> 00:06:43.740 align:middle line:84% person, that you're going to come up 00:06:43.740 --> 00:06:46.600 align:middle line:84% with something that nobody's ever heard of before. 00:06:46.600 --> 00:06:49.480 align:middle line:84% Chances are, other people have thought about this. 00:06:49.480 --> 00:06:53.560 align:middle line:84% So I organized a lunch in Armonk. 00:06:53.560 --> 00:06:56.060 align:middle line:84% And through my assistant at the time, 00:06:56.060 --> 00:06:59.590 align:middle line:84% we put out some mails and phone calls, and we said, 00:06:59.590 --> 00:07:01.840 align:middle line:84% anybody that knows anything about the internet, please 00:07:01.840 --> 00:07:04.240 align:middle line:90% come to this lunch. 00:07:04.240 --> 00:07:07.840 align:middle line:84% And much to our surprise, about 25 people came. 00:07:07.840 --> 00:07:12.040 align:middle line:84% A few of them were of the mind that the internet 00:07:12.040 --> 00:07:13.420 align:middle line:90% is a really stupid idea. 00:07:13.420 --> 00:07:15.120 align:middle line:90% It's going nowhere. 00:07:15.120 --> 00:07:18.387 align:middle line:84% And what we already have is better than the internet. 00:07:18.387 --> 00:07:20.220 align:middle line:84% So there were a few that were very negative. 00:07:20.220 --> 00:07:23.080 align:middle line:84% But most of them thought, yeah, oh, god-- 00:07:23.080 --> 00:07:25.640 align:middle line:84% I was like a messiah, that somebody 00:07:25.640 --> 00:07:29.560 align:middle line:84% from the executive ranks had called a meeting 00:07:29.560 --> 00:07:32.800 align:middle line:90% and could actually spell TCP/IP. 00:07:32.800 --> 00:07:35.720 align:middle line:84% So this was the initial breakthrough 00:07:35.720 --> 00:07:37.860 align:middle line:84% was finding out who these people were. 00:07:37.860 --> 00:07:40.940 align:middle line:84% And then we created a grassroots movement. 00:07:40.940 --> 00:07:46.210 align:middle line:84% And this was part of the next step, I would say, 00:07:46.210 --> 00:07:47.990 align:middle line:90% in creating something big. 00:07:47.990 --> 00:07:49.710 align:middle line:90% And that is communications. 00:07:49.710 --> 00:07:53.230 align:middle line:84% And I would say, again, from my experience, 00:07:53.230 --> 00:07:58.910 align:middle line:84% if you only have one skill, that one really strong skill, 00:07:58.910 --> 00:08:03.010 align:middle line:84% make it this one, because without communications, 00:08:03.010 --> 00:08:05.390 align:middle line:90% good ideas don't matter much. 00:08:05.390 --> 00:08:07.470 align:middle line:90% And Irving knows this very well. 00:08:07.470 --> 00:08:12.530 align:middle line:84% We've seen so many brilliant people at IBM that had an idea 00:08:12.530 --> 00:08:16.350 align:middle line:84% but couldn't explain it and got frustrated and left the company 00:08:16.350 --> 00:08:21.110 align:middle line:84% or became a real problem because they were so frustrated 00:08:21.110 --> 00:08:24.470 align:middle line:84% that other people weren't smart enough to see 00:08:24.470 --> 00:08:26.950 align:middle line:90% the brilliance of their idea. 00:08:26.950 --> 00:08:29.950 align:middle line:84% Well, the way people see the brilliance of your idea 00:08:29.950 --> 00:08:31.990 align:middle line:90% is to be able to communicate it. 00:08:31.990 --> 00:08:37.938 align:middle line:84% So all people that have had a successful career always 00:08:37.938 --> 00:08:39.730 align:middle line:84% get asked, well, what's the key to success? 00:08:39.730 --> 00:08:41.650 align:middle line:90% What are the three things? 00:08:41.650 --> 00:08:43.770 align:middle line:84% And I always say, well, there's really one thing. 00:08:43.770 --> 00:08:45.530 align:middle line:90% It's communications. 00:08:45.530 --> 00:08:49.410 align:middle line:84% So what do I mean by that is first 00:08:49.410 --> 00:08:54.290 align:middle line:84% developing a simple theme, not a complex theme. 00:08:54.290 --> 00:08:56.690 align:middle line:84% And being here at MIT, it reminds me 00:08:56.690 --> 00:08:58.610 align:middle line:84% about the Semantic Web, which we'll 00:08:58.610 --> 00:09:01.250 align:middle line:90% talk about in the second half. 00:09:01.250 --> 00:09:03.810 align:middle line:84% But I would say, if there's one thing that has held 00:09:03.810 --> 00:09:07.250 align:middle line:84% the Semantic Web back has been the inability 00:09:07.250 --> 00:09:10.170 align:middle line:84% of the fairly small number of people who understand 00:09:10.170 --> 00:09:12.890 align:middle line:90% it to be able to explain it. 00:09:12.890 --> 00:09:14.180 align:middle line:90% And it doesn't have-- 00:09:14.180 --> 00:09:16.555 align:middle line:84% IRVING WLADAWSKY-BERGER: [INAUDIBLE] if any of them know. 00:09:16.555 --> 00:09:18.370 align:middle line:84% Any of you know about the Semantic Web? 00:09:18.370 --> 00:09:21.590 align:middle line:90% 00:09:21.590 --> 00:09:23.737 align:middle line:90% AUDIENCE: [INAUDIBLE] 00:09:23.737 --> 00:09:25.070 align:middle line:90% JOHN PATRICK: Yeah, one visitor. 00:09:25.070 --> 00:09:27.122 align:middle line:84% Yeah, well, we're going to talk about it. 00:09:27.122 --> 00:09:27.830 align:middle line:90% It's a big thing. 00:09:27.830 --> 00:09:31.050 align:middle line:84% It's the next big turn of the crank of the web. 00:09:31.050 --> 00:09:33.050 align:middle line:90% It's extremely important. 00:09:33.050 --> 00:09:36.010 align:middle line:84% So I think I just proved my point. 00:09:36.010 --> 00:09:38.032 align:middle line:84% Irving just proved the point by asking how many 00:09:38.032 --> 00:09:38.990 align:middle line:90% are familiar with this. 00:09:38.990 --> 00:09:40.930 align:middle line:84% Very few people are familiar with it 00:09:40.930 --> 00:09:43.470 align:middle line:84% because there's only a few people who know about it, 00:09:43.470 --> 00:09:45.850 align:middle line:84% and the ones who know about it, generally speaking, 00:09:45.850 --> 00:09:47.630 align:middle line:90% can't explain it. 00:09:47.630 --> 00:09:50.670 align:middle line:84% So step one is to have a simple theme. 00:09:50.670 --> 00:09:54.310 align:middle line:84% The theme we used around getting the internet going at IBM 00:09:54.310 --> 00:09:59.270 align:middle line:84% was this idea, get connected, which later became, GetCo. 00:09:59.270 --> 00:10:01.190 align:middle line:90% Everything has a nickname. 00:10:01.190 --> 00:10:03.770 align:middle line:84% And GetCo became a grassroots movement. 00:10:03.770 --> 00:10:07.510 align:middle line:84% And so we energized those people who had come to that lunch, 00:10:07.510 --> 00:10:09.310 align:middle line:84% and it turned out they knew some people who 00:10:09.310 --> 00:10:10.310 align:middle line:90% knew about the internet. 00:10:10.310 --> 00:10:13.230 align:middle line:84% It turned out, eventually we learned 00:10:13.230 --> 00:10:15.950 align:middle line:84% that most of the patents associated with the internet 00:10:15.950 --> 00:10:18.430 align:middle line:84% were developed by IBM, but they didn't go anywhere 00:10:18.430 --> 00:10:21.127 align:middle line:84% because IBM didn't believe in the internet. 00:10:21.127 --> 00:10:22.710 align:middle line:84% And IBM didn't believe in the internet 00:10:22.710 --> 00:10:26.650 align:middle line:84% because it was a threat to IBM's fundamental networking business. 00:10:26.650 --> 00:10:28.270 align:middle line:84% I'll come back to that in a minute. 00:10:28.270 --> 00:10:29.670 align:middle line:84% So you develop this simple theme. 00:10:29.670 --> 00:10:31.630 align:middle line:90% And Get Connected was a-- 00:10:31.630 --> 00:10:34.170 align:middle line:84% you can see the paper on my website. 00:10:34.170 --> 00:10:36.210 align:middle line:90% I'm not saying it's seminal. 00:10:36.210 --> 00:10:37.490 align:middle line:90% Some people said it was. 00:10:37.490 --> 00:10:40.140 align:middle line:84% To me, it was just a very simple thing. 00:10:40.140 --> 00:10:43.000 align:middle line:84% It was communicating, what's the internet all about? 00:10:43.000 --> 00:10:45.400 align:middle line:90% And I had 10 steps. 00:10:45.400 --> 00:10:47.500 align:middle line:84% Here's what you should do as a company. 00:10:47.500 --> 00:10:50.300 align:middle line:84% And they were very simple things. 00:10:50.300 --> 00:10:58.220 align:middle line:84% One of them was to print a URL on anything that you print. 00:10:58.220 --> 00:11:00.500 align:middle line:90% Well, that sounds pretty simple. 00:11:00.500 --> 00:11:06.140 align:middle line:84% But back then, the idea of putting http:// and a whole 00:11:06.140 --> 00:11:09.820 align:middle line:84% bunch of stuff on a business card was very offensive 00:11:09.820 --> 00:11:13.540 align:middle line:84% to the people responsible for the format of business cards 00:11:13.540 --> 00:11:14.120 align:middle line:90% at IBM. 00:11:14.120 --> 00:11:16.220 align:middle line:84% They didn't allow you to put an email address on a business 00:11:16.220 --> 00:11:16.860 align:middle line:90% card. 00:11:16.860 --> 00:11:18.860 align:middle line:90% It didn't fit the template. 00:11:18.860 --> 00:11:20.820 align:middle line:90% It was bad. 00:11:20.820 --> 00:11:24.780 align:middle line:84% And you can just imagine, perhaps, the chief marketing 00:11:24.780 --> 00:11:29.220 align:middle line:84% officer of IBM, when I went to her and said, 00:11:29.220 --> 00:11:33.020 align:middle line:84% every ad should have a URL on it. 00:11:33.020 --> 00:11:37.120 align:middle line:84% And she was like, these URL things, whatever they are, 00:11:37.120 --> 00:11:39.400 align:middle line:90% they're really ugly. 00:11:39.400 --> 00:11:41.392 align:middle line:84% And they take a lot of real estate, 00:11:41.392 --> 00:11:43.100 align:middle line:84% and nobody's going to know what they are. 00:11:43.100 --> 00:11:46.280 align:middle line:84% Why would we put that in The Wall Street Journal 00:11:46.280 --> 00:11:48.260 align:middle line:90% or in Fortune magazine? 00:11:48.260 --> 00:11:49.220 align:middle line:90% Why would we do that? 00:11:49.220 --> 00:11:52.760 align:middle line:90% So these were simple ideas-- 00:11:52.760 --> 00:11:56.240 align:middle line:90% use email, answer email. 00:11:56.240 --> 00:11:58.920 align:middle line:84% Most companies still don't answer their email. 00:11:58.920 --> 00:12:02.160 align:middle line:90% So simple concepts. 00:12:02.160 --> 00:12:03.840 align:middle line:84% And then, of course, tell the story. 00:12:03.840 --> 00:12:05.720 align:middle line:90% You've got to be out there. 00:12:05.720 --> 00:12:08.260 align:middle line:84% Irving was a model for this at IBM, 00:12:08.260 --> 00:12:12.160 align:middle line:84% and it's a tremendous loss that he's not there full-time 00:12:12.160 --> 00:12:15.120 align:middle line:84% now because he spent-- what percentage of your time 00:12:15.120 --> 00:12:17.000 align:middle line:90% outside telling the story? 00:12:17.000 --> 00:12:18.600 align:middle line:90% A big percentage. 00:12:18.600 --> 00:12:22.100 align:middle line:84% And so you tell it, and you tell it to everybody, 00:12:22.100 --> 00:12:23.800 align:middle line:90% but you keep it simple. 00:12:23.800 --> 00:12:29.680 align:middle line:84% If the approach is to show how sophisticated your idea is 00:12:29.680 --> 00:12:33.280 align:middle line:84% and reveal the complexities of the idea, 00:12:33.280 --> 00:12:35.860 align:middle line:84% you're feeding your own ego, but you're not 00:12:35.860 --> 00:12:38.500 align:middle line:84% accomplishing the mission because the mission is 00:12:38.500 --> 00:12:40.847 align:middle line:84% to communicate and make it simple. 00:12:40.847 --> 00:12:42.680 align:middle line:84% And of course, you can't do it all yourself, 00:12:42.680 --> 00:12:44.940 align:middle line:84% so you have to have a team of people who are 00:12:44.940 --> 00:12:46.520 align:middle line:90% going to help you evangelize. 00:12:46.520 --> 00:12:49.780 align:middle line:84% And you have to teach them how to tell the story 00:12:49.780 --> 00:12:53.900 align:middle line:84% and give them the idea of keeping it simple, 00:12:53.900 --> 00:12:55.860 align:middle line:84% which leads to this last point about, here, 00:12:55.860 --> 00:12:59.940 align:middle line:84% you can be the evangelist, but don't protect the content. 00:12:59.940 --> 00:13:04.860 align:middle line:84% And this was something I was not familiar with in the first 30 00:13:04.860 --> 00:13:08.060 align:middle line:84% years of my career was the idea of how 00:13:08.060 --> 00:13:11.820 align:middle line:84% proprietary some people view their speeches 00:13:11.820 --> 00:13:13.620 align:middle line:90% and their materials. 00:13:13.620 --> 00:13:16.060 align:middle line:84% And my first public speech about the internet 00:13:16.060 --> 00:13:19.880 align:middle line:84% was in December 1994, in Washington, DC, 00:13:19.880 --> 00:13:21.620 align:middle line:90% at Internet World. 00:13:21.620 --> 00:13:25.560 align:middle line:84% And I got a lot of calls came into my office asking for, 00:13:25.560 --> 00:13:28.260 align:middle line:84% how do we get a copy of John's slides? 00:13:28.260 --> 00:13:31.980 align:middle line:84% Or, would he be willing to share a copy of his slides? 00:13:31.980 --> 00:13:36.210 align:middle line:84% Well, it immediately dawned on me, why don't I create a website 00:13:36.210 --> 00:13:38.210 align:middle line:90% and put the slides on a website? 00:13:38.210 --> 00:13:43.650 align:middle line:84% And again, this is 1994, so it was a kind of a unique idea 00:13:43.650 --> 00:13:45.010 align:middle line:90% back then. 00:13:45.010 --> 00:13:49.350 align:middle line:84% And when I would say to my assistant, 00:13:49.350 --> 00:13:51.730 align:middle line:84% anybody that calls that wants slides, 00:13:51.730 --> 00:13:55.370 align:middle line:84% tell them to go to ibm.com/patrick, 00:13:55.370 --> 00:13:57.930 align:middle line:90% and they'll find the slides. 00:13:57.930 --> 00:14:01.730 align:middle line:84% And people would still call-- are you sure he doesn't mind 00:14:01.730 --> 00:14:02.570 align:middle line:90% us-- 00:14:02.570 --> 00:14:04.390 align:middle line:90% can we use the slides? 00:14:04.390 --> 00:14:05.430 align:middle line:90% Can we copy the slides? 00:14:05.430 --> 00:14:07.010 align:middle line:90% Of course. 00:14:07.010 --> 00:14:12.390 align:middle line:84% See, this is such a subtle but important point. 00:14:12.390 --> 00:14:15.730 align:middle line:84% If you protect it, you defeat the purpose 00:14:15.730 --> 00:14:17.810 align:middle line:90% of spreading the word. 00:14:17.810 --> 00:14:19.190 align:middle line:84% And people would say to me, well, 00:14:19.190 --> 00:14:23.090 align:middle line:84% how about if somebody copies your presentation? 00:14:23.090 --> 00:14:24.110 align:middle line:90% I'd say, great. 00:14:24.110 --> 00:14:26.290 align:middle line:84% Then there's another copy of it out there. 00:14:26.290 --> 00:14:28.650 align:middle line:84% Well, how about if somebody in IBM 00:14:28.650 --> 00:14:32.310 align:middle line:84% that's not a very good speaker takes your presentation, 00:14:32.310 --> 00:14:34.630 align:middle line:84% and they make a fool of themselves? 00:14:34.630 --> 00:14:40.670 align:middle line:84% Well, if somebody doesn't get the points of the presentation, 00:14:40.670 --> 00:14:41.370 align:middle line:90% they'll call. 00:14:41.370 --> 00:14:43.130 align:middle line:90% They can go to the website. 00:14:43.130 --> 00:14:45.070 align:middle line:90% They'll pursue it. 00:14:45.070 --> 00:14:47.150 align:middle line:84% There's no downside, in other words. 00:14:47.150 --> 00:14:49.510 align:middle line:90% And what are you protecting? 00:14:49.510 --> 00:14:53.230 align:middle line:84% The key is to keep your slides simple 00:14:53.230 --> 00:14:57.230 align:middle line:84% and allow flexibility so that people-- the worst thing you can 00:14:57.230 --> 00:14:59.708 align:middle line:90% do is fill a slide with words. 00:14:59.708 --> 00:15:02.250 align:middle line:84% I learned a cardinal rule from a guy named Leonard [? Lew, ?] 00:15:02.250 --> 00:15:05.630 align:middle line:84% who was the inventor of Systems Network Architecture. 00:15:05.630 --> 00:15:06.630 align:middle line:90% Remember Leonard? 00:15:06.630 --> 00:15:08.390 align:middle line:90% Brilliant, brilliant man. 00:15:08.390 --> 00:15:10.990 align:middle line:84% He said, never have more than five bullets on a slide. 00:15:10.990 --> 00:15:13.990 align:middle line:84% He would cut your fingers off if you had more than five bullets 00:15:13.990 --> 00:15:14.530 align:middle line:90% on a slide. 00:15:14.530 --> 00:15:17.090 align:middle line:84% And I've kept that to this day, and it's served me well. 00:15:17.090 --> 00:15:17.697 align:middle line:90% Yeah, sure? 00:15:17.697 --> 00:15:19.530 align:middle line:84% AUDIENCE: How you're telling the story part, 00:15:19.530 --> 00:15:23.650 align:middle line:84% when you talk about how you do that to different groups-- 00:15:23.650 --> 00:15:28.310 align:middle line:84% because I was in a situation this summer, 00:15:28.310 --> 00:15:31.010 align:middle line:84% talking about some new technologies, and maybe 00:15:31.010 --> 00:15:32.590 align:middle line:84% the IT group is willing to listen, 00:15:32.590 --> 00:15:34.465 align:middle line:84% but then when you go to the marketing people, 00:15:34.465 --> 00:15:38.090 align:middle line:84% they really don't want to talk about URLs or whatever. 00:15:38.090 --> 00:15:39.870 align:middle line:90% So how do you change your story? 00:15:39.870 --> 00:15:41.770 align:middle line:84% JOHN PATRICK: Well, it's a very good point. 00:15:41.770 --> 00:15:45.410 align:middle line:84% How do you tailor your message to the audience? 00:15:45.410 --> 00:15:47.770 align:middle line:84% And step one is to recognize that you really 00:15:47.770 --> 00:15:51.730 align:middle line:84% do have to tailor the message to the audience. 00:15:51.730 --> 00:15:54.490 align:middle line:84% If you're speaking to a board of directors 00:15:54.490 --> 00:15:59.130 align:middle line:84% or if you're speaking to a group of programmers, 00:15:59.130 --> 00:16:00.670 align:middle line:90% you can use the same material. 00:16:00.670 --> 00:16:03.850 align:middle line:84% You can even use the same charts and the same bullets. 00:16:03.850 --> 00:16:06.450 align:middle line:84% But the words you use have to be a lot different. 00:16:06.450 --> 00:16:10.170 align:middle line:84% And you have to-- especially to executive audiences, 00:16:10.170 --> 00:16:14.010 align:middle line:84% you have to commit yourself to never use a buzzword, never. 00:16:14.010 --> 00:16:19.005 align:middle line:84% Don't put abbreviations on charts, which most of us 00:16:19.005 --> 00:16:20.630 align:middle line:84% who are interested in technical things, 00:16:20.630 --> 00:16:22.610 align:middle line:90% we like to use abbreviations. 00:16:22.610 --> 00:16:30.160 align:middle line:84% We like to be able to recite DHCP and TCP/IP and 50,000-- 00:16:30.160 --> 00:16:32.880 align:middle line:84% there's thousands, literally, of things that you know that are-- 00:16:32.880 --> 00:16:34.240 align:middle line:90% but the audience doesn't. 00:16:34.240 --> 00:16:36.600 align:middle line:90% So you assume they don't know. 00:16:36.600 --> 00:16:38.860 align:middle line:84% If it's a technical audience, of course, 00:16:38.860 --> 00:16:41.185 align:middle line:84% you can be a little more technical. 00:16:41.185 --> 00:16:43.060 align:middle line:84% IRVING WLADAWSKY-BERGER: Let me make a point, 00:16:43.060 --> 00:16:44.200 align:middle line:90% and then I have a question. 00:16:44.200 --> 00:16:47.380 align:middle line:90% 00:16:47.380 --> 00:16:52.500 align:middle line:84% In my experience, the only way to learn to communicate, 00:16:52.500 --> 00:16:55.440 align:middle line:84% whether it's to a technical audience, 00:16:55.440 --> 00:16:59.980 align:middle line:84% to clients, to senior executives, is to do it. 00:16:59.980 --> 00:17:02.000 align:middle line:90% There is no substitute. 00:17:02.000 --> 00:17:03.880 align:middle line:84% And if somebody said, well, but then you 00:17:03.880 --> 00:17:08.200 align:middle line:84% won't do it well, well, OK, but the first time, 00:17:08.200 --> 00:17:09.339 align:middle line:90% you won't do it well. 00:17:09.339 --> 00:17:14.359 align:middle line:84% The 15th time, you'll do it much better. 00:17:14.359 --> 00:17:18.000 align:middle line:84% But it's a very important thing that it is really 00:17:18.000 --> 00:17:25.339 align:middle line:84% a critical exercise to sell your ideas by selling your ideas, 00:17:25.339 --> 00:17:31.060 align:middle line:84% by talking to people and, of course, listening to them. 00:17:31.060 --> 00:17:36.780 align:middle line:84% And when you talk to people, and if they don't understand 00:17:36.780 --> 00:17:40.840 align:middle line:84% what you're telling them, the feedback is critical, 00:17:40.840 --> 00:17:41.940 align:middle line:90% wouldn't you say? 00:17:41.940 --> 00:17:42.460 align:middle line:90% JOHN PATRICK: Definitely. 00:17:42.460 --> 00:17:44.002 align:middle line:84% IRVING WLADAWSKY-BERGER: The only way 00:17:44.002 --> 00:17:47.900 align:middle line:84% to be able to tell whether the concepts that 00:17:47.900 --> 00:17:52.500 align:middle line:84% are obvious in your mind are getting across 00:17:52.500 --> 00:17:56.020 align:middle line:84% to different audiences is to do it. 00:17:56.020 --> 00:17:58.100 align:middle line:84% And you will quickly be able to tell 00:17:58.100 --> 00:18:01.780 align:middle line:84% if you're getting blank stares or if they 00:18:01.780 --> 00:18:04.020 align:middle line:90% are resonating with you. 00:18:04.020 --> 00:18:07.100 align:middle line:84% But I honestly don't know any other approach 00:18:07.100 --> 00:18:11.520 align:middle line:84% than to just do it and do it and do it. 00:18:11.520 --> 00:18:15.140 align:middle line:84% And wouldn't you say, generally people get much better at it 00:18:15.140 --> 00:18:16.072 align:middle line:90% through practice? 00:18:16.072 --> 00:18:17.780 align:middle line:84% JOHN PATRICK: It takes a lot of practice. 00:18:17.780 --> 00:18:21.100 align:middle line:84% And it's a very perceptive question 00:18:21.100 --> 00:18:24.560 align:middle line:84% because, if you buy into this, and you 00:18:24.560 --> 00:18:28.000 align:middle line:84% want to follow this idea of building communications 00:18:28.000 --> 00:18:31.700 align:middle line:84% as a strength, you can't just decide, and it's done. 00:18:31.700 --> 00:18:34.280 align:middle line:90% I mean, it takes a lot of work. 00:18:34.280 --> 00:18:37.280 align:middle line:84% And part of it is tailoring the message, 00:18:37.280 --> 00:18:38.900 align:middle line:90% which was your question. 00:18:38.900 --> 00:18:42.520 align:middle line:84% You tailor it based on the level of the person, the audience. 00:18:42.520 --> 00:18:47.120 align:middle line:84% You also tailor it based on horizontally, in other words, 00:18:47.120 --> 00:18:49.445 align:middle line:84% to the different vertical segments. 00:18:49.445 --> 00:18:51.820 align:middle line:84% If you're speaking to a group of hospital administrators, 00:18:51.820 --> 00:18:54.640 align:middle line:84% it's different than engineering or government. 00:18:54.640 --> 00:18:59.480 align:middle line:84% You have to know your audience and make your example, whatever 00:18:59.480 --> 00:19:03.600 align:middle line:84% examples you use, orient them toward their particular industry 00:19:03.600 --> 00:19:04.780 align:middle line:90% or their concerns. 00:19:04.780 --> 00:19:08.200 align:middle line:84% And the more you know about your audience, the better you are. 00:19:08.200 --> 00:19:12.840 align:middle line:90% And part of it also is delivery. 00:19:12.840 --> 00:19:15.360 align:middle line:84% And this takes a lot of practice. 00:19:15.360 --> 00:19:22.630 align:middle line:84% It literally takes a focus on what words you're going to use. 00:19:22.630 --> 00:19:25.470 align:middle line:90% And don't say "uh." 00:19:25.470 --> 00:19:30.130 align:middle line:84% How many speeches have you been to where 40% of the speech was 00:19:30.130 --> 00:19:33.030 align:middle line:90% "uh, uh, uh"? 00:19:33.030 --> 00:19:36.590 align:middle line:84% And that takes away from your message. 00:19:36.590 --> 00:19:38.110 align:middle line:90% It diverts people. 00:19:38.110 --> 00:19:39.170 align:middle line:90% But it's not easy to do. 00:19:39.170 --> 00:19:40.570 align:middle line:90% It takes a lot of practice. 00:19:40.570 --> 00:19:41.140 align:middle line:90% Yeah? 00:19:41.140 --> 00:19:42.890 align:middle line:84% AUDIENCE: I wanted to ask you a question-- 00:19:42.890 --> 00:19:43.682 align:middle line:90% JOHN PATRICK: Sure. 00:19:43.682 --> 00:19:48.830 align:middle line:84% AUDIENCE: --about the pace of widening the audience 00:19:48.830 --> 00:19:50.300 align:middle line:90% that you tell the story to. 00:19:50.300 --> 00:19:52.550 align:middle line:84% So I obviously have never done anything at this scale, 00:19:52.550 --> 00:19:57.090 align:middle line:84% but promoting an idea for a new product, for example, 00:19:57.090 --> 00:19:57.950 align:middle line:90% [INAUDIBLE]. 00:19:57.950 --> 00:20:01.390 align:middle line:84% One of the things I've noticed is, 00:20:01.390 --> 00:20:04.502 align:middle line:84% if you haven't fully developed the idea, 00:20:04.502 --> 00:20:06.710 align:middle line:84% and you start to share it, one of the toughest things 00:20:06.710 --> 00:20:09.910 align:middle line:84% to deal with is, everyone you tell it to takes the idea 00:20:09.910 --> 00:20:13.310 align:middle line:84% and tries to pull it in this direction, or that direction, 00:20:13.310 --> 00:20:14.480 align:middle line:90% or that direction. 00:20:14.480 --> 00:20:16.230 align:middle line:84% To some degree, it seems like a good thing 00:20:16.230 --> 00:20:19.870 align:middle line:84% because you want to be managing all of those tensions, 00:20:19.870 --> 00:20:21.310 align:middle line:90% but you want as much input. 00:20:21.310 --> 00:20:25.010 align:middle line:84% But to some degree, it seems like there's 00:20:25.010 --> 00:20:27.610 align:middle line:84% a certain kind of careful engineering of, 00:20:27.610 --> 00:20:30.090 align:middle line:84% when do you tell which people so that the idea 00:20:30.090 --> 00:20:32.730 align:middle line:84% development doesn't get diverted too 00:20:32.730 --> 00:20:35.570 align:middle line:90% early on from the [INAUDIBLE]? 00:20:35.570 --> 00:20:37.070 align:middle line:84% Do you have any perspective on that? 00:20:37.070 --> 00:20:39.930 align:middle line:84% JOHN PATRICK: Well, it's an extremely important point 00:20:39.930 --> 00:20:42.490 align:middle line:84% because half of communications, at least half of it, 00:20:42.490 --> 00:20:44.770 align:middle line:90% is listening. 00:20:44.770 --> 00:20:48.850 align:middle line:84% And I've seen so many cases where a person has a product 00:20:48.850 --> 00:20:51.090 align:middle line:90% or technology, an idea. 00:20:51.090 --> 00:20:54.050 align:middle line:84% They have a certain purpose for it. 00:20:54.050 --> 00:20:56.810 align:middle line:84% It's going to solve a certain set of problems. 00:20:56.810 --> 00:21:00.610 align:middle line:84% The questions keep coming in from a different perspective. 00:21:00.610 --> 00:21:02.970 align:middle line:84% And what that should say to the person 00:21:02.970 --> 00:21:06.810 align:middle line:84% is, maybe there's a better use for this product, 00:21:06.810 --> 00:21:07.990 align:middle line:90% even, than I thought. 00:21:07.990 --> 00:21:10.970 align:middle line:84% Or, even if it isn't better, maybe it's one somebody 00:21:10.970 --> 00:21:12.890 align:middle line:90% will actually buy. 00:21:12.890 --> 00:21:16.910 align:middle line:84% The one I had in mind, may be ultimately better, 00:21:16.910 --> 00:21:19.170 align:middle line:90% but you go where the market is. 00:21:19.170 --> 00:21:22.270 align:middle line:84% This is one of the great things about a company I really 00:21:22.270 --> 00:21:24.950 align:middle line:90% don't like called Microsoft. 00:21:24.950 --> 00:21:27.110 align:middle line:90% They listen. 00:21:27.110 --> 00:21:29.585 align:middle line:84% Sometimes they're a little slow, but Bill Gates 00:21:29.585 --> 00:21:31.710 align:middle line:84% made a lot of speeches around the time I was making 00:21:31.710 --> 00:21:32.877 align:middle line:90% speeches about the internet. 00:21:32.877 --> 00:21:34.790 align:middle line:84% He was making speeches saying, the internet 00:21:34.790 --> 00:21:36.830 align:middle line:90% will never be used for business. 00:21:36.830 --> 00:21:37.810 align:middle line:90% It's too slow. 00:21:37.810 --> 00:21:40.510 align:middle line:90% It's insecure. 00:21:40.510 --> 00:21:44.750 align:middle line:84% But once he listened to Brad Chase and others 00:21:44.750 --> 00:21:50.750 align:middle line:84% at Microsoft, whew, they changed on a dime. 00:21:50.750 --> 00:21:53.570 align:middle line:84% So it's really, really important. 00:21:53.570 --> 00:21:56.890 align:middle line:84% Your idea may be as good as you thought it was, 00:21:56.890 --> 00:21:58.550 align:middle line:90% but for a different purpose. 00:21:58.550 --> 00:22:01.870 align:middle line:84% And you learn that from the questions that people ask. 00:22:01.870 --> 00:22:03.030 align:middle line:90% Yeah? 00:22:03.030 --> 00:22:06.930 align:middle line:84% AUDIENCE: How long had you been at IBM when all this started? 00:22:06.930 --> 00:22:09.070 align:middle line:84% Because it seems to me, depending 00:22:09.070 --> 00:22:12.590 align:middle line:84% on where you are in your career, if you find yourself butting 00:22:12.590 --> 00:22:16.752 align:middle line:84% heads or banging your head against a stone wall, 00:22:16.752 --> 00:22:18.210 align:middle line:84% if you're new to a company, I would 00:22:18.210 --> 00:22:19.370 align:middle line:84% imagine you would just say, well, let 00:22:19.370 --> 00:22:20.750 align:middle line:90% me take my idea somewhere else. 00:22:20.750 --> 00:22:22.250 align:middle line:84% But if you've been here a long time, 00:22:22.250 --> 00:22:24.565 align:middle line:84% and you're vetted, then maybe that's different, 00:22:24.565 --> 00:22:27.190 align:middle line:84% because reading your article, I mean, I was thinking to myself, 00:22:27.190 --> 00:22:29.440 align:middle line:84% boy, why is this guy putting himself through all this? 00:22:29.440 --> 00:22:30.330 align:middle line:90% [LAUGHTER] 00:22:30.330 --> 00:22:33.010 align:middle line:84% Find somebody who's going to really empower you 00:22:33.010 --> 00:22:34.110 align:middle line:90% and go with you. 00:22:34.110 --> 00:22:35.682 align:middle line:90% But yeah. 00:22:35.682 --> 00:22:37.390 align:middle line:84% JOHN PATRICK: Well, it's a good question. 00:22:37.390 --> 00:22:39.598 align:middle line:84% Actually, I'm going to come to that in just, I think, 00:22:39.598 --> 00:22:41.330 align:middle line:90% in two slides. 00:22:41.330 --> 00:22:44.990 align:middle line:84% If I don't answer it, say something further about that. 00:22:44.990 --> 00:22:46.540 align:middle line:90% Yeah, sure? 00:22:46.540 --> 00:22:47.790 align:middle line:84% AUDIENCE: [? Exemplifying ?] the question that he asked, 00:22:47.790 --> 00:22:49.623 align:middle line:84% how did you manage to convince the marketing 00:22:49.623 --> 00:22:51.470 align:middle line:90% person at that URL? 00:22:51.470 --> 00:22:54.150 align:middle line:84% Because I can see that, at a company like IBM, at that time, 00:22:54.150 --> 00:22:56.910 align:middle line:84% it should be very tough to get that across to them. 00:22:56.910 --> 00:22:59.770 align:middle line:90% 00:22:59.770 --> 00:23:01.330 align:middle line:84% JOHN PATRICK: I guess one way to say 00:23:01.330 --> 00:23:06.210 align:middle line:84% it is, you have to really be a pain in the ass. 00:23:06.210 --> 00:23:09.730 align:middle line:84% And Lou Gerstner said that once to the senior management team. 00:23:09.730 --> 00:23:13.330 align:middle line:84% He said, I think more of you should be a pain in the ass, 00:23:13.330 --> 00:23:14.300 align:middle line:90% like John Patrick. 00:23:14.300 --> 00:23:15.080 align:middle line:90% Be a pain in the-- 00:23:15.080 --> 00:23:17.820 align:middle line:90% like him. 00:23:17.820 --> 00:23:20.560 align:middle line:84% IRVING WLADAWSKY-BERGER: Is it fair to say you convinced Lou, 00:23:20.560 --> 00:23:23.480 align:middle line:84% and he convinced the marketing people? 00:23:23.480 --> 00:23:24.860 align:middle line:90% Is that a fair statement? 00:23:24.860 --> 00:23:28.840 align:middle line:84% JOHN PATRICK: Yeah, I think a lot of things can converge. 00:23:28.840 --> 00:23:29.980 align:middle line:90% Irving was involved. 00:23:29.980 --> 00:23:34.120 align:middle line:84% We began to build support around the idea. 00:23:34.120 --> 00:23:38.920 align:middle line:84% The advertising agency at the time was-- they listened. 00:23:38.920 --> 00:23:40.430 align:middle line:90% What was the guy's name? 00:23:40.430 --> 00:23:41.400 align:middle line:84% IRVING WLADAWSKY-BERGER: Chris Wall. 00:23:41.400 --> 00:23:42.150 align:middle line:90% JOHN PATRICK: Chris Wall. 00:23:42.150 --> 00:23:43.608 align:middle line:84% IRVING WLADAWSKY-BERGER: He's going 00:23:43.608 --> 00:23:45.560 align:middle line:84% to be a guest lecturer in about a month. 00:23:45.560 --> 00:23:45.840 align:middle line:90% JOHN PATRICK: Right. 00:23:45.840 --> 00:23:47.757 align:middle line:84% IRVING WLADAWSKY-BERGER: He was the senior guy 00:23:47.757 --> 00:23:49.280 align:middle line:90% from Ogilvy and Mather. 00:23:49.280 --> 00:23:51.072 align:middle line:84% JOHN PATRICK: It was the other guy, though, 00:23:51.072 --> 00:23:53.260 align:middle line:84% the guy that did the Apple ad with the hammer. 00:23:53.260 --> 00:23:54.380 align:middle line:90% What was his name? 00:23:54.380 --> 00:23:55.000 align:middle line:84% IRVING WLADAWSKY-BERGER: [INAUDIBLE] 00:23:55.000 --> 00:23:56.792 align:middle line:84% JOHN PATRICK: I'll think of it in a minute. 00:23:56.792 --> 00:24:00.680 align:middle line:84% But there was a senior guy in the advertising agency-- 00:24:00.680 --> 00:24:03.780 align:middle line:84% and it wasn't like we would be the first to have a URL. 00:24:03.780 --> 00:24:05.440 align:middle line:90% We weren't the first. 00:24:05.440 --> 00:24:08.320 align:middle line:90% But we were the first-- 00:24:08.320 --> 00:24:11.340 align:middle line:84% IBM had a lot of firsts when it came to that type of thing. 00:24:11.340 --> 00:24:14.040 align:middle line:84% We were the first to take online job applications. 00:24:14.040 --> 00:24:16.100 align:middle line:84% We were the first to put our annual report. 00:24:16.100 --> 00:24:19.580 align:middle line:84% When I say the first, the first out of, say, the Fortune 500. 00:24:19.580 --> 00:24:21.880 align:middle line:84% We were the first to have a podcast. 00:24:21.880 --> 00:24:23.820 align:middle line:84% We didn't call it that back then. 00:24:23.820 --> 00:24:26.060 align:middle line:84% We called it-- it was an audio file. 00:24:26.060 --> 00:24:29.540 align:middle line:84% It had a picture of Lou Gerstner on the homepage, 00:24:29.540 --> 00:24:33.160 align:middle line:84% which was maybe lucky, but that didn't hurt any. 00:24:33.160 --> 00:24:37.180 align:middle line:84% We took a mock up of our first ibm.com page and showed it 00:24:37.180 --> 00:24:38.500 align:middle line:90% to Lou and had his-- 00:24:38.500 --> 00:24:40.413 align:middle line:84% most of the page was his picture. 00:24:40.413 --> 00:24:42.080 align:middle line:84% And you clicked on it, and he said, "Hi. 00:24:42.080 --> 00:24:42.955 align:middle line:90% This is Lou Gerstner. 00:24:42.955 --> 00:24:45.380 align:middle line:90% Welcome to our home page." 00:24:45.380 --> 00:24:51.280 align:middle line:84% So that actually had a lot of leverage. 00:24:51.280 --> 00:24:54.620 align:middle line:84% We showed that at a senior management meeting 00:24:54.620 --> 00:24:59.340 align:middle line:90% on May 24, 1994. 00:24:59.340 --> 00:25:03.500 align:middle line:84% And there were 300 people in the room. 00:25:03.500 --> 00:25:05.800 align:middle line:84% Lou was the only one-- probably Irving. 00:25:05.800 --> 00:25:08.680 align:middle line:84% There was just a few of us that had seen this. 00:25:08.680 --> 00:25:10.760 align:middle line:90% There were no approvals. 00:25:10.760 --> 00:25:11.820 align:middle line:90% There was no budget. 00:25:11.820 --> 00:25:13.620 align:middle line:90% There were no legal sign-offs. 00:25:13.620 --> 00:25:15.968 align:middle line:84% All the normals, we bypassed all that. 00:25:15.968 --> 00:25:18.260 align:middle line:84% And they just thought, oh, John's going to give a demo. 00:25:18.260 --> 00:25:21.337 align:middle line:84% He's been demoing the ThinkPad for a long time. 00:25:21.337 --> 00:25:22.420 align:middle line:90% He's going to give a demo. 00:25:22.420 --> 00:25:24.360 align:middle line:90% So I showed this home page. 00:25:24.360 --> 00:25:27.540 align:middle line:84% And I clicked on Lou's picture, and "Hi. 00:25:27.540 --> 00:25:28.540 align:middle line:90% This is Lou Gerstner. 00:25:28.540 --> 00:25:31.420 align:middle line:84% Welcome to our home page" booming out to all these people. 00:25:31.420 --> 00:25:32.940 align:middle line:84% And then at the end of the demo, and I said, well, 00:25:32.940 --> 00:25:34.357 align:middle line:84% if no one has any objection, we're 00:25:34.357 --> 00:25:37.840 align:middle line:84% going to turn this on live to the public tomorrow morning. 00:25:37.840 --> 00:25:39.920 align:middle line:84% Who's going to object, after they just 00:25:39.920 --> 00:25:43.080 align:middle line:84% heard Lou Gerstner say, welcome to our home page? 00:25:43.080 --> 00:25:45.480 align:middle line:84% And people were in a panic because there 00:25:45.480 --> 00:25:46.940 align:middle line:90% was nothing behind it. 00:25:46.940 --> 00:25:50.480 align:middle line:84% It was a little server under my desk in Armonk, 00:25:50.480 --> 00:25:51.780 align:middle line:90% and there were no approvals. 00:25:51.780 --> 00:25:52.780 align:middle line:90% There was no department. 00:25:52.780 --> 00:25:54.840 align:middle line:90% There was no webmaster. 00:25:54.840 --> 00:25:56.440 align:middle line:90% There was nothing. 00:25:56.440 --> 00:26:01.440 align:middle line:84% So I guess another way to answer the question about, 00:26:01.440 --> 00:26:06.720 align:middle line:84% How do you get people motivated? is, you have some air cover. 00:26:06.720 --> 00:26:09.470 align:middle line:84% And I'll get to that in a minute. 00:26:09.470 --> 00:26:13.070 align:middle line:84% Now, you have to have a team to take your idea forward. 00:26:13.070 --> 00:26:17.830 align:middle line:84% And you have to look around and find, who are the visionaries? 00:26:17.830 --> 00:26:21.150 align:middle line:84% Maybe you're one yourself, but there's a lot of visionaries. 00:26:21.150 --> 00:26:23.950 align:middle line:84% Find out who they are, and listen hard 00:26:23.950 --> 00:26:25.270 align:middle line:90% to ask them what they think. 00:26:25.270 --> 00:26:29.510 align:middle line:84% And then you have to it out because some visionaries are off 00:26:29.510 --> 00:26:30.330 align:middle line:90% in la-la land. 00:26:30.330 --> 00:26:32.890 align:middle line:84% They're not a little bit ahead of their time. 00:26:32.890 --> 00:26:35.230 align:middle line:84% They're 50 years ahead of their time, some of them. 00:26:35.230 --> 00:26:37.770 align:middle line:90% So you have to use your filters. 00:26:37.770 --> 00:26:39.530 align:middle line:90% But listen to the visionaries. 00:26:39.530 --> 00:26:40.830 align:middle line:90% And I was very fortunate. 00:26:40.830 --> 00:26:45.590 align:middle line:84% There were people-- a guy named Dave Grossman was a-- 00:26:45.590 --> 00:26:47.790 align:middle line:84% actually, he was a phys ed major, 00:26:47.790 --> 00:26:49.590 align:middle line:84% and I think he had a master's in-- maybe he 00:26:49.590 --> 00:26:53.550 align:middle line:84% had a master's in education or computer science, possibly. 00:26:53.550 --> 00:26:56.470 align:middle line:84% He was at Cornell at the Theory Center. 00:26:56.470 --> 00:26:58.310 align:middle line:84% They had a supercomputer, and they 00:26:58.310 --> 00:27:01.950 align:middle line:84% were paying attention to what's going on the internet. 00:27:01.950 --> 00:27:04.630 align:middle line:84% And Dave's also a sports guy, and he 00:27:04.630 --> 00:27:07.850 align:middle line:84% was following the Olympics, the Lillehammer Olympics. 00:27:07.850 --> 00:27:11.790 align:middle line:84% And Lillehammer Olympics was being automated. 00:27:11.790 --> 00:27:13.330 align:middle line:84% All the data services were provided 00:27:13.330 --> 00:27:15.290 align:middle line:84% by IBM, the collection of the data 00:27:15.290 --> 00:27:17.830 align:middle line:84% and all the applications at the Olympics. 00:27:17.830 --> 00:27:21.130 align:middle line:84% There was nothing on the internet, nothing, 00:27:21.130 --> 00:27:27.450 align:middle line:84% If you can imagine, until Sun Microsystems found a way 00:27:27.450 --> 00:27:32.770 align:middle line:84% to get into this feed of data that IBM was collecting 00:27:32.770 --> 00:27:34.350 align:middle line:90% and putting online. 00:27:34.350 --> 00:27:37.750 align:middle line:84% But it wasn't on the web, but you could get to it. 00:27:37.750 --> 00:27:41.970 align:middle line:84% They got to it, and they put it on the web on sun.com. 00:27:41.970 --> 00:27:45.750 align:middle line:84% And this David Grossman discovered this. 00:27:45.750 --> 00:27:47.270 align:middle line:90% And he was just beside himself. 00:27:47.270 --> 00:27:49.730 align:middle line:84% He drove down-- Irving and I were in a task force, 00:27:49.730 --> 00:27:52.910 align:middle line:84% at the time, looking at the strategy of the company. 00:27:52.910 --> 00:27:58.250 align:middle line:84% And remember, he came and showed you and I and Abby? 00:27:58.250 --> 00:27:59.850 align:middle line:84% He said, do you guys realize what's 00:27:59.850 --> 00:28:04.018 align:middle line:84% happening, that Sun is using IBM's data 00:28:04.018 --> 00:28:05.310 align:middle line:90% and putting it on the internet? 00:28:05.310 --> 00:28:07.370 align:middle line:90% And nobody knew. 00:28:07.370 --> 00:28:09.990 align:middle line:84% So there are a lot of things like that that I 00:28:09.990 --> 00:28:11.570 align:middle line:90% learned from Dave Grossman. 00:28:11.570 --> 00:28:13.210 align:middle line:84% He was not a strong communicator. 00:28:13.210 --> 00:28:16.310 align:middle line:84% He was not a guy that goes out and gives speeches. 00:28:16.310 --> 00:28:18.170 align:middle line:90% But he's a very visionary guy. 00:28:18.170 --> 00:28:20.270 align:middle line:84% He was the first person that I know 00:28:20.270 --> 00:28:29.750 align:middle line:84% of that recognized that the web had something to do with IT. 00:28:29.750 --> 00:28:32.990 align:middle line:84% Back then, the web was viewed as a document thing. 00:28:32.990 --> 00:28:37.650 align:middle line:84% I mean, the web started in 1989, the text version of it, 00:28:37.650 --> 00:28:39.430 align:middle line:84% when Tim Berners-Lee was basically 00:28:39.430 --> 00:28:42.772 align:middle line:90% a librarian at CERN in Geneva. 00:28:42.772 --> 00:28:44.230 align:middle line:84% And he was trying to figure out how 00:28:44.230 --> 00:28:49.070 align:middle line:84% to provide data about the particle physics research 00:28:49.070 --> 00:28:51.310 align:middle line:84% and make that same data available to people 00:28:51.310 --> 00:28:53.570 align:middle line:84% that had lots of different kinds of computers all over the world. 00:28:53.570 --> 00:28:55.028 align:middle line:84% He was trying to find, how could we 00:28:55.028 --> 00:28:59.790 align:middle line:84% have a common way to make these documents accessible? 00:28:59.790 --> 00:29:04.620 align:middle line:84% And he devised this idea called HTML, hypertext, 00:29:04.620 --> 00:29:09.000 align:middle line:84% where a document was independent of the operating system. 00:29:09.000 --> 00:29:11.000 align:middle line:84% It was independent of the network. 00:29:11.000 --> 00:29:12.820 align:middle line:90% It was independent. 00:29:12.820 --> 00:29:17.960 align:middle line:84% And so that's where that came from. 00:29:17.960 --> 00:29:21.780 align:middle line:84% But it was not thought to be anything to do with IT. 00:29:21.780 --> 00:29:24.780 align:middle line:84% And so I listened really hard to Dave. 00:29:24.780 --> 00:29:26.720 align:middle line:84% And there were other people like him. 00:29:26.720 --> 00:29:32.380 align:middle line:84% David Singer in [? Almaden ?] was the cultural spirit 00:29:32.380 --> 00:29:33.960 align:middle line:90% of the internet. 00:29:33.960 --> 00:29:41.020 align:middle line:84% He knew what the underlying feelings 00:29:41.020 --> 00:29:44.680 align:middle line:84% were, how people that used the internet, how they thought, 00:29:44.680 --> 00:29:46.480 align:middle line:84% how they worked, how they operated, 00:29:46.480 --> 00:29:50.540 align:middle line:84% kind of the grassroots orientation of the internet. 00:29:50.540 --> 00:29:53.300 align:middle line:90% And so you go find those people. 00:29:53.300 --> 00:29:56.820 align:middle line:84% And it doesn't matter what level they are. 00:29:56.820 --> 00:29:59.960 align:middle line:84% You can't let hierarchy get in your way. 00:29:59.960 --> 00:30:01.820 align:middle line:90% It might be somebody above you. 00:30:01.820 --> 00:30:03.580 align:middle line:84% It might be somebody way below you. 00:30:03.580 --> 00:30:05.020 align:middle line:90% It doesn't matter. 00:30:05.020 --> 00:30:06.562 align:middle line:84% IRVING WLADAWSKY-BERGER: But I think, 00:30:06.562 --> 00:30:08.840 align:middle line:84% if I can repeat what you're saying, 00:30:08.840 --> 00:30:13.200 align:middle line:84% for incremental innovations, usually there 00:30:13.200 --> 00:30:15.680 align:middle line:84% is a well-established organization that's 00:30:15.680 --> 00:30:18.440 align:middle line:84% been doing that, and you go talk to them, 00:30:18.440 --> 00:30:20.400 align:middle line:90% and that's how you do it better. 00:30:20.400 --> 00:30:24.080 align:middle line:84% For things that are brand new and disruptive, 00:30:24.080 --> 00:30:30.280 align:middle line:84% you have to search for the guerrilla warfare people. 00:30:30.280 --> 00:30:32.300 align:middle line:84% And they are almost always there. 00:30:32.300 --> 00:30:33.340 align:middle line:90% Wouldn't you say that? 00:30:33.340 --> 00:30:34.600 align:middle line:90% JOHN PATRICK: Definitely. 00:30:34.600 --> 00:30:36.560 align:middle line:84% IRVING WLADAWSKY-BERGER: Almost any idea, 00:30:36.560 --> 00:30:40.820 align:middle line:84% there are going to be people out there, but you don't know that. 00:30:40.820 --> 00:30:46.560 align:middle line:84% And especially-- and this is a job that John played very well-- 00:30:46.560 --> 00:30:51.400 align:middle line:84% when you find them, if you are a senior person, 00:30:51.400 --> 00:30:55.560 align:middle line:84% you are empowering them because they thought, oh, my god, I'm 00:30:55.560 --> 00:30:57.140 align:middle line:90% doing something on my own. 00:30:57.140 --> 00:31:00.220 align:middle line:84% What if somebody finds out I like the internet or Linux 00:31:00.220 --> 00:31:01.280 align:middle line:90% or something? 00:31:01.280 --> 00:31:05.420 align:middle line:84% And all of a sudden, somebody, a vice president shows up, 00:31:05.420 --> 00:31:08.500 align:middle line:84% and you just made their day, right? 00:31:08.500 --> 00:31:10.140 align:middle line:90% Wouldn't you say that? 00:31:10.140 --> 00:31:13.520 align:middle line:84% I mean, these were the orphans of the internet, 00:31:13.520 --> 00:31:17.740 align:middle line:84% and all of a sudden, they are part of a Get Connected team 00:31:17.740 --> 00:31:20.620 align:middle line:84% that Lou Gerstner is talking about. 00:31:20.620 --> 00:31:24.220 align:middle line:84% And they will-- I mean, they will love you. 00:31:24.220 --> 00:31:27.180 align:middle line:84% I mean, now they'll follow you anywhere. 00:31:27.180 --> 00:31:30.740 align:middle line:84% But you need to go out there and find these people 00:31:30.740 --> 00:31:32.040 align:middle line:90% and empower them. 00:31:32.040 --> 00:31:35.837 align:middle line:84% It's part of the leadership that you need to do. 00:31:35.837 --> 00:31:37.420 align:middle line:84% JOHN PATRICK: That's a very good point 00:31:37.420 --> 00:31:39.760 align:middle line:84% that I had not rendered specific, 00:31:39.760 --> 00:31:43.380 align:middle line:84% and that is about the grassroots. 00:31:43.380 --> 00:31:45.560 align:middle line:84% When we were starting this GetCo thing, 00:31:45.560 --> 00:31:48.820 align:middle line:84% we had probably-- initially, there were a handful, 00:31:48.820 --> 00:31:52.060 align:middle line:84% and then it grew to several hundred. 00:31:52.060 --> 00:31:55.850 align:middle line:90% And they didn't report to me. 00:31:55.850 --> 00:31:57.070 align:middle line:90% They didn't report to Irving. 00:31:57.070 --> 00:31:59.572 align:middle line:84% They were in all different organizational entities 00:31:59.572 --> 00:32:01.530 align:middle line:84% around the company, but they all felt like they 00:32:01.530 --> 00:32:04.370 align:middle line:90% were part of this GetCo thing. 00:32:04.370 --> 00:32:07.070 align:middle line:84% And I remember talking to Jim Cannavino one day. 00:32:07.070 --> 00:32:10.210 align:middle line:84% He was the number two guy in the company at the time. 00:32:10.210 --> 00:32:14.110 align:middle line:84% And he said, this GetCo thing is really important. 00:32:14.110 --> 00:32:17.090 align:middle line:84% He said, we could create an organization 00:32:17.090 --> 00:32:20.850 align:middle line:84% and have you be the head of that organization, 00:32:20.850 --> 00:32:22.892 align:middle line:84% but then you wouldn't have 300 people. 00:32:22.892 --> 00:32:24.850 align:middle line:84% You'd have some-- I don't know how many people. 00:32:24.850 --> 00:32:26.225 align:middle line:84% You'd have some number of people. 00:32:26.225 --> 00:32:28.650 align:middle line:84% But the way it is, you've got the whole company. 00:32:28.650 --> 00:32:31.490 align:middle line:84% You've got all these people feel like they work for you. 00:32:31.490 --> 00:32:34.650 align:middle line:84% And especially in the early stages, 00:32:34.650 --> 00:32:38.670 align:middle line:84% that's much more important than creating an organization. 00:32:38.670 --> 00:32:40.490 align:middle line:84% Now, later, we did create an organization, 00:32:40.490 --> 00:32:42.898 align:middle line:84% which Irving had called the Internet Division 00:32:42.898 --> 00:32:44.690 align:middle line:84% and which eventually we didn't need anymore 00:32:44.690 --> 00:32:47.690 align:middle line:84% because the whole company was an internet company. 00:32:47.690 --> 00:32:50.210 align:middle line:84% But in the early stages, it's really important 00:32:50.210 --> 00:32:54.490 align:middle line:84% to find these people that are the visionaries. 00:32:54.490 --> 00:32:57.230 align:middle line:84% And by the way, it might be finding people 00:32:57.230 --> 00:32:59.070 align:middle line:90% who are the communicators. 00:32:59.070 --> 00:33:03.210 align:middle line:84% You might have the idea and be the person behind all this, 00:33:03.210 --> 00:33:05.550 align:middle line:84% but maybe you don't want to be the communicator. 00:33:05.550 --> 00:33:06.210 align:middle line:90% That's OK. 00:33:06.210 --> 00:33:07.750 align:middle line:90% You don't have to be. 00:33:07.750 --> 00:33:09.990 align:middle line:84% Just make sure you have somebody that is. 00:33:09.990 --> 00:33:12.770 align:middle line:84% I was at a meeting somewhere the other day, 00:33:12.770 --> 00:33:16.690 align:middle line:84% and this person who was responsible for a particular-- 00:33:16.690 --> 00:33:18.990 align:middle line:90% he was the executive-- 00:33:18.990 --> 00:33:20.170 align:middle line:90% wasn't a very good speaker. 00:33:20.170 --> 00:33:22.550 align:middle line:90% He stood up. 00:33:22.550 --> 00:33:24.722 align:middle line:90% He was to have an hour. 00:33:24.722 --> 00:33:26.930 align:middle line:84% And he made a few introductory comments, and he said, 00:33:26.930 --> 00:33:30.390 align:middle line:84% I hope you don't mind, but I brought Bill along 00:33:30.390 --> 00:33:33.192 align:middle line:84% because he can really explain to you what we're doing. 00:33:33.192 --> 00:33:34.650 align:middle line:84% And then he turned it over to Bill. 00:33:34.650 --> 00:33:36.790 align:middle line:90% So he empowered Bill. 00:33:36.790 --> 00:33:38.150 align:middle line:90% So he was credible. 00:33:38.150 --> 00:33:40.310 align:middle line:90% This guy was the leader. 00:33:40.310 --> 00:33:44.170 align:middle line:84% But he put someone on the stage, so to speak, 00:33:44.170 --> 00:33:46.810 align:middle line:90% that the audience got more from. 00:33:46.810 --> 00:33:49.870 align:middle line:84% And obviously, the person in charge 00:33:49.870 --> 00:33:52.890 align:middle line:90% was familiar with the content. 00:33:52.890 --> 00:33:56.130 align:middle line:84% So you build this team, and then you trust them to the hilt 00:33:56.130 --> 00:33:57.795 align:middle line:90% and pay them well. 00:33:57.795 --> 00:33:59.170 align:middle line:84% And when you have somebody that's 00:33:59.170 --> 00:34:02.090 align:middle line:84% really critical to what you're trying to move forward, 00:34:02.090 --> 00:34:04.483 align:middle line:84% you might have to break the rules 00:34:04.483 --> 00:34:06.650 align:middle line:84% because, in the grand scheme of something, if you've 00:34:06.650 --> 00:34:13.730 align:middle line:84% got something big going on, if you lose a key person, that 00:34:13.730 --> 00:34:17.010 align:middle line:84% costs a lot more than paying them more than maybe 00:34:17.010 --> 00:34:18.969 align:middle line:90% you're supposed to. 00:34:18.969 --> 00:34:23.330 align:middle line:84% And the last concept here on the team idea 00:34:23.330 --> 00:34:27.330 align:middle line:84% is when you have things going, and it's going well, 00:34:27.330 --> 00:34:30.330 align:middle line:84% people are going to come after that team, 00:34:30.330 --> 00:34:32.370 align:middle line:84% and they're going to try to lure them away, 00:34:32.370 --> 00:34:36.052 align:middle line:84% either outside of the company or inside of the company. 00:34:36.052 --> 00:34:37.469 align:middle line:84% Outside of the company, of course, 00:34:37.469 --> 00:34:41.530 align:middle line:84% you want to do whatever you can to protect your team, to keep 00:34:41.530 --> 00:34:43.290 align:middle line:90% them in the company. 00:34:43.290 --> 00:34:45.370 align:middle line:84% But when it comes to having them go 00:34:45.370 --> 00:34:46.929 align:middle line:84% to another part of the company-- this 00:34:46.929 --> 00:34:50.340 align:middle line:84% is one of the things that's always admirable about Irving 00:34:50.340 --> 00:34:52.639 align:middle line:90% is he never held anybody back. 00:34:52.639 --> 00:34:53.679 align:middle line:90% A lot of people do. 00:34:53.679 --> 00:34:57.680 align:middle line:84% They hold their people back because they 00:34:57.680 --> 00:35:00.680 align:middle line:84% want to keep the strength of their team. 00:35:00.680 --> 00:35:02.360 align:middle line:84% The way I always felt about that was, 00:35:02.360 --> 00:35:05.440 align:middle line:84% if somebody comes after a key person, 00:35:05.440 --> 00:35:06.780 align:middle line:90% we're not losing that person. 00:35:06.780 --> 00:35:09.840 align:middle line:84% We're gaining the department they go to. 00:35:09.840 --> 00:35:12.400 align:middle line:84% Another way to say it is, we're infecting 00:35:12.400 --> 00:35:16.640 align:middle line:84% another part of the company with the spirit, the attitude, 00:35:16.640 --> 00:35:21.280 align:middle line:84% the internet feeling, the internet spirit. 00:35:21.280 --> 00:35:24.580 align:middle line:84% That proved to be very successful for us. 00:35:24.580 --> 00:35:25.252 align:middle line:90% Yeah? 00:35:25.252 --> 00:35:26.710 align:middle line:84% AUDIENCE: Say you're the innovator, 00:35:26.710 --> 00:35:31.120 align:middle line:84% and you're the one that has some of great idea, 00:35:31.120 --> 00:35:35.695 align:middle line:84% and you need some higher corporate sponsorship. 00:35:35.695 --> 00:35:37.320 align:middle line:84% I mean, do you have any recommendations 00:35:37.320 --> 00:35:41.280 align:middle line:84% in terms of finding the right people to convince and get 00:35:41.280 --> 00:35:42.260 align:middle line:90% on your side? 00:35:42.260 --> 00:35:44.560 align:middle line:84% And then, how do you go about getting 00:35:44.560 --> 00:35:48.180 align:middle line:84% them as excited about this idea as you are? 00:35:48.180 --> 00:35:50.860 align:middle line:84% JOHN PATRICK: Well, what I did was I went to see 00:35:50.860 --> 00:35:54.660 align:middle line:84% every executive, just about all of them. 00:35:54.660 --> 00:35:58.860 align:middle line:84% And some of them were receptive, and some of them weren't. 00:35:58.860 --> 00:36:02.700 align:middle line:84% And the ones that are receptive, go see them again. 00:36:02.700 --> 00:36:04.240 align:middle line:90% Thank them profusely. 00:36:04.240 --> 00:36:05.900 align:middle line:90% Keep them up to date. 00:36:05.900 --> 00:36:09.620 align:middle line:84% And it might not be the logical department. 00:36:09.620 --> 00:36:12.900 align:middle line:84% It might be much more logical that this executive be the one 00:36:12.900 --> 00:36:14.400 align:middle line:90% to really support your idea. 00:36:14.400 --> 00:36:16.663 align:middle line:84% But if they're not interested, it doesn't matter. 00:36:16.663 --> 00:36:18.580 align:middle line:84% If this one is interested, even though they're 00:36:18.580 --> 00:36:20.900 align:middle line:90% in some totally unrelated-- 00:36:20.900 --> 00:36:21.775 align:middle line:90% make them your buddy. 00:36:21.775 --> 00:36:23.483 align:middle line:84% AUDIENCE: How do you press their buttons? 00:36:23.483 --> 00:36:25.180 align:middle line:84% How do you get them excited about what-- 00:36:25.180 --> 00:36:26.760 align:middle line:90% I mean, is it budget? 00:36:26.760 --> 00:36:27.640 align:middle line:90% Is it money? 00:36:27.640 --> 00:36:29.328 align:middle line:90% Is it opportunity? 00:36:29.328 --> 00:36:31.120 align:middle line:84% JOHN PATRICK: It's enthusiasm for the idea. 00:36:31.120 --> 00:36:32.240 align:middle line:90% It's contagious. 00:36:32.240 --> 00:36:33.840 align:middle line:90% Enthusiasm is contagious. 00:36:33.840 --> 00:36:35.423 align:middle line:84% IRVING WLADAWSKY-BERGER: Remember, you 00:36:35.423 --> 00:36:41.000 align:middle line:84% are selling to them, or imagine you're talking to a VC, 00:36:41.000 --> 00:36:42.700 align:middle line:90% something similar. 00:36:42.700 --> 00:36:46.440 align:middle line:84% And the more you can put the idea 00:36:46.440 --> 00:36:51.440 align:middle line:84% in the context of a problem you know they care about, 00:36:51.440 --> 00:36:53.060 align:middle line:90% the easier it is to sell. 00:36:53.060 --> 00:36:55.800 align:middle line:84% So that's where the [? homework ?] comes in. 00:36:55.800 --> 00:36:59.360 align:middle line:84% Now, sometimes you may do an incredible job, 00:36:59.360 --> 00:37:01.120 align:middle line:90% and they still don't want it. 00:37:01.120 --> 00:37:04.360 align:middle line:84% So you go to the next one and the next one. 00:37:04.360 --> 00:37:10.880 align:middle line:84% But generally, if you just talk about an abstract idea, 00:37:10.880 --> 00:37:12.020 align:middle line:90% they won't get it. 00:37:12.020 --> 00:37:15.600 align:middle line:84% But if you know that they're trying to figure out 00:37:15.600 --> 00:37:18.320 align:middle line:84% how to reach the sales force, and they 00:37:18.320 --> 00:37:22.280 align:middle line:84% don't know how to do that, and you have now a technology that 00:37:22.280 --> 00:37:25.720 align:middle line:84% lets them reach sales force worldwide, 00:37:25.720 --> 00:37:27.960 align:middle line:90% that might be a better way. 00:37:27.960 --> 00:37:34.280 align:middle line:84% But this gets back to the fact that, in order 00:37:34.280 --> 00:37:38.040 align:middle line:84% to get a new innovation accepted, 00:37:38.040 --> 00:37:42.460 align:middle line:84% you have to do serious selling of the idea. 00:37:42.460 --> 00:37:44.583 align:middle line:90% And I don't know any other term. 00:37:44.583 --> 00:37:46.250 align:middle line:84% JOHN PATRICK: Yes, that's exactly right. 00:37:46.250 --> 00:37:46.310 align:middle line:84% IRVING WLADAWSKY-BERGER: [? Selling-- ?] 00:37:46.310 --> 00:37:46.790 align:middle line:90% can you say that? 00:37:46.790 --> 00:37:48.207 align:middle line:84% JOHN PATRICK: You have to sell it. 00:37:48.207 --> 00:37:50.350 align:middle line:84% IRVING WLADAWSKY-BERGER: And what I also find-- 00:37:50.350 --> 00:37:53.570 align:middle line:84% and we talked about it before because I think one of you said, 00:37:53.570 --> 00:37:55.630 align:middle line:84% well, isn't that the job of the marketing 00:37:55.630 --> 00:37:58.510 align:middle line:84% people, and the engineers are in the lab? 00:37:58.510 --> 00:38:03.350 align:middle line:84% When something is new, the passion and the selling 00:38:03.350 --> 00:38:05.350 align:middle line:90% is critical. 00:38:05.350 --> 00:38:10.910 align:middle line:84% And I think the only people who can communicate the passion 00:38:10.910 --> 00:38:14.350 align:middle line:84% are people who really feel it, and they are often 00:38:14.350 --> 00:38:16.470 align:middle line:84% the people who have been involved 00:38:16.470 --> 00:38:17.882 align:middle line:84% with the idea in the first place. 00:38:17.882 --> 00:38:19.090 align:middle line:90% Wouldn't you say [INAUDIBLE]? 00:38:19.090 --> 00:38:20.507 align:middle line:84% JOHN PATRICK: Yeah, exactly right. 00:38:20.507 --> 00:38:23.070 align:middle line:84% And if it's not you personally, then you 00:38:23.070 --> 00:38:26.870 align:middle line:84% have this person that, wherever you go, you bring them with you, 00:38:26.870 --> 00:38:29.550 align:middle line:84% and you just-- you don't give up. 00:38:29.550 --> 00:38:33.150 align:middle line:84% I remember trying to convince the head of the PC company 00:38:33.150 --> 00:38:36.870 align:middle line:84% back in '94 or '95 that we should be selling PCs 00:38:36.870 --> 00:38:38.510 align:middle line:90% on the internet. 00:38:38.510 --> 00:38:40.988 align:middle line:84% And I had had lunch with Michael-- 00:38:40.988 --> 00:38:43.030 align:middle line:84% IRVING WLADAWSKY-BERGER: Dell hadn't started yet? 00:38:43.030 --> 00:38:44.510 align:middle line:84% JOHN PATRICK: Dell was starting it. 00:38:44.510 --> 00:38:46.230 align:middle line:84% And I had lunch with Michael Dell, 00:38:46.230 --> 00:38:51.050 align:middle line:84% and he was selling PCs over the phone. 00:38:51.050 --> 00:38:52.510 align:middle line:90% And I was at this conference. 00:38:52.510 --> 00:38:54.490 align:middle line:84% And I sat next to him, and he said, 00:38:54.490 --> 00:38:56.630 align:middle line:84% I understand you're the internet guy at IBM. 00:38:56.630 --> 00:39:00.810 align:middle line:84% What do you think about selling PCs on the internet? 00:39:00.810 --> 00:39:02.690 align:middle line:90% I said, yeah, absolutely. 00:39:02.690 --> 00:39:04.690 align:middle line:84% Well, of course, it was an easy decision for him 00:39:04.690 --> 00:39:06.410 align:middle line:84% because all he had was phones, and he 00:39:06.410 --> 00:39:08.570 align:middle line:84% would be supplementing or later replacing 00:39:08.570 --> 00:39:10.610 align:middle line:90% most of that with the web. 00:39:10.610 --> 00:39:12.910 align:middle line:84% IBM, the guy running the PC business 00:39:12.910 --> 00:39:17.610 align:middle line:84% had just spent $100 million fortifying the dealers. 00:39:17.610 --> 00:39:20.010 align:middle line:90% Nobody liked the dealers. 00:39:20.010 --> 00:39:23.430 align:middle line:84% I remember one of the top executives saying, 00:39:23.430 --> 00:39:25.952 align:middle line:84% have you ever had lunch with a dealer? 00:39:25.952 --> 00:39:27.910 align:middle line:84% You wouldn't even want to have lunch with them, 00:39:27.910 --> 00:39:29.243 align:middle line:90% let alone do business with them. 00:39:29.243 --> 00:39:32.590 align:middle line:84% And our customers didn't particularly like the dealers. 00:39:32.590 --> 00:39:35.690 align:middle line:84% But that was IBM's channel was the dealers. 00:39:35.690 --> 00:39:38.970 align:middle line:84% So to start selling direct over the internet 00:39:38.970 --> 00:39:43.870 align:middle line:84% was viewed as a big threat to the channel, the dealer channel. 00:39:43.870 --> 00:39:48.710 align:middle line:84% So basically, I gave up on him and worked on somebody else 00:39:48.710 --> 00:39:51.490 align:middle line:84% that I thought would care about it. 00:39:51.490 --> 00:39:57.190 align:middle line:84% So you can't bang your head against the wall too long. 00:39:57.190 --> 00:39:59.510 align:middle line:84% In a big company, there's a lot of places 00:39:59.510 --> 00:40:01.150 align:middle line:90% where you can find allies. 00:40:01.150 --> 00:40:02.790 align:middle line:84% If it's a little company, then there's 00:40:02.790 --> 00:40:06.950 align:middle line:84% even more because you tend to be looking on the outside. 00:40:06.950 --> 00:40:09.370 align:middle line:84% You also want to leverage the organization. 00:40:09.370 --> 00:40:12.270 align:middle line:84% We had some lucky things that we did 00:40:12.270 --> 00:40:16.590 align:middle line:84% that were not really part of a grand plan, 00:40:16.590 --> 00:40:20.630 align:middle line:90% but that served us really well. 00:40:20.630 --> 00:40:22.710 align:middle line:84% One of them was called alphaWorks, 00:40:22.710 --> 00:40:27.170 align:middle line:84% and they just had their 10th reunion, 00:40:27.170 --> 00:40:29.510 align:middle line:90% their 10th-year celebration. 00:40:29.510 --> 00:40:32.590 align:middle line:84% Irving went to visit Research one Friday. 00:40:32.590 --> 00:40:36.250 align:middle line:84% I was somewhere else giving a speech at the time. 00:40:36.250 --> 00:40:38.000 align:middle line:84% And he called me that weekend and he said, 00:40:38.000 --> 00:40:39.120 align:middle line:90% I was just at Research. 00:40:39.120 --> 00:40:43.220 align:middle line:84% You ought to see all the clever research projects 00:40:43.220 --> 00:40:47.660 align:middle line:84% they have that are built around the internet. 00:40:47.660 --> 00:40:51.460 align:middle line:90% This was in 1995. 00:40:51.460 --> 00:40:55.580 align:middle line:84% And he said, we've got to do something to get those ideas-- 00:40:55.580 --> 00:40:58.300 align:middle line:90% get them out of the laboratory. 00:40:58.300 --> 00:41:03.023 align:middle line:84% And so Irving's challenge-- solve this problem. 00:41:03.023 --> 00:41:04.440 align:middle line:84% So I thought about it all weekend, 00:41:04.440 --> 00:41:05.940 align:middle line:84% and I came up with this idea of, why 00:41:05.940 --> 00:41:10.100 align:middle line:84% don't we take these technologies that are going nowhere-- 00:41:10.100 --> 00:41:13.640 align:middle line:84% there's some researcher who is enthusiastic about it, 00:41:13.640 --> 00:41:15.880 align:middle line:84% but there's no clear market for the idea. 00:41:15.880 --> 00:41:19.620 align:middle line:84% Let's put them on the internet for free 00:41:19.620 --> 00:41:21.980 align:middle line:90% and let people evaluate them. 00:41:21.980 --> 00:41:23.828 align:middle line:90% We'll get feedback from those-- 00:41:23.828 --> 00:41:26.120 align:middle line:84% I mean, this is so obvious in today's world, of course, 00:41:26.120 --> 00:41:29.980 align:middle line:84% but this was not obvious in 1995, a dozen years ago. 00:41:29.980 --> 00:41:32.120 align:middle line:84% In fact, people thought this was really stupid. 00:41:32.120 --> 00:41:36.383 align:middle line:84% You had people-- you're paying these PhDs to develop 00:41:36.383 --> 00:41:37.800 align:middle line:84% these great ideas, and then you're 00:41:37.800 --> 00:41:39.307 align:middle line:90% going to give their idea away? 00:41:39.307 --> 00:41:41.140 align:middle line:84% I said, no, we're not really giving it away. 00:41:41.140 --> 00:41:42.765 align:middle line:84% We're just going to open it, put it out 00:41:42.765 --> 00:41:44.720 align:middle line:90% there for the world to see. 00:41:44.720 --> 00:41:46.100 align:middle line:90% They can download it for free. 00:41:46.100 --> 00:41:49.260 align:middle line:84% They can't go sell it, but they can use it. 00:41:49.260 --> 00:41:53.040 align:middle line:84% They can do almost whatever they want with it. 00:41:53.040 --> 00:41:56.380 align:middle line:84% So we decided this was a good idea, 00:41:56.380 --> 00:41:59.720 align:middle line:84% and I decided we needed a good name for it. 00:41:59.720 --> 00:42:03.060 align:middle line:84% And beta software was a common name. 00:42:03.060 --> 00:42:04.960 align:middle line:84% Alpha software-- a lot of people thought 00:42:04.960 --> 00:42:06.700 align:middle line:90% that's got a bad connotation. 00:42:06.700 --> 00:42:08.260 align:middle line:84% That's not even ready for beta yet, 00:42:08.260 --> 00:42:10.520 align:middle line:90% but I kind of liked the idea. 00:42:10.520 --> 00:42:13.320 align:middle line:84% Normally you would go through a trademark search 00:42:13.320 --> 00:42:15.720 align:middle line:84% and pay lawyers lots of money, and I just 00:42:15.720 --> 00:42:18.717 align:middle line:84% went to, at the time-- there was no Google then. 00:42:18.717 --> 00:42:19.800 align:middle line:90% I forget what the search-- 00:42:19.800 --> 00:42:21.600 align:middle line:90% it might have been Yahoo. 00:42:21.600 --> 00:42:24.820 align:middle line:84% I'm not even sure Yahoo was there at the time. 00:42:24.820 --> 00:42:26.320 align:middle line:84% But one of the early search engines, 00:42:26.320 --> 00:42:27.920 align:middle line:84% and I did a search on alphaWorks. 00:42:27.920 --> 00:42:31.560 align:middle line:84% And I got no hits, so I said, OK, we can use it. 00:42:31.560 --> 00:42:35.205 align:middle line:84% And I announced it again at a senior management meeting. 00:42:35.205 --> 00:42:36.580 align:middle line:84% And I remember Lou Gerstner was-- 00:42:36.580 --> 00:42:39.480 align:middle line:84% I was sitting behind him, and he hands me a little slip of paper. 00:42:39.480 --> 00:42:43.380 align:middle line:84% He says, how do we get paid for this? 00:42:43.380 --> 00:42:46.140 align:middle line:90% And I put back, I don't know. 00:42:46.140 --> 00:42:48.200 align:middle line:84% And then he put another question on. 00:42:48.200 --> 00:42:51.260 align:middle line:84% He said, how about if people steal it? 00:42:51.260 --> 00:42:54.840 align:middle line:84% And [? I ?] think it's going nowhere as it is, 00:42:54.840 --> 00:42:58.380 align:middle line:84% and we have it protected, so they can't sell it. 00:42:58.380 --> 00:43:00.560 align:middle line:84% They can just evaluate it and give us feedback. 00:43:00.560 --> 00:43:02.300 align:middle line:90% He says, oh, OK. 00:43:02.300 --> 00:43:06.060 align:middle line:84% Well this is what turned out to be a very big, big success 00:43:06.060 --> 00:43:10.720 align:middle line:84% because it made IBM relevant to the technical community. 00:43:10.720 --> 00:43:12.820 align:middle line:84% And it allowed IBM Research projects 00:43:12.820 --> 00:43:15.380 align:middle line:84% to become visible where, otherwise, nobody 00:43:15.380 --> 00:43:16.400 align:middle line:90% would know about it. 00:43:16.400 --> 00:43:18.200 align:middle line:84% And of course, today, it's obvious. 00:43:18.200 --> 00:43:20.180 align:middle line:90% But back then, it wasn't. 00:43:20.180 --> 00:43:23.620 align:middle line:84% Then a real breakthrough for this overall project 00:43:23.620 --> 00:43:28.660 align:middle line:84% came also in 1995, when IBM was preparing 00:43:28.660 --> 00:43:32.570 align:middle line:84% for the sponsorship of the Summer Olympics in Atlanta. 00:43:32.570 --> 00:43:34.628 align:middle line:84% And Dave Grossman, that I mentioned earlier, 00:43:34.628 --> 00:43:36.670 align:middle line:84% went down to Atlanta to see what they were doing. 00:43:36.670 --> 00:43:39.170 align:middle line:84% He was very interested in the project. 00:43:39.170 --> 00:43:41.030 align:middle line:84% And he came back, and he was a wreck. 00:43:41.030 --> 00:43:42.197 align:middle line:90% He was just beside himself. 00:43:42.197 --> 00:43:44.530 align:middle line:84% He says, you're not going to believe what they're doing. 00:43:44.530 --> 00:43:48.130 align:middle line:84% They've let a contract to an advertising company 00:43:48.130 --> 00:43:50.730 align:middle line:84% to build a website for the Olympics. 00:43:50.730 --> 00:43:53.170 align:middle line:84% He said, we can't let them do that. 00:43:53.170 --> 00:43:56.770 align:middle line:84% And this was the very first time that I'm 00:43:56.770 --> 00:43:59.170 align:middle line:84% aware of that anybody related information 00:43:59.170 --> 00:44:01.950 align:middle line:90% technology to the web. 00:44:01.950 --> 00:44:06.650 align:middle line:84% As I said earlier, it was viewed as a document thing. 00:44:06.650 --> 00:44:09.650 align:middle line:84% And so obviously, there should be some web pages 00:44:09.650 --> 00:44:10.470 align:middle line:90% about the Olympics. 00:44:10.470 --> 00:44:15.530 align:middle line:84% But Dave saw the potential to gather all this data from Swatch 00:44:15.530 --> 00:44:18.930 align:middle line:84% timing devices, build it into a database, 00:44:18.930 --> 00:44:23.410 align:middle line:84% and show that database on the web. 00:44:23.410 --> 00:44:25.050 align:middle line:90% So it made sense to me. 00:44:25.050 --> 00:44:29.270 align:middle line:84% And I really listened hard to him and agreed-- 00:44:29.270 --> 00:44:31.110 align:middle line:84% I said, well, who's going to do it? 00:44:31.110 --> 00:44:33.530 align:middle line:84% If we get this contract canceled, 00:44:33.530 --> 00:44:36.270 align:middle line:84% who's going to build the-- he said, well, we have to do it. 00:44:36.270 --> 00:44:38.353 align:middle line:84% And of course, we didn't have the people to do it, 00:44:38.353 --> 00:44:39.830 align:middle line:90% but we said, well, we'll do it. 00:44:39.830 --> 00:44:41.390 align:middle line:84% So we started working on it, and then 00:44:41.390 --> 00:44:45.010 align:middle line:84% we got really scared of what we-- 00:44:45.010 --> 00:44:52.310 align:middle line:84% we realized now that we're going to create this global website, 00:44:52.310 --> 00:44:54.250 align:middle line:90% and it's got to work. 00:44:54.250 --> 00:44:56.270 align:middle line:90% And it's got to be scalable. 00:44:56.270 --> 00:45:00.130 align:middle line:84% And back then, we used to say, with regard to the web, 00:45:00.130 --> 00:45:02.310 align:middle line:84% you don't know how many people are going to come, 00:45:02.310 --> 00:45:04.060 align:middle line:84% you don't know when they're going to come, 00:45:04.060 --> 00:45:06.910 align:middle line:84% and you don't know what they're going to do when they get there. 00:45:06.910 --> 00:45:09.010 align:middle line:90% So we really got into a panic. 00:45:09.010 --> 00:45:11.097 align:middle line:84% And so I went around and visited the heads of all 00:45:11.097 --> 00:45:12.930 align:middle line:84% the different product divisions, and I said, 00:45:12.930 --> 00:45:16.030 align:middle line:84% I need two or three of your very best people. 00:45:16.030 --> 00:45:17.610 align:middle line:84% Irving was a big supporter of this. 00:45:17.610 --> 00:45:22.070 align:middle line:84% And we assembled a group of 54 of the best technical talent 00:45:22.070 --> 00:45:24.730 align:middle line:84% in the company, and we begged, borrowed, 00:45:24.730 --> 00:45:26.590 align:middle line:84% and [? stealed ?] all kinds of resources 00:45:26.590 --> 00:45:27.930 align:middle line:90% in Southbury, Connecticut. 00:45:27.930 --> 00:45:32.530 align:middle line:84% We got some space, and we got the equipment, the best 00:45:32.530 --> 00:45:34.030 align:middle line:84% and the latest of all the equipment. 00:45:34.030 --> 00:45:36.870 align:middle line:84% Irving dug up an old SP1 supercomputer, 00:45:36.870 --> 00:45:40.350 align:middle line:90% and we built this website. 00:45:40.350 --> 00:45:43.450 align:middle line:84% And at the time, it was the largest website in the world. 00:45:43.450 --> 00:45:47.130 align:middle line:84% And one of the guys got the idea that we 00:45:47.130 --> 00:45:49.730 align:middle line:90% could build a ticket server. 00:45:49.730 --> 00:45:51.470 align:middle line:84% So we built this little experimental-- 00:45:51.470 --> 00:45:55.410 align:middle line:84% it was a little HTTP daemon, just a simple, little thing 00:45:55.410 --> 00:45:59.730 align:middle line:84% where you could buy a ticket with a credit card. 00:45:59.730 --> 00:46:02.130 align:middle line:90% This was unheard of in 1995. 00:46:02.130 --> 00:46:03.190 align:middle line:90% Again, there was no eBay. 00:46:03.190 --> 00:46:04.150 align:middle line:90% There was no Amazon. 00:46:04.150 --> 00:46:05.450 align:middle line:90% There was no e-commerce. 00:46:05.450 --> 00:46:08.130 align:middle line:84% This turned out to be the largest e-commerce site 00:46:08.130 --> 00:46:09.410 align:middle line:90% in the world. 00:46:09.410 --> 00:46:13.810 align:middle line:84% It sold $5 million worth of tickets to the Olympics. 00:46:13.810 --> 00:46:19.650 align:middle line:84% And it was a completely unstable, rudimentary system. 00:46:19.650 --> 00:46:21.890 align:middle line:84% But that system went on to become 00:46:21.890 --> 00:46:24.250 align:middle line:90% a technology called WebSphere. 00:46:24.250 --> 00:46:27.060 align:middle line:90% And it was quite successful. 00:46:27.060 --> 00:46:30.760 align:middle line:84% L.L. Bean was the first commercial user of it, 00:46:30.760 --> 00:46:31.283 align:middle line:90% and it was-- 00:46:31.283 --> 00:46:32.700 align:middle line:84% IRVING WLADAWSKY-BERGER: Their CEO 00:46:32.700 --> 00:46:34.562 align:middle line:90% has come to talk [? to me-- ?] 00:46:34.562 --> 00:46:35.520 align:middle line:90% JOHN PATRICK: Terrific. 00:46:35.520 --> 00:46:37.312 align:middle line:84% IRVING WLADAWSKY-BERGER: --Chris McCormick, 00:46:37.312 --> 00:46:39.740 align:middle line:84% who was our partner in developing their e-commerce. 00:46:39.740 --> 00:46:43.420 align:middle line:84% JOHN PATRICK: Oh, well, he'll hopefully validate that story. 00:46:43.420 --> 00:46:48.020 align:middle line:84% So the Olympics became a really important thing for us to learn. 00:46:48.020 --> 00:46:49.620 align:middle line:90% We tried a lot of experiments. 00:46:49.620 --> 00:46:52.360 align:middle line:84% We had the first streaming audio. 00:46:52.360 --> 00:46:53.398 align:middle line:90% Do you remember there-- 00:46:53.398 --> 00:46:54.440 align:middle line:90% some of you may remember. 00:46:54.440 --> 00:46:56.280 align:middle line:84% There was a bombing that occurred 00:46:56.280 --> 00:46:58.440 align:middle line:90% at the Atlanta Olympics. 00:46:58.440 --> 00:47:01.000 align:middle line:84% And we were thinking, it would really 00:47:01.000 --> 00:47:03.540 align:middle line:84% be-- there were a lot of people, ex-pats, 00:47:03.540 --> 00:47:05.920 align:middle line:84% Americans working in Japan and other places that 00:47:05.920 --> 00:47:06.940 align:middle line:90% really care about this. 00:47:06.940 --> 00:47:08.107 align:middle line:90% But how do you get the news? 00:47:08.107 --> 00:47:10.720 align:middle line:84% There were no news sites on the web at the time. 00:47:10.720 --> 00:47:13.120 align:middle line:84% So we said, let's get the Atlanta radio station, 00:47:13.120 --> 00:47:17.197 align:middle line:84% and let's stream it through this audio streaming technology 00:47:17.197 --> 00:47:18.780 align:middle line:84% and make it available on the internet. 00:47:18.780 --> 00:47:20.880 align:middle line:90% This was a huge, big hit. 00:47:20.880 --> 00:47:25.540 align:middle line:84% This is, again, before there was any internet streaming radio 00:47:25.540 --> 00:47:27.060 align:middle line:90% stations, et cetera. 00:47:27.060 --> 00:47:30.660 align:middle line:84% So when the Olympics were over, the Summer Games, 00:47:30.660 --> 00:47:32.125 align:middle line:90% we had these 54 people. 00:47:32.125 --> 00:47:33.500 align:middle line:84% We had this room full of millions 00:47:33.500 --> 00:47:35.180 align:middle line:90% of dollars worth of equipment. 00:47:35.180 --> 00:47:37.100 align:middle line:90% And now what do we do? 00:47:37.100 --> 00:47:41.380 align:middle line:84% Well, I went to see the head of strategy of the company 00:47:41.380 --> 00:47:43.980 align:middle line:84% and convinced him that we should come up 00:47:43.980 --> 00:47:46.620 align:middle line:90% with this notion of Web Ahead. 00:47:46.620 --> 00:47:50.820 align:middle line:90% And Irving-- I don't remember-- 00:47:50.820 --> 00:47:52.840 align:middle line:84% I guess I worked for you at that time. 00:47:52.840 --> 00:47:53.380 align:middle line:84% IRVING WLADAWSKY-BERGER: Yeah, [INAUDIBLE]. 00:47:53.380 --> 00:47:55.963 align:middle line:84% JOHN PATRICK: It must have been, yeah, the Internet Division. 00:47:55.963 --> 00:47:57.380 align:middle line:84% So we said, let's keep that group, 00:47:57.380 --> 00:47:59.540 align:middle line:84% and let's keep it in the Internet Division, 00:47:59.540 --> 00:48:02.400 align:middle line:84% and let's work on internal problems. 00:48:02.400 --> 00:48:05.220 align:middle line:90% Let's web-ify IBM. 00:48:05.220 --> 00:48:06.428 align:middle line:90% And that's what we did. 00:48:06.428 --> 00:48:07.970 align:middle line:84% We used the people and the resources, 00:48:07.970 --> 00:48:10.580 align:middle line:84% and we built websites, and we created applications 00:48:10.580 --> 00:48:12.520 align:middle line:90% that were quite advanced. 00:48:12.520 --> 00:48:14.222 align:middle line:90% So this was a way to leverage-- 00:48:14.222 --> 00:48:16.180 align:middle line:84% IRVING WLADAWSKY-BERGER: JOHN, all these things 00:48:16.180 --> 00:48:21.940 align:middle line:84% you're talking about are a very good example of something 00:48:21.940 --> 00:48:26.420 align:middle line:84% that I think has been a very big change in the last, 00:48:26.420 --> 00:48:31.400 align:middle line:84% let me say, 10 years, that, in the past, 00:48:31.400 --> 00:48:35.040 align:middle line:84% when you develop a major new technology, 00:48:35.040 --> 00:48:38.920 align:middle line:84% you did your experimentation in the lab, 00:48:38.920 --> 00:48:42.080 align:middle line:90% and then you threw it over. 00:48:42.080 --> 00:48:46.540 align:middle line:84% With these technologies that almost, by definition, 00:48:46.540 --> 00:48:50.160 align:middle line:84% are market-facing technologies, you 00:48:50.160 --> 00:48:54.200 align:middle line:84% have to do the experimentation in the marketplace. 00:48:54.200 --> 00:48:55.140 align:middle line:90% Wouldn't you say that? 00:48:55.140 --> 00:48:56.182 align:middle line:90% JOHN PATRICK: Absolutely. 00:48:56.182 --> 00:48:58.980 align:middle line:84% IRVING WLADAWSKY-BERGER: And there is no substitute. 00:48:58.980 --> 00:49:02.160 align:middle line:84% I mean, there is no doing it in the lab. 00:49:02.160 --> 00:49:04.320 align:middle line:84% You can do that, but then you still have 00:49:04.320 --> 00:49:07.120 align:middle line:90% to do it in the marketplace. 00:49:07.120 --> 00:49:12.640 align:middle line:84% And that gets, also, part to why I've been so insisting 00:49:12.640 --> 00:49:17.560 align:middle line:84% that the technical people, the engineers, the people who 00:49:17.560 --> 00:49:20.550 align:middle line:84% understand all this, have to have 00:49:20.550 --> 00:49:24.950 align:middle line:84% such good market-facing skills because that's 00:49:24.950 --> 00:49:31.110 align:middle line:84% what will enable identifying what kinds of experiments. 00:49:31.110 --> 00:49:36.430 align:middle line:84% I mean, you had to have a pretty good idea that this Olympics 00:49:36.430 --> 00:49:39.210 align:middle line:84% website was going to work because, if it didn't work, 00:49:39.210 --> 00:49:42.710 align:middle line:84% it would be such a horrendous black eye. 00:49:42.710 --> 00:49:46.030 align:middle line:84% But you assembled brilliant people, 00:49:46.030 --> 00:49:51.370 align:middle line:84% but they were doing the marketplace experiment directly. 00:49:51.370 --> 00:49:57.530 align:middle line:84% And I think that was not the case 10, 15 years ago, 00:49:57.530 --> 00:49:58.270 align:middle line:90% would you say? 00:49:58.270 --> 00:49:59.090 align:middle line:90% This [INAUDIBLE]-- 00:49:59.090 --> 00:49:59.510 align:middle line:90% JOHN PATRICK: No, definitely no. 00:49:59.510 --> 00:50:01.177 align:middle line:84% IRVING WLADAWSKY-BERGER: --post-internet 00:50:01.177 --> 00:50:05.870 align:middle line:84% that all these much more market-facing experimentation 00:50:05.870 --> 00:50:06.530 align:middle line:90% has happened. 00:50:06.530 --> 00:50:12.310 align:middle line:84% I don't know if you all see it this way. 00:50:12.310 --> 00:50:14.450 align:middle line:84% Any comments or questions on that? 00:50:14.450 --> 00:50:20.050 align:middle line:84% But just, it's been just a really big shift 00:50:20.050 --> 00:50:27.890 align:middle line:84% in the view of technology, from just the lab to almost the lab 00:50:27.890 --> 00:50:33.810 align:middle line:84% is a necessary, but the real innovation is 00:50:33.810 --> 00:50:35.130 align:middle line:90% when you start taking-- 00:50:35.130 --> 00:50:35.450 align:middle line:90% JOHN PATRICK: It's outside. 00:50:35.450 --> 00:50:36.230 align:middle line:84% IRVING WLADAWSKY-BERGER: --the stuff out-- 00:50:36.230 --> 00:50:37.670 align:middle line:84% JOHN PATRICK: The world becomes the lab. 00:50:37.670 --> 00:50:39.190 align:middle line:84% IRVING WLADAWSKY-BERGER: The world becomes the lab. 00:50:39.190 --> 00:50:39.410 align:middle line:90% Exactly. 00:50:39.410 --> 00:50:40.202 align:middle line:90% JOHN PATRICK: Yeah. 00:50:40.202 --> 00:50:42.570 align:middle line:90% One way to think-- go ahead. 00:50:42.570 --> 00:50:43.430 align:middle line:90% Yeah, go ahead. 00:50:43.430 --> 00:50:45.138 align:middle line:84% AUDIENCE: Yeah, I think it's interesting. 00:50:45.138 --> 00:50:48.390 align:middle line:84% I think the internet, in particular, is like that. 00:50:48.390 --> 00:50:51.410 align:middle line:84% But it seems to me like you would set people up, 00:50:51.410 --> 00:50:54.090 align:middle line:84% sort of, by promising things that they didn't really 00:50:54.090 --> 00:50:55.590 align:middle line:84% understand what they were promising. 00:50:55.590 --> 00:50:58.050 align:middle line:84% And then when they realized the commitment-- 00:50:58.050 --> 00:50:59.930 align:middle line:84% that's how you seem to band [? together ?] 00:50:59.930 --> 00:51:02.650 align:middle line:84% a bunch of resources that normally you wouldn't have got. 00:51:02.650 --> 00:51:04.490 align:middle line:90% JOHN PATRICK: No, that's true. 00:51:04.490 --> 00:51:06.590 align:middle line:84% Yeah, I didn't think of it as a setup, 00:51:06.590 --> 00:51:10.685 align:middle line:84% but I guess, retroactively, you could think of it that way. 00:51:10.685 --> 00:51:12.810 align:middle line:84% We didn't know what we were getting into, at first. 00:51:12.810 --> 00:51:14.393 align:middle line:84% IRVING WLADAWSKY-BERGER: I think of it 00:51:14.393 --> 00:51:18.390 align:middle line:84% as, you commit to jump out of the plane, 00:51:18.390 --> 00:51:22.350 align:middle line:84% and you think you have a parachute strapped to your back, 00:51:22.350 --> 00:51:25.470 align:middle line:90% but you're not totally sure. 00:51:25.470 --> 00:51:30.510 align:middle line:84% And you hope that, when you pull the string, it opens. 00:51:30.510 --> 00:51:34.690 align:middle line:84% And it's been packed by good people, but you don't know. 00:51:34.690 --> 00:51:40.110 align:middle line:84% And the problem is, if you wait, then your competitor 00:51:40.110 --> 00:51:41.990 align:middle line:90% will have done it. 00:51:41.990 --> 00:51:50.670 align:middle line:84% And now this is worse, that your competitor did something 00:51:50.670 --> 00:51:55.323 align:middle line:84% while you were thinking about, should you jump off the plane? 00:51:55.323 --> 00:51:56.990 align:middle line:84% AUDIENCE: Yeah, you seem to get yourself 00:51:56.990 --> 00:52:00.150 align:middle line:84% in a lot of sink-or-swim situations, 00:52:00.150 --> 00:52:02.812 align:middle line:84% where you either make it, or you're you are a goner. 00:52:02.812 --> 00:52:04.770 align:middle line:84% IRVING WLADAWSKY-BERGER: Yeah, well, remember-- 00:52:04.770 --> 00:52:05.950 align:middle line:84% JOHN PATRICK: It was a high risk. 00:52:05.950 --> 00:52:06.750 align:middle line:84% IRVING WLADAWSKY-BERGER: --we're talking 00:52:06.750 --> 00:52:07.917 align:middle line:90% about disruptive innovation. 00:52:07.917 --> 00:52:13.410 align:middle line:84% No, no, I think this is the nature of disruptive innovation. 00:52:13.410 --> 00:52:17.500 align:middle line:84% Wouldn't you say entrepreneurs, in general, behave that way, 00:52:17.500 --> 00:52:18.547 align:middle line:90% forgetting big companies? 00:52:18.547 --> 00:52:19.880 align:middle line:90% JOHN PATRICK: Yeah, risk-takers. 00:52:19.880 --> 00:52:21.422 align:middle line:84% IRVING WLADAWSKY-BERGER: Risk-takers. 00:52:21.422 --> 00:52:25.100 align:middle line:84% That's why entrepreneur-- you cannot be an entrepreneur 00:52:25.100 --> 00:52:28.620 align:middle line:84% and not almost get off in the risk. 00:52:28.620 --> 00:52:33.320 align:middle line:84% You get a high from, oh, my god, am I going to crash, 00:52:33.320 --> 00:52:38.500 align:middle line:90% and it's all over? 00:52:38.500 --> 00:52:42.100 align:middle line:84% I mean, obviously, if you're a really good project 00:52:42.100 --> 00:52:45.500 align:middle line:84% manager, as well, which is why good management 00:52:45.500 --> 00:52:48.100 align:middle line:84% and organizational skills are good, 00:52:48.100 --> 00:52:53.220 align:middle line:84% you will assemble brilliant people. 00:52:53.220 --> 00:52:54.505 align:middle line:90% JOHN PATRICK: Yeah, go ahead. 00:52:54.505 --> 00:52:56.880 align:middle line:84% AUDIENCE: So we're talking about risk-taking [INAUDIBLE], 00:52:56.880 --> 00:52:59.900 align:middle line:84% but what do you think is the difference between taking risks 00:52:59.900 --> 00:53:04.620 align:middle line:84% at IBM versus taking risks outside in your own startup? 00:53:04.620 --> 00:53:07.540 align:middle line:84% JOHN PATRICK: Well, actually, there are a lot of parallels. 00:53:07.540 --> 00:53:11.240 align:middle line:84% In a big company, if this project had really gone bust, 00:53:11.240 --> 00:53:14.100 align:middle line:84% it wouldn't have made a blip in the annual report. 00:53:14.100 --> 00:53:16.540 align:middle line:84% So in that respect, they're different. 00:53:16.540 --> 00:53:20.680 align:middle line:84% But in terms of being willing to take risks 00:53:20.680 --> 00:53:26.760 align:middle line:84% and putting all your eggs in one basket with a team of people, 00:53:26.760 --> 00:53:29.040 align:middle line:90% it's the same thing. 00:53:29.040 --> 00:53:31.800 align:middle line:90% Yeah, I don't think it's-- 00:53:31.800 --> 00:53:33.860 align:middle line:84% we were fortunate to have the resources. 00:53:33.860 --> 00:53:35.420 align:middle line:90% I think it's a fair comment. 00:53:35.420 --> 00:53:37.240 align:middle line:84% We never would have gotten the resources 00:53:37.240 --> 00:53:40.860 align:middle line:84% if we had, from the outset, made a proposal to say, 00:53:40.860 --> 00:53:42.400 align:middle line:90% here's what we're going to need. 00:53:42.400 --> 00:53:43.320 align:middle line:84% IRVING WLADAWSKY-BERGER: But it's interesting, also-- 00:53:43.320 --> 00:53:45.440 align:middle line:84% JOHN PATRICK: I'm not sure we could have sold it. 00:53:45.440 --> 00:53:47.773 align:middle line:84% IRVING WLADAWSKY-BERGER: --that the number of resources, 00:53:47.773 --> 00:53:53.400 align:middle line:84% when all is said and done, were infinitesimal for the comp-- 00:53:53.400 --> 00:53:59.320 align:middle line:84% 50 people for IBM is not a large number 00:53:59.320 --> 00:54:04.080 align:middle line:84% or, let's say, even 100 people, which gets back to, 00:54:04.080 --> 00:54:09.380 align:middle line:84% because you were able to do it not with a large group, 00:54:09.380 --> 00:54:14.500 align:middle line:84% but with a small number of Black Belts, that kept the cost 00:54:14.500 --> 00:54:18.500 align:middle line:84% way down, whereas if you had had to do it 00:54:18.500 --> 00:54:21.900 align:middle line:84% the classic, hierarchical organization, 00:54:21.900 --> 00:54:25.740 align:middle line:84% I bet you the number would have been 10 times higher. 00:54:25.740 --> 00:54:31.740 align:middle line:84% And now you-- the more you spend, 00:54:31.740 --> 00:54:35.420 align:middle line:84% the more the accountants are on your back, 00:54:35.420 --> 00:54:38.840 align:middle line:84% whereas if you spend as little as John was spending, 00:54:38.840 --> 00:54:40.500 align:middle line:90% you're under the radar. 00:54:40.500 --> 00:54:42.420 align:middle line:90% Who gives a shit about that? 00:54:42.420 --> 00:54:43.140 align:middle line:90% [INAUDIBLE] 00:54:43.140 --> 00:54:44.160 align:middle line:90% No, no, I'm serious. 00:54:44.160 --> 00:54:46.180 align:middle line:84% And there is a time when you want 00:54:46.180 --> 00:54:48.440 align:middle line:84% the accountants to say that about you, 00:54:48.440 --> 00:54:50.660 align:middle line:90% that you don't matter. 00:54:50.660 --> 00:54:53.860 align:middle line:84% You're not ready to take on the accountants yet. 00:54:53.860 --> 00:54:55.700 align:middle line:84% JOHN PATRICK: Yeah, a lot of resources 00:54:55.700 --> 00:54:59.180 align:middle line:84% went into it, when I think about it. 00:54:59.180 --> 00:55:02.380 align:middle line:84% From a hardware point of view, we 00:55:02.380 --> 00:55:05.040 align:middle line:84% went to the guy that ran the Disk Drive Division, 00:55:05.040 --> 00:55:06.998 align:middle line:84% for example, and said, the whole world's 00:55:06.998 --> 00:55:08.290 align:middle line:90% going to be watching this site. 00:55:08.290 --> 00:55:10.675 align:middle line:84% We really wouldn't want to have a disk drive crash. 00:55:10.675 --> 00:55:11.550 align:middle line:90% Oh, no, you're right. 00:55:11.550 --> 00:55:13.175 align:middle line:84% We better get some of the very latest-- 00:55:13.175 --> 00:55:15.170 align:middle line:90% we'll give you two of them. 00:55:15.170 --> 00:55:17.590 align:middle line:84% So there was definitely that element. 00:55:17.590 --> 00:55:22.170 align:middle line:84% I think, in the end, it all revolves around people. 00:55:22.170 --> 00:55:30.130 align:middle line:84% And when this phase was over, we started thinking ahead about, 00:55:30.130 --> 00:55:33.370 align:middle line:84% how do we continue to bring really good people 00:55:33.370 --> 00:55:35.090 align:middle line:90% into the organization? 00:55:35.090 --> 00:55:37.330 align:middle line:84% And one of the people in the organization 00:55:37.330 --> 00:55:43.690 align:middle line:84% had this idea called Extreme Blue, where we would set up 00:55:43.690 --> 00:55:48.170 align:middle line:84% in Cambridge a group, and we would recruit the absolute best 00:55:48.170 --> 00:55:52.930 align:middle line:84% students we could find around the country from the top schools 00:55:52.930 --> 00:55:57.010 align:middle line:84% in computer science and set them up in a very unique program 00:55:57.010 --> 00:56:00.170 align:middle line:84% and give them really important projects. 00:56:00.170 --> 00:56:03.450 align:middle line:84% And that's evolved into quite a large program now. 00:56:03.450 --> 00:56:06.930 align:middle line:84% Hundreds of people come through that program. 00:56:06.930 --> 00:56:10.470 align:middle line:84% So it's all about people, people and skills. 00:56:10.470 --> 00:56:13.290 align:middle line:84% And the other thing I would mention about these things, 00:56:13.290 --> 00:56:17.030 align:middle line:84% and as you're putting your concept together and launching 00:56:17.030 --> 00:56:20.910 align:middle line:84% a company or an idea in a company, names really 00:56:20.910 --> 00:56:24.750 align:middle line:84% matter what you call something, whether it's alphaWorks, 00:56:24.750 --> 00:56:29.110 align:middle line:84% or Web Ahead, or Extreme Blue, or new product. 00:56:29.110 --> 00:56:31.990 align:middle line:84% One of the rules that we established on alphaWorks 00:56:31.990 --> 00:56:34.690 align:middle line:84% was that, in order to put a technology up there, 00:56:34.690 --> 00:56:37.310 align:middle line:84% the researcher had to come up with a name. 00:56:37.310 --> 00:56:40.030 align:middle line:84% And it couldn't be a technical name. 00:56:40.030 --> 00:56:44.490 align:middle line:84% It had to be a simple name that may be related to it, 00:56:44.490 --> 00:56:46.710 align:middle line:84% but not a generic description with 10 00:56:46.710 --> 00:56:49.190 align:middle line:90% words of five syllables each. 00:56:49.190 --> 00:56:51.670 align:middle line:90% No, it had to have a name. 00:56:51.670 --> 00:56:55.230 align:middle line:84% This was very offensive to some of the researchers, 00:56:55.230 --> 00:56:59.710 align:middle line:84% to marketize their brilliant idea. 00:56:59.710 --> 00:57:01.590 align:middle line:84% But we hung very tough with that, 00:57:01.590 --> 00:57:06.850 align:middle line:84% that it has to have a simple, memorable name. 00:57:06.850 --> 00:57:10.650 align:middle line:84% And I believe, to this day, the ThinkPad-- 00:57:10.650 --> 00:57:13.270 align:middle line:84% when the ThinkPad came out in April 1, 1992, 00:57:13.270 --> 00:57:17.610 align:middle line:84% there was a huge debate about the name ThinkPad. 00:57:17.610 --> 00:57:21.710 align:middle line:84% And the original ThinkPad was actually a pad. 00:57:21.710 --> 00:57:23.570 align:middle line:90% It was a stylus-based computer. 00:57:23.570 --> 00:57:24.570 align:middle line:90% It was about that thick. 00:57:24.570 --> 00:57:26.730 align:middle line:90% It weighed about 10 pounds. 00:57:26.730 --> 00:57:29.270 align:middle line:84% UPS was going to be the first customer of it. 00:57:29.270 --> 00:57:32.130 align:middle line:84% It used an operating system called Go-- 00:57:32.130 --> 00:57:34.970 align:middle line:84% some of you may have heard of, which ultimately got bought 00:57:34.970 --> 00:57:37.490 align:middle line:90% by AT&T, and then it folded. 00:57:37.490 --> 00:57:41.570 align:middle line:84% And this first product-- it was a breakthrough product 00:57:41.570 --> 00:57:44.130 align:middle line:84% at the time, and it needed to have a name. 00:57:44.130 --> 00:57:47.250 align:middle line:84% We got a consultant to research this. 00:57:47.250 --> 00:57:50.570 align:middle line:84% We said we needed a name in a hurry because the proposed name 00:57:50.570 --> 00:57:54.990 align:middle line:90% the IBM 486 SLC 2-1. 00:57:54.990 --> 00:57:57.050 align:middle line:84% That was the name of this product. 00:57:57.050 --> 00:58:00.030 align:middle line:84% And I had just come in as the new VP of marketing, 00:58:00.030 --> 00:58:01.470 align:middle line:90% and I said, over my dead body. 00:58:01.470 --> 00:58:03.440 align:middle line:90% We need a better name than that. 00:58:03.440 --> 00:58:04.183 align:middle line:90% There isn't time. 00:58:04.183 --> 00:58:06.100 align:middle line:84% I said, then we're going to delay the product. 00:58:06.100 --> 00:58:09.720 align:middle line:84% And we got a consultant to come in, and the consultant said, 00:58:09.720 --> 00:58:11.040 align:middle line:90% ThinkPad. 00:58:11.040 --> 00:58:15.800 align:middle line:84% And he was focusing on the little physical pad 00:58:15.800 --> 00:58:20.680 align:middle line:84% that Tom Watson developed back at NCR many, many years ago. 00:58:20.680 --> 00:58:22.800 align:middle line:84% And you can't imagine the look on people's face 00:58:22.800 --> 00:58:24.720 align:middle line:90% when he said ThinkPad. 00:58:24.720 --> 00:58:27.640 align:middle line:84% It was a really, really strange name. 00:58:27.640 --> 00:58:30.860 align:middle line:84% We launched it because we didn't have time to do much else. 00:58:30.860 --> 00:58:33.580 align:middle line:84% And there were debates about, it doesn't translate, 00:58:33.580 --> 00:58:36.040 align:middle line:84% and it means a dirty word in this country, 00:58:36.040 --> 00:58:38.322 align:middle line:90% and all these problems with it. 00:58:38.322 --> 00:58:39.780 align:middle line:84% So we got the product out the door. 00:58:39.780 --> 00:58:42.000 align:middle line:84% The product was a miserable failure. 00:58:42.000 --> 00:58:47.040 align:middle line:84% But then it was time to come along with the first laptop. 00:58:47.040 --> 00:58:49.880 align:middle line:84% Toshiba was kicking IBM's butt at the time. 00:58:49.880 --> 00:58:53.040 align:middle line:84% The salesmen were begging for a product. 00:58:53.040 --> 00:58:56.318 align:middle line:84% The first product was ready to be launched, 00:58:56.318 --> 00:58:57.860 align:middle line:84% and there's a discussion about, well, 00:58:57.860 --> 00:59:00.120 align:middle line:90% what are we going to call it? 00:59:00.120 --> 00:59:03.460 align:middle line:84% Well, to me, we have a name, ThinkPad. 00:59:03.460 --> 00:59:07.180 align:middle line:84% Yeah, but this one has a keyboard on it. 00:59:07.180 --> 00:59:09.520 align:middle line:84% See, now there's the engineering mentality. 00:59:09.520 --> 00:59:10.580 align:middle line:90% [LAUGHTER] 00:59:10.580 --> 00:59:12.240 align:middle line:84% This one, you can't call it a ThinkPad. 00:59:12.240 --> 00:59:14.700 align:middle line:90% It doesn't have a pad. 00:59:14.700 --> 00:59:17.360 align:middle line:84% I said, OK, we're going to do a little exercise. 00:59:17.360 --> 00:59:21.500 align:middle line:84% I'm going to say a word, and think about what comes to mind. 00:59:21.500 --> 00:59:22.740 align:middle line:90% Ready? 00:59:22.740 --> 00:59:23.740 align:middle line:90% Apple. 00:59:23.740 --> 00:59:27.960 align:middle line:84% Everybody that thought of a fruit, raise your hand. 00:59:27.960 --> 00:59:28.460 align:middle line:90% See? 00:59:28.460 --> 00:59:29.293 align:middle line:90% So that's the point. 00:59:29.293 --> 00:59:31.780 align:middle line:90% So now ThinkPads-- 00:59:31.780 --> 00:59:34.460 align:middle line:84% I think there's 35 million of them. 00:59:34.460 --> 00:59:37.940 align:middle line:84% And when Lenovo bought the laptop business 00:59:37.940 --> 00:59:41.460 align:middle line:84% from IBM, what do you think was one of the most important assets 00:59:41.460 --> 00:59:43.220 align:middle line:90% that was part of that deal? 00:59:43.220 --> 00:59:44.780 align:middle line:90% The name ThinkPad. 00:59:44.780 --> 00:59:47.220 align:middle line:90% So now they're Lenovo ThinkPads. 00:59:47.220 --> 00:59:49.560 align:middle line:84% So names are really, really important. 00:59:49.560 --> 00:59:52.320 align:middle line:84% And a lot of companies underestimate that. 00:59:52.320 --> 00:59:54.160 align:middle line:90% And I see it in IBM. 00:59:54.160 --> 00:59:57.820 align:middle line:84% IBM still, frankly, in the software area, 00:59:57.820 --> 01:00:04.320 align:middle line:84% they tend to like big, long, generic names for the firewall 01:00:04.320 --> 01:00:05.020 align:middle line:90% software. 01:00:05.020 --> 01:00:06.620 align:middle line:90% It was-- I can't remember. 01:00:06.620 --> 01:00:09.240 align:middle line:84% It was, like, 10 words long, and the competitor 01:00:09.240 --> 01:00:13.460 align:middle line:84% was Fire Point or something simple. 01:00:13.460 --> 01:00:15.840 align:middle line:90% So names are a really big deal. 01:00:15.840 --> 01:00:19.600 align:middle line:84% A couple ideas for you when it comes to development, 01:00:19.600 --> 01:00:21.400 align:middle line:90% technical development-- 01:00:21.400 --> 01:00:24.200 align:middle line:90% small teams. 01:00:24.200 --> 01:00:27.560 align:middle line:90% Big teams are death. 01:00:27.560 --> 01:00:30.880 align:middle line:84% When you have a big team, then subteams form. 01:00:30.880 --> 01:00:32.480 align:middle line:84% And a subteam needs an assistant, 01:00:32.480 --> 01:00:34.980 align:middle line:84% and the assistant starts talking to the other assistant. 01:00:34.980 --> 01:00:37.800 align:middle line:84% And then you need-- you know what happens, 01:00:37.800 --> 01:00:39.800 align:middle line:90% and it's exponential. 01:00:39.800 --> 01:00:43.240 align:middle line:84% And so small teams are really important. 01:00:43.240 --> 01:00:46.440 align:middle line:90% Yeah, please. 01:00:46.440 --> 01:00:48.800 align:middle line:84% AUDIENCE: So what do you think about focusing 01:00:48.800 --> 01:00:52.200 align:middle line:84% on co-located teams versus distributed teams? 01:00:52.200 --> 01:00:53.800 align:middle line:84% There's a whole set of discussion 01:00:53.800 --> 01:00:54.800 align:middle line:90% you can have about that. 01:00:54.800 --> 01:00:57.130 align:middle line:84% But in the context of what you just said here, 01:00:57.130 --> 01:01:00.702 align:middle line:84% is it important to have teams [INAUDIBLE]? 01:01:00.702 --> 01:01:02.410 align:middle line:84% JOHN PATRICK: I would say it's debatable. 01:01:02.410 --> 01:01:05.390 align:middle line:90% 01:01:05.390 --> 01:01:09.030 align:middle line:84% Physically, you have reach a certain point where everybody 01:01:09.030 --> 01:01:11.990 align:middle line:84% doesn't fit on the same floor, and you 01:01:11.990 --> 01:01:15.470 align:middle line:84% have to spill over onto the floor upstairs or downstairs. 01:01:15.470 --> 01:01:17.170 align:middle line:84% Once you're not on the same floor, 01:01:17.170 --> 01:01:20.390 align:middle line:84% you might as well be in a different country 01:01:20.390 --> 01:01:23.430 align:middle line:84% because people don't go to that floor. 01:01:23.430 --> 01:01:25.898 align:middle line:90% Microsoft has this big campus. 01:01:25.898 --> 01:01:27.690 align:middle line:84% The idea is, everybody's in the same place. 01:01:27.690 --> 01:01:30.130 align:middle line:84% Well, they might as well be in a different continent. 01:01:30.130 --> 01:01:32.172 align:middle line:84% IRVING WLADAWSKY-BERGER: Wouldn't you say, John-- 01:01:32.172 --> 01:01:35.990 align:middle line:84% I would say, it honestly depends on the person. 01:01:35.990 --> 01:01:39.070 align:middle line:84% If somebody is really good, they could be in Tajikistan, 01:01:39.070 --> 01:01:40.590 align:middle line:90% for all you care. 01:01:40.590 --> 01:01:45.230 align:middle line:84% I mean, obviously, as long as we get IT, 01:01:45.230 --> 01:01:48.390 align:middle line:90% they are connected, and so on. 01:01:48.390 --> 01:01:51.890 align:middle line:84% If somebody is new and is not a member of the team, 01:01:51.890 --> 01:01:55.430 align:middle line:84% you need them to become a member of the team. 01:01:55.430 --> 01:02:06.290 align:middle line:84% So I find the most important thing is flexibility and adjust 01:02:06.290 --> 01:02:08.770 align:middle line:90% to individual people. 01:02:08.770 --> 01:02:14.250 align:middle line:84% And again, that's a huge change in the last 10 years. 01:02:14.250 --> 01:02:18.890 align:middle line:84% And given, as John has said over and over again-- 01:02:18.890 --> 01:02:21.870 align:middle line:84% remember, we're talking about disruptive innovations, 01:02:21.870 --> 01:02:24.810 align:middle line:84% and how do you now start bringing them to market? 01:02:24.810 --> 01:02:30.570 align:middle line:84% The number one thing of a really, really capable team, 01:02:30.570 --> 01:02:34.410 align:middle line:84% and the quality of the people is far more important 01:02:34.410 --> 01:02:36.750 align:middle line:84% than whether they're physically together. 01:02:36.750 --> 01:02:38.710 align:middle line:84% Is it better to have them together? 01:02:38.710 --> 01:02:40.410 align:middle line:90% Sure. 01:02:40.410 --> 01:02:42.370 align:middle line:84% But in today's world, the probability 01:02:42.370 --> 01:02:47.410 align:middle line:84% that you can do that is very small, wouldn't you say? 01:02:47.410 --> 01:02:48.450 align:middle line:90% JOHN PATRICK: Yeah. 01:02:48.450 --> 01:02:50.450 align:middle line:84% IRVING WLADAWSKY-BERGER: So it's the flexibility 01:02:50.450 --> 01:02:53.710 align:middle line:84% that is more critical than anything else, I think. 01:02:53.710 --> 01:02:55.510 align:middle line:84% JOHN PATRICK: I mean, technically, 01:02:55.510 --> 01:03:00.590 align:middle line:84% with all the various web tools and the low cost of voice 01:03:00.590 --> 01:03:03.670 align:middle line:84% and video over the internet, you could argue that everybody 01:03:03.670 --> 01:03:05.770 align:middle line:90% could be totally distributed. 01:03:05.770 --> 01:03:09.670 align:middle line:84% I think there's value in getting people together 01:03:09.670 --> 01:03:12.870 align:middle line:90% on some frequency. 01:03:12.870 --> 01:03:16.090 align:middle line:84% Whether it's social or for a meeting or whatever, 01:03:16.090 --> 01:03:18.430 align:middle line:90% there's definitely-- 01:03:18.430 --> 01:03:19.610 align:middle line:90% I think that's required. 01:03:19.610 --> 01:03:23.560 align:middle line:84% But once people know each other, every time you have a meeting, 01:03:23.560 --> 01:03:25.310 align:middle line:84% you don't have to be in person because you 01:03:25.310 --> 01:03:27.830 align:middle line:84% know what they look like, you know what they sound like, 01:03:27.830 --> 01:03:28.670 align:middle line:90% and it works. 01:03:28.670 --> 01:03:31.710 align:middle line:84% The key thing is to have freedom of action 01:03:31.710 --> 01:03:34.430 align:middle line:84% and not to have too many people trying 01:03:34.430 --> 01:03:36.670 align:middle line:90% to solve a particular problem. 01:03:36.670 --> 01:03:40.390 align:middle line:84% Five people can do a lot more than 50 people because the 50 01:03:40.390 --> 01:03:42.790 align:middle line:84% people can bring a lot of overhead, 01:03:42.790 --> 01:03:46.510 align:middle line:84% unless you can break it down into subsets. 01:03:46.510 --> 01:03:47.470 align:middle line:90% Yeah? 01:03:47.470 --> 01:03:49.270 align:middle line:84% AUDIENCE: So I managed a development team 01:03:49.270 --> 01:03:53.210 align:middle line:84% for the last seven years, and I never met, face to face, 01:03:53.210 --> 01:03:55.630 align:middle line:84% some of my development guys in that time. 01:03:55.630 --> 01:03:59.330 align:middle line:90% And it worked out really well. 01:03:59.330 --> 01:04:01.122 align:middle line:84% It was a software development team. 01:04:01.122 --> 01:04:02.830 align:middle line:84% IRVING WLADAWSKY-BERGER: In what company? 01:04:02.830 --> 01:04:04.330 align:middle line:90% AUDIENCE: Global Crossing. 01:04:04.330 --> 01:04:08.090 align:middle line:84% And so it worked well up until the point 01:04:08.090 --> 01:04:10.030 align:middle line:84% that we had to persuade on something, 01:04:10.030 --> 01:04:12.690 align:middle line:84% some big product where we had to push it out 01:04:12.690 --> 01:04:14.450 align:middle line:90% to the rest of the corporation. 01:04:14.450 --> 01:04:16.370 align:middle line:90% We developed tools in-house. 01:04:16.370 --> 01:04:19.070 align:middle line:84% And so I found that, when we needed to do that, 01:04:19.070 --> 01:04:21.970 align:middle line:84% I needed to go somewhere and sit in front of people 01:04:21.970 --> 01:04:24.430 align:middle line:84% and talk to them and try to persuade them that way. 01:04:24.430 --> 01:04:26.990 align:middle line:84% Otherwise, it was exponentially harder, 01:04:26.990 --> 01:04:31.110 align:middle line:84% it seemed, to try to do that from Michigan, 01:04:31.110 --> 01:04:35.430 align:middle line:84% when trying to do that-- persuade people down in Phoenix, 01:04:35.430 --> 01:04:36.290 align:middle line:90% for instance. 01:04:36.290 --> 01:04:37.810 align:middle line:84% JOHN PATRICK: And how often did you 01:04:37.810 --> 01:04:39.648 align:middle line:90% find it necessary to do that? 01:04:39.648 --> 01:04:42.190 align:middle line:84% AUDIENCE: Well, product releases sometimes for in house tools 01:04:42.190 --> 01:04:46.990 align:middle line:84% sometimes maybe as frequently as every six months. 01:04:46.990 --> 01:04:48.280 align:middle line:90% JOHN PATRICK: Yeah. 01:04:48.280 --> 01:04:49.680 align:middle line:90% Yeah. 01:04:49.680 --> 01:04:54.020 align:middle line:84% IRVING WLADAWSKY-BERGER: Every six months, even once a quarter, 01:04:54.020 --> 01:04:55.913 align:middle line:90% seems quite manageable. 01:04:55.913 --> 01:04:57.580 align:middle line:84% AUDIENCE: So Global Crossing, of course, 01:04:57.580 --> 01:04:59.163 align:middle line:84% is in the telecommunications industry. 01:04:59.163 --> 01:05:02.800 align:middle line:84% And that means we're-- that industry is completely 01:05:02.800 --> 01:05:05.860 align:middle line:84% competitive, and so that means that there's tight margins. 01:05:05.860 --> 01:05:09.880 align:middle line:84% And so I even had to, on occasion, 01:05:09.880 --> 01:05:11.260 align:middle line:84% buy my own plane ticket to do it. 01:05:11.260 --> 01:05:12.060 align:middle line:90% But I found that-- 01:05:12.060 --> 01:05:12.560 align:middle line:90% IRVING WLADAWSKY-BERGER: Really? 01:05:12.560 --> 01:05:15.000 align:middle line:84% AUDIENCE: Yeah, because when I'd tell them 01:05:15.000 --> 01:05:18.160 align:middle line:84% that I wanted to come down there and try to persuade them-- 01:05:18.160 --> 01:05:19.660 align:middle line:84% OK, we're not going to pay for that. 01:05:19.660 --> 01:05:23.740 align:middle line:84% And sometimes you have to do it out of your own pocket. 01:05:23.740 --> 01:05:26.980 align:middle line:84% But the persuasion, like you were saying, 01:05:26.980 --> 01:05:28.640 align:middle line:84% is very, very important, it seems. 01:05:28.640 --> 01:05:29.920 align:middle line:84% JOHN PATRICK: But the development effort, you 01:05:29.920 --> 01:05:31.860 align:middle line:84% were able to coordinate electronically? 01:05:31.860 --> 01:05:33.902 align:middle line:84% AUDIENCE: What I've learned from this whole thing 01:05:33.902 --> 01:05:36.320 align:middle line:84% is that you can do development engineering remotely. 01:05:36.320 --> 01:05:38.317 align:middle line:84% But when you're trying to, let's say, 01:05:38.317 --> 01:05:39.900 align:middle line:84% persuade people or move up the ladder, 01:05:39.900 --> 01:05:41.332 align:middle line:90% even, you need to be there. 01:05:41.332 --> 01:05:43.040 align:middle line:84% IRVING WLADAWSKY-BERGER: Very good point. 01:05:43.040 --> 01:05:44.320 align:middle line:90% JOHN PATRICK: Yeah. 01:05:44.320 --> 01:05:45.480 align:middle line:90% Yeah, sure. 01:05:45.480 --> 01:05:48.220 align:middle line:84% AUDIENCE: What was unique about IBM's culture that 01:05:48.220 --> 01:05:53.260 align:middle line:84% enabled you to have all this success with energizing 01:05:53.260 --> 01:05:56.660 align:middle line:84% the rest of IBM and moving them in the direction 01:05:56.660 --> 01:05:57.520 align:middle line:90% of the internet? 01:05:57.520 --> 01:06:01.380 align:middle line:84% I mean, I think a lot of us here worked with companies 01:06:01.380 --> 01:06:04.420 align:middle line:90% that just don't change. 01:06:04.420 --> 01:06:11.540 align:middle line:84% I mean, they don't work with disruptive innovation, I mean. 01:06:11.540 --> 01:06:14.900 align:middle line:84% So what is it about IBM that you think enable 01:06:14.900 --> 01:06:18.190 align:middle line:90% you to have such success? 01:06:18.190 --> 01:06:20.440 align:middle line:84% IRVING WLADAWSKY-BERGER: And John, as you answer that, 01:06:20.440 --> 01:06:25.660 align:middle line:84% think of a question that has come up in the other classes. 01:06:25.660 --> 01:06:30.820 align:middle line:84% If IBM hadn't just been through a near-death experience 01:06:30.820 --> 01:06:33.340 align:middle line:84% a few years before that, would it 01:06:33.340 --> 01:06:39.020 align:middle line:84% have been as open to this kind of innovation as it was then? 01:06:39.020 --> 01:06:42.400 align:middle line:90% See, is that a reasonable-- 01:06:42.400 --> 01:06:43.680 align:middle line:90% AUDIENCE: Is that what it was? 01:06:43.680 --> 01:06:44.320 align:middle line:84% IRVING WLADAWSKY-BERGER: Well, I don't know-- 01:06:44.320 --> 01:06:45.200 align:middle line:90% I [INAUDIBLE]. 01:06:45.200 --> 01:06:45.880 align:middle line:90% JOHN PATRICK: I don't know. 01:06:45.880 --> 01:06:47.755 align:middle line:84% Irving And I were talking about that earlier. 01:06:47.755 --> 01:06:54.560 align:middle line:84% It's hard to say because we never really presented 01:06:54.560 --> 01:06:58.280 align:middle line:84% the internet as a money-maker, that this was going to solve 01:06:58.280 --> 01:07:00.460 align:middle line:90% a $9 billion profit problem. 01:07:00.460 --> 01:07:02.600 align:middle line:84% AUDIENCE: So how do you get resources? 01:07:02.600 --> 01:07:08.120 align:middle line:84% JOHN PATRICK: Well, I think, in the end, it's all about people. 01:07:08.120 --> 01:07:11.440 align:middle line:90% It's a matter of persistence. 01:07:11.440 --> 01:07:15.200 align:middle line:84% It's a matter of people believing in you 01:07:15.200 --> 01:07:18.120 align:middle line:90% and you believing in people. 01:07:18.120 --> 01:07:21.780 align:middle line:84% And you have an idea that's exciting. 01:07:21.780 --> 01:07:23.700 align:middle line:84% And you can make it exciting for people, 01:07:23.700 --> 01:07:26.160 align:middle line:90% and you just don't give up. 01:07:26.160 --> 01:07:30.260 align:middle line:84% IRVING WLADAWSKY-BERGER: Did you read Lou Gerstner's chapter? 01:07:30.260 --> 01:07:34.120 align:middle line:84% Because he talks quite a bit about that. 01:07:34.120 --> 01:07:41.000 align:middle line:84% And I think Lou Gerstner was convinced in '95-- 01:07:41.000 --> 01:07:45.190 align:middle line:84% remember, first, he had people like John 01:07:45.190 --> 01:07:48.350 align:middle line:84% and quite a few others doing these things inside. 01:07:48.350 --> 01:07:52.070 align:middle line:84% Then there was the Netscape IPO, which 01:07:52.070 --> 01:07:59.710 align:middle line:84% just got everybody saying, what the hell is going on? 01:07:59.710 --> 01:08:04.210 align:middle line:84% And then Lou himself talked to clients a lot. 01:08:04.210 --> 01:08:08.110 align:middle line:84% And I bet you-- in fact, when did Lou 01:08:08.110 --> 01:08:10.790 align:middle line:90% start taking you to see CEOs? 01:08:10.790 --> 01:08:12.265 align:middle line:90% JOHN PATRICK: May of '90-- 01:08:12.265 --> 01:08:14.390 align:middle line:84% IRVING WLADAWSKY-BERGER: [? '95?. ?] Yeah, it was-- 01:08:14.390 --> 01:08:14.750 align:middle line:90% JOHN PATRICK: Was it '94 or '95? 01:08:14.750 --> 01:08:16.050 align:middle line:84% IRVING WLADAWSKY-BERGER: --before the Internet Division 01:08:16.050 --> 01:08:16.550 align:middle line:90% because-- 01:08:16.550 --> 01:08:18.390 align:middle line:84% JOHN PATRICK: I believe it was May of '94. 01:08:18.390 --> 01:08:19.890 align:middle line:84% IRVING WLADAWSKY-BERGER: May of '94? 01:08:19.890 --> 01:08:21.890 align:middle line:84% JOHN PATRICK: No, no, it had to be '95, May '95. 01:08:21.890 --> 01:08:24.348 align:middle line:84% IRVING WLADAWSKY-BERGER: Because it was before the Internet 01:08:24.348 --> 01:08:27.010 align:middle line:84% Division because you continued to do that even afterwards. 01:08:27.010 --> 01:08:27.843 align:middle line:90% JOHN PATRICK: Right. 01:08:27.843 --> 01:08:35.270 align:middle line:84% IRVING WLADAWSKY-BERGER: So now, if Lou Gerstner hadn't 01:08:35.270 --> 01:08:39.790 align:middle line:84% been as open-minded and forward-thinking, 01:08:39.790 --> 01:08:43.130 align:middle line:90% could we still have done it? 01:08:43.130 --> 01:08:46.756 align:middle line:84% It would have been much harder, wouldn't you say? 01:08:46.756 --> 01:08:48.423 align:middle line:84% JOHN PATRICK: Yeah, no doubt about that. 01:08:48.423 --> 01:08:49.609 align:middle line:84% AUDIENCE: I'm just amazed at the amount of resources 01:08:49.609 --> 01:08:52.569 align:middle line:84% that they were willing to throw at stuff like the Olympics 01:08:52.569 --> 01:08:57.410 align:middle line:84% website and whatnot when there wasn't a demonstrated revenue 01:08:57.410 --> 01:08:58.310 align:middle line:90% stream for them. 01:08:58.310 --> 01:09:01.130 align:middle line:84% JOHN PATRICK: Well, let me put that in perspective. 01:09:01.130 --> 01:09:03.170 align:middle line:84% The internet part of the Olympics 01:09:03.170 --> 01:09:05.250 align:middle line:90% was actually the small part. 01:09:05.250 --> 01:09:08.689 align:middle line:84% IBM had been sponsoring the Olympics for many, many years 01:09:08.689 --> 01:09:11.609 align:middle line:84% and doing all the dirty work behind the scenes, 01:09:11.609 --> 01:09:14.490 align:middle line:84% capturing all the data from every person who 01:09:14.490 --> 01:09:17.390 align:middle line:84% crosses every finish line and capturing that data, 01:09:17.390 --> 01:09:22.569 align:middle line:84% providing the billing services in the cafeteria and the press 01:09:22.569 --> 01:09:26.729 align:middle line:84% support and the ticketing and all that. 01:09:26.729 --> 01:09:29.810 align:middle line:84% And in fact, that's why IBM eventually 01:09:29.810 --> 01:09:34.130 align:middle line:84% dropped support of the Olympics because it wasn't justified. 01:09:34.130 --> 01:09:39.010 align:middle line:84% We had 50 people and a big data center that built this website. 01:09:39.010 --> 01:09:42.069 align:middle line:84% There were over a thousand people, a thousand 01:09:42.069 --> 01:09:43.970 align:middle line:90% IBMers working on the Olympics. 01:09:43.970 --> 01:09:47.029 align:middle line:84% So we were a very small part of it. 01:09:47.029 --> 01:09:52.689 align:middle line:84% And I would say, with regard to the internet changing IBM, 01:09:52.689 --> 01:09:54.630 align:middle line:84% there's no doubt that it did, but I 01:09:54.630 --> 01:09:59.770 align:middle line:84% don't think it was viewed as prescriptive initially. 01:09:59.770 --> 01:10:03.890 align:middle line:84% I mean, it was a fairly small investment, 01:10:03.890 --> 01:10:07.190 align:middle line:84% and it seemed like a pretty cool thing. 01:10:07.190 --> 01:10:11.030 align:middle line:84% And then later, when the company was 01:10:11.030 --> 01:10:12.710 align:middle line:84% ready to change the strategy to more 01:10:12.710 --> 01:10:17.630 align:middle line:84% of a networking-oriented strategy, it melded very nicely. 01:10:17.630 --> 01:10:21.010 align:middle line:84% The revenue from the internet was very small. 01:10:21.010 --> 01:10:24.270 align:middle line:84% We did a study in 1995 and estimated 01:10:24.270 --> 01:10:27.150 align:middle line:84% that the total revenue of the entire industry 01:10:27.150 --> 01:10:29.030 align:middle line:90% was $100 million. 01:10:29.030 --> 01:10:30.530 align:middle line:90% That included Cisco. 01:10:30.530 --> 01:10:33.070 align:middle line:90% 01:10:33.070 --> 01:10:35.670 align:middle line:84% But we projected it would be a billion. 01:10:35.670 --> 01:10:39.180 align:middle line:84% And IBM's share of it was very small. 01:10:39.180 --> 01:10:43.360 align:middle line:84% So we did eventually prove out a business model. 01:10:43.360 --> 01:10:45.230 align:middle line:90% IRVING WLADAWSKY-BERGER: Yeah. 01:10:45.230 --> 01:10:53.420 align:middle line:84% Next week, we'll talk about a very important part of this, 01:10:53.420 --> 01:10:55.580 align:middle line:90% also, which is-- 01:10:55.580 --> 01:11:04.240 align:middle line:84% remember, John's made the point that, I would say, around '95 01:11:04.240 --> 01:11:10.620 align:middle line:84% and before, people thought, OK, here is IT, and here is the web, 01:11:10.620 --> 01:11:12.760 align:middle line:90% and the twain do not meet. 01:11:12.760 --> 01:11:15.340 align:middle line:84% And if you want to publish a brochure 01:11:15.340 --> 01:11:20.860 align:middle line:84% where you called it [INAUDIBLE] the web, but here is IT. 01:11:20.860 --> 01:11:24.660 align:middle line:84% In '96, when we started putting together what became, 01:11:24.660 --> 01:11:29.820 align:middle line:84% in business, a major breakthrough that, 01:11:29.820 --> 01:11:34.140 align:middle line:84% in all honesty, we discovered from our customers-- 01:11:34.140 --> 01:11:36.240 align:middle line:90% they were already doing it. 01:11:36.240 --> 01:11:39.600 align:middle line:84% And then we said, oh, my god, that's what they're doing. 01:11:39.600 --> 01:11:49.560 align:middle line:84% Let's do that-- was that IT was becoming IT web-enabled. 01:11:49.560 --> 01:11:53.320 align:middle line:84% Think of Federal Express or [? APN. ?] 01:11:53.320 --> 01:11:57.080 align:middle line:84% And that was critical to convince everybody 01:11:57.080 --> 01:12:04.060 align:middle line:84% in IBM that the web with IT was the direction of IT. 01:12:04.060 --> 01:12:06.800 align:middle line:84% So if you wanted to be the leader of IT, 01:12:06.800 --> 01:12:09.400 align:middle line:90% this is the way you have to go. 01:12:09.400 --> 01:12:13.400 align:middle line:84% When you say, once that connection was made, 01:12:13.400 --> 01:12:18.240 align:middle line:84% web plus IT and business, then it 01:12:18.240 --> 01:12:22.160 align:middle line:84% became clear this was the direction for IT. 01:12:22.160 --> 01:12:26.140 align:middle line:84% And if you wanted to still be a leader in IT, 01:12:26.140 --> 01:12:27.568 align:middle line:90% you had to go there. 01:12:27.568 --> 01:12:28.360 align:middle line:90% JOHN PATRICK: Yeah. 01:12:28.360 --> 01:12:31.700 align:middle line:84% I would say, in the early days, I mean, 01:12:31.700 --> 01:12:34.780 align:middle line:84% there were a handful of companies where the web just 01:12:34.780 --> 01:12:37.080 align:middle line:84% fit naturally, like Federal Express, 01:12:37.080 --> 01:12:40.100 align:middle line:84% the idea of looking up a tracking number. 01:12:40.100 --> 01:12:43.540 align:middle line:84% And it was viewed to be a low-risk application. 01:12:43.540 --> 01:12:46.820 align:middle line:84% There was really no security issue 01:12:46.820 --> 01:12:48.740 align:middle line:90% of putting in a tracking number. 01:12:48.740 --> 01:12:52.020 align:middle line:84% You can't get any information about what's in the box. 01:12:52.020 --> 01:12:54.340 align:middle line:84% You can't get any information about the person. 01:12:54.340 --> 01:12:57.020 align:middle line:90% It's just, where's the box? 01:12:57.020 --> 01:12:58.440 align:middle line:90% So it was a very low-risk thing. 01:12:58.440 --> 01:13:04.060 align:middle line:84% And I can tell you in '95, '96, even later, when 01:13:04.060 --> 01:13:07.660 align:middle line:84% I would be out giving talks about the future of the internet 01:13:07.660 --> 01:13:10.220 align:middle line:84% for customers, and I'd meet with a group of bankers 01:13:10.220 --> 01:13:14.020 align:middle line:84% and a banker-- more than one CEO of a big bank 01:13:14.020 --> 01:13:15.800 align:middle line:84% said to me, that's interesting, John. 01:13:15.800 --> 01:13:20.820 align:middle line:84% We will never put this bank on the internet. 01:13:20.820 --> 01:13:22.540 align:middle line:90% And they meant it. 01:13:22.540 --> 01:13:23.880 align:middle line:90% And that wasn't in '95. 01:13:23.880 --> 01:13:25.240 align:middle line:90% That was much later. 01:13:25.240 --> 01:13:27.180 align:middle line:90% And even today-- 01:13:27.180 --> 01:13:29.600 align:middle line:84% I'm going to get into this a little bit later-- 01:13:29.600 --> 01:13:32.250 align:middle line:84% but the commitment is not as deep 01:13:32.250 --> 01:13:34.550 align:middle line:84% as you might think for a lot of companies. 01:13:34.550 --> 01:13:37.210 align:middle line:84% There are still companies that are-- 01:13:37.210 --> 01:13:40.130 align:middle line:84% every company has a website, and they do something. 01:13:40.130 --> 01:13:43.870 align:middle line:84% But in terms of fundamental things, 01:13:43.870 --> 01:13:45.790 align:middle line:90% there's a long, long way to go. 01:13:45.790 --> 01:13:48.410 align:middle line:84% And IBM took a much different approach 01:13:48.410 --> 01:13:50.270 align:middle line:84% than any of the other IT companies. 01:13:50.270 --> 01:13:52.810 align:middle line:84% Lou Gerstner made a speech at Internet World in December 01:13:52.810 --> 01:13:55.330 align:middle line:90% of-- it must have been '96. 01:13:55.330 --> 01:13:57.970 align:middle line:84% And he said, the web is not about surfing. 01:13:57.970 --> 01:14:00.730 align:middle line:90% The web is about transactions. 01:14:00.730 --> 01:14:03.570 align:middle line:84% And this was at a time when Microsoft was still 01:14:03.570 --> 01:14:05.010 align:middle line:90% poo-pooing the internet. 01:14:05.010 --> 01:14:11.010 align:middle line:84% And even Sun and HP, which were really very early pioneers, 01:14:11.010 --> 01:14:14.350 align:middle line:84% they weren't pushing the deep infrastructure. 01:14:14.350 --> 01:14:17.770 align:middle line:84% And that's where IBM focused is to build it from the guts, 01:14:17.770 --> 01:14:21.010 align:middle line:84% from the inside, all the way out and not so 01:14:21.010 --> 01:14:24.490 align:middle line:84% much on the outside, not browser stuff, 01:14:24.490 --> 01:14:27.250 align:middle line:84% but deep integration software that 01:14:27.250 --> 01:14:30.950 align:middle line:84% tied all the subsystems for transactions and database 01:14:30.950 --> 01:14:32.990 align:middle line:90% processing directly to the web. 01:14:32.990 --> 01:14:35.045 align:middle line:84% That's what's still unique about IBM. 01:14:35.045 --> 01:14:36.670 align:middle line:84% IRVING WLADAWSKY-BERGER: This gets back 01:14:36.670 --> 01:14:40.470 align:middle line:84% to a question maybe you asked, which is, how do you sell it 01:14:40.470 --> 01:14:43.830 align:middle line:90% to the very senior management? 01:14:43.830 --> 01:14:48.070 align:middle line:84% In this case, we convinced them that this was 01:14:48.070 --> 01:14:51.590 align:middle line:90% the direction IT was taking. 01:14:51.590 --> 01:14:56.670 align:middle line:84% So all hardware, all software, all services 01:14:56.670 --> 01:15:00.550 align:middle line:90% needed to become web-enabled. 01:15:00.550 --> 01:15:07.990 align:middle line:84% And we have now lots of examples of early pioneers 01:15:07.990 --> 01:15:09.870 align:middle line:90% that were already doing it. 01:15:09.870 --> 01:15:14.850 align:middle line:84% Some IBM customers, quite a few-- 01:15:14.850 --> 01:15:19.070 align:middle line:84% the Amazons and so on were starting. 01:15:19.070 --> 01:15:22.030 align:middle line:84% And universities and the research community, they 01:15:22.030 --> 01:15:24.630 align:middle line:90% were way ahead. 01:15:24.630 --> 01:15:30.570 align:middle line:84% But remember, we had to sell them on that in the terms-- 01:15:30.570 --> 01:15:33.450 align:middle line:84% and again, we'll talk about it either next time or the one 01:15:33.450 --> 01:15:34.250 align:middle line:90% after-- 01:15:34.250 --> 01:15:38.930 align:middle line:84% where you put the fear of God in them 01:15:38.930 --> 01:15:42.650 align:middle line:84% that, if this is the direction IT is taking, 01:15:42.650 --> 01:15:45.370 align:middle line:84% and if you want to remain the leader in IT, 01:15:45.370 --> 01:15:49.450 align:middle line:84% you better get board the ride, or else you are toast. 01:15:49.450 --> 01:15:51.370 align:middle line:90% And [INAUDIBLE]. 01:15:51.370 --> 01:15:55.790 align:middle line:84% John, at some point, we should switch, and you should take a 5, 01:15:55.790 --> 01:16:00.290 align:middle line:84% 10-minute break and then switch to the future section 01:16:00.290 --> 01:16:02.750 align:middle line:90% in the next 10 minutes or so. 01:16:02.750 --> 01:16:03.250 align:middle line:90% Is that OK? 01:16:03.250 --> 01:16:04.110 align:middle line:90% JOHN PATRICK: Yep, that's fine. 01:16:04.110 --> 01:16:04.610 align:middle line:90% Yep. 01:16:04.610 --> 01:16:09.930 align:middle line:84% Let me just wrap up a couple of points here on development. 01:16:09.930 --> 01:16:14.090 align:middle line:84% Failure is something nobody likes. 01:16:14.090 --> 01:16:21.290 align:middle line:84% But if you make it so clear that failure is really, really bad, 01:16:21.290 --> 01:16:24.370 align:middle line:84% then you're not going to get any really good ideas. 01:16:24.370 --> 01:16:28.600 align:middle line:84% So you have to get that balance of allowing failure-- 01:16:28.600 --> 01:16:30.100 align:middle line:90% and not just one failure. 01:16:30.100 --> 01:16:33.920 align:middle line:84% Less failures than successes, but failures are OK. 01:16:33.920 --> 01:16:35.100 align:middle line:90% It's OK to experiment. 01:16:35.100 --> 01:16:38.080 align:middle line:84% It's OK to have something that doesn't work. 01:16:38.080 --> 01:16:41.480 align:middle line:84% And of course, the one size fits all mentality 01:16:41.480 --> 01:16:45.080 align:middle line:84% is a problem when you're trying to innovate and get 01:16:45.080 --> 01:16:46.460 align:middle line:90% something new out there. 01:16:46.460 --> 01:16:50.120 align:middle line:84% If you're trying to be horizontal, 01:16:50.120 --> 01:16:51.260 align:middle line:90% I think it's a problem. 01:16:51.260 --> 01:16:54.520 align:middle line:84% I see this in companies where I'm a director, where 01:16:54.520 --> 01:16:55.900 align:middle line:90% a person has a vision. 01:16:55.900 --> 01:16:56.920 align:middle line:90% They have this idea. 01:16:56.920 --> 01:16:59.000 align:middle line:84% And I say, well, what's the target market? 01:16:59.000 --> 01:17:00.680 align:middle line:90% Everybody. 01:17:00.680 --> 01:17:05.060 align:middle line:84% If your target market is everybody, it might work, 01:17:05.060 --> 01:17:07.740 align:middle line:84% but your odds of success are dramatically lower. 01:17:07.740 --> 01:17:11.880 align:middle line:84% I'm sure you all know the book crossing the chasm. 01:17:11.880 --> 01:17:14.600 align:middle line:84% Segment the market as narrowly as you can. 01:17:14.600 --> 01:17:17.110 align:middle line:84% Identify a segment that you can dominate. 01:17:17.110 --> 01:17:19.360 align:middle line:84% Dominate that segment, and then go to the next segment 01:17:19.360 --> 01:17:20.320 align:middle line:90% and the next segment. 01:17:20.320 --> 01:17:22.093 align:middle line:84% I find, in the companies I'm involved in, 01:17:22.093 --> 01:17:24.260 align:middle line:84% that's still the biggest challenge because everybody 01:17:24.260 --> 01:17:27.260 align:middle line:84% wants to have their product be used 01:17:27.260 --> 01:17:32.380 align:middle line:84% on every PC and every possible user. 01:17:32.380 --> 01:17:36.800 align:middle line:84% Making things easy-- this sounds so simple, 01:17:36.800 --> 01:17:38.302 align:middle line:90% but I think it's profound. 01:17:38.302 --> 01:17:40.260 align:middle line:84% How many times have you gone to a website where 01:17:40.260 --> 01:17:43.300 align:middle line:84% you put in the date, and you get an error message that says, 01:17:43.300 --> 01:17:47.378 align:middle line:84% you forgot the dash, or you put the dash, 01:17:47.378 --> 01:17:49.420 align:middle line:84% and then you run out of space, and the date won't 01:17:49.420 --> 01:17:52.300 align:middle line:90% fit because you used dashes? 01:17:52.300 --> 01:17:55.420 align:middle line:84% And you think about the power of JavaScript 01:17:55.420 --> 01:17:57.860 align:middle line:84% to be able to interact on a page, 01:17:57.860 --> 01:18:00.380 align:middle line:84% and you say, after all these years-- 01:18:00.380 --> 01:18:02.860 align:middle line:84% I wrote a book about this six years ago 01:18:02.860 --> 01:18:04.360 align:middle line:90% and made a point of this. 01:18:04.360 --> 01:18:07.660 align:middle line:84% And I really didn't think that, six years later, we 01:18:07.660 --> 01:18:10.460 align:middle line:84% would still find such dumb websites 01:18:10.460 --> 01:18:12.420 align:middle line:90% that you can't enter a date. 01:18:12.420 --> 01:18:15.660 align:middle line:84% Or they print an account number on a statement, 01:18:15.660 --> 01:18:19.067 align:middle line:84% and they'll tell you, you can renew this online. 01:18:19.067 --> 01:18:21.400 align:middle line:84% And you go to online, it says, enter the account number. 01:18:21.400 --> 01:18:24.580 align:middle line:84% And you enter right from the statement, but it's different. 01:18:24.580 --> 01:18:26.720 align:middle line:84% It has a dash or doesn't have a dash-- 01:18:26.720 --> 01:18:28.760 align:middle line:90% simple stuff. 01:18:28.760 --> 01:18:33.080 align:middle line:84% So every company is in the middle of a site redesign, 01:18:33.080 --> 01:18:35.620 align:middle line:84% and I always tell them, forget your site redesign. 01:18:35.620 --> 01:18:38.120 align:middle line:84% Fix all the things that are dumb. 01:18:38.120 --> 01:18:41.360 align:middle line:84% Find all the things on the website that you can't do, 01:18:41.360 --> 01:18:42.960 align:middle line:90% and make them really simple. 01:18:42.960 --> 01:18:44.963 align:middle line:90% People will love you. 01:18:44.963 --> 01:18:46.880 align:middle line:84% And lastly, of course, think, [? integrate, ?] 01:18:46.880 --> 01:18:48.130 align:middle line:90% and make things work together. 01:18:48.130 --> 01:18:51.100 align:middle line:84% I mean, you would think that would go without saying, 01:18:51.100 --> 01:18:54.380 align:middle line:84% but we're nowhere near having achieved that today. 01:18:54.380 --> 01:18:57.680 align:middle line:84% When you think of either B2B or B2C, 01:18:57.680 --> 01:19:00.880 align:middle line:84% your ability to buy it online, return it at the store, 01:19:00.880 --> 01:19:04.920 align:middle line:84% or buy it online and get the return information 01:19:04.920 --> 01:19:07.000 align:middle line:90% or parts or notices or-- 01:19:07.000 --> 01:19:08.480 align:middle line:90% things are not integrated. 01:19:08.480 --> 01:19:12.600 align:middle line:84% So let me go to the next to the last one here. 01:19:12.600 --> 01:19:16.280 align:middle line:84% There will be detractors and ambushers of your idea. 01:19:16.280 --> 01:19:18.310 align:middle line:90% That you can be sure of. 01:19:18.310 --> 01:19:22.390 align:middle line:84% And the way I think about this is, find out 01:19:22.390 --> 01:19:25.490 align:middle line:84% what their issue is, and if you can solve it, solve it. 01:19:25.490 --> 01:19:28.990 align:middle line:84% If you can't, ignore it, and go around them. 01:19:28.990 --> 01:19:31.710 align:middle line:84% And we had this big time at IBM because IBM 01:19:31.710 --> 01:19:34.470 align:middle line:84% had two businesses that were very negatively 01:19:34.470 --> 01:19:36.050 align:middle line:90% impacted by the internet. 01:19:36.050 --> 01:19:39.790 align:middle line:84% One was a networking software business called Systems Network 01:19:39.790 --> 01:19:40.990 align:middle line:90% Architecture. 01:19:40.990 --> 01:19:44.710 align:middle line:84% It was a billion dollars in revenue and $850 million 01:19:44.710 --> 01:19:46.990 align:middle line:90% in profit. 01:19:46.990 --> 01:19:49.750 align:middle line:84% And I had proposed that we create 01:19:49.750 --> 01:19:56.870 align:middle line:84% a separate group for TCP/IP and put the very best people 01:19:56.870 --> 01:19:59.110 align:middle line:84% in that group and give it the mission 01:19:59.110 --> 01:20:02.110 align:middle line:84% to destroy that billion dollars because everything 01:20:02.110 --> 01:20:04.870 align:middle line:90% was going to be TCP/IP. 01:20:04.870 --> 01:20:07.130 align:middle line:90% And today, everything is TCP/IP. 01:20:07.130 --> 01:20:11.350 align:middle line:84% But in 1995, the person that was responsible for that billion 01:20:11.350 --> 01:20:14.030 align:middle line:90% dollars-- 01:20:14.030 --> 01:20:16.930 align:middle line:84% there was no way of convincing him, no way. 01:20:16.930 --> 01:20:20.465 align:middle line:84% And they viewed me as a virus running around, 01:20:20.465 --> 01:20:21.590 align:middle line:90% talking about the internet. 01:20:21.590 --> 01:20:23.350 align:middle line:84% So if you can change it, change it. 01:20:23.350 --> 01:20:27.290 align:middle line:84% But I knew I wasn't going to be able to change that. 01:20:27.290 --> 01:20:29.210 align:middle line:90% So find other allies. 01:20:29.210 --> 01:20:31.150 align:middle line:84% And it doesn't have to be the right fit. 01:20:31.150 --> 01:20:33.230 align:middle line:84% That's what I mean here by form versus substance. 01:20:33.230 --> 01:20:36.010 align:middle line:84% It might be the wrong department, 01:20:36.010 --> 01:20:37.310 align:middle line:90% in a theoretical sense. 01:20:37.310 --> 01:20:39.930 align:middle line:84% But if it's somebody that you can gain the support of, 01:20:39.930 --> 01:20:42.210 align:middle line:90% then it's OK. 01:20:42.210 --> 01:20:45.330 align:middle line:84% A couple of other organizational factors-- 01:20:45.330 --> 01:20:47.210 align:middle line:90% we touched on this-- air cover. 01:20:47.210 --> 01:20:50.090 align:middle line:90% 01:20:50.090 --> 01:20:52.988 align:middle line:84% Lou had a meeting with some customers, 01:20:52.988 --> 01:20:54.530 align:middle line:84% and he asked to have somebody come in 01:20:54.530 --> 01:20:57.330 align:middle line:84% and give a presentation about the ThinkPad. 01:20:57.330 --> 01:20:59.530 align:middle line:84% Well, I was the ThinkPad guy, so I 01:20:59.530 --> 01:21:02.090 align:middle line:84% came in and gave a presentation on the ThinkPad 01:21:02.090 --> 01:21:04.490 align:middle line:90% about the internet. 01:21:04.490 --> 01:21:07.473 align:middle line:84% This is not what they expected, but Lou was intrigued by it. 01:21:07.473 --> 01:21:08.890 align:middle line:84% I wouldn't say he liked it, but he 01:21:08.890 --> 01:21:11.430 align:middle line:90% was intrigued by the delivery. 01:21:11.430 --> 01:21:14.050 align:middle line:84% So he invited me to present it to the board of directors 01:21:14.050 --> 01:21:15.870 align:middle line:90% of the company, which I did. 01:21:15.870 --> 01:21:18.090 align:middle line:84% And then he invited me to go to the CEO conference. 01:21:18.090 --> 01:21:21.910 align:middle line:84% And this was a turning point in this overall process 01:21:21.910 --> 01:21:25.050 align:middle line:84% because he wasn't immediately convinced, 01:21:25.050 --> 01:21:27.870 align:middle line:84% but Lou Gerstner is a very quick study. 01:21:27.870 --> 01:21:29.910 align:middle line:90% He's incredibly intuitive. 01:21:29.910 --> 01:21:31.850 align:middle line:84% He gets to the punch line in a hurry. 01:21:31.850 --> 01:21:36.270 align:middle line:84% When we showed him the first web page, his reaction was, 01:21:36.270 --> 01:21:38.910 align:middle line:90% where's the Buy button? 01:21:38.910 --> 01:21:41.283 align:middle line:84% And again, this is before there was any e-commerce, 01:21:41.283 --> 01:21:43.450 align:middle line:84% and here's the guy who says, where's the Buy button? 01:21:43.450 --> 01:21:47.430 align:middle line:84% So he began to invite me to come present 01:21:47.430 --> 01:21:48.890 align:middle line:90% at these CEO conferences. 01:21:48.890 --> 01:21:51.833 align:middle line:84% Now, the rest of the people in the company 01:21:51.833 --> 01:21:53.250 align:middle line:84% didn't know what I was presenting, 01:21:53.250 --> 01:21:55.950 align:middle line:84% but they knew I was presenting at these CEO meetings 01:21:55.950 --> 01:21:57.710 align:middle line:90% that Lou was having. 01:21:57.710 --> 01:22:00.510 align:middle line:84% That's what you might call air cover. 01:22:00.510 --> 01:22:03.410 align:middle line:90% And you cannot underestimate it. 01:22:03.410 --> 01:22:05.550 align:middle line:84% When people say, oh, well, you changed this, 01:22:05.550 --> 01:22:06.870 align:middle line:90% or Irving changed that. 01:22:06.870 --> 01:22:09.130 align:middle line:84% OK, well, we did a lot of things, 01:22:09.130 --> 01:22:12.670 align:middle line:84% but without Lou and that air cover support, 01:22:12.670 --> 01:22:14.260 align:middle line:90% it wouldn't have happened. 01:22:14.260 --> 01:22:16.420 align:middle line:84% The other thing is, you need a taskmaster. 01:22:16.420 --> 01:22:20.140 align:middle line:84% If you're the visionary or you've got an innovation project 01:22:20.140 --> 01:22:22.100 align:middle line:84% underway you're trying to get to market, 01:22:22.100 --> 01:22:27.180 align:middle line:84% don't lose sight of the details about expenses and taxes 01:22:27.180 --> 01:22:31.737 align:middle line:84% and budgets and all the stuff that can get you in trouble. 01:22:31.737 --> 01:22:33.320 align:middle line:84% Especially if you're a public company, 01:22:33.320 --> 01:22:35.420 align:middle line:84% you've got all kinds of SarbOx issues. 01:22:35.420 --> 01:22:37.720 align:middle line:84% You don't have to understand all that stuff, 01:22:37.720 --> 01:22:39.440 align:middle line:84% but you have to have somebody who does. 01:22:39.440 --> 01:22:42.100 align:middle line:84% I was blessed with a woman named Jane Harper who 01:22:42.100 --> 01:22:48.060 align:middle line:84% was my right-hand person, and she made everything work. 01:22:48.060 --> 01:22:52.060 align:middle line:84% And then lastly, I have to throw in a key organizational factor 01:22:52.060 --> 01:22:53.300 align:middle line:90% is luck. 01:22:53.300 --> 01:22:56.100 align:middle line:84% I remember years ago, the chairman of the board of IBM 01:22:56.100 --> 01:22:57.302 align:middle line:90% was a guy named Vin Learson. 01:22:57.302 --> 01:22:59.260 align:middle line:84% And he was interviewed, and he was on the cover 01:22:59.260 --> 01:23:00.480 align:middle line:90% of Fortune magazine. 01:23:00.480 --> 01:23:03.420 align:middle line:84% And they asked him, to what do you attribute your great success 01:23:03.420 --> 01:23:04.940 align:middle line:90% as the chairman of IBM? 01:23:04.940 --> 01:23:06.660 align:middle line:90% He said, luck. 01:23:06.660 --> 01:23:07.880 align:middle line:90% And I never forgot that. 01:23:07.880 --> 01:23:10.540 align:middle line:90% And really, I mean-- 01:23:10.540 --> 01:23:13.800 align:middle line:84% so I was invited to come give a talk about the ThinkPad. 01:23:13.800 --> 01:23:15.440 align:middle line:90% I talked about the internet. 01:23:15.440 --> 01:23:16.580 align:middle line:90% Lou Gerstner was there. 01:23:16.580 --> 01:23:20.120 align:middle line:90% That was luck, you could say. 01:23:20.120 --> 01:23:24.260 align:middle line:84% The Olympics and a lot of these things were luck. 01:23:24.260 --> 01:23:26.320 align:middle line:84% Now, you might say, well, you can make 01:23:26.320 --> 01:23:28.560 align:middle line:90% your own luck, to some degree. 01:23:28.560 --> 01:23:30.920 align:middle line:84% And that's true, and you have to execute. 01:23:30.920 --> 01:23:34.360 align:middle line:84% But I think it would be a mistake 01:23:34.360 --> 01:23:37.800 align:middle line:84% to think that it was perfectly planned. 01:23:37.800 --> 01:23:39.280 align:middle line:90% It certainly wasn't. 01:23:39.280 --> 01:23:43.300 align:middle line:84% I'm going to finish now with just a few guiding principles. 01:23:43.300 --> 01:23:47.440 align:middle line:84% These are things that I learned from the team, the people who 01:23:47.440 --> 01:23:48.960 align:middle line:90% were my inner circle. 01:23:48.960 --> 01:23:51.200 align:middle line:84% I used to call them the dirty dozen. 01:23:51.200 --> 01:23:55.760 align:middle line:84% And we would get together every summer, the 12 of us, 01:23:55.760 --> 01:23:58.120 align:middle line:84% and drink a lot of wine and water ski 01:23:58.120 --> 01:24:01.360 align:middle line:84% and spend two or three days in the woods 01:24:01.360 --> 01:24:03.680 align:middle line:84% at a place I have in the mountains. 01:24:03.680 --> 01:24:06.240 align:middle line:84% And I would learn from them, and these are 01:24:06.240 --> 01:24:07.580 align:middle line:90% the things I learned from them. 01:24:07.580 --> 01:24:11.420 align:middle line:84% Think big, start simple, iterate quickly. 01:24:11.420 --> 01:24:12.980 align:middle line:90% That's the model. 01:24:12.980 --> 01:24:15.540 align:middle line:84% That's not a typical business model. 01:24:15.540 --> 01:24:18.620 align:middle line:84% Yeah, everybody wants to think big, but starting simple-- 01:24:18.620 --> 01:24:22.780 align:middle line:84% so many companies-- remember Webvan? 01:24:22.780 --> 01:24:24.780 align:middle line:90% People loved Webvan. 01:24:24.780 --> 01:24:27.120 align:middle line:84% They thought big, but they didn't start simple. 01:24:27.120 --> 01:24:29.418 align:middle line:84% They borrowed billions of dollars, 01:24:29.418 --> 01:24:30.960 align:middle line:84% and they were going to put warehouses 01:24:30.960 --> 01:24:32.168 align:middle line:90% every-- they started too big. 01:24:32.168 --> 01:24:34.920 align:middle line:84% They didn't start simple and iterate quickly. 01:24:34.920 --> 01:24:40.780 align:middle line:84% I've seen many projects at IBM fail because they were too big. 01:24:40.780 --> 01:24:43.300 align:middle line:84% Just enough is good enough is one 01:24:43.300 --> 01:24:46.020 align:middle line:84% that I learned from Dave Grossman. 01:24:46.020 --> 01:24:48.080 align:middle line:84% Things don't have to be perfect on the internet. 01:24:48.080 --> 01:24:50.620 align:middle line:84% The internet is an imperfect network. 01:24:50.620 --> 01:24:53.140 align:middle line:84% They call it a probabilistic network, 01:24:53.140 --> 01:24:55.820 align:middle line:84% compared to the old systems network architecture, which 01:24:55.820 --> 01:24:59.180 align:middle line:90% was a deterministic network. 01:24:59.180 --> 01:25:01.640 align:middle line:84% Cynics like to say it isn't probabilistic, 01:25:01.640 --> 01:25:05.500 align:middle line:84% that what that means is that the packets probably won't arrive. 01:25:05.500 --> 01:25:09.090 align:middle line:84% It is an imperfect network, but it works. 01:25:09.090 --> 01:25:12.050 align:middle line:84% You ever notice, when you click on something, 01:25:12.050 --> 01:25:13.730 align:middle line:90% and nothing happens? 01:25:13.730 --> 01:25:15.670 align:middle line:84% You say, I know I clicked on that. 01:25:15.670 --> 01:25:17.130 align:middle line:90% I know I clicked on that. 01:25:17.130 --> 01:25:19.010 align:middle line:84% And you click again, and it works. 01:25:19.010 --> 01:25:22.290 align:middle line:84% Well, what happened is a disk drive broke, or a server failed 01:25:22.290 --> 01:25:24.950 align:middle line:84% in between, or some packets got hung up in a router somewhere. 01:25:24.950 --> 01:25:26.770 align:middle line:90% It is an imperfect network. 01:25:26.770 --> 01:25:29.110 align:middle line:84% Trial by fire-- Irving was making this point. 01:25:29.110 --> 01:25:30.710 align:middle line:90% You got to be out there. 01:25:30.710 --> 01:25:33.070 align:middle line:84% You can't keep it in the lab until it's perfect 01:25:33.070 --> 01:25:36.350 align:middle line:84% and then launch it and expect people to see the wisdom of it. 01:25:36.350 --> 01:25:38.970 align:middle line:90% You've got to trial by fire. 01:25:38.970 --> 01:25:43.650 align:middle line:84% And this is the key way I think of it here is, 01:25:43.650 --> 01:25:44.790 align:middle line:90% plan, build, deliver. 01:25:44.790 --> 01:25:46.450 align:middle line:90% That's the old model. 01:25:46.450 --> 01:25:49.890 align:middle line:84% You plan your new product, you build it, 01:25:49.890 --> 01:25:53.490 align:middle line:84% and then you deliver it, 18 months. 01:25:53.490 --> 01:25:56.170 align:middle line:84% Sense and respond is the internet model. 01:25:56.170 --> 01:25:58.050 align:middle line:90% It's 18 minutes. 01:25:58.050 --> 01:26:01.610 align:middle line:84% eBay refreshes their whole site every couple of weeks. 01:26:01.610 --> 01:26:04.530 align:middle line:84% They don't use a six-month update cycle or an 18-month 01:26:04.530 --> 01:26:05.910 align:middle line:90% update cycle. 01:26:05.910 --> 01:26:08.150 align:middle line:84% And the technology is now available to do 01:26:08.150 --> 01:26:09.290 align:middle line:90% continuous development. 01:26:09.290 --> 01:26:12.150 align:middle line:84% So your site-- you can literally, every hour, 01:26:12.150 --> 01:26:17.310 align:middle line:84% be making changes, and it's propagated, published, updated, 01:26:17.310 --> 01:26:20.430 align:middle line:84% not just data, but the systems themselves. 01:26:20.430 --> 01:26:22.870 align:middle line:84% Of course, thinking globally and act locally-- you 01:26:22.870 --> 01:26:26.870 align:middle line:90% can't impose something globally. 01:26:26.870 --> 01:26:29.810 align:middle line:84% You need to be aware of the global markets, 01:26:29.810 --> 01:26:31.870 align:middle line:84% but there, obviously, are differences. 01:26:31.870 --> 01:26:34.030 align:middle line:90% And then thinking inside out-- 01:26:34.030 --> 01:26:38.030 align:middle line:84% and I guess the punchline on that is the call center. 01:26:38.030 --> 01:26:43.710 align:middle line:84% And I use that as the example of the difference between inside 01:26:43.710 --> 01:26:46.630 align:middle line:90% out and outside in. 01:26:46.630 --> 01:26:50.830 align:middle line:84% So the call center is, press 1 for English, 2 for Spanish. 01:26:50.830 --> 01:26:52.730 align:middle line:84% And you want to change your postal code, 01:26:52.730 --> 01:26:55.070 align:middle line:90% so you press 1 or 2. 01:26:55.070 --> 01:26:58.590 align:middle line:84% And then it says, press 1 for the location of our nearest 01:26:58.590 --> 01:26:59.870 align:middle line:90% branch offices. 01:26:59.870 --> 01:27:04.110 align:middle line:84% Press 2 for our service and support functions. 01:27:04.110 --> 01:27:08.122 align:middle line:84% By the way, we have a website at http:-- 01:27:08.122 --> 01:27:09.370 align:middle line:90% and [SNORTS]. 01:27:09.370 --> 01:27:12.210 align:middle line:84% I'm just trying to change my postal code. 01:27:12.210 --> 01:27:14.145 align:middle line:90% And so you press 0-- 01:27:14.145 --> 01:27:15.270 align:middle line:90% I want to talk to somebody. 01:27:15.270 --> 01:27:16.710 align:middle line:84% I don't really want to talk to somebody. 01:27:16.710 --> 01:27:18.150 align:middle line:84% I just want to change my postal code. 01:27:18.150 --> 01:27:20.358 align:middle line:84% And you press 0, and it says, welcome to ABC Company. 01:27:20.358 --> 01:27:23.010 align:middle line:84% Press 1 for English, 2 for Spanish. 01:27:23.010 --> 01:27:26.750 align:middle line:84% Please pay attention because our menus have recently changed. 01:27:26.750 --> 01:27:30.530 align:middle line:84% How could it be that every menu of every system, every company 01:27:30.530 --> 01:27:32.890 align:middle line:84% int he world, they all just changed? 01:27:32.890 --> 01:27:35.810 align:middle line:84% And then, please note that this conversation 01:27:35.810 --> 01:27:40.130 align:middle line:84% is recorded for quality and training purposes. 01:27:40.130 --> 01:27:42.610 align:middle line:84% And you just want to change your postal code. 01:27:42.610 --> 01:27:46.470 align:middle line:84% And you press 0, and it says, you have pressed an invalid key. 01:27:46.470 --> 01:27:47.530 align:middle line:90% [LAUGHTER] 01:27:47.530 --> 01:27:51.490 align:middle line:84% Now, how could you more slap a customer in the face, when 01:27:51.490 --> 01:27:55.990 align:middle line:84% they press 0, the operator key, and it says, you idiot, 01:27:55.990 --> 01:27:57.550 align:middle line:90% you pressed an invalid key. 01:27:57.550 --> 01:28:00.840 align:middle line:84% So then you press 9, and it says, thanks for calling. 01:28:00.840 --> 01:28:01.360 align:middle line:90% Goodbye. 01:28:01.360 --> 01:28:03.300 align:middle line:90% [LAUGHTER] 01:28:03.300 --> 01:28:03.800 align:middle line:90% 01:28:03.800 --> 01:28:08.120 align:middle line:84% Well, then it says, enter your 16-digit account number. 01:28:08.120 --> 01:28:10.880 align:middle line:84% And you enter your 16-digit account number, 01:28:10.880 --> 01:28:14.900 align:middle line:84% and then Mary comes on the line and says, this is Mary. 01:28:14.900 --> 01:28:16.440 align:middle line:90% How can I help you? 01:28:16.440 --> 01:28:20.320 align:middle line:84% Please enter, first of all, your 16-digit account number. 01:28:20.320 --> 01:28:21.820 align:middle line:90% Have you experienced that? 01:28:21.820 --> 01:28:23.480 align:middle line:90% Every time. 01:28:23.480 --> 01:28:25.340 align:middle line:90% So that's inside out. 01:28:25.340 --> 01:28:28.600 align:middle line:84% That's a command-and-control, military, tops-down, 01:28:28.600 --> 01:28:32.920 align:middle line:84% 1950s-style bureaucratic approach. 01:28:32.920 --> 01:28:35.260 align:middle line:84% Does it still exist in the 21st century? 01:28:35.260 --> 01:28:36.560 align:middle line:90% It's everywhere. 01:28:36.560 --> 01:28:38.500 align:middle line:84% So I'm not saying get rid of call centers. 01:28:38.500 --> 01:28:41.880 align:middle line:84% But can call centers be integrated with your iPhone? 01:28:41.880 --> 01:28:44.720 align:middle line:84% Of course they can be integrated with the web. 01:28:44.720 --> 01:28:47.520 align:middle line:90% So questions, comments? 01:28:47.520 --> 01:28:52.240 align:middle line:84% And we'll move on to the future of the internet. 01:28:52.240 --> 01:28:53.320 align:middle line:90% Yeah, sure. 01:28:53.320 --> 01:28:57.120 align:middle line:84% AUDIENCE: How did you motivate yourself at times of failure? 01:28:57.120 --> 01:28:58.860 align:middle line:84% IRVING WLADAWSKY-BERGER: I'm sorry? 01:28:58.860 --> 01:29:02.020 align:middle line:84% AUDIENCE: At times of failure, how did you motivate yourself to 01:29:02.020 --> 01:29:03.392 align:middle line:90% [? experiment? ?] 01:29:03.392 --> 01:29:04.100 align:middle line:90% JOHN PATRICK: Oh. 01:29:04.100 --> 01:29:06.540 align:middle line:84% AUDIENCE: What was motivating factor? 01:29:06.540 --> 01:29:09.540 align:middle line:90% JOHN PATRICK: Survival, I guess. 01:29:09.540 --> 01:29:12.012 align:middle line:84% There were times when-- during the Olympics, 01:29:12.012 --> 01:29:13.720 align:middle line:84% Irving would call every Saturday morning. 01:29:13.720 --> 01:29:14.680 align:middle line:90% Is everything working? 01:29:14.680 --> 01:29:15.220 align:middle line:90% Sure. 01:29:15.220 --> 01:29:16.460 align:middle line:90% Everything's fine. 01:29:16.460 --> 01:29:19.900 align:middle line:84% And we didn't always know it was fine. 01:29:19.900 --> 01:29:25.500 align:middle line:84% There were certainly a lot of risks going to the internet. 01:29:25.500 --> 01:29:29.160 align:middle line:84% But it all comes back to having confidence in the people. 01:29:29.160 --> 01:29:33.600 align:middle line:84% I had tremendous confidence in this dirty dozen, 01:29:33.600 --> 01:29:37.540 align:middle line:84% and I knew, whatever might happen, they could fix it. 01:29:37.540 --> 01:29:40.560 align:middle line:84% And obviously, we had problems and issues. 01:29:40.560 --> 01:29:44.820 align:middle line:84% But if you have good people, they can fix them. 01:29:44.820 --> 01:29:47.740 align:middle line:84% Was there something different that you were looking for? 01:29:47.740 --> 01:29:48.240 align:middle line:90% Yeah. 01:29:48.240 --> 01:29:49.948 align:middle line:84% IRVING WLADAWSKY-BERGER: Yeah, I honestly 01:29:49.948 --> 01:29:52.400 align:middle line:90% think it gets back to people. 01:29:52.400 --> 01:29:54.860 align:middle line:84% And obviously, there is a culture 01:29:54.860 --> 01:29:57.600 align:middle line:90% of [INAUDIBLE] solve problems. 01:29:57.600 --> 01:30:01.120 align:middle line:84% But if you have good people with the right culture, 01:30:01.120 --> 01:30:04.760 align:middle line:84% then you can take risks that you wouldn't take 01:30:04.760 --> 01:30:06.760 align:middle line:90% if you don't have the people. 01:30:06.760 --> 01:30:09.580 align:middle line:84% That's really what it comes down to, I think. 01:30:09.580 --> 01:30:14.200 align:middle line:90% And we also-- 01:30:14.200 --> 01:30:21.440 align:middle line:84% I mean, like with the Olympics, everybody 01:30:21.440 --> 01:30:24.120 align:middle line:90% knew this was an experiment. 01:30:24.120 --> 01:30:28.920 align:middle line:84% So we never overhyped that [? it's-- ?] it's 01:30:28.920 --> 01:30:33.340 align:middle line:84% the most exciting experiment in the world. 01:30:33.340 --> 01:30:36.960 align:middle line:84% We marketed it a lot, but we made 01:30:36.960 --> 01:30:41.000 align:middle line:84% sure people knew it wasn't the Federal Reserve production 01:30:41.000 --> 01:30:42.240 align:middle line:90% system. 01:30:42.240 --> 01:30:43.840 align:middle line:90% It was an experiment. 01:30:43.840 --> 01:30:47.740 align:middle line:84% And I think that made people feel more comfortable. 01:30:47.740 --> 01:30:48.660 align:middle line:90% Wouldn't you say that? 01:30:48.660 --> 01:30:49.960 align:middle line:90% JOHN PATRICK: Yeah. 01:30:49.960 --> 01:30:51.300 align:middle line:90% It was high risk. 01:30:51.300 --> 01:30:53.360 align:middle line:84% I mean, if it had blown up, and the press 01:30:53.360 --> 01:30:54.590 align:middle line:90% had gotten hold of it, and-- 01:30:54.590 --> 01:30:56.590 align:middle line:84% IRVING WLADAWSKY-BERGER: Well, in fact, I know-- 01:30:56.590 --> 01:30:57.570 align:middle line:84% JOHN PATRICK: --it would have been ugly. 01:30:57.570 --> 01:30:58.030 align:middle line:84% IRVING WLADAWSKY-BERGER: --I'm going 01:30:58.030 --> 01:30:59.565 align:middle line:84% into your future of the internet, 01:30:59.565 --> 01:31:01.190 align:middle line:84% and we still have to take five minutes. 01:31:01.190 --> 01:31:04.230 align:middle line:84% The fascinating thing that happened-- 01:31:04.230 --> 01:31:06.370 align:middle line:90% this was an experiment. 01:31:06.370 --> 01:31:11.030 align:middle line:84% And of course, IBM's whole management 01:31:11.030 --> 01:31:13.110 align:middle line:84% of the back office of the Olympics 01:31:13.110 --> 01:31:15.350 align:middle line:90% was the production system. 01:31:15.350 --> 01:31:19.510 align:middle line:84% As it turned out, IBM made some bad mistakes 01:31:19.510 --> 01:31:24.190 align:middle line:84% in the Atlanta Olympics that delayed getting 01:31:24.190 --> 01:31:26.990 align:middle line:90% the results to the press. 01:31:26.990 --> 01:31:30.670 align:middle line:84% If you're going to screw somebody, 01:31:30.670 --> 01:31:34.790 align:middle line:84% don't pick the press because then we 01:31:34.790 --> 01:31:39.630 align:middle line:84% got horrific articles about how IBM-- really, it 01:31:39.630 --> 01:31:43.190 align:middle line:90% was just pretty bad. 01:31:43.190 --> 01:31:45.390 align:middle line:84% And all of a sudden, IBM was getting 01:31:45.390 --> 01:31:48.790 align:middle line:84% a very black eye with the production 01:31:48.790 --> 01:31:51.510 align:middle line:90% systems for the Olympics. 01:31:51.510 --> 01:31:57.210 align:middle line:84% And the thing that was working the best was the website. 01:31:57.210 --> 01:31:59.890 align:middle line:84% And so the Olympics is about two and a half weeks. 01:31:59.890 --> 01:32:04.330 align:middle line:84% After the first week, and we were getting all these bad eyes, 01:32:04.330 --> 01:32:10.170 align:middle line:84% people from IBM were now begging us, make sure the website works. 01:32:10.170 --> 01:32:12.170 align:middle line:84% And in fact, what we did is we had 01:32:12.170 --> 01:32:16.650 align:middle line:84% a series of additional experiments we wanted to make, 01:32:16.650 --> 01:32:18.890 align:middle line:90% and we shut those off. 01:32:18.890 --> 01:32:20.490 align:middle line:90% I don't know if you remember. 01:32:20.490 --> 01:32:24.690 align:middle line:84% We really brought the risk down so 01:32:24.690 --> 01:32:29.570 align:middle line:84% that we concentrated on the core website, and new ideas 01:32:29.570 --> 01:32:32.570 align:middle line:84% that we had planned to introduce the second week, 01:32:32.570 --> 01:32:35.770 align:middle line:84% we didn't do because all of a sudden, the damn thing 01:32:35.770 --> 01:32:36.750 align:middle line:90% had to work. 01:32:36.750 --> 01:32:38.940 align:middle line:90% So we were more-- 01:32:38.940 --> 01:32:43.450 align:middle line:84% JOHN PATRICK: Yeah, that was my introduction to PR 01:32:43.450 --> 01:32:47.050 align:middle line:84% was a new senior executive that Lou 01:32:47.050 --> 01:32:50.470 align:middle line:84% had brought along who was in charge of communications. 01:32:50.470 --> 01:32:54.550 align:middle line:84% And when this press application that Irving described 01:32:54.550 --> 01:32:58.870 align:middle line:84% failed, which had nothing to do with the website at all, 01:32:58.870 --> 01:33:01.330 align:middle line:84% they were really on the defense, of course, 01:33:01.330 --> 01:33:04.990 align:middle line:84% trying to-- they were in damage control. 01:33:04.990 --> 01:33:07.970 align:middle line:84% And meanwhile, we were doing all this neat stuff on the internet, 01:33:07.970 --> 01:33:09.910 align:middle line:84% and I wanted to have a press day, 01:33:09.910 --> 01:33:12.710 align:middle line:84% invite the press to come to Southbury so they could see 01:33:12.710 --> 01:33:15.530 align:middle line:84% the world's largest website, the world's largest database, 01:33:15.530 --> 01:33:17.090 align:middle line:90% the first streaming audio. 01:33:17.090 --> 01:33:19.590 align:middle line:84% We had a lot of really innovative things. 01:33:19.590 --> 01:33:22.430 align:middle line:90% The guy said no. 01:33:22.430 --> 01:33:24.310 align:middle line:84% And I said, no, but you don't understand. 01:33:24.310 --> 01:33:26.527 align:middle line:84% He said, no, you don't understand. 01:33:26.527 --> 01:33:29.110 align:middle line:84% He says, that's the worst thing in the world we could possibly 01:33:29.110 --> 01:33:30.630 align:middle line:84% do is invite the press in because you're 01:33:30.630 --> 01:33:32.380 align:middle line:84% going to tell them about their big server, 01:33:32.380 --> 01:33:35.190 align:middle line:84% and they're going to say, well, what about this other problem 01:33:35.190 --> 01:33:37.390 align:middle line:90% in Atlanta with the press feed? 01:33:37.390 --> 01:33:41.210 align:middle line:84% So needless to say, he won out on that, and it was a shame. 01:33:41.210 --> 01:33:44.763 align:middle line:84% But nevertheless, it was the website, we learned a lot from. 01:33:44.763 --> 01:33:46.930 align:middle line:84% IRVING WLADAWSKY-BERGER: Shall we take five minutes? 01:33:46.930 --> 01:33:48.990 align:middle line:84% And then, when we come back, John 01:33:48.990 --> 01:33:52.140 align:middle line:84% will talk about what he usually talks about, 01:33:52.140 --> 01:33:54.920 align:middle line:84% which is, where is this all heading in the future? 01:33:54.920 --> 01:33:59.284 align:middle line:90% 01:33:59.284 --> 01:34:00.243 align:middle line:90% [SIDE CONVERSATIONS] 01:34:00.243 --> 01:34:01.660 align:middle line:84% JOHN PATRICK: --opinion, at least, 01:34:01.660 --> 01:34:03.920 align:middle line:84% about what's going on with the internet. 01:34:03.920 --> 01:34:07.540 align:middle line:84% And I would say, for starters, that we're about 5% of the way 01:34:07.540 --> 01:34:09.700 align:middle line:90% there. 01:34:09.700 --> 01:34:11.680 align:middle line:90% I used to say 2%. 01:34:11.680 --> 01:34:13.240 align:middle line:90% Now [INAUDIBLE] 5%. 01:34:13.240 --> 01:34:16.440 align:middle line:84% And one of my former colleagues at IBM, Mike Nelson, 01:34:16.440 --> 01:34:19.380 align:middle line:84% he says, now you really should say 10%. 01:34:19.380 --> 01:34:20.920 align:middle line:84% Oh, [INAUDIBLE] turn this back in? 01:34:20.920 --> 01:34:23.740 align:middle line:84% IRVING WLADAWSKY-BERGER: Yeah, thanks. 01:34:23.740 --> 01:34:26.520 align:middle line:84% JOHN PATRICK: But I still believe we're at 5%. 01:34:26.520 --> 01:34:28.360 align:middle line:84% And at a recent conference where I spoke, 01:34:28.360 --> 01:34:30.680 align:middle line:84% a person said, I highly object to 5%. 01:34:30.680 --> 01:34:33.540 align:middle line:90% It's really not even 2%. 01:34:33.540 --> 01:34:35.200 align:middle line:90% And so what do I mean by that? 01:34:35.200 --> 01:34:36.737 align:middle line:84% There are a lot of metrics that you 01:34:36.737 --> 01:34:38.820 align:middle line:84% could look at-- how many cell phones are connected 01:34:38.820 --> 01:34:42.020 align:middle line:84% to the internet, how many people use broadband, what percentage 01:34:42.020 --> 01:34:44.540 align:middle line:84% of the world's population-- there are a lot of metrics, 01:34:44.540 --> 01:34:46.960 align:middle line:84% and you can get different numbers from all of those. 01:34:46.960 --> 01:34:49.680 align:middle line:84% But the way I think about it is very simple. 01:34:49.680 --> 01:34:51.280 align:middle line:84% Of all the things that could be done 01:34:51.280 --> 01:34:53.600 align:middle line:84% on the internet in a way that would simplify our life 01:34:53.600 --> 01:34:56.560 align:middle line:84% and make us happy, how much of that do we have? 01:34:56.560 --> 01:34:57.820 align:middle line:90% 5%. 01:34:57.820 --> 01:34:59.560 align:middle line:90% That's what I believe. 01:34:59.560 --> 01:35:05.280 align:middle line:84% And clearly, this is about power to the people. 01:35:05.280 --> 01:35:09.140 align:middle line:84% I am not talking about Tiananmen Square or anarchy. 01:35:09.140 --> 01:35:13.680 align:middle line:84% I'm talking about the power of the click on an iPhone 01:35:13.680 --> 01:35:16.000 align:middle line:84% or a mouse or a personal digital assistant 01:35:16.000 --> 01:35:18.700 align:middle line:84% where people can express what they want, and how they want it, 01:35:18.700 --> 01:35:22.720 align:middle line:84% and the terms of business by which they want to operate. 01:35:22.720 --> 01:35:25.780 align:middle line:84% And some people object to, oh, you're talking about consumers. 01:35:25.780 --> 01:35:27.600 align:middle line:90% No, I'm talking about people. 01:35:27.600 --> 01:35:30.560 align:middle line:84% "Consumer" is a troublesome word. 01:35:30.560 --> 01:35:33.700 align:middle line:84% I don't know what a consumer is, but I know what a person is. 01:35:33.700 --> 01:35:35.380 align:middle line:84% And some people work in big companies. 01:35:35.380 --> 01:35:37.220 align:middle line:84% Some people work at home for themselves. 01:35:37.220 --> 01:35:38.100 align:middle line:90% They're all people. 01:35:38.100 --> 01:35:39.500 align:middle line:90% They all use the web. 01:35:39.500 --> 01:35:41.620 align:middle line:84% They all have very similar expectations, 01:35:41.620 --> 01:35:44.560 align:middle line:84% and those expectations are skyrocketing. 01:35:44.560 --> 01:35:47.420 align:middle line:84% Every day, we see new things that we can do on the web 01:35:47.420 --> 01:35:48.800 align:middle line:90% that we weren't aware of before. 01:35:48.800 --> 01:35:50.700 align:middle line:84% And then the next day, we find we 01:35:50.700 --> 01:35:54.780 align:middle line:84% have to drive to the bank to get something notarized, 01:35:54.780 --> 01:35:57.460 align:middle line:84% like we did a thousand years ago. 01:35:57.460 --> 01:36:00.380 align:middle line:84% And we have to fax this form, but we can only do it 9:00 01:36:00.380 --> 01:36:01.800 align:middle line:90% to 5:00, Monday to Friday. 01:36:01.800 --> 01:36:04.520 align:middle line:84% And we have these things that just don't make any sense. 01:36:04.520 --> 01:36:07.260 align:middle line:84% So those are the reasons I say 5%. 01:36:07.260 --> 01:36:12.970 align:middle line:84% It really is an attitudinal issue, at the core, my belief. 01:36:12.970 --> 01:36:14.720 align:middle line:84% Net Attitude-- that's the name of my book. 01:36:14.720 --> 01:36:15.680 align:middle line:90% That's the way I think. 01:36:15.680 --> 01:36:16.920 align:middle line:90% It's what I believe. 01:36:16.920 --> 01:36:19.200 align:middle line:90% It's not a technology issue. 01:36:19.200 --> 01:36:23.260 align:middle line:84% There are technology issues, but anything you can imagine you 01:36:23.260 --> 01:36:27.900 align:middle line:84% want to do, the technology, most likely, is available. 01:36:27.900 --> 01:36:30.200 align:middle line:84% Of course, the internet is evolving very rapidly-- 01:36:30.200 --> 01:36:34.380 align:middle line:84% millions of businesses, billions of people, trillions of things, 01:36:34.380 --> 01:36:36.640 align:middle line:84% everything connected to everything. 01:36:36.640 --> 01:36:39.700 align:middle line:84% This is a horrifying thought to many people. 01:36:39.700 --> 01:36:43.330 align:middle line:84% But I think it's really a terrific thing, 01:36:43.330 --> 01:36:45.730 align:middle line:84% as long as we can have the security and privacy 01:36:45.730 --> 01:36:47.030 align:middle line:90% at all levels that we expect. 01:36:47.030 --> 01:36:48.530 align:middle line:90% And I believe that we can. 01:36:48.530 --> 01:36:52.398 align:middle line:84% I'm one of the, perhaps, small number of optimists about this. 01:36:52.398 --> 01:36:54.690 align:middle line:84% But let me first drill down a little bit on this notion 01:36:54.690 --> 01:36:55.990 align:middle line:90% of the power of the click. 01:36:55.990 --> 01:36:59.030 align:middle line:84% What is it people expect from the internet? 01:36:59.030 --> 01:37:00.490 align:middle line:90% And I believe it's-- 01:37:00.490 --> 01:37:02.230 align:middle line:90% I call it end-to-end solutions. 01:37:02.230 --> 01:37:03.890 align:middle line:84% You might call it beginning to end. 01:37:03.890 --> 01:37:06.930 align:middle line:84% It's a holistic thought for your hospital, 01:37:06.930 --> 01:37:10.290 align:middle line:84% or your government, or your business, or your university. 01:37:10.290 --> 01:37:13.810 align:middle line:84% And I think eBay is a good way to think about this. 01:37:13.810 --> 01:37:16.630 align:middle line:84% eBay isn't, click here to buy, or click here to sell. 01:37:16.630 --> 01:37:22.610 align:middle line:84% eBay is also about escrow, about insurance, about shipping, 01:37:22.610 --> 01:37:26.390 align:middle line:84% about warranties, about marketing, about collaborations, 01:37:26.390 --> 01:37:30.630 align:middle line:84% about educational programs for how to sell. 01:37:30.630 --> 01:37:34.130 align:middle line:84% They have-- I would guess it's close to a million people 01:37:34.130 --> 01:37:38.730 align:middle line:84% now whose primary income comes from doing things on eBay. 01:37:38.730 --> 01:37:43.310 align:middle line:84% And they have the world's largest reputation database, 01:37:43.310 --> 01:37:44.815 align:middle line:90% and it's growing very rapidly. 01:37:44.815 --> 01:37:47.190 align:middle line:84% So they've really tried to think the whole thing through. 01:37:47.190 --> 01:37:49.530 align:middle line:84% That, I believe, is what people expect. 01:37:49.530 --> 01:37:51.553 align:middle line:84% Unfortunately, what we get is different. 01:37:51.553 --> 01:37:53.470 align:middle line:84% IRVING WLADAWSKY-BERGER: So wouldn't you say-- 01:37:53.470 --> 01:37:55.910 align:middle line:84% what you're saying is something very profound, 01:37:55.910 --> 01:38:01.850 align:middle line:84% that those businesses that are doing a good job 01:38:01.850 --> 01:38:06.070 align:middle line:84% have stepped back and thought through, 01:38:06.070 --> 01:38:08.790 align:middle line:84% what's the business experience they want 01:38:08.790 --> 01:38:11.590 align:middle line:90% to provide you over the web? 01:38:11.590 --> 01:38:14.810 align:middle line:84% And they put themselves in the position of the client. 01:38:14.810 --> 01:38:16.370 align:middle line:90% They thought all the things-- 01:38:16.370 --> 01:38:17.190 align:middle line:90% JOHN PATRICK: All the things. 01:38:17.190 --> 01:38:19.107 align:middle line:84% IRVING WLADAWSKY-BERGER: --that should happen. 01:38:19.107 --> 01:38:22.470 align:middle line:84% So they've almost applied, I would say, 01:38:22.470 --> 01:38:26.210 align:middle line:84% almost the engineering thinking to the problem. 01:38:26.210 --> 01:38:27.930 align:middle line:90% What are all the pieces? 01:38:27.930 --> 01:38:29.910 align:middle line:84% Like, if you're building a bridge, 01:38:29.910 --> 01:38:34.750 align:middle line:84% that you don't want to forget cables or something like that. 01:38:34.750 --> 01:38:41.230 align:middle line:84% So this notion of looking at the whole business problem-- 01:38:41.230 --> 01:38:44.010 align:middle line:90% why don't most businesses do it? 01:38:44.010 --> 01:38:49.050 align:middle line:84% What do you think is in the way of them doing that? 01:38:49.050 --> 01:38:55.910 align:middle line:84% JOHN PATRICK: Partly vision, partly having the team, 01:38:55.910 --> 01:39:01.330 align:middle line:84% the skills to be able to do it, partly an aversion to risk. 01:39:01.330 --> 01:39:03.650 align:middle line:84% Public companies now have to report everything 01:39:03.650 --> 01:39:06.930 align:middle line:90% that doesn't go right. 01:39:06.930 --> 01:39:09.250 align:middle line:84% The audit committee in companies now 01:39:09.250 --> 01:39:13.570 align:middle line:84% is responsible for every possible failure of any kind. 01:39:13.570 --> 01:39:15.690 align:middle line:84% They're worried about getting sued. 01:39:15.690 --> 01:39:17.790 align:middle line:84% So there are quite a few inhibitors. 01:39:17.790 --> 01:39:21.010 align:middle line:90% Notice I didn't say technology. 01:39:21.010 --> 01:39:26.110 align:middle line:84% And it's even broader than the customers. 01:39:26.110 --> 01:39:28.650 align:middle line:90% It's all constituents. 01:39:28.650 --> 01:39:30.250 align:middle line:90% So it's the suppliers. 01:39:30.250 --> 01:39:31.490 align:middle line:90% It's the partners. 01:39:31.490 --> 01:39:34.130 align:middle line:90% It's the employees, of course. 01:39:34.130 --> 01:39:36.410 align:middle line:84% Now, I'm going to use a few slides 01:39:36.410 --> 01:39:41.720 align:middle line:84% to illustrate why I say we're only 5% of the way there. 01:39:41.720 --> 01:39:46.640 align:middle line:84% I recently got an email from a large, multi-billion dollar 01:39:46.640 --> 01:39:53.400 align:middle line:84% company that introduced to me their new security feature. 01:39:53.400 --> 01:39:56.640 align:middle line:84% Now, you've all seen these, where you pick your question, 01:39:56.640 --> 01:39:59.860 align:middle line:84% and you pick your answer, and it's not really security. 01:39:59.860 --> 01:40:03.520 align:middle line:84% It's really to offload the administrative help desk 01:40:03.520 --> 01:40:05.100 align:middle line:90% functions to the customer. 01:40:05.100 --> 01:40:05.660 align:middle line:90% But it's OK. 01:40:05.660 --> 01:40:06.760 align:middle line:90% It's a good thing. 01:40:06.760 --> 01:40:09.660 align:middle line:84% So this one, I picked, what is the name of a childhood pet? 01:40:09.660 --> 01:40:12.040 align:middle line:90% And my answer was Leo. 01:40:12.040 --> 01:40:14.400 align:middle line:84% And I clicked the Continue button, 01:40:14.400 --> 01:40:16.760 align:middle line:84% and I got the following error message-- 01:40:16.760 --> 01:40:20.600 align:middle line:84% the secret answer you entered is not valid. 01:40:20.600 --> 01:40:24.560 align:middle line:84% It must be at least five characters. 01:40:24.560 --> 01:40:27.960 align:middle line:90% OK, I'll try my favorite color. 01:40:27.960 --> 01:40:31.055 align:middle line:84% 38 years at IBM-- guess what the color would be? 01:40:31.055 --> 01:40:31.680 align:middle line:90% AUDIENCE: Blue. 01:40:31.680 --> 01:40:33.520 align:middle line:90% JOHN PATRICK: Blue doesn't work. 01:40:33.520 --> 01:40:34.500 align:middle line:90% Red doesn't work. 01:40:34.500 --> 01:40:35.300 align:middle line:90% Pink doesn't work. 01:40:35.300 --> 01:40:36.160 align:middle line:90% Gray doesn't work. 01:40:36.160 --> 01:40:38.620 align:middle line:84% What in the hell were they thinking? 01:40:38.620 --> 01:40:40.900 align:middle line:90% Is this a technology problem? 01:40:40.900 --> 01:40:42.360 align:middle line:90% They create an expectation. 01:40:42.360 --> 01:40:43.760 align:middle line:90% You can pick your question. 01:40:43.760 --> 01:40:46.460 align:middle line:84% You would think you could pick your answer. 01:40:46.460 --> 01:40:48.800 align:middle line:84% Now, a one-character or two-character answer, 01:40:48.800 --> 01:40:51.460 align:middle line:90% OK, there's an issue there. 01:40:51.460 --> 01:40:54.180 align:middle line:90% But has to be more than five? 01:40:54.180 --> 01:40:55.500 align:middle line:90% I don't think so. 01:40:55.500 --> 01:41:00.460 align:middle line:84% And then we have another issue going on out there. 01:41:00.460 --> 01:41:04.880 align:middle line:84% Verizon Wireless-- we never stop working for you. 01:41:04.880 --> 01:41:07.240 align:middle line:90% [LAUGHTER] 01:41:07.240 --> 01:41:07.740 align:middle line:90% 01:41:07.740 --> 01:41:09.300 align:middle line:84% Now, unfortunately, I could probably 01:41:09.300 --> 01:41:12.560 align:middle line:84% find a page like this at IBM or GE or any company, 01:41:12.560 --> 01:41:15.140 align:middle line:84% so I'm not beating up on Verizon, 01:41:15.140 --> 01:41:17.860 align:middle line:90% although they deserve it. 01:41:17.860 --> 01:41:18.920 align:middle line:90% What's the issue? 01:41:18.920 --> 01:41:21.543 align:middle line:84% The issue is that we do systems maintenance. 01:41:21.543 --> 01:41:22.960 align:middle line:84% When do we do systems maintenance? 01:41:22.960 --> 01:41:26.740 align:middle line:84% We do it at 3:00 in the morning when nobody's using the system, 01:41:26.740 --> 01:41:29.380 align:middle line:84% except for a couple million expats who are in Japan, 01:41:29.380 --> 01:41:34.000 align:middle line:84% where it's 4:00 PM, or kids who do their are online banking 01:41:34.000 --> 01:41:37.320 align:middle line:84% at 4:00 in the morning after they get home from partying. 01:41:37.320 --> 01:41:40.960 align:middle line:90% You can't be 9:00 to 5:00. 01:41:40.960 --> 01:41:42.760 align:middle line:90% So what are they thinking? 01:41:42.760 --> 01:41:44.380 align:middle line:90% They're thinking the old way. 01:41:44.380 --> 01:41:48.500 align:middle line:84% They're not thinking about the global, ubiquitous, anytime, 01:41:48.500 --> 01:41:50.600 align:middle line:90% anywhere network. 01:41:50.600 --> 01:41:54.460 align:middle line:84% And then I sent an email to my friend Gary, 01:41:54.460 --> 01:41:57.080 align:middle line:90% who is the CEO of the bank. 01:41:57.080 --> 01:42:00.160 align:middle line:84% Gary, I said, are we still on for lunch tomorrow? 01:42:00.160 --> 01:42:02.706 align:middle line:90% Here's his answer. 01:42:02.706 --> 01:42:04.600 align:middle line:90% [LAUGHTER] 01:42:04.600 --> 01:42:07.780 align:middle line:84% So all these years, I thought Gary ran the bank. 01:42:07.780 --> 01:42:10.040 align:middle line:84% And now I have learned that the compliance department 01:42:10.040 --> 01:42:11.520 align:middle line:90% runs the bank. 01:42:11.520 --> 01:42:13.280 align:middle line:90% What is all this? 01:42:13.280 --> 01:42:16.160 align:middle line:84% Does that have to be on every email? 01:42:16.160 --> 01:42:17.340 align:middle line:90% Who are we protecting? 01:42:17.340 --> 01:42:18.880 align:middle line:90% From what? 01:42:18.880 --> 01:42:21.480 align:middle line:84% The email is not authenticated, anyway. 01:42:21.480 --> 01:42:23.460 align:middle line:90% It's not encrypted, anyway. 01:42:23.460 --> 01:42:25.280 align:middle line:90% Why do we need all this? 01:42:25.280 --> 01:42:27.320 align:middle line:90% Do you see this on emails? 01:42:27.320 --> 01:42:28.660 align:middle line:90% Maybe MIT uses it. 01:42:28.660 --> 01:42:30.200 align:middle line:90% A lot of universities do. 01:42:30.200 --> 01:42:32.770 align:middle line:84% It's ridiculous, and in my opinion, 01:42:32.770 --> 01:42:37.570 align:middle line:84% it's totally like not in touch with what's going on. 01:42:37.570 --> 01:42:42.150 align:middle line:84% And then, of course, there's kids. 01:42:42.150 --> 01:42:43.510 align:middle line:90% I was in Europe. 01:42:43.510 --> 01:42:47.110 align:middle line:84% I had some snail mail with me in my briefcase. 01:42:47.110 --> 01:42:49.990 align:middle line:84% One of the snail mails said, you have to get back to us 01:42:49.990 --> 01:42:51.270 align:middle line:90% by X date. 01:42:51.270 --> 01:42:52.990 align:middle line:90% Oh, that's today. 01:42:52.990 --> 01:42:54.850 align:middle line:90% It's too early to call the US. 01:42:54.850 --> 01:42:56.350 align:middle line:90% I'll send them an email. 01:42:56.350 --> 01:42:58.570 align:middle line:84% This was a trivial administrative matter. 01:42:58.570 --> 01:43:01.070 align:middle line:84% This was not buying or selling millions of dollars' worth 01:43:01.070 --> 01:43:01.890 align:middle line:90% of securities. 01:43:01.890 --> 01:43:03.610 align:middle line:84% This was a simple administrative matter. 01:43:03.610 --> 01:43:05.770 align:middle line:84% So I sent them an email, and there's their answer. 01:43:05.770 --> 01:43:08.110 align:middle line:90% We can't do that by email. 01:43:08.110 --> 01:43:12.610 align:middle line:84% You have to talk to us at a 1-800 number, 01:43:12.610 --> 01:43:16.710 align:middle line:84% which you can't call from most parts of the world, 01:43:16.710 --> 01:43:19.210 align:middle line:84% Monday to Friday, 9:00 to 5:00 EST. 01:43:19.210 --> 01:43:24.110 align:middle line:84% What does this mean in Bled, Slovenia, EST? 01:43:24.110 --> 01:43:25.670 align:middle line:90% What's EST? 01:43:25.670 --> 01:43:27.170 align:middle line:90% This is a global network. 01:43:27.170 --> 01:43:32.250 align:middle line:84% If you have any other questions, just send us an email. 01:43:32.250 --> 01:43:35.330 align:middle line:90% Now, the big deal here is kids. 01:43:35.330 --> 01:43:37.130 align:middle line:84% The Pew Foundation in Philadelphia 01:43:37.130 --> 01:43:39.690 align:middle line:84% does these marvelous studies on the cultural aspects 01:43:39.690 --> 01:43:40.430 align:middle line:90% of the internet. 01:43:40.430 --> 01:43:43.210 align:middle line:84% And one of their studies revealed-- big surprise-- 01:43:43.210 --> 01:43:50.930 align:middle line:84% that 98% of teenagers use email or SMS, chat, texting 01:43:50.930 --> 01:43:53.730 align:middle line:84% as their primary way to communicate. 01:43:53.730 --> 01:43:56.250 align:middle line:84% So here's this multibillion dollar financial services 01:43:56.250 --> 01:43:59.230 align:middle line:90% company saying, come to us. 01:43:59.230 --> 01:44:02.690 align:middle line:90% Come to us when we're open. 01:44:02.690 --> 01:44:05.310 align:middle line:84% And the kids say, we're not going to go to your branch bank. 01:44:05.310 --> 01:44:08.930 align:middle line:84% We don't even know what-- what is a branch bank? 01:44:08.930 --> 01:44:12.170 align:middle line:84% We don't get what you're saying here. 01:44:12.170 --> 01:44:15.750 align:middle line:84% Now, are there technical issues with regard to secure email? 01:44:15.750 --> 01:44:16.850 align:middle line:90% Of course. 01:44:16.850 --> 01:44:20.190 align:middle line:84% Is it possible to have secure email with existing technology? 01:44:20.190 --> 01:44:20.903 align:middle line:90% Of course it is. 01:44:20.903 --> 01:44:22.070 align:middle line:90% Encryption has been around-- 01:44:22.070 --> 01:44:28.730 align:middle line:84% IBM invented encryption in 1965, gave it to the Air Force in '67, 01:44:28.730 --> 01:44:31.970 align:middle line:84% put it in the public domain in 1969. 01:44:31.970 --> 01:44:33.930 align:middle line:84% This is not a technology problem. 01:44:33.930 --> 01:44:36.230 align:middle line:90% This is an attitude problem. 01:44:36.230 --> 01:44:38.630 align:middle line:90% And then in health care-- 01:44:38.630 --> 01:44:43.130 align:middle line:84% 5% would be extraordinarily generous for health care. 01:44:43.130 --> 01:44:44.610 align:middle line:90% And there are so many examples. 01:44:44.610 --> 01:44:48.830 align:middle line:84% The e-pharmacies-- I call it e-pharmacy.not, 01:44:48.830 --> 01:44:51.330 align:middle line:84% where you fill out the online registration form, 01:44:51.330 --> 01:44:54.030 align:middle line:84% you put all your data in, you click Submit. 01:44:54.030 --> 01:44:54.890 align:middle line:90% It says, "Thanks. 01:44:54.890 --> 01:44:55.930 align:middle line:90% We have your data. 01:44:55.930 --> 01:44:56.930 align:middle line:90% Click here to continue." 01:44:56.930 --> 01:44:58.055 align:middle line:90% You click here to continue. 01:44:58.055 --> 01:45:00.710 align:middle line:84% It says, "Print this form and fax it to us." 01:45:00.710 --> 01:45:03.490 align:middle line:84% And on the form is none of the data you just entered. 01:45:03.490 --> 01:45:07.630 align:middle line:84% You have to fill it out again with a pen. 01:45:07.630 --> 01:45:12.030 align:middle line:84% And then, of course, in health care, 01:45:12.030 --> 01:45:14.550 align:middle line:84% blood is probably the best example 01:45:14.550 --> 01:45:18.350 align:middle line:84% I can think of to make the very simple point that's 01:45:18.350 --> 01:45:19.450 align:middle line:90% going to be a revolution. 01:45:19.450 --> 01:45:21.430 align:middle line:84% I keep telling the CEO of a hospital where 01:45:21.430 --> 01:45:25.270 align:middle line:84% I'm a member of the board that there is a tsunami coming, 01:45:25.270 --> 01:45:28.410 align:middle line:84% and the tsunami is for consumer expectations 01:45:28.410 --> 01:45:32.330 align:middle line:90% about data about their health. 01:45:32.330 --> 01:45:37.490 align:middle line:84% If you make a deposit or take money out of an ATM, 01:45:37.490 --> 01:45:39.930 align:middle line:84% 15 minutes later, it's in Quicken, 01:45:39.930 --> 01:45:42.730 align:middle line:84% and you have a complete record of every penny you ever spent 01:45:42.730 --> 01:45:44.530 align:middle line:90% and every dime you own. 01:45:44.530 --> 01:45:46.870 align:middle line:84% And wherever it is, you have a complete audit trail. 01:45:46.870 --> 01:45:49.410 align:middle line:84% What do you have about your blood? 01:45:49.410 --> 01:45:53.330 align:middle line:84% Blood comes out of your arm and goes into a computer, 01:45:53.330 --> 01:45:57.010 align:middle line:84% and all the chemistry is determined. 01:45:57.010 --> 01:45:58.570 align:middle line:90% It's digital. 01:45:58.570 --> 01:46:01.690 align:middle line:84% You call the doctor's office for the result of your blood test. 01:46:01.690 --> 01:46:03.410 align:middle line:90% The doctor is not in yet. 01:46:03.410 --> 01:46:05.570 align:middle line:84% He's in, but he hasn't seen it yet. 01:46:05.570 --> 01:46:07.970 align:middle line:84% He saw it, but he doesn't have time to talk to you. 01:46:07.970 --> 01:46:08.670 align:middle line:90% You call again. 01:46:08.670 --> 01:46:10.210 align:middle line:90% We're closed from 12:00 to 2:00. 01:46:10.210 --> 01:46:12.590 align:middle line:84% He saw it, but he'll call you later. 01:46:12.590 --> 01:46:13.970 align:middle line:90% He calls you at 7:00 PM. 01:46:13.970 --> 01:46:14.850 align:middle line:90% You're OK. 01:46:14.850 --> 01:46:15.370 align:middle line:90% Oh, great. 01:46:15.370 --> 01:46:15.870 align:middle line:90% I'm OK. 01:46:15.870 --> 01:46:18.850 align:middle line:84% Could I have the data about my blood? 01:46:18.850 --> 01:46:22.050 align:middle line:84% Yeah, let me get the nurse to get your fax number so we 01:46:22.050 --> 01:46:26.040 align:middle line:84% can convert digital information back to analog 01:46:26.040 --> 01:46:28.320 align:middle line:90% again before we give it to you. 01:46:28.320 --> 01:46:29.740 align:middle line:90% Contrast that with Quicken. 01:46:29.740 --> 01:46:32.200 align:middle line:84% So that's the tsunami that's coming. 01:46:32.200 --> 01:46:33.740 align:middle line:90% Healthcare data-- it's our data. 01:46:33.740 --> 01:46:34.340 align:middle line:90% It's our body. 01:46:34.340 --> 01:46:35.480 align:middle line:90% It's our health. 01:46:35.480 --> 01:46:37.380 align:middle line:84% We want to take responsibility for it. 01:46:37.380 --> 01:46:40.480 align:middle line:84% Health inquiries is the fastest growing part of the web, 01:46:40.480 --> 01:46:42.160 align:middle line:90% but you can't get the data. 01:46:42.160 --> 01:46:45.740 align:middle line:84% So these are the reasons I say it's just 5%. 01:46:45.740 --> 01:46:47.310 align:middle line:84% And then, of course, in government-- 01:46:47.310 --> 01:46:48.560 align:middle line:90% IRVING WLADAWSKY-BERGER: John? 01:46:48.560 --> 01:46:49.760 align:middle line:90% JOHN PATRICK: Yeah, please. 01:46:49.760 --> 01:46:52.840 align:middle line:84% AUDIENCE: To the health care example, 01:46:52.840 --> 01:46:55.800 align:middle line:84% it seems you were kind of implying that the health care 01:46:55.800 --> 01:46:58.560 align:middle line:84% institution that adopted those kinds of practices, 01:46:58.560 --> 01:47:00.560 align:middle line:84% took learning from financial industry, 01:47:00.560 --> 01:47:05.710 align:middle line:84% would have competitive advantage over the ones that didn't. 01:47:05.710 --> 01:47:06.960 align:middle line:90% JOHN PATRICK: You would think. 01:47:06.960 --> 01:47:08.640 align:middle line:84% AUDIENCE: Well, you would think, but is 01:47:08.640 --> 01:47:13.240 align:middle line:84% it because, in health care, the core asset is the actual health 01:47:13.240 --> 01:47:13.740 align:middle line:90% care? 01:47:13.740 --> 01:47:16.720 align:middle line:84% So I would never pick a doctor because they had a better IT 01:47:16.720 --> 01:47:18.020 align:middle line:90% system than the other doctor. 01:47:18.020 --> 01:47:20.840 align:middle line:84% Is that-- speculating on, is that why 01:47:20.840 --> 01:47:23.300 align:middle line:84% it hasn't happened in health care as it has in [INAUDIBLE]? 01:47:23.300 --> 01:47:25.980 align:middle line:84% JOHN PATRICK: Well, there are a number of reasons. 01:47:25.980 --> 01:47:28.740 align:middle line:90% Part of it is vision. 01:47:28.740 --> 01:47:35.060 align:middle line:84% Part of it is that the payers and the providers 01:47:35.060 --> 01:47:37.780 align:middle line:90% don't trust each other. 01:47:37.780 --> 01:47:41.820 align:middle line:84% Part of it is that the benefits of integrating 01:47:41.820 --> 01:47:45.860 align:middle line:84% electronic medical information are shared benefits. 01:47:45.860 --> 01:47:49.162 align:middle line:84% So between the patient, the provider, and the payer, 01:47:49.162 --> 01:47:50.620 align:middle line:84% they each benefit, but none of them 01:47:50.620 --> 01:47:54.020 align:middle line:90% benefits enough to pay the bill. 01:47:54.020 --> 01:47:55.880 align:middle line:90% So there's a cost issue. 01:47:55.880 --> 01:47:58.220 align:middle line:84% There also are some standards issues 01:47:58.220 --> 01:48:01.020 align:middle line:84% which have moved forward fairly well now. 01:48:01.020 --> 01:48:03.540 align:middle line:84% There's a new concept called a Regional Health Information 01:48:03.540 --> 01:48:05.740 align:middle line:84% Organization, the RHIO, which is going 01:48:05.740 --> 01:48:08.340 align:middle line:84% to allow community doctors and regional medical centers 01:48:08.340 --> 01:48:12.900 align:middle line:84% to be able to share data based on standards. 01:48:12.900 --> 01:48:14.600 align:middle line:90% So there's progress being made. 01:48:14.600 --> 01:48:18.460 align:middle line:84% But fundamentally, it's just for the same reasons 01:48:18.460 --> 01:48:21.400 align:middle line:90% that we talked about earlier. 01:48:21.400 --> 01:48:23.160 align:middle line:90% They're old systems. 01:48:23.160 --> 01:48:26.200 align:middle line:84% Most hospitals have systems from the '60s. 01:48:26.200 --> 01:48:28.040 align:middle line:90% They're silo systems. 01:48:28.040 --> 01:48:30.240 align:middle line:84% They're incompatible with each other. 01:48:30.240 --> 01:48:35.200 align:middle line:84% And it takes a really gutsy, strong leader and funding 01:48:35.200 --> 01:48:36.845 align:middle line:90% to be able to move forward. 01:48:36.845 --> 01:48:38.220 align:middle line:84% There are some that have done it. 01:48:38.220 --> 01:48:40.840 align:middle line:84% Denmark is paperless in health care. 01:48:40.840 --> 01:48:44.440 align:middle line:84% The Mayo Clinic has done some amazing things in health care 01:48:44.440 --> 01:48:47.880 align:middle line:84% with electronic medical records, including physician notes that 01:48:47.880 --> 01:48:51.160 align:middle line:84% have been scanned, semantically analyzed, and put 01:48:51.160 --> 01:48:57.300 align:middle line:84% into an ability to not have anecdotal medicine, 01:48:57.300 --> 01:49:00.400 align:middle line:84% but to have, really, predictive medicine 01:49:00.400 --> 01:49:02.315 align:middle line:90% unique to the individual. 01:49:02.315 --> 01:49:03.940 align:middle line:84% So there's some great things happening. 01:49:03.940 --> 01:49:10.360 align:middle line:84% But overall, it's about 3% to 5% of health care systems that 01:49:10.360 --> 01:49:11.980 align:middle line:90% have moved forward with this. 01:49:11.980 --> 01:49:13.480 align:middle line:84% IRVING WLADAWSKY-BERGER: John, and I 01:49:13.480 --> 01:49:17.670 align:middle line:84% wonder, through your examples, and given also the nature 01:49:17.670 --> 01:49:25.950 align:middle line:84% of this course, my hypothesis is that to do the kinds of things 01:49:25.950 --> 01:49:31.010 align:middle line:84% you're talking about, while it's not technology, 01:49:31.010 --> 01:49:34.790 align:middle line:84% you need people in leadership positions 01:49:34.790 --> 01:49:40.830 align:middle line:84% that can think of problems as a system, that is, that know, 01:49:40.830 --> 01:49:46.390 align:middle line:84% oh, if you just link A to B to C, magic will happen. 01:49:46.390 --> 01:49:51.150 align:middle line:84% And linking A to B to C is usually not a big deal. 01:49:51.150 --> 01:49:56.210 align:middle line:84% But to know that when you link A to B to C, magic happens, 01:49:56.210 --> 01:50:00.910 align:middle line:84% that's a big deal, and that we don't 01:50:00.910 --> 01:50:07.830 align:middle line:84% have enough people comfortable with complex system thinking out 01:50:07.830 --> 01:50:12.450 align:middle line:84% there in the business world in positions of leadership. 01:50:12.450 --> 01:50:13.550 align:middle line:90% Do you agree, [? John? ?] 01:50:13.550 --> 01:50:14.883 align:middle line:90% JOHN PATRICK: Yeah, that's true. 01:50:14.883 --> 01:50:17.330 align:middle line:84% And in health care, doctors, many of them 01:50:17.330 --> 01:50:18.930 align:middle line:90% don't want to change. 01:50:18.930 --> 01:50:21.830 align:middle line:84% They've been scribbling out a prescription for a long time, 01:50:21.830 --> 01:50:24.670 align:middle line:84% and they don't want to learn how to go into a system. 01:50:24.670 --> 01:50:26.090 align:middle line:84% In some cases, the system actually 01:50:26.090 --> 01:50:28.770 align:middle line:84% does take longer to e-prescribe than it does 01:50:28.770 --> 01:50:30.450 align:middle line:90% to just scribble something. 01:50:30.450 --> 01:50:34.290 align:middle line:84% But of course, when you scribble something, 35% of the time, 01:50:34.290 --> 01:50:35.610 align:middle line:90% it's unreadable. 01:50:35.610 --> 01:50:36.890 align:middle line:90% Pharmacies guess. 01:50:36.890 --> 01:50:38.850 align:middle line:90% 10% of the guesses are wrong. 01:50:38.850 --> 01:50:40.430 align:middle line:90% 1% of those people die. 01:50:40.430 --> 01:50:44.730 align:middle line:84% About 195,000 people will die this year from medical errors, 01:50:44.730 --> 01:50:48.330 align:middle line:84% not judgmental errors, because the doctor did this instead 01:50:48.330 --> 01:50:51.570 align:middle line:84% of that, but information-related errors, 01:50:51.570 --> 01:50:53.730 align:middle line:84% where they amputated the wrong foot. 01:50:53.730 --> 01:50:57.210 align:middle line:90% Infections happened because-- 01:50:57.210 --> 01:50:58.710 align:middle line:84% IRVING WLADAWSKY-BERGER: [INAUDIBLE] 01:50:58.710 --> 01:51:00.543 align:middle line:84% JOHN PATRICK: Well, 60% of it's because they 01:51:00.543 --> 01:51:01.530 align:middle line:90% don't wash their hands. 01:51:01.530 --> 01:51:04.430 align:middle line:84% But improper medications are administered. 01:51:04.430 --> 01:51:08.920 align:middle line:84% There are just frightening errors that occur. 01:51:08.920 --> 01:51:12.250 align:middle line:84% IRVING WLADAWSKY-BERGER: But this is very important. 01:51:12.250 --> 01:51:14.790 align:middle line:84% Other people will think about it-- 01:51:14.790 --> 01:51:16.210 align:middle line:90% we'll fire people. 01:51:16.210 --> 01:51:19.190 align:middle line:84% We'll do this and that and whatever. 01:51:19.190 --> 01:51:25.550 align:middle line:84% When I hear what John is saying, I say, well, shit. 01:51:25.550 --> 01:51:28.930 align:middle line:84% If we were in the automotive industry, 01:51:28.930 --> 01:51:31.190 align:middle line:84% and we had that kind of error rate 01:51:31.190 --> 01:51:33.453 align:middle line:90% coming out of the plant floor-- 01:51:33.453 --> 01:51:34.870 align:middle line:84% JOHN PATRICK: Yeah, we'd be broke. 01:51:34.870 --> 01:51:36.787 align:middle line:84% IRVING WLADAWSKY-BERGER: Well, we'll be broke, 01:51:36.787 --> 01:51:40.690 align:middle line:84% but also, there are a whole set of procedures-- defect analysis. 01:51:40.690 --> 01:51:45.350 align:middle line:84% You know how to look at errors and then backtrack 01:51:45.350 --> 01:51:46.850 align:middle line:90% and figure it out. 01:51:46.850 --> 01:51:50.550 align:middle line:84% And in fact, Toyota and others have said, 01:51:50.550 --> 01:51:55.290 align:middle line:84% as soon as an error occurs, stop the whole production 01:51:55.290 --> 01:51:59.470 align:middle line:84% because-- remember, you were in St. Petersburg, 01:51:59.470 --> 01:52:03.310 align:middle line:84% and you heard the chairman-- he was talking to us about that 01:52:03.310 --> 01:52:07.350 align:middle line:84% because it's so much easier to find the error then that later. 01:52:07.350 --> 01:52:13.460 align:middle line:84% But I don't think we can underestimate estimate that it 01:52:13.460 --> 01:52:17.620 align:middle line:84% takes a certain level of confidence that these are 01:52:17.620 --> 01:52:22.360 align:middle line:84% systems problems, that if you apply system thinking, 01:52:22.360 --> 01:52:25.740 align:middle line:84% the kind that hopefully you're all learning in [? ACM ?] 01:52:25.740 --> 01:52:30.900 align:middle line:84% and [? LSM ?] and other places where you're doing things here, 01:52:30.900 --> 01:52:32.480 align:middle line:90% this will solve the problems. 01:52:32.480 --> 01:52:37.580 align:middle line:84% But I don't think that's percolated through the business 01:52:37.580 --> 01:52:39.823 align:middle line:90% world, including health care. 01:52:39.823 --> 01:52:41.740 align:middle line:84% JOHN PATRICK: Well, especially in health care. 01:52:41.740 --> 01:52:42.080 align:middle line:90% Yeah. 01:52:42.080 --> 01:52:42.880 align:middle line:90% It's beginning to. 01:52:42.880 --> 01:52:47.260 align:middle line:84% I mean, Six Sigma is occurring in some hospitals. 01:52:47.260 --> 01:52:50.500 align:middle line:84% Where I'm a director in Connecticut, 01:52:50.500 --> 01:52:53.780 align:middle line:84% all the surgical heads and all the department chiefs 01:52:53.780 --> 01:52:55.560 align:middle line:84% have all been through Six Sigma training. 01:52:55.560 --> 01:52:57.660 align:middle line:84% We have Team Leaders, Black Belts. 01:52:57.660 --> 01:52:59.220 align:middle line:90% It's beginning to happen. 01:52:59.220 --> 01:53:04.140 align:middle line:84% But still, sponges get left inside of people every day. 01:53:04.140 --> 01:53:05.880 align:middle line:90% Now we have RFID sponges. 01:53:05.880 --> 01:53:08.940 align:middle line:84% So there's an LCD panel in the OR, 01:53:08.940 --> 01:53:12.060 align:middle line:84% and it shows how many sponges there are and where they are, 01:53:12.060 --> 01:53:16.080 align:middle line:90% and it's 100% accurate. 01:53:16.080 --> 01:53:17.840 align:middle line:84% The technology is available, but it 01:53:17.840 --> 01:53:20.260 align:middle line:84% takes the leadership, the vision, 01:53:20.260 --> 01:53:23.040 align:middle line:84% and, of course, the skills, the people. 01:53:23.040 --> 01:53:24.900 align:middle line:84% There are many excuses that get used. 01:53:24.900 --> 01:53:28.480 align:middle line:84% I would say one of the overarching issues on the point 01:53:28.480 --> 01:53:35.080 align:middle line:84% that Irving is making is that the system includes 01:53:35.080 --> 01:53:39.540 align:middle line:84% things that are outside of the control of the organization. 01:53:39.540 --> 01:53:42.440 align:middle line:84% So in health care, for example, you have a hospital, maybe even 01:53:42.440 --> 01:53:44.760 align:middle line:84% a regional hospital, but then most of the doctors 01:53:44.760 --> 01:53:46.320 align:middle line:90% are community doctors. 01:53:46.320 --> 01:53:48.920 align:middle line:84% They're not employed by the hospital. 01:53:48.920 --> 01:53:53.320 align:middle line:84% And so whose EMR, Electronic Medical Record, whose do you 01:53:53.320 --> 01:53:55.960 align:middle line:84% use, and how do you make them compatible? 01:53:55.960 --> 01:53:58.960 align:middle line:84% And is who's going to pay for the community doctor 01:53:58.960 --> 01:54:00.780 align:middle line:84% to have electronic medical record? 01:54:00.780 --> 01:54:03.600 align:middle line:84% You have computerized physician order entry 01:54:03.600 --> 01:54:07.040 align:middle line:84% in a lot of hospitals now, which allows 01:54:07.040 --> 01:54:09.125 align:middle line:84% them to enter a prescription and ensures 01:54:09.125 --> 01:54:10.500 align:middle line:84% that that prescription is checked 01:54:10.500 --> 01:54:13.385 align:middle line:84% against all known allergies and other medications. 01:54:13.385 --> 01:54:15.260 align:middle line:84% But as soon as the person leaves the hospital 01:54:15.260 --> 01:54:16.843 align:middle line:84% and goes back to the community doctor, 01:54:16.843 --> 01:54:19.820 align:middle line:84% the community doctor doesn't have access to that information. 01:54:19.820 --> 01:54:23.540 align:middle line:84% So the point I'm making is that some 01:54:23.540 --> 01:54:27.340 align:middle line:84% feel, if I can't do everything, then I don't do anything. 01:54:27.340 --> 01:54:32.820 align:middle line:84% This is a classic case of systems and impediments 01:54:32.820 --> 01:54:34.140 align:middle line:90% that I've seen. 01:54:34.140 --> 01:54:36.405 align:middle line:84% If we can't fix everything, then we don't do anything. 01:54:36.405 --> 01:54:37.780 align:middle line:84% We're going to wait until there's 01:54:37.780 --> 01:54:40.200 align:middle line:84% a single agreed-upon electronic medical. 01:54:40.200 --> 01:54:41.420 align:middle line:90% Then we'll implement it. 01:54:41.420 --> 01:54:42.340 align:middle line:90% Yeah? 01:54:42.340 --> 01:54:44.060 align:middle line:84% AUDIENCE: How much of this is really 01:54:44.060 --> 01:54:45.640 align:middle line:90% because of legal entanglements? 01:54:45.640 --> 01:54:48.420 align:middle line:84% Because what I'm noticing in a lot of things 01:54:48.420 --> 01:54:50.520 align:middle line:84% where they force you to fax things 01:54:50.520 --> 01:54:55.420 align:middle line:84% is some lawyer came in and said, this won't stand up in court. 01:54:55.420 --> 01:54:58.240 align:middle line:84% Or when the doctor doesn't give out information, 01:54:58.240 --> 01:55:01.360 align:middle line:84% it's probably because he or she is protecting [? themselves. ?] 01:55:01.360 --> 01:55:06.230 align:middle line:84% How much of it is because of that versus bad engineering 01:55:06.230 --> 01:55:07.270 align:middle line:90% or bad marketing? 01:55:07.270 --> 01:55:10.027 align:middle line:84% JOHN PATRICK: It's a very good question. 01:55:10.027 --> 01:55:11.610 align:middle line:84% And if you didn't hear it in the back, 01:55:11.610 --> 01:55:15.930 align:middle line:84% the question was, how much legal impediment 01:55:15.930 --> 01:55:18.750 align:middle line:90% exists, and is it real or not? 01:55:18.750 --> 01:55:20.190 align:middle line:90% And what can you do about it? 01:55:20.190 --> 01:55:23.010 align:middle line:84% And my experience has been that there 01:55:23.010 --> 01:55:25.550 align:middle line:84% are some real legal impediments, first of all. 01:55:25.550 --> 01:55:27.770 align:middle line:84% There are some states that say, a prescription 01:55:27.770 --> 01:55:30.370 align:middle line:90% must be on a piece of paper. 01:55:30.370 --> 01:55:32.450 align:middle line:90% I mean, they're very specific. 01:55:32.450 --> 01:55:38.210 align:middle line:84% It's almost like, caution-- do not use a computer. 01:55:38.210 --> 01:55:42.630 align:middle line:84% I recently bought a wine cooler, a Uline. 01:55:42.630 --> 01:55:44.470 align:middle line:84% I'm writing a story for my blog about this, 01:55:44.470 --> 01:55:46.410 align:middle line:84% so I'm going to call it Old-line. 01:55:46.410 --> 01:55:52.770 align:middle line:84% And Uline, you click to buy, and this big pop-up that says, 01:55:52.770 --> 01:55:54.370 align:middle line:90% "Caution-- 01:55:54.370 --> 01:55:56.550 align:middle line:84% we do not sell our products on the internet. 01:55:56.550 --> 01:55:59.550 align:middle line:84% And if anybody sells you one over the internet, 01:55:59.550 --> 01:56:04.390 align:middle line:84% be advised that we don't provide any warranty service." 01:56:04.390 --> 01:56:06.830 align:middle line:84% So there are dinosaurs out there. 01:56:06.830 --> 01:56:10.590 align:middle line:84% But to get right to your question, 01:56:10.590 --> 01:56:12.990 align:middle line:84% my experience has been most of the legal impediments 01:56:12.990 --> 01:56:14.710 align:middle line:90% are imagined. 01:56:14.710 --> 01:56:16.377 align:middle line:84% And I ran into this at IBM all the time. 01:56:16.377 --> 01:56:18.043 align:middle line:84% Somebody would come in and say, well, we 01:56:18.043 --> 01:56:19.830 align:middle line:84% can't do this application because there's 01:56:19.830 --> 01:56:21.550 align:middle line:90% a security problem. 01:56:21.550 --> 01:56:23.430 align:middle line:84% I said, well, what's the security problem? 01:56:23.430 --> 01:56:27.030 align:middle line:84% Well, I don't know exactly, but I talked to corporate security, 01:56:27.030 --> 01:56:28.770 align:middle line:90% and they said we can't do that. 01:56:28.770 --> 01:56:31.070 align:middle line:84% I said, well, who did you talk to? 01:56:31.070 --> 01:56:32.250 align:middle line:90% Well, I don't know his name. 01:56:32.250 --> 01:56:34.670 align:middle line:90% Well, get me the name. 01:56:34.670 --> 01:56:35.790 align:middle line:90% I want to talk to them. 01:56:35.790 --> 01:56:37.290 align:middle line:84% And I would call the person and say, 01:56:37.290 --> 01:56:38.957 align:middle line:84% I understand we have a security problem. 01:56:38.957 --> 01:56:41.230 align:middle line:84% Well, actually, I was just cautioning them 01:56:41.230 --> 01:56:42.630 align:middle line:90% about the importance-- 01:56:42.630 --> 01:56:45.130 align:middle line:84% well, can we do this, or can't we do it? 01:56:45.130 --> 01:56:46.930 align:middle line:84% Well, if you do it right, you can do it. 01:56:46.930 --> 01:56:47.692 align:middle line:90% OK, thank you. 01:56:47.692 --> 01:56:48.650 align:middle line:90% So then I get back to-- 01:56:48.650 --> 01:56:50.590 align:middle line:90% OK, we can do it. 01:56:50.590 --> 01:56:53.470 align:middle line:84% And a lot of it is that way, where 01:56:53.470 --> 01:56:56.090 align:middle line:90% it's perceived to be illegal. 01:56:56.090 --> 01:56:57.470 align:middle line:90% Show me the law. 01:56:57.470 --> 01:56:58.770 align:middle line:90% I want to see-- bring it. 01:56:58.770 --> 01:56:59.410 align:middle line:90% I'm serious. 01:56:59.410 --> 01:57:00.190 align:middle line:90% I want to see-- 01:57:00.190 --> 01:57:01.110 align:middle line:84% IRVING WLADAWSKY-BERGER: You're illustrating-- 01:57:01.110 --> 01:57:03.170 align:middle line:84% JOHN PATRICK: Show me the statute. 01:57:03.170 --> 01:57:04.970 align:middle line:90% Where does it say it's illegal? 01:57:04.970 --> 01:57:06.803 align:middle line:84% IRVING WLADAWSKY-BERGER: You're illustrating 01:57:06.803 --> 01:57:10.070 align:middle line:84% a very important principle that John always used, 01:57:10.070 --> 01:57:15.290 align:middle line:84% which is, it's much easier to ask for forgiveness 01:57:15.290 --> 01:57:18.090 align:middle line:90% than to ask for permission. 01:57:18.090 --> 01:57:22.450 align:middle line:84% So go ahead and do it, and then if it turns out 01:57:22.450 --> 01:57:26.650 align:middle line:84% to be the 1% of the time you should have asked beforehand, 01:57:26.650 --> 01:57:28.310 align:middle line:90% you'll ask for forgiveness. 01:57:28.310 --> 01:57:31.090 align:middle line:90% 01:57:31.090 --> 01:57:32.270 align:middle line:90% Am I not correct? 01:57:32.270 --> 01:57:33.490 align:middle line:90% JOHN PATRICK: Yeah, right. 01:57:33.490 --> 01:57:38.210 align:middle line:84% IRVING WLADAWSKY-BERGER: And especially for smart people 01:57:38.210 --> 01:57:43.290 align:middle line:84% in good positions, like you all are and you will have, 01:57:43.290 --> 01:57:47.970 align:middle line:84% almost always, the probability that somebody will stop you 01:57:47.970 --> 01:57:52.850 align:middle line:84% from doing something important is very small. 01:57:52.850 --> 01:57:54.570 align:middle line:90% So you just do it. 01:57:54.570 --> 01:57:57.550 align:middle line:84% And then there will be a small probability, 01:57:57.550 --> 01:58:00.680 align:middle line:84% and then you ask for forgiveness. 01:58:00.680 --> 01:58:03.328 align:middle line:84% And would you say that you operated on that principle? 01:58:03.328 --> 01:58:04.120 align:middle line:90% JOHN PATRICK: Yeah. 01:58:04.120 --> 01:58:06.040 align:middle line:84% I mean, since I've been chairman of the audit 01:58:06.040 --> 01:58:08.360 align:middle line:84% committee of a public company, I've 01:58:08.360 --> 01:58:11.180 align:middle line:84% learned a lot more about this with Sarbanes-Oxley. 01:58:11.180 --> 01:58:12.940 align:middle line:90% And you do have to be compliant. 01:58:12.940 --> 01:58:17.200 align:middle line:84% So I'm not suggesting, ignore the law or ignore compliance. 01:58:17.200 --> 01:58:19.460 align:middle line:84% What I am suggesting is, when somebody tells you 01:58:19.460 --> 01:58:21.800 align:middle line:90% you can't do it, ask them why. 01:58:21.800 --> 01:58:24.140 align:middle line:84% And if they say it's illegal, then show me the law. 01:58:24.140 --> 01:58:25.865 align:middle line:84% If it's a security problem, who says so, 01:58:25.865 --> 01:58:27.240 align:middle line:84% and what is the security problem, 01:58:27.240 --> 01:58:28.880 align:middle line:90% and what are the workarounds? 01:58:28.880 --> 01:58:32.280 align:middle line:84% And if you go back and running a company or an innovation 01:58:32.280 --> 01:58:35.080 align:middle line:84% project, and the compliance person 01:58:35.080 --> 01:58:39.920 align:middle line:84% says you can't do that, then the CEO should get the compliance 01:58:39.920 --> 01:58:42.000 align:middle line:84% person and a marketing person in the room 01:58:42.000 --> 01:58:45.220 align:middle line:84% and say to the marketing person, I want you to be market-driven. 01:58:45.220 --> 01:58:48.800 align:middle line:84% I want you to do the 95% of the things we're not doing. 01:58:48.800 --> 01:58:52.600 align:middle line:84% And compliance person, your job is to make sure we're compliant. 01:58:52.600 --> 01:58:55.780 align:middle line:84% But the burden of proof is on compliance, 01:58:55.780 --> 01:58:59.060 align:middle line:84% not on marketing because if you put the burden of proof 01:58:59.060 --> 01:59:02.300 align:middle line:84% on marketing, most people will wimp out, and nothing gets done. 01:59:02.300 --> 01:59:04.500 align:middle line:90% There's no progress. 01:59:04.500 --> 01:59:06.140 align:middle line:84% So I'll skip over this stuff here 01:59:06.140 --> 01:59:07.520 align:middle line:90% about government and education. 01:59:07.520 --> 01:59:13.700 align:middle line:84% I would just say, overall, that government is not the impediment 01:59:13.700 --> 01:59:14.200 align:middle line:90% here. 01:59:14.200 --> 01:59:15.950 align:middle line:84% Government tends to get blamed for things. 01:59:15.950 --> 01:59:17.660 align:middle line:90% We've been very fortunate. 01:59:17.660 --> 01:59:19.860 align:middle line:84% Al Gore didn't invent the internet, 01:59:19.860 --> 01:59:22.520 align:middle line:90% but he was supportive about it. 01:59:22.520 --> 01:59:25.740 align:middle line:84% And generally speaking, politicians, fortunately, 01:59:25.740 --> 01:59:28.220 align:middle line:84% don't know much about technology, don't know much 01:59:28.220 --> 01:59:29.040 align:middle line:90% about the internet. 01:59:29.040 --> 01:59:32.260 align:middle line:84% And they know something big has happened to the economy because 01:59:32.260 --> 01:59:35.020 align:middle line:84% of the internet, and they've resisted the temptation 01:59:35.020 --> 01:59:36.480 align:middle line:90% to regulate it. 01:59:36.480 --> 01:59:39.380 align:middle line:90% 01:59:39.380 --> 01:59:42.220 align:middle line:84% The bottom line here on this 5% thing 01:59:42.220 --> 01:59:44.320 align:middle line:90% is, the opportunity is enormous. 01:59:44.320 --> 01:59:47.020 align:middle line:90% 01:59:47.020 --> 01:59:52.140 align:middle line:84% The possibility of making people really happy-- 01:59:52.140 --> 01:59:54.328 align:middle line:90% it exists. 01:59:54.328 --> 01:59:55.120 align:middle line:90% Things can be done. 01:59:55.120 --> 01:59:57.120 align:middle line:84% I mean, there are great websites that 01:59:57.120 --> 02:00:00.160 align:middle line:90% are really fun and easy to use. 02:00:00.160 --> 02:00:01.600 align:middle line:84% AUDIENCE: There's an interesting-- 02:00:01.600 --> 02:00:03.740 align:middle line:90% so my bank allows-- 02:00:03.740 --> 02:00:05.680 align:middle line:84% I always had a local bank because my bank 02:00:05.680 --> 02:00:06.597 align:middle line:90% is in Texas somewhere. 02:00:06.597 --> 02:00:08.263 align:middle line:84% But anyway, they switched over, and they 02:00:08.263 --> 02:00:09.555 align:middle line:90% allow you to deposit from home. 02:00:09.555 --> 02:00:11.930 align:middle line:84% So if you get a check, a random check, or whatever it is, 02:00:11.930 --> 02:00:13.680 align:middle line:84% you just scan it in, and it goes right 02:00:13.680 --> 02:00:15.480 align:middle line:90% into your bank account that day. 02:00:15.480 --> 02:00:18.555 align:middle line:84% And so I was mentioning it to a friend of mine, 02:00:18.555 --> 02:00:20.680 align:middle line:84% and he said, well, geez, that's the only reason why 02:00:20.680 --> 02:00:21.722 align:middle line:90% I have a local bank, too. 02:00:21.722 --> 02:00:23.240 align:middle line:90% So he switched totally over. 02:00:23.240 --> 02:00:25.760 align:middle line:84% So I happened to tell my sister-in-law, who 02:00:25.760 --> 02:00:27.400 align:middle line:90% works for the bank. 02:00:27.400 --> 02:00:31.400 align:middle line:84% And she asked me to send her an email explaining it 02:00:31.400 --> 02:00:34.920 align:middle line:84% all because the CEO of the company, I guess, at the bank, 02:00:34.920 --> 02:00:36.660 align:middle line:84% they knew it was kind of a thing, 02:00:36.660 --> 02:00:38.360 align:middle line:84% but they don't have any metric to say if it's [INAUDIBLE] 02:00:38.360 --> 02:00:39.040 align:middle line:90% or worthwhile. 02:00:39.040 --> 02:00:42.520 align:middle line:84% It was just some idea that the IT guys just kind of did. 02:00:42.520 --> 02:00:45.320 align:middle line:84% But they really-- it's not part of their metrics 02:00:45.320 --> 02:00:47.000 align:middle line:84% for success for the company is always 02:00:47.000 --> 02:00:48.140 align:middle line:90% investing, whatever it is. 02:00:48.140 --> 02:00:49.940 align:middle line:90% That's really nothing to do-- 02:00:49.940 --> 02:00:51.760 align:middle line:84% I mean, they can't tell how many people 02:00:51.760 --> 02:00:54.190 align:middle line:84% stopped going to other banks just because they 02:00:54.190 --> 02:00:55.050 align:middle line:90% added this feature. 02:00:55.050 --> 02:00:56.490 align:middle line:90% So it was really interesting. 02:00:56.490 --> 02:00:57.740 align:middle line:90% They had no way to measure it. 02:00:57.740 --> 02:01:00.190 align:middle line:84% That's why they thought it was really cool that somebody 02:01:00.190 --> 02:01:01.030 align:middle line:90% said something. 02:01:01.030 --> 02:01:02.270 align:middle line:90% JOHN PATRICK: Yeah, exactly. 02:01:02.270 --> 02:01:06.350 align:middle line:84% A lot of you used Quicken, probably. 02:01:06.350 --> 02:01:08.390 align:middle line:84% Quicken was started by a guy named Scott 02:01:08.390 --> 02:01:10.570 align:middle line:90% Cook I've known for many years. 02:01:10.570 --> 02:01:12.350 align:middle line:90% He's a brilliant guy. 02:01:12.350 --> 02:01:14.370 align:middle line:90% He's not a technology guy. 02:01:14.370 --> 02:01:17.110 align:middle line:90% He was from Procter & Gamble. 02:01:17.110 --> 02:01:18.910 align:middle line:90% He's a consumer guy. 02:01:18.910 --> 02:01:21.230 align:middle line:84% And he had the idea, he and his wife, 02:01:21.230 --> 02:01:24.110 align:middle line:90% that paying bills could be fun. 02:01:24.110 --> 02:01:28.350 align:middle line:84% And people actually have said that, that I love to use-- 02:01:28.350 --> 02:01:29.790 align:middle line:90% I love to pay my bills. 02:01:29.790 --> 02:01:32.230 align:middle line:90% It's fun with Quicken. 02:01:32.230 --> 02:01:33.250 align:middle line:90% How about iTunes? 02:01:33.250 --> 02:01:35.310 align:middle line:90% Anybody use iTunes? 02:01:35.310 --> 02:01:39.950 align:middle line:84% I mean, it's an easy-to-use, intuitive application. 02:01:39.950 --> 02:01:43.050 align:middle line:84% So again, it's not a technical problem. 02:01:43.050 --> 02:01:44.970 align:middle line:90% It's an attitudinal problem. 02:01:44.970 --> 02:01:46.210 align:middle line:90% The opportunity is huge. 02:01:46.210 --> 02:01:50.310 align:middle line:84% I think the big issue is, are you 02:01:50.310 --> 02:01:52.730 align:middle line:84% going to accommodate the internet, 02:01:52.730 --> 02:01:56.410 align:middle line:84% or are you going to provide on-demand service? 02:01:56.410 --> 02:01:57.910 align:middle line:90% Those are the two alternatives. 02:01:57.910 --> 02:02:01.570 align:middle line:84% Accommodation is where, I think, many companies still are. 02:02:01.570 --> 02:02:03.045 align:middle line:90% Oh, yeah, we have a website. 02:02:03.045 --> 02:02:04.670 align:middle line:84% We have some of our products available. 02:02:04.670 --> 02:02:07.610 align:middle line:84% Part of our catalog is actually on the internet. 02:02:07.610 --> 02:02:10.810 align:middle line:90% But it's not a total commitment. 02:02:10.810 --> 02:02:13.090 align:middle line:90% On-demand is a different idea. 02:02:13.090 --> 02:02:17.090 align:middle line:84% On-demand means that all of the processes 02:02:17.090 --> 02:02:21.650 align:middle line:84% and all of the data for all of the constituencies 02:02:21.650 --> 02:02:26.550 align:middle line:84% are available for those that are authorized, wherever they are, 02:02:26.550 --> 02:02:28.850 align:middle line:84% whenever they want, on whatever kind of device 02:02:28.850 --> 02:02:31.850 align:middle line:84% they may be using to connect to the internet. 02:02:31.850 --> 02:02:34.690 align:middle line:84% That's my definition of on-demand. 02:02:34.690 --> 02:02:37.030 align:middle line:90% Now, that's easy to say. 02:02:37.030 --> 02:02:39.930 align:middle line:84% It's hard to do, but it is doable. 02:02:39.930 --> 02:02:41.190 align:middle line:90% It just takes a commitment. 02:02:41.190 --> 02:02:44.170 align:middle line:84% If you have that commitment, that the internet is 02:02:44.170 --> 02:02:46.490 align:middle line:84% your primary relationship mechanism 02:02:46.490 --> 02:02:49.330 align:middle line:84% for all constituencies, you're on the way 02:02:49.330 --> 02:02:51.870 align:middle line:84% to becoming an on-demand business. 02:02:51.870 --> 02:02:56.180 align:middle line:84% And that's where the bar is, in my opinion. 02:02:56.180 --> 02:02:57.930 align:middle line:84% I want to make a comment about the bubble, 02:02:57.930 --> 02:03:01.310 align:middle line:84% and then I'm going to move into where I see the internet going. 02:03:01.310 --> 02:03:02.770 align:middle line:90% There definitely was a bubble. 02:03:02.770 --> 02:03:04.863 align:middle line:84% Some of you may have been part of it. 02:03:04.863 --> 02:03:06.530 align:middle line:84% We all were affected one way or another. 02:03:06.530 --> 02:03:10.110 align:middle line:84% A lot of people lost jobs and money and so on. 02:03:10.110 --> 02:03:14.070 align:middle line:84% So it's typically called the internet bubble. 02:03:14.070 --> 02:03:16.830 align:middle line:90% This is '99, 2000, 2001. 02:03:16.830 --> 02:03:20.070 align:middle line:84% And my point is that internet had nothing to do with it. 02:03:20.070 --> 02:03:24.310 align:middle line:84% The internet gave people a lot of enthusiasm for new ideas, 02:03:24.310 --> 02:03:26.330 align:middle line:84% but their ideas got out of control. 02:03:26.330 --> 02:03:29.150 align:middle line:84% They had ideas to make water run uphill. 02:03:29.150 --> 02:03:31.710 align:middle line:84% They had application service provider applications 02:03:31.710 --> 02:03:34.050 align:middle line:84% to solve problems that weren't problems, 02:03:34.050 --> 02:03:35.910 align:middle line:84% or they had ideas that they were going 02:03:35.910 --> 02:03:37.530 align:middle line:84% to integrate all the supply chains, 02:03:37.530 --> 02:03:40.410 align:middle line:84% but the individual pieces were not automated, 02:03:40.410 --> 02:03:42.830 align:middle line:84% so how are they going to integrate the whole thing? 02:03:42.830 --> 02:03:46.790 align:middle line:84% A lot of problems that weren't problems or couldn't be solved. 02:03:46.790 --> 02:03:50.100 align:middle line:84% So what we're left with is the same economy we've always had. 02:03:50.100 --> 02:03:52.060 align:middle line:90% The internet is the new tool. 02:03:52.060 --> 02:03:55.340 align:middle line:84% And are we on the way to bubble number two? 02:03:55.340 --> 02:03:57.620 align:middle line:90% A lot of people think we are. 02:03:57.620 --> 02:04:00.540 align:middle line:84% I'm an investor in a number of startups 02:04:00.540 --> 02:04:02.260 align:middle line:84% through a group called First-Round 02:04:02.260 --> 02:04:04.880 align:middle line:90% Capital and some other things. 02:04:04.880 --> 02:04:08.340 align:middle line:84% And so I see quarterly investment reviews 02:04:08.340 --> 02:04:09.960 align:middle line:90% of a lot of small companies. 02:04:09.960 --> 02:04:11.960 align:middle line:84% And there is a lot of enthusiasm. 02:04:11.960 --> 02:04:15.560 align:middle line:84% Frankly, it does feel like 1999 in many respects. 02:04:15.560 --> 02:04:20.420 align:middle line:84% But the difference is that investors are smarter, 02:04:20.420 --> 02:04:22.420 align:middle line:90% and entrepreneurs are smarter. 02:04:22.420 --> 02:04:25.340 align:middle line:84% And they know they need to have a business model. 02:04:25.340 --> 02:04:28.680 align:middle line:84% Back in '99, people would say, oh, revenue is great. 02:04:28.680 --> 02:04:29.860 align:middle line:90% We have $50 million. 02:04:29.860 --> 02:04:32.275 align:middle line:84% You got $50 million of revenue from customers? 02:04:32.275 --> 02:04:33.400 align:middle line:90% Oh, no, not from customers. 02:04:33.400 --> 02:04:35.580 align:middle line:90% It's venture capital. 02:04:35.580 --> 02:04:37.200 align:middle line:90% They thought of it as revenue. 02:04:37.200 --> 02:04:38.660 align:middle line:90% [LAUGHTER] 02:04:38.660 --> 02:04:39.380 align:middle line:90% 02:04:39.380 --> 02:04:40.820 align:middle line:84% That was the name of the game was 02:04:40.820 --> 02:04:43.500 align:middle line:90% to get the investment capital. 02:04:43.500 --> 02:04:44.917 align:middle line:84% They don't think that way anymore. 02:04:44.917 --> 02:04:46.500 align:middle line:84% I mean, it's still trying to get that, 02:04:46.500 --> 02:04:48.360 align:middle line:84% but they know they have to get real revenue. 02:04:48.360 --> 02:04:50.700 align:middle line:84% IRVING WLADAWSKY-BERGER: [? ABCs ?] won't let them now. 02:04:50.700 --> 02:04:51.807 align:middle line:90% Isn't that correct? 02:04:51.807 --> 02:04:52.640 align:middle line:90% JOHN PATRICK: Right. 02:04:52.640 --> 02:04:54.460 align:middle line:84% IRVING WLADAWSKY-BERGER: For some reason, then, they did. 02:04:54.460 --> 02:04:55.420 align:middle line:90% JOHN PATRICK: They did. 02:04:55.420 --> 02:04:55.920 align:middle line:90% Yeah. 02:04:55.920 --> 02:04:58.720 align:middle line:90% It was la-la land. 02:04:58.720 --> 02:05:00.660 align:middle line:90% It was magic. 02:05:00.660 --> 02:05:02.960 align:middle line:90% So let's go on to the internet. 02:05:02.960 --> 02:05:05.840 align:middle line:84% Years ago, my team and I came up with this little structure 02:05:05.840 --> 02:05:07.340 align:middle line:90% here of these seven things. 02:05:07.340 --> 02:05:08.640 align:middle line:90% This is arbitrary. 02:05:08.640 --> 02:05:11.040 align:middle line:84% It's a way to parse the opportunity of what's 02:05:11.040 --> 02:05:13.120 align:middle line:84% happening in the internet, and it's just 02:05:13.120 --> 02:05:14.180 align:middle line:90% a way to talk about it. 02:05:14.180 --> 02:05:16.405 align:middle line:84% So some of the things I'll discuss 02:05:16.405 --> 02:05:17.780 align:middle line:84% could be in any of these buckets. 02:05:17.780 --> 02:05:21.440 align:middle line:84% Let's start with speed, bandwidth. 02:05:21.440 --> 02:05:23.240 align:middle line:90% Some people worry about this. 02:05:23.240 --> 02:05:25.640 align:middle line:84% Are we going to run out of bandwidth? 02:05:25.640 --> 02:05:28.040 align:middle line:84% The first thing that may surprise you-- how 02:05:28.040 --> 02:05:31.580 align:middle line:84% do you think America, where we are at the moment, 02:05:31.580 --> 02:05:36.760 align:middle line:84% ranks in the world in terms of the availability of bandwidth? 02:05:36.760 --> 02:05:38.200 align:middle line:90% Anybody know? 02:05:38.200 --> 02:05:39.760 align:middle line:90% Four? 02:05:39.760 --> 02:05:41.880 align:middle line:90% I wish it was that good. 02:05:41.880 --> 02:05:44.980 align:middle line:90% 15, most people say, 15th. 02:05:44.980 --> 02:05:48.700 align:middle line:84% You go to Scandinavia or to Korea, 02:05:48.700 --> 02:05:57.140 align:middle line:84% or to many parts of Asia and Europe, Brazil, it's better. 02:05:57.140 --> 02:05:58.460 align:middle line:90% Why is it better? 02:05:58.460 --> 02:06:02.820 align:middle line:84% They don't have as many lawyers is my short answer. 02:06:02.820 --> 02:06:09.300 align:middle line:84% The lobbying efforts to protect market positions is huge. 02:06:09.300 --> 02:06:11.520 align:middle line:84% And while they argue competition, 02:06:11.520 --> 02:06:14.500 align:middle line:84% they really want protection, most of the operators. 02:06:14.500 --> 02:06:17.540 align:middle line:84% Some people feel the operators are going to disappear, 02:06:17.540 --> 02:06:20.160 align:middle line:84% that Google is going to lead the way, 02:06:20.160 --> 02:06:22.580 align:middle line:84% and others will move into this new spectrum 02:06:22.580 --> 02:06:24.980 align:middle line:84% and that Verizon, Comcast, and AT&T, 02:06:24.980 --> 02:06:27.080 align:middle line:84% and T-Mobile, they'll go belly-up. 02:06:27.080 --> 02:06:29.540 align:middle line:90% I'm not so sure of that, myself. 02:06:29.540 --> 02:06:32.040 align:middle line:84% But I do know that we're going to have dramatic changes 02:06:32.040 --> 02:06:38.780 align:middle line:84% because the way we are right now is not good for America. 02:06:38.780 --> 02:06:43.450 align:middle line:84% There is some hope in the area of the power line grid. 02:06:43.450 --> 02:06:45.330 align:middle line:84% The power line grid can deliver broadband 02:06:45.330 --> 02:06:47.170 align:middle line:90% into the home or business. 02:06:47.170 --> 02:06:52.890 align:middle line:84% It's called BPL, Broadband Power Line. 02:06:52.890 --> 02:06:54.710 align:middle line:90% You can buy BPL modems today. 02:06:54.710 --> 02:06:57.210 align:middle line:84% Linksys makes them, and others do. 02:06:57.210 --> 02:06:58.350 align:middle line:90% So it's an alternative. 02:06:58.350 --> 02:07:00.330 align:middle line:84% But unfortunately, the electric companies 02:07:00.330 --> 02:07:02.450 align:middle line:90% are not very good at marketing. 02:07:02.450 --> 02:07:04.490 align:middle line:84% And even though they've separated distribution 02:07:04.490 --> 02:07:07.370 align:middle line:84% from production and, in theory, could really 02:07:07.370 --> 02:07:09.770 align:middle line:84% go after this market, they haven't 02:07:09.770 --> 02:07:13.530 align:middle line:84% had the will and the experience to be able to do it. 02:07:13.530 --> 02:07:15.370 align:middle line:84% Now, assuming we get everybody hooked up 02:07:15.370 --> 02:07:18.570 align:middle line:84% with lots of bandwidth, can the backbone handle it? 02:07:18.570 --> 02:07:22.650 align:middle line:84% My good friend Bob Metcalf predicted about eight years ago 02:07:22.650 --> 02:07:25.330 align:middle line:84% that the internet was going to collapse, and a lot of people 02:07:25.330 --> 02:07:27.770 align:middle line:84% were watching the packets flying around the internet 02:07:27.770 --> 02:07:30.270 align:middle line:90% and measuring impact on routers. 02:07:30.270 --> 02:07:32.870 align:middle line:84% And there was a belief that, at the current growth rate, 02:07:32.870 --> 02:07:34.930 align:middle line:90% it would fall apart. 02:07:34.930 --> 02:07:37.890 align:middle line:84% But people at Global Crossings and other telcos 02:07:37.890 --> 02:07:41.550 align:middle line:84% know very well that there's still a lot of dark fiber 02:07:41.550 --> 02:07:42.330 align:middle line:90% out there. 02:07:42.330 --> 02:07:46.590 align:middle line:84% And you see things coming out from some of the operators 02:07:46.590 --> 02:07:49.325 align:middle line:84% making accusations that voiceover internet is 02:07:49.325 --> 02:07:50.450 align:middle line:90% going to ruin the internet. 02:07:50.450 --> 02:07:52.590 align:middle line:90% It's going to bring it down. 02:07:52.590 --> 02:07:55.710 align:middle line:84% A friend of mine made a calculation that if every phone 02:07:55.710 --> 02:07:58.730 align:middle line:84% in the world, every phone-- every cell phone, 02:07:58.730 --> 02:08:01.870 align:middle line:84% every landline phone, every phone of any kind-- 02:08:01.870 --> 02:08:06.270 align:middle line:84% was online, talking, everybody that had a phone was talking 02:08:06.270 --> 02:08:12.110 align:middle line:84% at once over the internet, that it wouldn't-- it's not even 02:08:12.110 --> 02:08:16.470 align:middle line:84% a fraction of a percentage of the available fiber. 02:08:16.470 --> 02:08:17.730 align:middle line:90% So it's a smokescreen. 02:08:17.730 --> 02:08:21.190 align:middle line:90% There's plenty of capacity. 02:08:21.190 --> 02:08:24.430 align:middle line:84% Torrents of bits-- the nature of the traffic 02:08:24.430 --> 02:08:26.270 align:middle line:90% is changing dramatically. 02:08:26.270 --> 02:08:29.670 align:middle line:84% BitTorrent-- some of you probably use BitTorrent. 02:08:29.670 --> 02:08:33.570 align:middle line:84% BitTorrent is now delivering not just games, but also movies, 02:08:33.570 --> 02:08:36.190 align:middle line:84% copies of operating systems, browser 02:08:36.190 --> 02:08:39.290 align:middle line:90% software, large amounts of code. 02:08:39.290 --> 02:08:41.190 align:middle line:90% It's a very effective way. 02:08:41.190 --> 02:08:43.610 align:middle line:90% It's a distributed protocol. 02:08:43.610 --> 02:08:46.330 align:middle line:84% A lot of it was developed here at MIT, actually. 02:08:46.330 --> 02:08:50.310 align:middle line:84% And it's open, and kids know how to use it. 02:08:50.310 --> 02:08:52.990 align:middle line:84% So bottlenecks are moving around, but in the bottom line, 02:08:52.990 --> 02:08:58.570 align:middle line:84% when it comes to speed, I would say it's not an issue. 02:08:58.570 --> 02:09:01.890 align:middle line:84% Always on is the second of the seven. 02:09:01.890 --> 02:09:04.363 align:middle line:90% Dial is pretty much gone. 02:09:04.363 --> 02:09:06.030 align:middle line:84% There's more of it than you would think. 02:09:06.030 --> 02:09:09.210 align:middle line:84% There still are millions of people who say, 02:09:09.210 --> 02:09:11.410 align:middle line:90% dial up is good enough for me. 02:09:11.410 --> 02:09:14.510 align:middle line:84% Maybe YouTube will change them, win them over. 02:09:14.510 --> 02:09:17.630 align:middle line:84% But there's always the trailing majority, 02:09:17.630 --> 02:09:18.990 align:middle line:90% but dial is pretty much gone. 02:09:18.990 --> 02:09:20.390 align:middle line:90% But the new way of thinking-- 02:09:20.390 --> 02:09:23.210 align:middle line:90% I call it IP everything. 02:09:23.210 --> 02:09:27.010 align:middle line:84% And IP everything is just what the name implies. 02:09:27.010 --> 02:09:28.610 align:middle line:84% And those of us that have been hanging 02:09:28.610 --> 02:09:29.970 align:middle line:84% around the internet for a long time 02:09:29.970 --> 02:09:31.410 align:middle line:84% have always known that television 02:09:31.410 --> 02:09:34.810 align:middle line:84% would be just another thing on the internet. 02:09:34.810 --> 02:09:36.880 align:middle line:84% We've always known that telephony would all 02:09:36.880 --> 02:09:37.780 align:middle line:90% be on the internet. 02:09:37.780 --> 02:09:42.600 align:middle line:84% You cannot justify a network other than the internet. 02:09:42.600 --> 02:09:47.680 align:middle line:84% And at one time, there were 50-some proprietary, very good-- 02:09:47.680 --> 02:09:51.680 align:middle line:84% Apple Link and [? DEC ?] Link and IBM's SNA. 02:09:51.680 --> 02:09:54.640 align:middle line:84% And there were a large number, maybe 100. 02:09:54.640 --> 02:09:58.080 align:middle line:84% But now there's one, TCP/IP, the internet. 02:09:58.080 --> 02:10:00.060 align:middle line:84% And it's not just to connect computers. 02:10:00.060 --> 02:10:01.720 align:middle line:84% It's to connect all these things. 02:10:01.720 --> 02:10:05.680 align:middle line:84% It's to create an internet inside of your home. 02:10:05.680 --> 02:10:09.960 align:middle line:84% So when your phone beeps, and you authenticate 02:10:09.960 --> 02:10:13.080 align:middle line:84% through the firewall, which is protecting 02:10:13.080 --> 02:10:15.740 align:middle line:84% against unwanted intrusion to your home, 02:10:15.740 --> 02:10:17.240 align:middle line:84% then you can unlock the door and let 02:10:17.240 --> 02:10:20.320 align:middle line:84% the repairman come in to work on the boiler 02:10:20.320 --> 02:10:22.040 align:middle line:90% or whatever it might be. 02:10:22.040 --> 02:10:25.060 align:middle line:84% You can turn on your spa when you're on your way home. 02:10:25.060 --> 02:10:26.420 align:middle line:90% You can check your security. 02:10:26.420 --> 02:10:29.560 align:middle line:84% If you have a security issue, you can deal with it remotely. 02:10:29.560 --> 02:10:33.640 align:middle line:84% And so everything is firewalled to protect 02:10:33.640 --> 02:10:35.620 align:middle line:84% against unwanted intrusion, but everything 02:10:35.620 --> 02:10:37.780 align:middle line:90% is connected to the internet. 02:10:37.780 --> 02:10:43.180 align:middle line:84% Did any of you use Fios, the Verizon fiber optic? 02:10:43.180 --> 02:10:44.220 align:middle line:90% Yeah. 02:10:44.220 --> 02:10:47.040 align:middle line:84% I would give anything to have it. 02:10:47.040 --> 02:10:48.860 align:middle line:84% In the early days of broadband, people 02:10:48.860 --> 02:10:52.900 align:middle line:84% used to say, if you don't have broadband where you live, move. 02:10:52.900 --> 02:10:55.720 align:middle line:84% And some people say that now about Fios. 02:10:55.720 --> 02:10:57.540 align:middle line:84% You've got to move somewhere that has it 02:10:57.540 --> 02:11:00.140 align:middle line:84% because it is so incredibly fast. 02:11:00.140 --> 02:11:02.480 align:middle line:84% And so we're living in a slow world right now, 02:11:02.480 --> 02:11:05.460 align:middle line:90% but it's going to change. 02:11:05.460 --> 02:11:08.260 align:middle line:84% Wi-Fi-- a lot of discussion going 02:11:08.260 --> 02:11:10.800 align:middle line:90% on about the future of Wi-Fi. 02:11:10.800 --> 02:11:15.180 align:middle line:84% And some people think of it as Starbucks. 02:11:15.180 --> 02:11:16.165 align:middle line:90% Yeah, go ahead. 02:11:16.165 --> 02:11:18.540 align:middle line:84% AUDIENCE: So I had a question about IT [? at the time. ?] 02:11:18.540 --> 02:11:19.332 align:middle line:90% JOHN PATRICK: Sure. 02:11:19.332 --> 02:11:23.980 align:middle line:84% AUDIENCE: One of the follies of having 02:11:23.980 --> 02:11:28.180 align:middle line:84% everything on the same network is robustness because, 02:11:28.180 --> 02:11:29.900 align:middle line:84% if everything is connected there, 02:11:29.900 --> 02:11:32.060 align:middle line:90% what do you do if it goes down? 02:11:32.060 --> 02:11:34.440 align:middle line:84% Your everything is down by that, right? 02:11:34.440 --> 02:11:36.640 align:middle line:90% JOHN PATRICK: Yeah, yeah. 02:11:36.640 --> 02:11:40.000 align:middle line:84% The internet's a very distributed network. 02:11:40.000 --> 02:11:46.040 align:middle line:84% And it was devised in the '50s by a guy named Paul Baran who 02:11:46.040 --> 02:11:49.600 align:middle line:84% was doing a lot of thinking about the Cold War and what 02:11:49.600 --> 02:11:53.260 align:middle line:84% would happen if the Russian missiles hit America. 02:11:53.260 --> 02:11:54.920 align:middle line:90% How would we communicate? 02:11:54.920 --> 02:11:58.000 align:middle line:84% And he had this simple idea that we could take messages and break 02:11:58.000 --> 02:12:01.880 align:middle line:90% them up into pieces, packets. 02:12:01.880 --> 02:12:04.360 align:middle line:84% And the packets could be distributed from point A 02:12:04.360 --> 02:12:08.440 align:middle line:84% to point B, not directly, but by going from New York, 02:12:08.440 --> 02:12:12.720 align:middle line:84% to Dallas, to Chicago, to Phoenix, to San Francisco. 02:12:12.720 --> 02:12:15.960 align:middle line:84% And if one of those points got blown up, 02:12:15.960 --> 02:12:17.900 align:middle line:84% the packets would just get rerouted. 02:12:17.900 --> 02:12:19.720 align:middle line:84% Maybe you'd lose a packet or two, 02:12:19.720 --> 02:12:21.880 align:middle line:84% but you don't lose the whole message. 02:12:21.880 --> 02:12:25.240 align:middle line:84% On 9/11, a lot of routers were blown up in New York. 02:12:25.240 --> 02:12:27.400 align:middle line:90% The internet did not shut down. 02:12:27.400 --> 02:12:29.420 align:middle line:84% So there's not a single point of failure. 02:12:29.420 --> 02:12:32.270 align:middle line:84% It's a very highly distributed network, 02:12:32.270 --> 02:12:33.930 align:middle line:84% and there are a lot of subnetworks. 02:12:33.930 --> 02:12:36.832 align:middle line:84% So that IP everything chart I showed within your house-- 02:12:36.832 --> 02:12:38.790 align:middle line:84% the network might go down inside of your house. 02:12:38.790 --> 02:12:40.550 align:middle line:84% That doesn't bring the internet down. 02:12:40.550 --> 02:12:42.258 align:middle line:84% AUDIENCE: No, no, that's not what I mean. 02:12:42.258 --> 02:12:45.410 align:middle line:84% I meant from a person's perspective, 02:12:45.410 --> 02:12:51.910 align:middle line:84% if all his appliances are on the network, on the same network, 02:12:51.910 --> 02:12:55.910 align:middle line:84% and then somehow his connection to the network is gone. 02:12:55.910 --> 02:12:56.890 align:middle line:90% He's just gone. 02:12:56.890 --> 02:12:58.870 align:middle line:90% He's nowhere connected. 02:12:58.870 --> 02:13:00.990 align:middle line:84% But right now, if we have a cell phone 02:13:00.990 --> 02:13:05.310 align:middle line:84% network and an internet network and the telephone network 02:13:05.310 --> 02:13:07.070 align:middle line:84% and maybe something else, then we 02:13:07.070 --> 02:13:10.098 align:middle line:84% are at least connected to the outside world through something. 02:13:10.098 --> 02:13:10.890 align:middle line:90% JOHN PATRICK: Yeah. 02:13:10.890 --> 02:13:12.390 align:middle line:90% No, I see your point. 02:13:12.390 --> 02:13:17.310 align:middle line:84% So at the point at which you become dependent-- 02:13:17.310 --> 02:13:21.110 align:middle line:84% so if you can't have dinner if the internet's down, 02:13:21.110 --> 02:13:22.210 align:middle line:90% then that's a problem. 02:13:22.210 --> 02:13:26.070 align:middle line:84% So with electricity, a lot of people have generators. 02:13:26.070 --> 02:13:31.530 align:middle line:84% With networks, today people say, well, I can wait. 02:13:31.530 --> 02:13:35.610 align:middle line:84% Other people say, I can't wait, so they have a backup. 02:13:35.610 --> 02:13:39.330 align:middle line:84% And their backup may be cellular, so it's slow. 02:13:39.330 --> 02:13:42.670 align:middle line:84% So I have Verizon EV-DO on this ThinkPad. 02:13:42.670 --> 02:13:45.270 align:middle line:84% So if I lose my Comcast high-speed internet, 02:13:45.270 --> 02:13:47.450 align:middle line:84% I don't lose the internet because I have this. 02:13:47.450 --> 02:13:50.227 align:middle line:84% Now, this doesn't provide networking to the whole house, 02:13:50.227 --> 02:13:51.810 align:middle line:84% but I don't really care because I know 02:13:51.810 --> 02:13:53.350 align:middle line:90% it's a short-term interruption. 02:13:53.350 --> 02:13:56.370 align:middle line:84% If I did care, then I could share this connection, 02:13:56.370 --> 02:14:01.770 align:middle line:84% or I could put a cellular substation in my network closet 02:14:01.770 --> 02:14:03.290 align:middle line:90% for backup purposes. 02:14:03.290 --> 02:14:04.970 align:middle line:90% I could split my router. 02:14:04.970 --> 02:14:07.090 align:middle line:90% I could have multiple switches. 02:14:07.090 --> 02:14:11.570 align:middle line:84% I could have-- you can have all the redundancy you want. 02:14:11.570 --> 02:14:16.490 align:middle line:84% But today, most people say, it's not worth it. 02:14:16.490 --> 02:14:16.990 align:middle line:90% Yeah? 02:14:16.990 --> 02:14:20.050 align:middle line:84% AUDIENCE: Is that even be an issue with wireless mesh 02:14:20.050 --> 02:14:22.750 align:middle line:90% networking becoming prevalent? 02:14:22.750 --> 02:14:27.530 align:middle line:84% I mean, we have WiMAX and meshes of WiMAX everywhere. 02:14:27.530 --> 02:14:29.490 align:middle line:84% I mean, it's not even going to be an issue. 02:14:29.490 --> 02:14:32.610 align:middle line:84% I mean, we'll have always-on internet everywhere. 02:14:32.610 --> 02:14:34.710 align:middle line:84% JOHN PATRICK: Well, I think so, but there will be 02:14:34.710 --> 02:14:38.230 align:middle line:90% pockets that will take a hit. 02:14:38.230 --> 02:14:42.930 align:middle line:84% If a town gets-- if a town loses its electricity, 02:14:42.930 --> 02:14:44.730 align:middle line:84% the mesh in that town could go down. 02:14:44.730 --> 02:14:49.550 align:middle line:84% I mean, it depends on how important it is. 02:14:49.550 --> 02:14:53.550 align:middle line:84% And military and defense security applications-- 02:14:53.550 --> 02:14:57.710 align:middle line:84% they're going to have multiple levels of redundancy. 02:14:57.710 --> 02:15:00.190 align:middle line:84% As a person or a business, you can have whatever 02:15:00.190 --> 02:15:02.310 align:middle line:90% redundancy you can afford. 02:15:02.310 --> 02:15:03.012 align:middle line:90% And I agree. 02:15:03.012 --> 02:15:04.970 align:middle line:84% With mesh, it's going to get better and better. 02:15:04.970 --> 02:15:07.530 align:middle line:84% And in fact, that's the thing about Wi-Fi. 02:15:07.530 --> 02:15:08.690 align:middle line:90% There's a lot more to this. 02:15:08.690 --> 02:15:12.230 align:middle line:84% And a lot of people are asking about WiMAX. 02:15:12.230 --> 02:15:15.190 align:middle line:90% Does WiMAX replace Wi-Fi? 02:15:15.190 --> 02:15:18.950 align:middle line:84% And the answer is, it depends on what you believe. 02:15:18.950 --> 02:15:23.270 align:middle line:84% Intel would like for WiMAX to replace Wi-Fi. 02:15:23.270 --> 02:15:25.040 align:middle line:84% They have a big vested interest in it. 02:15:25.040 --> 02:15:28.660 align:middle line:84% They've invested a lot of people and money into it. 02:15:28.660 --> 02:15:30.800 align:middle line:84% They're working with people like Sprint. 02:15:30.800 --> 02:15:33.900 align:middle line:84% Sprint is building out a WiMAX network. 02:15:33.900 --> 02:15:37.340 align:middle line:84% It sounds great, but it's not a sure thing 02:15:37.340 --> 02:15:39.620 align:middle line:84% because the business model is not proven. 02:15:39.620 --> 02:15:44.500 align:middle line:84% And you've got entrenched giants who 02:15:44.500 --> 02:15:48.140 align:middle line:84% do not want advanced wireless networking, people 02:15:48.140 --> 02:15:52.300 align:middle line:84% like Verizon, and AT&T, and Comcast, and many others. 02:15:52.300 --> 02:15:55.940 align:middle line:84% In Philadelphia, the CIO thought it'd 02:15:55.940 --> 02:15:59.860 align:middle line:84% be a really great idea to blanket Philadelphia with Wi-Fi, 02:15:59.860 --> 02:16:02.620 align:middle line:90% 85 square miles. 02:16:02.620 --> 02:16:06.580 align:middle line:84% They believe, in Philadelphia, that by having Wi-Fi available 02:16:06.580 --> 02:16:09.840 align:middle line:84% everywhere, that education will be improved. 02:16:09.840 --> 02:16:11.325 align:middle line:90% Businesses will come to town. 02:16:11.325 --> 02:16:12.700 align:middle line:84% There'll never be an issue about, 02:16:12.700 --> 02:16:14.877 align:middle line:84% can you get connected if you're in Philadelphia? 02:16:14.877 --> 02:16:16.460 align:middle line:84% They really believe it'd be a big shot 02:16:16.460 --> 02:16:17.900 align:middle line:90% in the arm for the economy. 02:16:17.900 --> 02:16:19.340 align:middle line:90% Guess who opposed it? 02:16:19.340 --> 02:16:21.280 align:middle line:90% Verizon. 02:16:21.280 --> 02:16:23.040 align:middle line:84% Verizon, says that's our bailiwick. 02:16:23.040 --> 02:16:25.480 align:middle line:84% And they've been lobbying intensely 02:16:25.480 --> 02:16:28.080 align:middle line:84% to get states to pass laws to make it 02:16:28.080 --> 02:16:33.820 align:middle line:84% against the law for a public government to offer Wi-Fi. 02:16:33.820 --> 02:16:38.680 align:middle line:84% And I think 17 states have got some form of legislation now. 02:16:38.680 --> 02:16:43.080 align:middle line:90% So there are issues in the US. 02:16:43.080 --> 02:16:49.080 align:middle line:84% Meanwhile, what's flabbergasting to me is that, in France-- 02:16:49.080 --> 02:16:51.400 align:middle line:84% when I spoke at the World Wide Web Conference 02:16:51.400 --> 02:16:55.280 align:middle line:84% in France in 1994, they were like, 02:16:55.280 --> 02:16:57.920 align:middle line:90% the internet is not for us. 02:16:57.920 --> 02:17:02.480 align:middle line:84% And 20% of all meetings had to be in English, 02:17:02.480 --> 02:17:04.100 align:middle line:90% and that included websites. 02:17:04.100 --> 02:17:08.799 align:middle line:84% So they sued Georgia Tech that had a campus in Paris 02:17:08.799 --> 02:17:10.280 align:middle line:84% because the web server didn't have 02:17:10.280 --> 02:17:13.440 align:middle line:90% 20% of its content in French. 02:17:13.440 --> 02:17:16.639 align:middle line:84% Now, fast-forward 10 years, France 02:17:16.639 --> 02:17:20.040 align:middle line:84% has partnered with the electric utilities, 02:17:20.040 --> 02:17:23.100 align:middle line:84% and they are blanketing France with Wi-Fi 02:17:23.100 --> 02:17:28.219 align:middle line:90% in every town of France. 02:17:28.219 --> 02:17:34.139 align:middle line:84% And they're offering 100-megabit broadband at less than we pay 02:17:34.139 --> 02:17:35.940 align:middle line:90% for rinky-dink-- 02:17:35.940 --> 02:17:39.559 align:middle line:84% what Comcast and others call broadband, 02:17:39.559 --> 02:17:41.080 align:middle line:90% which really isn't broadband. 02:17:41.080 --> 02:17:45.180 align:middle line:84% So the Europeans, who were way behind, are now-- 02:17:45.180 --> 02:17:46.240 align:middle line:90% and Germany is doing it. 02:17:46.240 --> 02:17:47.160 align:middle line:90% Norway is doing it. 02:17:47.160 --> 02:17:49.219 align:middle line:84% They're partnering with the electric companies 02:17:49.219 --> 02:17:53.379 align:middle line:84% to blanket their countries with Wi-Fi and very, very 02:17:53.379 --> 02:17:55.459 align:middle line:90% high-speed service. 02:17:55.459 --> 02:17:56.059 align:middle line:90% Yeah? 02:17:56.059 --> 02:17:57.820 align:middle line:84% AUDIENCE: I was going to ask if-- 02:17:57.820 --> 02:18:00.139 align:middle line:84% Cambridge is just-- they're in the process 02:18:00.139 --> 02:18:01.600 align:middle line:90% of doing the same thing. 02:18:01.600 --> 02:18:04.660 align:middle line:84% It's called the Cambridge Public Internet. 02:18:04.660 --> 02:18:08.700 align:middle line:84% I'm just wondering if they've seen that sort of push-back 02:18:08.700 --> 02:18:10.700 align:middle line:90% from the big telcos, as well? 02:18:10.700 --> 02:18:13.480 align:middle line:84% JOHN PATRICK: I suspect that they have. 02:18:13.480 --> 02:18:18.330 align:middle line:84% But Cambridge has let's say the right-- 02:18:18.330 --> 02:18:21.129 align:middle line:84% I don't know what the right word is, but the credibility 02:18:21.129 --> 02:18:22.270 align:middle line:90% to do something like that. 02:18:22.270 --> 02:18:27.410 align:middle line:84% They've had mesh Wi-Fi in Cambridge for years. 02:18:27.410 --> 02:18:30.450 align:middle line:84% They call it Roofnet, I think it's called-- yeah, Roofnet. 02:18:30.450 --> 02:18:33.490 align:middle line:84% And San Francisco has credibility, 02:18:33.490 --> 02:18:36.690 align:middle line:84% being near Silicon Valley and being kind of a mini Silicon 02:18:36.690 --> 02:18:38.110 align:middle line:90% Valley itself. 02:18:38.110 --> 02:18:41.270 align:middle line:84% And they're moving forward, and Google is fueling the flames. 02:18:41.270 --> 02:18:42.790 align:middle line:90% So it's beginning to happen. 02:18:42.790 --> 02:18:45.549 align:middle line:84% But compared to-- Europe is way ahead of us on this, 02:18:45.549 --> 02:18:48.730 align:middle line:90% unfortunately. 02:18:48.730 --> 02:18:53.350 align:middle line:84% Wi-Fi-- I don't know if you know about the Pringles can antenna-- 02:18:53.350 --> 02:18:57.809 align:middle line:84% do you know about this?-- where kids have taken a Pringles can, 02:18:57.809 --> 02:19:01.889 align:middle line:84% $6.45 worth of parts, and constructed what is called 02:19:01.889 --> 02:19:06.650 align:middle line:84% a Yagi antenna, which, when strapped onto the back porch, 02:19:06.650 --> 02:19:10.889 align:middle line:84% changes the 300-foot limitation of Wi-Fi to 3 miles. 02:19:10.889 --> 02:19:12.850 align:middle line:84% And they just aim it at their employer 02:19:12.850 --> 02:19:15.090 align:middle line:90% and borrow a little bandwidth. 02:19:15.090 --> 02:19:17.990 align:middle line:84% And this idea was so popular that a company 02:19:17.990 --> 02:19:21.830 align:middle line:84% was formed called Cantenna to capitalize 02:19:21.830 --> 02:19:23.709 align:middle line:90% on the students' idea. 02:19:23.709 --> 02:19:26.889 align:middle line:84% And Cantenna launched this product. 02:19:26.889 --> 02:19:29.389 align:middle line:84% But the students, being undaunted, 02:19:29.389 --> 02:19:31.629 align:middle line:84% came back with the Nalley Big Chunk Beef Stew 02:19:31.629 --> 02:19:34.709 align:middle line:84% can, the world's record holder for point-to-point Wi-Fi 02:19:34.709 --> 02:19:36.170 align:middle line:90% of 75 miles. 02:19:36.170 --> 02:19:37.930 align:middle line:90% [LAUGHTER] 02:19:37.930 --> 02:19:38.430 align:middle line:90% 02:19:38.430 --> 02:19:42.070 align:middle line:84% And then, of course, there's the Stratollite over Houston, 02:19:42.070 --> 02:19:44.490 align:middle line:84% with an idea to deliver Wi-Fi to everybody. 02:19:44.490 --> 02:19:47.790 align:middle line:84% So there are a lot of reasons to be optimistic. 02:19:47.790 --> 02:19:49.910 align:middle line:90% Will WiMAX replace Wi-Fi? 02:19:49.910 --> 02:19:52.350 align:middle line:90% I have my doubts, personally. 02:19:52.350 --> 02:19:54.130 align:middle line:90% I think they can coexist. 02:19:54.130 --> 02:19:56.030 align:middle line:84% There's slightly different protocols. 02:19:56.030 --> 02:20:02.670 align:middle line:84% WiMAX is an 802.16, if you follow the IEEE protocol work. 02:20:02.670 --> 02:20:06.170 align:middle line:84% Conceptually, WiMAX is just Wi-Fi, 02:20:06.170 --> 02:20:10.110 align:middle line:84% except instead of being 300 feet, it's point-to-point, 02:20:10.110 --> 02:20:13.350 align:middle line:90% fixed antennas, 75 miles. 02:20:13.350 --> 02:20:17.530 align:middle line:84% And so it basically replaces the T1, the old backhaul, 02:20:17.530 --> 02:20:18.630 align:middle line:90% they used to call it. 02:20:18.630 --> 02:20:20.810 align:middle line:84% It brings high-speed internet into a community 02:20:20.810 --> 02:20:22.670 align:middle line:84% and then distributes it through Wi-Fi. 02:20:22.670 --> 02:20:26.730 align:middle line:84% So my prediction is that we will see a hybrid of both WiMAX 02:20:26.730 --> 02:20:27.810 align:middle line:90% and Wi-Fi. 02:20:27.810 --> 02:20:29.640 align:middle line:84% Global Crossing, do you feel that way? 02:20:29.640 --> 02:20:30.515 align:middle line:90% AUDIENCE: I think so. 02:20:30.515 --> 02:20:32.290 align:middle line:90% JOHN PATRICK: Yeah. 02:20:32.290 --> 02:20:33.030 align:middle line:90% OK, good. 02:20:33.030 --> 02:20:35.570 align:middle line:84% So where is the internet, anyway? 02:20:35.570 --> 02:20:37.870 align:middle line:84% And I still marvel when I hear people say, 02:20:37.870 --> 02:20:39.710 align:middle line:84% well, I'll go check that on the internet. 02:20:39.710 --> 02:20:43.133 align:middle line:84% And I say to myself, where is it you're going to go? 02:20:43.133 --> 02:20:44.550 align:middle line:84% And of course, we know the answer. 02:20:44.550 --> 02:20:48.390 align:middle line:84% They're going to go to their PC because, for most people still, 02:20:48.390 --> 02:20:52.050 align:middle line:84% that's where the internet is, unless you happen to be in India 02:20:52.050 --> 02:20:54.533 align:middle line:90% or China or Eastern Europe. 02:20:54.533 --> 02:20:55.950 align:middle line:84% And where's the internet for them? 02:20:55.950 --> 02:20:57.970 align:middle line:90% It's where they are. 02:20:57.970 --> 02:21:01.970 align:middle line:84% And it's delightful, but, in a way, a shame 02:21:01.970 --> 02:21:03.450 align:middle line:84% that we had to wait for Steve Jobs 02:21:03.450 --> 02:21:07.170 align:middle line:84% to show us that the internet was available on a phone. 02:21:07.170 --> 02:21:11.840 align:middle line:84% He accomplished more with the iPhone, this little beauty here, 02:21:11.840 --> 02:21:14.540 align:middle line:84% than companies that focused on this. 02:21:14.540 --> 02:21:15.960 align:middle line:84% I was on the board for a long time 02:21:15.960 --> 02:21:17.720 align:middle line:90% at Opera Software in Norway. 02:21:17.720 --> 02:21:19.760 align:middle line:90% Any of you ever heard of Opera? 02:21:19.760 --> 02:21:22.840 align:middle line:84% Yeah, they make a browser for mobile phones. 02:21:22.840 --> 02:21:25.800 align:middle line:84% It's a fantastic technology, Opera Mini. 02:21:25.800 --> 02:21:27.560 align:middle line:84% If you go to operamini.com, you can put it 02:21:27.560 --> 02:21:29.102 align:middle line:84% on-- whatever kind of phone you have, 02:21:29.102 --> 02:21:30.800 align:middle line:90% you can put Opera Mini on it. 02:21:30.800 --> 02:21:34.240 align:middle line:84% But in one announcement, Steve Jobs 02:21:34.240 --> 02:21:36.880 align:middle line:84% catapulted beyond that to make the simple point 02:21:36.880 --> 02:21:38.540 align:middle line:84% that the internet is where you are. 02:21:38.540 --> 02:21:40.640 align:middle line:90% It's not where your PC is. 02:21:40.640 --> 02:21:43.552 align:middle line:84% And this little iPhone-- there's only one problem 02:21:43.552 --> 02:21:44.260 align:middle line:90% with this iPhone. 02:21:44.260 --> 02:21:46.160 align:middle line:90% You know what it is? 02:21:46.160 --> 02:21:47.020 align:middle line:90% AT&T. 02:21:47.020 --> 02:21:48.120 align:middle line:90% [LAUGHTER] 02:21:48.120 --> 02:21:51.420 align:middle line:84% I cannot believe that they made this exclusive agreement. 02:21:51.420 --> 02:21:54.380 align:middle line:84% AT&T is great in a lot of places. 02:21:54.380 --> 02:21:58.640 align:middle line:84% But I flew up here this morning and landed at Hanscom Field. 02:21:58.640 --> 02:22:01.200 align:middle line:84% Most of the way from Hanscom Field to Cambridge, 02:22:01.200 --> 02:22:03.960 align:middle line:90% there's no signal, none. 02:22:03.960 --> 02:22:07.560 align:middle line:84% So the theory behind the iPhone, which 02:22:07.560 --> 02:22:10.940 align:middle line:84% is not unique-- everybody's going to pick up on this. 02:22:10.940 --> 02:22:15.580 align:middle line:84% The theory is very simple, that Wi-Fi is really the network. 02:22:15.580 --> 02:22:18.620 align:middle line:84% So as Wi-Fi becomes ubiquitous, you 02:22:18.620 --> 02:22:21.303 align:middle line:84% don't care whether AT&T is any good or not, unless maybe you 02:22:21.303 --> 02:22:22.720 align:middle line:84% want to have a phone conversation. 02:22:22.720 --> 02:22:24.980 align:middle line:84% But even that-- you know somebody's 02:22:24.980 --> 02:22:26.900 align:middle line:84% going to put Skype on the iPhone. 02:22:26.900 --> 02:22:29.980 align:middle line:84% One way or another, we're going to have Skype on here. 02:22:29.980 --> 02:22:31.920 align:middle line:90% And so then you don't need-- 02:22:31.920 --> 02:22:33.960 align:middle line:84% to hell with AT&T. We don't need you anymore, 02:22:33.960 --> 02:22:36.340 align:middle line:84% as long as there's Wi-Fi somewhere. 02:22:36.340 --> 02:22:40.020 align:middle line:84% And increasingly, for most of us, there will be Wi-Fi. 02:22:40.020 --> 02:22:42.040 align:middle line:84% And it always switches to whichever is faster. 02:22:42.040 --> 02:22:43.740 align:middle line:90% So when I'm at home-- 02:22:43.740 --> 02:22:45.980 align:middle line:90% I obviously have Wi-Fi at home. 02:22:45.980 --> 02:22:48.620 align:middle line:84% Then I can do whatever I want on the back porch 02:22:48.620 --> 02:22:52.220 align:middle line:90% with this at very high speed. 02:22:52.220 --> 02:22:54.920 align:middle line:84% And they're going to support Web 2.0 applications. 02:22:54.920 --> 02:22:56.460 align:middle line:84% We'll come back to that in a minute. 02:22:56.460 --> 02:22:57.710 align:middle line:90% Somebody had-- yeah, go ahead. 02:22:57.710 --> 02:22:59.127 align:middle line:84% AUDIENCE: I was just going to say, 02:22:59.127 --> 02:23:01.320 align:middle line:84% I mean, just to give a little credit where it's due, 02:23:01.320 --> 02:23:03.480 align:middle line:84% also, I mean, Nokia has been doing a lot in that area, 02:23:03.480 --> 02:23:05.730 align:middle line:84% and they're actually over in the Student Center today. 02:23:05.730 --> 02:23:07.660 align:middle line:84% And their tablet, the N800, actually 02:23:07.660 --> 02:23:10.893 align:middle line:84% has Skype already preloaded on there with video capability. 02:23:10.893 --> 02:23:12.060 align:middle line:90% JOHN PATRICK: No, thank you. 02:23:12.060 --> 02:23:12.940 align:middle line:90% That's very true. 02:23:12.940 --> 02:23:14.700 align:middle line:84% Nokia has definitely been a pioneer. 02:23:14.700 --> 02:23:18.460 align:middle line:84% In fact, Opera and Nokia, both being Scandinavian companies, 02:23:18.460 --> 02:23:19.527 align:middle line:90% have been very-- 02:23:19.527 --> 02:23:21.360 align:middle line:84% IRVING WLADAWSKY-BERGER: Nokia is coming out 02:23:21.360 --> 02:23:25.340 align:middle line:84% with an iPhone [INAUDIBLE] and with the same browser. 02:23:25.340 --> 02:23:28.233 align:middle line:84% What's the name of the browser that the iPhone uses, 02:23:28.233 --> 02:23:29.400 align:middle line:90% which is an open-source one? 02:23:29.400 --> 02:23:30.443 align:middle line:90% JOHN PATRICK: Safari. 02:23:30.443 --> 02:23:32.360 align:middle line:84% IRVING WLADAWSKY-BERGER: That the iPhone uses? 02:23:32.360 --> 02:23:34.200 align:middle line:84% JOHN PATRICK: Yeah, the iPhone uses Safari. 02:23:34.200 --> 02:23:35.400 align:middle line:84% IRVING WLADAWSKY-BERGER: [INAUDIBLE]. 02:23:35.400 --> 02:23:35.900 align:middle line:90% Really? 02:23:35.900 --> 02:23:36.840 align:middle line:90% JOHN PATRICK: Yeah. 02:23:36.840 --> 02:23:38.757 align:middle line:84% IRVING WLADAWSKY-BERGER: And it's open-source? 02:23:38.757 --> 02:23:39.963 align:middle line:90% JOHN PATRICK: No. 02:23:39.963 --> 02:23:42.380 align:middle line:84% IRVING WLADAWSKY-BERGER: No, they use Safari on the Apple, 02:23:42.380 --> 02:23:44.040 align:middle line:90% but I thought the iPhone-- 02:23:44.040 --> 02:23:44.960 align:middle line:90% JOHN PATRICK: Safari. 02:23:44.960 --> 02:23:45.460 align:middle line:90% IRVING WLADAWSKY-BERGER: Really? 02:23:45.460 --> 02:23:46.900 align:middle line:90% JOHN PATRICK: Yep, yep. 02:23:46.900 --> 02:23:51.800 align:middle line:84% But there is a KHTML open-source browser 02:23:51.800 --> 02:23:54.320 align:middle line:84% that Nokia has been experimenting with, Motorola. 02:23:54.320 --> 02:23:55.300 align:middle line:90% A lot of people have. 02:23:55.300 --> 02:23:56.480 align:middle line:90% And it's kind of-- 02:23:56.480 --> 02:23:57.300 align:middle line:84% IRVING WLADAWSKY-BERGER: What's it called? 02:23:57.300 --> 02:23:58.133 align:middle line:90% JOHN PATRICK: KHTML. 02:23:58.133 --> 02:24:01.680 align:middle line:90% 02:24:01.680 --> 02:24:03.880 align:middle line:84% In theory, it could be like Firefox. 02:24:03.880 --> 02:24:06.510 align:middle line:84% Firefox is doing a lot of work in this area. 02:24:06.510 --> 02:24:10.130 align:middle line:84% But as of right now, I can, I think, 02:24:10.130 --> 02:24:13.750 align:middle line:84% fairly say that the leader as far as mobile browsing 02:24:13.750 --> 02:24:15.670 align:middle line:90% technology is Opera. 02:24:15.670 --> 02:24:19.470 align:middle line:84% They invented tab browsing 11 years ago. 02:24:19.470 --> 02:24:23.870 align:middle line:84% And they have more users of mobile browsers 02:24:23.870 --> 02:24:25.230 align:middle line:90% than anybody does. 02:24:25.230 --> 02:24:29.290 align:middle line:84% The iPhone, other than AT&T, is phenomenal. 02:24:29.290 --> 02:24:31.925 align:middle line:84% But it's really a very small number 02:24:31.925 --> 02:24:34.050 align:middle line:84% of people that are going to pay that kind of money. 02:24:34.050 --> 02:24:36.230 align:middle line:90% Now, it's coming down in price. 02:24:36.230 --> 02:24:37.650 align:middle line:90% They're bringing it into Europe. 02:24:37.650 --> 02:24:43.270 align:middle line:84% But still, it's low single-digit percentage compared 02:24:43.270 --> 02:24:45.970 align:middle line:90% to a billion phones, overall. 02:24:45.970 --> 02:24:48.410 align:middle line:84% And the Opera browser will work on any of those phones. 02:24:48.410 --> 02:24:50.070 align:middle line:90% Somebody-- yeah? 02:24:50.070 --> 02:24:52.517 align:middle line:84% AUDIENCE: In typical fashion, the incumbents, 02:24:52.517 --> 02:24:54.850 align:middle line:84% the Verizons of the world, the [INAUDIBLE] of the world, 02:24:54.850 --> 02:24:58.590 align:middle line:84% were actually working on technology in their switches 02:24:58.590 --> 02:25:01.550 align:middle line:84% to send Skype traffic and BitTorrent 02:25:01.550 --> 02:25:05.810 align:middle line:84% traffic and other traffic that would erode their revenue base 02:25:05.810 --> 02:25:07.858 align:middle line:90% and [? block ?] it or go for it. 02:25:07.858 --> 02:25:08.650 align:middle line:90% JOHN PATRICK: Yeah. 02:25:08.650 --> 02:25:12.210 align:middle line:84% Does anybody here work for Verizon? 02:25:12.210 --> 02:25:13.210 align:middle line:90% Yeah. 02:25:13.210 --> 02:25:15.810 align:middle line:90% It's really bad. 02:25:15.810 --> 02:25:18.010 align:middle line:84% What you're saying is true, but it's actually 02:25:18.010 --> 02:25:19.810 align:middle line:90% even worse than that. 02:25:19.810 --> 02:25:23.210 align:middle line:84% Imagine that you're on your PC, and you go to a website, 02:25:23.210 --> 02:25:25.070 align:middle line:84% and it says, oh, try this new application. 02:25:25.070 --> 02:25:27.010 align:middle line:90% Click here to download. 02:25:27.010 --> 02:25:29.690 align:middle line:84% And up pops a message that says, this message is 02:25:29.690 --> 02:25:32.610 align:middle line:84% from your internet service provider, Comcast. 02:25:32.610 --> 02:25:35.410 align:middle line:84% We don't support that application. 02:25:35.410 --> 02:25:40.093 align:middle line:84% I mean, can you imagine the internet being that-- 02:25:40.093 --> 02:25:41.510 align:middle line:84% all of a sudden, it's proprietary. 02:25:41.510 --> 02:25:44.570 align:middle line:84% Well, that's what we have in mobile. 02:25:44.570 --> 02:25:47.170 align:middle line:84% You can't put an application on a Verizon phone 02:25:47.170 --> 02:25:50.010 align:middle line:90% if Verizon doesn't agree. 02:25:50.010 --> 02:25:54.915 align:middle line:84% And even on the iPhone, AT&T decides 02:25:54.915 --> 02:25:57.290 align:middle line:84% what can go on this phone because they feel they're going 02:25:57.290 --> 02:25:59.570 align:middle line:90% to have to be the support arm. 02:25:59.570 --> 02:26:01.150 align:middle line:90% So it's really, really bad. 02:26:01.150 --> 02:26:03.392 align:middle line:90% And you can find it in my blog. 02:26:03.392 --> 02:26:04.850 align:middle line:84% I've been writing a lot about this. 02:26:04.850 --> 02:26:07.730 align:middle line:84% There's a thing called Free the iPhone or something. 02:26:07.730 --> 02:26:11.090 align:middle line:84% It's a big movement where people are trying to say, 02:26:11.090 --> 02:26:12.190 align:middle line:90% wait a minute. 02:26:12.190 --> 02:26:14.275 align:middle line:90% This is about consumer choice. 02:26:14.275 --> 02:26:15.650 align:middle line:84% If I'm connected to the internet, 02:26:15.650 --> 02:26:17.900 align:middle line:84% I should be able to go to any website I want to go to, 02:26:17.900 --> 02:26:20.930 align:middle line:84% and I should be able to download anything I want to download. 02:26:20.930 --> 02:26:23.510 align:middle line:84% And if it blows up my phone, that's my problem. 02:26:23.510 --> 02:26:27.230 align:middle line:84% But I should not be controlled by my internet service 02:26:27.230 --> 02:26:30.590 align:middle line:84% provider or my mobile operator telling me 02:26:30.590 --> 02:26:32.108 align:middle line:90% that I can't download something. 02:26:32.108 --> 02:26:34.150 align:middle line:84% AUDIENCE: There's a guy who broke his [? phone ?] 02:26:34.150 --> 02:26:37.910 align:middle line:84% and probably can get on to any other network, as well. 02:26:37.910 --> 02:26:39.810 align:middle line:84% There was some 16-year-old guy who did that. 02:26:39.810 --> 02:26:42.550 align:middle line:84% JOHN PATRICK: Well, yeah, but that's a little bit of-- 02:26:42.550 --> 02:26:45.110 align:middle line:84% that's getting a lot of PR, but the reality 02:26:45.110 --> 02:26:49.830 align:middle line:84% is that the main interface for the iPhone is iTunes. 02:26:49.830 --> 02:26:51.950 align:middle line:84% Now, you don't have to use iTunes 02:26:51.950 --> 02:26:54.710 align:middle line:84% unless you want to get the latest firmware for your phone, 02:26:54.710 --> 02:26:56.975 align:middle line:84% or unless you want to synchronize your music, 02:26:56.975 --> 02:26:59.350 align:middle line:84% or unless you want to make sure you've got all the latest 02:26:59.350 --> 02:27:00.570 align:middle line:90% bug fixes. 02:27:00.570 --> 02:27:04.490 align:middle line:84% So guess what happens when you put this in the cradle and sync 02:27:04.490 --> 02:27:05.510 align:middle line:90% to iTunes? 02:27:05.510 --> 02:27:07.753 align:middle line:84% It erases that fix that this kid made. 02:27:07.753 --> 02:27:08.670 align:middle line:90% AUDIENCE: Oh, it does? 02:27:08.670 --> 02:27:10.210 align:middle line:90% JOHN PATRICK: Yeah. 02:27:10.210 --> 02:27:15.230 align:middle line:84% So Apple is playing this very-- they're brilliant marketers. 02:27:15.230 --> 02:27:18.050 align:middle line:90% Steve Jobs is brilliant. 02:27:18.050 --> 02:27:20.330 align:middle line:84% I think he's smarter than Bill Gates. 02:27:20.330 --> 02:27:24.010 align:middle line:84% He is allowing this controversy to be ignited in the press, 02:27:24.010 --> 02:27:27.770 align:middle line:84% and he's basically making it AT&T's problem. 02:27:27.770 --> 02:27:30.070 align:middle line:84% And I think that's really brilliant. 02:27:30.070 --> 02:27:32.330 align:middle line:84% By the way, you can take the SIM card out 02:27:32.330 --> 02:27:35.250 align:middle line:84% of an iPhone, which I did the other day, because I 02:27:35.250 --> 02:27:36.430 align:middle line:90% can't use this where I live. 02:27:36.430 --> 02:27:38.250 align:middle line:84% There's no AT&T signal, even though there's 02:27:38.250 --> 02:27:42.010 align:middle line:84% a tower in the Methodist church a mile from my house. 02:27:42.010 --> 02:27:44.650 align:middle line:84% For some reason, it's a bad signal. 02:27:44.650 --> 02:27:48.370 align:middle line:84% Anyway, I took the chip out and put it in a Palm Treo 02:27:48.370 --> 02:27:54.090 align:middle line:84% that I have, and then I took another chip and put it in here. 02:27:54.090 --> 02:27:56.670 align:middle line:84% It took me a day and a half to get back to normal. 02:27:56.670 --> 02:27:58.250 align:middle line:90% [LAUGHTER] 02:27:58.250 --> 02:27:58.900 align:middle line:90% 02:27:58.900 --> 02:28:01.240 align:middle line:84% This is a very proprietary relationship. 02:28:01.240 --> 02:28:04.720 align:middle line:84% And Qualcomm and Verizon have the same-- they sleep together, 02:28:04.720 --> 02:28:06.120 align:middle line:90% also. 02:28:06.120 --> 02:28:11.800 align:middle line:84% So the mobile industry in the US are highly proprietary, 02:28:11.800 --> 02:28:16.340 align:middle line:84% basically anti-competitively oriented. 02:28:16.340 --> 02:28:17.360 align:middle line:90% Yeah? 02:28:17.360 --> 02:28:21.220 align:middle line:84% AUDIENCE: What do you think the power of having an attractive, 02:28:21.220 --> 02:28:26.020 align:middle line:84% easy-to-use mobile web device like the iPhone-- 02:28:26.020 --> 02:28:29.960 align:middle line:84% I mean, do you see that eventually 02:28:29.960 --> 02:28:33.180 align:middle line:84% solving stuff, like the, what was it, 02:28:33.180 --> 02:28:36.980 align:middle line:90% the medical data record problem? 02:28:36.980 --> 02:28:39.640 align:middle line:84% I mean, all of a sudden, if every doctor had an iPhone 02:28:39.640 --> 02:28:42.820 align:middle line:84% already, and somebody just wrote the application for-- 02:28:42.820 --> 02:28:43.840 align:middle line:90% JOHN PATRICK: Yeah. 02:28:43.840 --> 02:28:47.120 align:middle line:84% AUDIENCE: Some hospital can create a centralized repository 02:28:47.120 --> 02:28:52.928 align:middle line:84% of data and make it a web-based application for accessing it. 02:28:52.928 --> 02:28:53.970 align:middle line:90% JOHN PATRICK: Absolutely. 02:28:53.970 --> 02:28:56.345 align:middle line:84% IRVING WLADAWSKY-BERGER: How about your medical records-- 02:28:56.345 --> 02:28:57.520 align:middle line:90% they are encrypted in there? 02:28:57.520 --> 02:28:58.120 align:middle line:90% JOHN PATRICK: Absolutely. 02:28:58.120 --> 02:28:59.160 align:middle line:84% IRVING WLADAWSKY-BERGER: Isn't that reasonable? 02:28:59.160 --> 02:28:59.420 align:middle line:90% JOHN PATRICK: Yeah. 02:28:59.420 --> 02:29:01.210 align:middle line:84% I mean, you're on a really important point. 02:29:01.210 --> 02:29:02.240 align:middle line:84% IRVING WLADAWSKY-BERGER: That's your point, also. 02:29:02.240 --> 02:29:02.907 align:middle line:90% AUDIENCE: Right. 02:29:02.907 --> 02:29:05.100 align:middle line:84% Well, it's just that, eventually, 02:29:05.100 --> 02:29:09.580 align:middle line:84% if we have an attractive device that everybody has that you can 02:29:09.580 --> 02:29:11.340 align:middle line:84% easily surf the web on, can't you 02:29:11.340 --> 02:29:12.818 align:middle line:90% start solving some of these-- 02:29:12.818 --> 02:29:13.860 align:middle line:90% JOHN PATRICK: Absolutely. 02:29:13.860 --> 02:29:15.580 align:middle line:84% IRVING WLADAWSKY-BERGER: I think the problem is legislative here 02:29:15.580 --> 02:29:17.380 align:middle line:84% because these things are already possible 02:29:17.380 --> 02:29:18.800 align:middle line:90% in some European countries. 02:29:18.800 --> 02:29:21.660 align:middle line:84% They have a central database where everybody can access this. 02:29:21.660 --> 02:29:24.480 align:middle line:84% Over here, they keep lobbying about privacy issues and stuff. 02:29:24.480 --> 02:29:26.540 align:middle line:90% That really is not the issue. 02:29:26.540 --> 02:29:29.677 align:middle line:84% They just keep lobbying and just confusing people about this. 02:29:29.677 --> 02:29:30.760 align:middle line:90% JOHN PATRICK: Oh, I agree. 02:29:30.760 --> 02:29:33.520 align:middle line:84% I mean, if we could get our medical records on the internet, 02:29:33.520 --> 02:29:36.060 align:middle line:84% they would be a lot safer than they are in manila folders, 02:29:36.060 --> 02:29:38.420 align:middle line:84% where we have no idea who has authorization 02:29:38.420 --> 02:29:40.140 align:middle line:90% to look in those folders. 02:29:40.140 --> 02:29:44.380 align:middle line:84% The big thing about the point you raise is authentication. 02:29:44.380 --> 02:29:47.500 align:middle line:84% The one thing we don't have on the web is authentication. 02:29:47.500 --> 02:29:51.780 align:middle line:84% If you can figure out my password and user ID, you're me. 02:29:51.780 --> 02:29:53.840 align:middle line:84% With a mobile device, it's a little different. 02:29:53.840 --> 02:29:55.180 align:middle line:90% How do I authenticate? 02:29:55.180 --> 02:29:55.740 align:middle line:90% Very simple. 02:29:55.740 --> 02:29:58.080 align:middle line:90% I go like this-- this is John. 02:29:58.080 --> 02:30:03.080 align:middle line:84% And voice recognition determines that it's me. 02:30:03.080 --> 02:30:06.100 align:middle line:84% Or this has an incredible UI with the finger 02:30:06.100 --> 02:30:08.800 align:middle line:90% now, so you swipe, boom. 02:30:08.800 --> 02:30:12.900 align:middle line:84% So authentication is much easier in mobile than it is on the PC. 02:30:12.900 --> 02:30:17.480 align:middle line:84% And I think it will lead to these applications. 02:30:17.480 --> 02:30:19.360 align:middle line:84% Did somebody else want to say something here? 02:30:19.360 --> 02:30:20.520 align:middle line:84% AUDIENCE: I think what we're seeing right now 02:30:20.520 --> 02:30:23.152 align:middle line:84% is, like you were saying, the core of the internet, 02:30:23.152 --> 02:30:24.860 align:middle line:84% there's more than enough bandwidth there. 02:30:24.860 --> 02:30:25.380 align:middle line:90% JOHN PATRICK: Oh, yeah. 02:30:25.380 --> 02:30:26.838 align:middle line:84% AUDIENCE: And what we're seeing now 02:30:26.838 --> 02:30:28.683 align:middle line:84% is the everything move out toward the edge. 02:30:28.683 --> 02:30:30.600 align:middle line:84% And I think that's where the big play is going 02:30:30.600 --> 02:30:32.232 align:middle line:90% to be in the next 20 years. 02:30:32.232 --> 02:30:33.940 align:middle line:84% And that's what David Clark said, anyway. 02:30:33.940 --> 02:30:38.975 align:middle line:84% I guess he built the TCP/IP stack at IBM or something. 02:30:38.975 --> 02:30:40.600 align:middle line:84% IRVING WLADAWSKY-BERGER: David is here. 02:30:40.600 --> 02:30:40.700 align:middle line:90% JOHN PATRICK: [? No. ?] 02:30:40.700 --> 02:30:42.320 align:middle line:84% AUDIENCE: Yeah, yeah, he's here, and I've talked to him. 02:30:42.320 --> 02:30:44.480 align:middle line:84% And he was saying that the edge of the network 02:30:44.480 --> 02:30:46.600 align:middle line:84% is where we're going to see a lot of play. 02:30:46.600 --> 02:30:50.760 align:middle line:84% And from a policy standpoint, it seems like we haven't-- 02:30:50.760 --> 02:30:54.150 align:middle line:84% companies haven't worked out that relationship yet. 02:30:54.150 --> 02:30:56.390 align:middle line:84% The core of the network is older, it seems. 02:30:56.390 --> 02:30:57.830 align:middle line:90% This was his thinking. 02:30:57.830 --> 02:31:00.810 align:middle line:84% JOHN PATRICK: Yeah, it's true, but the edge-- 02:31:00.810 --> 02:31:03.790 align:middle line:84% the only problem with the edge, is if the edge happens 02:31:03.790 --> 02:31:07.430 align:middle line:84% to be a place where there's no Wi-Fi and only AT&T, 02:31:07.430 --> 02:31:09.165 align:middle line:90% you got a problem. 02:31:09.165 --> 02:31:09.790 align:middle line:90% AUDIENCE: Yeah. 02:31:09.790 --> 02:31:13.230 align:middle line:84% He was saying that that is the edge, as well. 02:31:13.230 --> 02:31:16.670 align:middle line:84% So you can't deliver traffic from here 02:31:16.670 --> 02:31:20.210 align:middle line:84% to San Jose on the edge network, on that network. 02:31:20.210 --> 02:31:22.770 align:middle line:84% JOHN PATRICK: No, it's like the worst possible network. 02:31:22.770 --> 02:31:26.990 align:middle line:84% And the reason they did it was because the edge network 02:31:26.990 --> 02:31:30.990 align:middle line:84% chip consumes much less electrical power 02:31:30.990 --> 02:31:35.430 align:middle line:84% than the third-generation broadband mobile network does. 02:31:35.430 --> 02:31:38.830 align:middle line:84% And you can't get at the battery, which 02:31:38.830 --> 02:31:42.270 align:middle line:84% is both a feature and a bug, depending on how you look at it. 02:31:42.270 --> 02:31:45.990 align:middle line:84% And if they had a high-speed network, 02:31:45.990 --> 02:31:48.190 align:middle line:90% this wouldn't last the day. 02:31:48.190 --> 02:31:52.030 align:middle line:84% And plus, they're relying on the availability of Wi-Fi. 02:31:52.030 --> 02:31:53.890 align:middle line:84% So if you live where there's Wi-Fi, 02:31:53.890 --> 02:31:55.910 align:middle line:84% or you live in a big city, it's not a problem. 02:31:55.910 --> 02:31:56.570 align:middle line:90% Yeah? 02:31:56.570 --> 02:31:58.445 align:middle line:84% IRVING WLADAWSKY-BERGER: So most of this talk 02:31:58.445 --> 02:31:59.930 align:middle line:84% is about business transformations 02:31:59.930 --> 02:32:04.850 align:middle line:84% using advances in IT that are going on right now. 02:32:04.850 --> 02:32:08.530 align:middle line:84% But there are two other major technology streams 02:32:08.530 --> 02:32:11.090 align:middle line:84% that are going on, the biotech and nanotech, 02:32:11.090 --> 02:32:14.917 align:middle line:84% that can potentially transform businesses. 02:32:14.917 --> 02:32:15.750 align:middle line:90% JOHN PATRICK: Right. 02:32:15.750 --> 02:32:17.010 align:middle line:84% IRVING WLADAWSKY-BERGER: I mean, even iPhone, I 02:32:17.010 --> 02:32:19.210 align:middle line:84% could imagine being created out of nanomaterials 02:32:19.210 --> 02:32:21.470 align:middle line:90% and being shaped into anything. 02:32:21.470 --> 02:32:22.210 align:middle line:90% I don't know. 02:32:22.210 --> 02:32:23.350 align:middle line:90% JOHN PATRICK: Absolutely. 02:32:23.350 --> 02:32:25.392 align:middle line:84% IRVING WLADAWSKY-BERGER: So do you have any ideas 02:32:25.392 --> 02:32:28.130 align:middle line:84% about where that is going, how that's going 02:32:28.130 --> 02:32:29.930 align:middle line:90% to play with IT, eventually? 02:32:29.930 --> 02:32:34.370 align:middle line:84% JOHN PATRICK: Well, nanotech is really broad. 02:32:34.370 --> 02:32:37.210 align:middle line:90% It's going to affect everything. 02:32:37.210 --> 02:32:41.570 align:middle line:84% Specifically to IT, the nearest-term impact is storage. 02:32:41.570 --> 02:32:44.987 align:middle line:84% And you may have seen some recent breakthroughs by IBM, 02:32:44.987 --> 02:32:46.570 align:middle line:84% where we're going to be walking around 02:32:46.570 --> 02:32:50.450 align:middle line:84% with terabytes in our iPhones or whatever phone we have. 02:32:50.450 --> 02:32:52.090 align:middle line:90% So that will have huge impact. 02:32:52.090 --> 02:32:53.590 align:middle line:84% I think I'd better move on because I 02:32:53.590 --> 02:32:55.010 align:middle line:90% want to get to Semantic Web. 02:32:55.010 --> 02:32:56.350 align:middle line:84% IRVING WLADAWSKY-BERGER: We need to stop at 3:00. 02:32:56.350 --> 02:32:57.930 align:middle line:84% JOHN PATRICK: Yeah, so I better hustle here. 02:32:57.930 --> 02:32:59.810 align:middle line:84% So long distance is a thing of the past. 02:32:59.810 --> 02:33:01.870 align:middle line:90% It costs $0.02 a minute. 02:33:01.870 --> 02:33:04.990 align:middle line:90% The operators charge $1.49. 02:33:04.990 --> 02:33:08.110 align:middle line:84% Something's wrong with that picture, right? 02:33:08.110 --> 02:33:13.390 align:middle line:84% Social networking is so huge, and there's a lot 02:33:13.390 --> 02:33:15.010 align:middle line:90% of misconceptions in business. 02:33:15.010 --> 02:33:18.190 align:middle line:84% A lot of businesses think social networking is about 11-year-old 02:33:18.190 --> 02:33:19.530 align:middle line:90% girls on MySpace. 02:33:19.530 --> 02:33:20.550 align:middle line:90% [LAUGHTER] 02:33:20.550 --> 02:33:25.590 align:middle line:84% They don't realize it's 60-year-old guys on Facebook. 02:33:25.590 --> 02:33:28.390 align:middle line:84% When Mark Zuckerberg started that at Harvard, 02:33:28.390 --> 02:33:29.570 align:middle line:90% it was just students. 02:33:29.570 --> 02:33:32.670 align:middle line:84% Well, those students, a lot of them have graduated. 02:33:32.670 --> 02:33:34.950 align:middle line:84% Incoming students at most universities 02:33:34.950 --> 02:33:39.990 align:middle line:84% now get a Facebook ID when they check in as a freshman. 02:33:39.990 --> 02:33:43.910 align:middle line:84% And now business people are joining networks as alumni. 02:33:43.910 --> 02:33:46.330 align:middle line:84% Most universities have alumni forever. 02:33:46.330 --> 02:33:48.300 align:middle line:90% You get an email address. 02:33:48.300 --> 02:33:50.880 align:middle line:84% So they use that to establish a subnetwork. 02:33:50.880 --> 02:33:54.020 align:middle line:84% So the social networks are merging, 02:33:54.020 --> 02:33:58.020 align:middle line:84% not in an organizational sense, but semantically. 02:33:58.020 --> 02:34:01.720 align:middle line:84% So you don't have to join all these social networks. 02:34:01.720 --> 02:34:04.020 align:middle line:90% There's hundreds of them. 02:34:04.020 --> 02:34:08.040 align:middle line:84% But Facebook, in my opinion, is the gorilla here. 02:34:08.040 --> 02:34:09.820 align:middle line:84% They have 40 million users, and they've 02:34:09.820 --> 02:34:11.520 align:middle line:90% got this subnetworking ability. 02:34:11.520 --> 02:34:14.100 align:middle line:84% And they have an application programming interface 02:34:14.100 --> 02:34:17.140 align:middle line:84% that allows people to build these little applets 02:34:17.140 --> 02:34:18.420 align:middle line:90% on Facebook. 02:34:18.420 --> 02:34:22.340 align:middle line:84% And I see that as the point of integration. 02:34:22.340 --> 02:34:26.240 align:middle line:84% Wikimedia-- a lot of controversy about this. 02:34:26.240 --> 02:34:27.840 align:middle line:90% I'm a big advocate of this. 02:34:27.840 --> 02:34:31.220 align:middle line:84% I believe, over time, that it will self-regulate. 02:34:31.220 --> 02:34:34.280 align:middle line:84% I just read a book called Killing Che about Che Guevara, 02:34:34.280 --> 02:34:35.660 align:middle line:90% a very interesting book. 02:34:35.660 --> 02:34:39.820 align:middle line:84% And I went to Wikipedia to find out something 02:34:39.820 --> 02:34:41.940 align:middle line:90% I wasn't quite sure about him. 02:34:41.940 --> 02:34:43.640 align:middle line:84% And up at the top there was a banner. 02:34:43.640 --> 02:34:48.480 align:middle line:84% It says "Caution-- this topical material is temporarily under 02:34:48.480 --> 02:34:52.360 align:middle line:84% review," and so, in other words, disagreement. 02:34:52.360 --> 02:34:54.120 align:middle line:90% It'll self-regulate. 02:34:54.120 --> 02:34:57.220 align:middle line:84% Blogging is the beginning of the Semantic Web. 02:34:57.220 --> 02:34:58.042 align:middle line:90% Yeah? 02:34:58.042 --> 02:35:00.000 align:middle line:84% AUDIENCE: I have a question on social networks. 02:35:00.000 --> 02:35:02.760 align:middle line:84% What do you think about the gated social networking sites, 02:35:02.760 --> 02:35:05.060 align:middle line:84% gated being very small community, 02:35:05.060 --> 02:35:09.360 align:middle line:84% and it's restricted to premium users and [? Diamond Square, ?] 02:35:09.360 --> 02:35:10.980 align:middle line:84% [? Diamond House, ?] and a few others. 02:35:10.980 --> 02:35:12.600 align:middle line:84% JOHN PATRICK: There's tons of them, yeah. 02:35:12.600 --> 02:35:14.140 align:middle line:84% AUDIENCE: Do you think it's a good business model? 02:35:14.140 --> 02:35:15.473 align:middle line:90% I just want to know [INAUDIBLE]. 02:35:15.473 --> 02:35:17.800 align:middle line:84% JOHN PATRICK: Well, I think it's an OK idea for people 02:35:17.800 --> 02:35:20.820 align:middle line:84% that just want to be in a gated community. 02:35:20.820 --> 02:35:25.120 align:middle line:84% Most people, I think, want to be in a larger community, 02:35:25.120 --> 02:35:27.020 align:middle line:90% to be connected more broadly. 02:35:27.020 --> 02:35:27.860 align:middle line:90% But it's OK. 02:35:27.860 --> 02:35:30.848 align:middle line:84% The only question will be the business model, 02:35:30.848 --> 02:35:32.640 align:middle line:84% whether it's going to be subscription-based 02:35:32.640 --> 02:35:35.082 align:middle line:84% or if they can get advertising to cover it. 02:35:35.082 --> 02:35:36.540 align:middle line:84% But to get advertising to cover it, 02:35:36.540 --> 02:35:38.760 align:middle line:84% you need to have more than the gated community. 02:35:38.760 --> 02:35:41.200 align:middle line:84% So I think there will be a lot of them, but most of them, 02:35:41.200 --> 02:35:46.900 align:middle line:84% I think, will fail, and the big ones will succeed. 02:35:46.900 --> 02:35:50.100 align:middle line:84% Blogging is important because of the tags. 02:35:50.100 --> 02:35:53.360 align:middle line:84% So when you write a blog story, there's a subject, 02:35:53.360 --> 02:35:55.880 align:middle line:84% there's a date, there's a category or categories, 02:35:55.880 --> 02:35:58.220 align:middle line:84% there's an author, and there's content. 02:35:58.220 --> 02:36:01.560 align:middle line:84% Those five tags give that kind of a web page 02:36:01.560 --> 02:36:04.500 align:middle line:84% a context that most web pages don't have. 02:36:04.500 --> 02:36:07.680 align:middle line:84% What I mean by that is, because of the tags, it can be found, 02:36:07.680 --> 02:36:09.440 align:middle line:84% it can be archived, it can be sorted, 02:36:09.440 --> 02:36:12.580 align:middle line:84% searched, shared, subscribed to without giving your email 02:36:12.580 --> 02:36:13.580 align:middle line:90% address. 02:36:13.580 --> 02:36:15.000 align:middle line:90% So blogging is really big. 02:36:15.000 --> 02:36:19.740 align:middle line:84% Think of the hospital gurney going down the hall 02:36:19.740 --> 02:36:21.660 align:middle line:90% with an RFID tag on it. 02:36:21.660 --> 02:36:25.780 align:middle line:84% And as it goes from the ER to the medical unit, 02:36:25.780 --> 02:36:30.340 align:middle line:84% a blog story is posted to the primary care physician's folder, 02:36:30.340 --> 02:36:32.380 align:middle line:90% his patient's folder. 02:36:32.380 --> 02:36:33.860 align:middle line:84% So it's not just people-- it's not 02:36:33.860 --> 02:36:36.000 align:middle line:84% a vanity thing about people writing about, 02:36:36.000 --> 02:36:37.660 align:middle line:90% here's what I did today. 02:36:37.660 --> 02:36:39.940 align:middle line:90% It's partly about that. 02:36:39.940 --> 02:36:41.750 align:middle line:90% But it's a bigger thing. 02:36:41.750 --> 02:36:43.510 align:middle line:90% It's warranting notices. 02:36:43.510 --> 02:36:45.310 align:middle line:90% It's product recalls. 02:36:45.310 --> 02:36:46.550 align:middle line:90% It's press releases. 02:36:46.550 --> 02:36:47.830 align:middle line:90% It's health care information. 02:36:47.830 --> 02:36:49.530 align:middle line:84% It's any kind of information that 02:36:49.530 --> 02:36:52.090 align:middle line:84% has context should be tagged, and blogging 02:36:52.090 --> 02:36:54.490 align:middle line:90% is a protocol to do that. 02:36:54.490 --> 02:36:58.170 align:middle line:84% IRVING WLADAWSKY-BERGER: John, does the Semantic Web community 02:36:58.170 --> 02:37:02.970 align:middle line:84% accept what you are saying, that the Semantic Web is actually 02:37:02.970 --> 02:37:05.070 align:middle line:90% getting built all around those? 02:37:05.070 --> 02:37:06.090 align:middle line:90% JOHN PATRICK: Oh, yeah. 02:37:06.090 --> 02:37:07.330 align:middle line:90% Yeah. 02:37:07.330 --> 02:37:09.730 align:middle line:84% The challenge of the Semantic Web 02:37:09.730 --> 02:37:13.650 align:middle line:84% is that it's very hard to explain. 02:37:13.650 --> 02:37:16.770 align:middle line:84% Tim Berners-Lee could give you a short three-hour summary 02:37:16.770 --> 02:37:18.810 align:middle line:90% of what it's about. 02:37:18.810 --> 02:37:22.450 align:middle line:84% And that's not what the world's looking for. 02:37:22.450 --> 02:37:24.930 align:middle line:84% And the way I think of the Semantic Web 02:37:24.930 --> 02:37:28.690 align:middle line:84% is, everything relates to everything. 02:37:28.690 --> 02:37:33.530 align:middle line:84% So when you make an entry on your calendar, there's a date. 02:37:33.530 --> 02:37:35.630 align:middle line:84% Well, there's other things happening on that date. 02:37:35.630 --> 02:37:37.490 align:middle line:84% There's a person you're going to meet with. 02:37:37.490 --> 02:37:39.570 align:middle line:84% Well, there's other things about that person. 02:37:39.570 --> 02:37:41.050 align:middle line:90% They're in your contact list. 02:37:41.050 --> 02:37:43.030 align:middle line:84% That person is related to this other person 02:37:43.030 --> 02:37:45.090 align:middle line:84% because they work for the same company. 02:37:45.090 --> 02:37:48.970 align:middle line:84% The subject of this meeting also has other implications. 02:37:48.970 --> 02:37:50.767 align:middle line:84% It has emails that are about that subject. 02:37:50.767 --> 02:37:52.850 align:middle line:84% It has other meetings that are about that subject. 02:37:52.850 --> 02:37:54.350 align:middle line:84% So everything relates to everything. 02:37:54.350 --> 02:37:56.015 align:middle line:90% That's the Semantic Web. 02:37:56.015 --> 02:37:57.390 align:middle line:84% Now, the reason it's important is 02:37:57.390 --> 02:38:01.670 align:middle line:84% because it provides a way for data to get smarter. 02:38:01.670 --> 02:38:04.350 align:middle line:84% So you go to a web page, and you see 02:38:04.350 --> 02:38:07.350 align:middle line:84% a story somebody's saying about, well, there's 02:38:07.350 --> 02:38:11.350 align:middle line:84% going to be this concert Friday night at Carnegie Hall, 02:38:11.350 --> 02:38:14.490 align:middle line:84% and such-and-such is going to be performing at 8 o'clock. 02:38:14.490 --> 02:38:16.070 align:middle line:90% Don't miss it. 02:38:16.070 --> 02:38:16.670 align:middle line:90% Great. 02:38:16.670 --> 02:38:17.910 align:middle line:90% OK. 02:38:17.910 --> 02:38:19.090 align:middle line:90% Can you click on it? 02:38:19.090 --> 02:38:20.470 align:middle line:90% No, you can't. 02:38:20.470 --> 02:38:22.790 align:middle line:90% It's information in a web page. 02:38:22.790 --> 02:38:24.390 align:middle line:90% So you can copy and paste it. 02:38:24.390 --> 02:38:25.770 align:middle line:90% OK, so you copy it. 02:38:25.770 --> 02:38:28.328 align:middle line:84% Now where are you going to paste it? 02:38:28.328 --> 02:38:29.870 align:middle line:84% And if you paste it in your calendar, 02:38:29.870 --> 02:38:35.390 align:middle line:84% then you have to parse that into date, person, place, subject, 02:38:35.390 --> 02:38:37.030 align:middle line:90% Beethoven, concert. 02:38:37.030 --> 02:38:39.965 align:middle line:84% Why couldn't the data actually be smart? 02:38:39.965 --> 02:38:42.090 align:middle line:84% So when you read that information, you click on it, 02:38:42.090 --> 02:38:43.632 align:middle line:84% and boom, it goes into your calendar, 02:38:43.632 --> 02:38:46.930 align:middle line:84% it goes into your categories, it goes into your contact list. 02:38:46.930 --> 02:38:49.552 align:middle line:84% So it's making data smart, everything 02:38:49.552 --> 02:38:50.510 align:middle line:90% relating to everything. 02:38:50.510 --> 02:38:51.850 align:middle line:90% That's the Semantic Web. 02:38:51.850 --> 02:38:53.910 align:middle line:84% And it's going to be billions of dollars. 02:38:53.910 --> 02:38:56.010 align:middle line:84% It's going to be evolutionary, like all things 02:38:56.010 --> 02:38:56.910 align:middle line:90% with the internet. 02:38:56.910 --> 02:39:00.538 align:middle line:84% It's not like, when do we get there? 02:39:00.538 --> 02:39:01.830 align:middle line:90% We'll know it when we're there. 02:39:01.830 --> 02:39:06.490 align:middle line:84% It's just like the web we have of today. 02:39:06.490 --> 02:39:11.890 align:middle line:84% Intelligence-- AJAX is becoming JAX or better. 02:39:11.890 --> 02:39:13.910 align:middle line:84% Web pages-- when you click on a web page, 02:39:13.910 --> 02:39:17.450 align:middle line:84% it goes to another page, or it refreshes that page. 02:39:17.450 --> 02:39:18.650 align:middle line:90% That's the old way. 02:39:18.650 --> 02:39:24.410 align:middle line:84% Look at kayak.com, and you'll see what Web 2.0 is. 02:39:24.410 --> 02:39:27.630 align:middle line:84% AJAX-- Asynchronous JavaScript with XML. 02:39:27.630 --> 02:39:29.770 align:middle line:84% It's a page that's talking to a server 02:39:29.770 --> 02:39:31.570 align:middle line:84% while you're looking at it, and the data 02:39:31.570 --> 02:39:34.960 align:middle line:84% gets refreshed and updated in place. 02:39:34.960 --> 02:39:38.080 align:middle line:90% That's the next generation. 02:39:38.080 --> 02:39:40.120 align:middle line:90% Everything becomes a service. 02:39:40.120 --> 02:39:41.660 align:middle line:84% I've been thinking about this a lot, 02:39:41.660 --> 02:39:45.600 align:middle line:84% about, how could I not have to use Windows anymore? 02:39:45.600 --> 02:39:48.560 align:middle line:84% And the only thing that's holding me back is Quicken. 02:39:48.560 --> 02:39:54.320 align:middle line:84% Everything else I do, I can do with Linux or do on the web. 02:39:54.320 --> 02:39:56.300 align:middle line:84% There are some Quicken-like things, 02:39:56.300 --> 02:39:59.120 align:middle line:84% but Quicken is a very specialized 02:39:59.120 --> 02:40:00.920 align:middle line:90% kind of an application. 02:40:00.920 --> 02:40:03.240 align:middle line:84% IRVING WLADAWSKY-BERGER: Quicken doesn't run on Linux? 02:40:03.240 --> 02:40:05.840 align:middle line:90% JOHN PATRICK: No, no. 02:40:05.840 --> 02:40:08.420 align:middle line:84% But it does run on the Mac, so it could run on Linux. 02:40:08.420 --> 02:40:11.640 align:middle line:90% Anybody here with Intuit? 02:40:11.640 --> 02:40:14.920 align:middle line:84% Open document-- I don't know if you're following this. 02:40:14.920 --> 02:40:16.300 align:middle line:90% This is very profound. 02:40:16.300 --> 02:40:20.080 align:middle line:84% A simple concept-- when you create a spreadsheet with Excel, 02:40:20.080 --> 02:40:22.040 align:middle line:84% why should that spreadsheet forever and a day 02:40:22.040 --> 02:40:24.520 align:middle line:90% be married to Microsoft Excel? 02:40:24.520 --> 02:40:26.765 align:middle line:84% Wouldn't it be nice if you could create a spreadsheet 02:40:26.765 --> 02:40:29.140 align:middle line:84% and know that that spreadsheet, a hundred years from now, 02:40:29.140 --> 02:40:31.680 align:middle line:84% could be open with who-knows-what software? 02:40:31.680 --> 02:40:33.060 align:middle line:90% That's an open document. 02:40:33.060 --> 02:40:37.700 align:middle line:84% It's separating the format, the document itself, 02:40:37.700 --> 02:40:39.600 align:middle line:84% from the application that created it. 02:40:39.600 --> 02:40:41.760 align:middle line:84% IBM has been behind this for a long time, 02:40:41.760 --> 02:40:45.220 align:middle line:84% and everybody's behind it except Microsoft, of course. 02:40:45.220 --> 02:40:47.722 align:middle line:84% This presentation, by the way-- this is not PowerPoint. 02:40:47.722 --> 02:40:49.680 align:middle line:84% Can you believe that you don't need PowerPoint? 02:40:49.680 --> 02:40:53.100 align:middle line:84% I haven't used Office for six or seven years. 02:40:53.100 --> 02:40:54.520 align:middle line:90% This is OpenOffice. 02:40:54.520 --> 02:40:56.340 align:middle line:90% It works. 02:40:56.340 --> 02:40:58.860 align:middle line:84% And Microsoft [INAUDIBLE] compatibility. 02:40:58.860 --> 02:41:02.060 align:middle line:84% OpenOffice is more compatible with Old Microsoft documents 02:41:02.060 --> 02:41:04.340 align:middle line:90% than Microsoft Office is. 02:41:04.340 --> 02:41:06.113 align:middle line:90% It's true. 02:41:06.113 --> 02:41:07.780 align:middle line:84% YouTube-- you know all about YouTube, so 02:41:07.780 --> 02:41:09.860 align:middle line:90% let me just go to the last one. 02:41:09.860 --> 02:41:11.120 align:middle line:90% This is the big one. 02:41:11.120 --> 02:41:13.580 align:middle line:90% Will people trust the internet? 02:41:13.580 --> 02:41:16.260 align:middle line:84% And there are a lot of issues, and I 02:41:16.260 --> 02:41:17.640 align:middle line:90% don't mean to gloss over them. 02:41:17.640 --> 02:41:19.720 align:middle line:84% There are deep, important issues. 02:41:19.720 --> 02:41:23.220 align:middle line:84% There are a lot of bad people out there that want to harm us. 02:41:23.220 --> 02:41:26.440 align:middle line:84% I'm not talking about terrorists, necessarily, 02:41:26.440 --> 02:41:31.160 align:middle line:84% but people who, either for fun or for money, 02:41:31.160 --> 02:41:35.703 align:middle line:84% want to invade the integrity of the web. 02:41:35.703 --> 02:41:37.620 align:middle line:84% There are people who, just for the hell of it, 02:41:37.620 --> 02:41:39.720 align:middle line:84% would like to bring the web down, 02:41:39.720 --> 02:41:41.540 align:middle line:84% who would like to crash the internet. 02:41:41.540 --> 02:41:43.460 align:middle line:84% So there are some really important issues. 02:41:43.460 --> 02:41:46.585 align:middle line:84% Generally speaking, businesses can be as secure 02:41:46.585 --> 02:41:48.960 align:middle line:84% as they want to be if they're willing to spend the money. 02:41:48.960 --> 02:41:52.120 align:middle line:84% It's mostly an issue of spending a lot more money 02:41:52.120 --> 02:41:53.920 align:middle line:90% than they spend today. 02:41:53.920 --> 02:41:55.060 align:middle line:90% It's just like insurance. 02:41:55.060 --> 02:41:56.680 align:middle line:84% How much insurance do you do you want 02:41:56.680 --> 02:41:59.260 align:middle line:84% to have on your motorcycle, or your health, or whatever? 02:41:59.260 --> 02:42:01.460 align:middle line:90% And we all decide how much. 02:42:01.460 --> 02:42:03.300 align:middle line:84% Well, whatever businesses are spending, 02:42:03.300 --> 02:42:05.240 align:middle line:90% they've got to spend more. 02:42:05.240 --> 02:42:10.040 align:middle line:84% Privacy-- my perspective on this is that privacy policy 02:42:10.040 --> 02:42:11.520 align:middle line:90% is kind of a joke. 02:42:11.520 --> 02:42:14.720 align:middle line:84% The Congress passed a bill, so everybody sent out 02:42:14.720 --> 02:42:15.803 align:middle line:90% a privacy policy. 02:42:15.803 --> 02:42:18.220 align:middle line:84% The privacy policies, for the most part, are all the same. 02:42:18.220 --> 02:42:19.180 align:middle line:90% We have your information. 02:42:19.180 --> 02:42:20.860 align:middle line:84% We're going to do whatever we want with it. 02:42:20.860 --> 02:42:22.527 align:middle line:84% If you don't like it, write us a letter, 02:42:22.527 --> 02:42:26.440 align:middle line:84% and 12 weeks later, maybe we'll do something. 02:42:26.440 --> 02:42:30.030 align:middle line:84% The issue is to create a framework that 02:42:30.030 --> 02:42:33.070 align:middle line:84% allows the company to know whether or not 02:42:33.070 --> 02:42:36.030 align:middle line:84% something in a database or a transaction 02:42:36.030 --> 02:42:39.150 align:middle line:84% is touching upon data that belongs to a person 02:42:39.150 --> 02:42:43.310 align:middle line:84% and being able to say no or notify you or at least be 02:42:43.310 --> 02:42:46.530 align:middle line:84% able to have the option to do something about it. 02:42:46.530 --> 02:42:49.330 align:middle line:84% The perpetrators here are the banks. 02:42:49.330 --> 02:42:51.630 align:middle line:90% They send all the paper mail. 02:42:51.630 --> 02:42:53.510 align:middle line:84% There are a lot of financial institutions 02:42:53.510 --> 02:42:56.470 align:middle line:84% that don't even offer paperless statements. 02:42:56.470 --> 02:43:00.210 align:middle line:84% And they send all these free checks and all this stuff, 02:43:00.210 --> 02:43:03.430 align:middle line:84% and thieves go out and rip mailboxes out of the ground 02:43:03.430 --> 02:43:08.430 align:middle line:84% and put them in a pickup truck, drill the blocks out, 02:43:08.430 --> 02:43:10.510 align:middle line:84% and rifle through, looking for electric bills 02:43:10.510 --> 02:43:12.670 align:middle line:84% and things with account numbers to be 02:43:12.670 --> 02:43:15.950 align:middle line:90% able to steal your information. 02:43:15.950 --> 02:43:17.890 align:middle line:84% Linkage of the brand and the digital ID-- 02:43:17.890 --> 02:43:22.150 align:middle line:84% this is the big opportunity is to be able to take a smart card, 02:43:22.150 --> 02:43:26.030 align:middle line:84% put your company brand on it, use it for authentication, 02:43:26.030 --> 02:43:27.850 align:middle line:84% and link it to all the applications 02:43:27.850 --> 02:43:30.510 align:middle line:84% and provide integrity that customers will trust. 02:43:30.510 --> 02:43:33.650 align:middle line:84% This is going to be a home run for the companies that 02:43:33.650 --> 02:43:34.350 align:middle line:90% start doing it. 02:43:34.350 --> 02:43:36.810 align:middle line:84% And there will be early adopters, 02:43:36.810 --> 02:43:40.330 align:middle line:90% and they'll set the bar. 02:43:40.330 --> 02:43:44.550 align:middle line:84% Health care and finance were moving very quickly on that. 02:43:44.550 --> 02:43:46.310 align:middle line:84% That's actually beginning to happen. 02:43:46.310 --> 02:43:48.650 align:middle line:90% I'm optimistic about these. 02:43:48.650 --> 02:43:53.570 align:middle line:84% And lastly, I would say that, with regard to the bad things, 02:43:53.570 --> 02:43:58.730 align:middle line:84% a lot of people are asking for laws, and laws don't work. 02:43:58.730 --> 02:44:00.730 align:middle line:90% The Do Not Call legislation-- 02:44:00.730 --> 02:44:02.290 align:middle line:90% I get calls every day. 02:44:02.290 --> 02:44:04.190 align:middle line:84% There are 19 exceptions in that bill. 02:44:04.190 --> 02:44:06.990 align:middle line:84% Can you imagine a law against spam? 02:44:06.990 --> 02:44:08.310 align:middle line:90% It would be a joke. 02:44:08.310 --> 02:44:10.930 align:middle line:84% It would delight the spammers because they would finally 02:44:10.930 --> 02:44:13.010 align:middle line:84% would see a definition that they can work around, 02:44:13.010 --> 02:44:15.210 align:middle line:84% and there would be even more spam. 02:44:15.210 --> 02:44:19.010 align:middle line:84% So we need to use technology like challenge response. 02:44:19.010 --> 02:44:21.170 align:middle line:84% Filtering, unfortunately-- there's 02:44:21.170 --> 02:44:23.570 align:middle line:84% some brilliant PhDs all over the world who've 02:44:23.570 --> 02:44:25.210 align:middle line:84% been working on filtering for years, 02:44:25.210 --> 02:44:27.430 align:middle line:84% but the hackers are ahead of them. 02:44:27.430 --> 02:44:31.325 align:middle line:84% I think only authentication or challenge response-- 02:44:31.325 --> 02:44:32.950 align:middle line:84% they're really the only ways that we're 02:44:32.950 --> 02:44:34.630 align:middle line:90% going to get around this. 02:44:34.630 --> 02:44:35.990 align:middle line:90% So I got to the end here. 02:44:35.990 --> 02:44:37.650 align:middle line:84% I went a little long on a few things. 02:44:37.650 --> 02:44:39.910 align:middle line:84% I won't go through this stuff here. 02:44:39.910 --> 02:44:42.990 align:middle line:84% IRVING WLADAWSKY-BERGER: Any last-minute questions? 02:44:42.990 --> 02:44:45.710 align:middle line:84% AUDIENCE: One of the big things I see in the early '90s and now 02:44:45.710 --> 02:44:49.310 align:middle line:84% is that large companies like IBM were involved in innovation 02:44:49.310 --> 02:44:52.310 align:middle line:84% then, and now, smaller companies and individuals are involved 02:44:52.310 --> 02:44:53.590 align:middle line:90% in innovation. 02:44:53.590 --> 02:44:55.490 align:middle line:84% So let's take the example of health care. 02:44:55.490 --> 02:44:58.390 align:middle line:84% A lot of people are innovating, but they don't have 02:44:58.390 --> 02:45:00.370 align:middle line:90% the support of corporations. 02:45:00.370 --> 02:45:03.270 align:middle line:84% They don't have access to servers, technology. 02:45:03.270 --> 02:45:07.410 align:middle line:84% Yet they have ideas that they can convert to reality, 02:45:07.410 --> 02:45:09.230 align:middle line:84% provided they have the resources. 02:45:09.230 --> 02:45:12.590 align:middle line:84% My question is, are companies like IBM venturing 02:45:12.590 --> 02:45:16.110 align:middle line:84% into some kind of contracts or agreements 02:45:16.110 --> 02:45:18.710 align:middle line:84% or partnerships with individuals, companies, 02:45:18.710 --> 02:45:19.690 align:middle line:90% and other entities? 02:45:19.690 --> 02:45:20.230 align:middle line:90% JOHN PATRICK: Absolutely. 02:45:20.230 --> 02:45:22.272 align:middle line:84% IRVING WLADAWSKY-BERGER: [INAUDIBLE] health care. 02:45:22.272 --> 02:45:25.460 align:middle line:84% I personally have not been able to [? penetrate ?] IBM 02:45:25.460 --> 02:45:26.660 align:middle line:90% for many reasons. 02:45:26.660 --> 02:45:30.140 align:middle line:84% JOHN PATRICK: No, actually, a consortium of IT companies 02:45:30.140 --> 02:45:33.980 align:middle line:84% are the leaders with regard to solving these health care 02:45:33.980 --> 02:45:34.520 align:middle line:90% problems. 02:45:34.520 --> 02:45:38.900 align:middle line:84% Intel, Microsoft, IBM, Cisco and a handful of others 02:45:38.900 --> 02:45:41.460 align:middle line:84% have gotten together and they alone 02:45:41.460 --> 02:45:44.980 align:middle line:84% have millions of employees, and they are mandating 02:45:44.980 --> 02:45:46.680 align:middle line:90% electronic medical records. 02:45:46.680 --> 02:45:51.660 align:middle line:84% IBM gives-- not a bonus, but an allowance 02:45:51.660 --> 02:45:54.900 align:middle line:84% toward employees that fill out an electronic medical record. 02:45:54.900 --> 02:45:56.990 align:middle line:90% They provide a-- 02:45:56.990 --> 02:45:58.800 align:middle line:90% I was going to say Webvan. 02:45:58.800 --> 02:46:01.380 align:middle line:90% 02:46:01.380 --> 02:46:07.140 align:middle line:84% WebMD, excuse me-- WebMD resources, a free subscription 02:46:07.140 --> 02:46:08.340 align:middle line:90% for employees. 02:46:08.340 --> 02:46:10.860 align:middle line:84% So the IT companies actually are stepping up 02:46:10.860 --> 02:46:12.040 align:middle line:90% to the plate on this. 02:46:12.040 --> 02:46:13.930 align:middle line:84% IRVING WLADAWSKY-BERGER: [INAUDIBLE]. 02:46:13.930 --> 02:46:15.513 align:middle line:90% John, thank you so much. 02:46:15.513 --> 02:46:16.680 align:middle line:90% JOHN PATRICK: OK, thank you. 02:46:16.680 --> 02:46:19.430 align:middle line:90% [APPLAUSE] 02:46:19.430 --> 02:46:22.000 align:middle line:90%