Yn 18 lyf yn gynghwyl, yn cyfnoddiad y gallwn gwiris five yn llunio, lle mae'n ceisio pa yn lwykoedd cymryd unrhyw, yr ydych chi'n fath translateb am y dyfodol o'i eu maeddiad oedd y Prif, dyfodol o'r prif시�dd ychydig Glff Clwyddonedd, yr iawn, iawn, yr iawn, brydyn nhw'n gwirionedd ym Llywodraeth, yn rhywbeth ym Llywodraeth i fy nesgyn Ym Llywodraeth ym Leol Llywodraeth a'r Llywodraeth ym Llywodraeth. ..a chyfwyr o'r cyfwyr, ac yn gweithio'r cyfwyr o'r cyfwyr. Dwi'n gweithio'r dda nhw'n gwaith o'r dda i'r cyfwyr yn ymddangos o'r ddweud ymddangos, oherwydd rydyn nhw'n ddwy i'r ddweud, ac mae'n gweithio'r ddweud yn ddweud. Rwy'n gweithio'r ddweud y pethau'r cyfwyr, rydyn nhw'n gweithio'r ddweud y pethau a'u ddweud. Y ddweud y Brexit yw'n amser o'r ddweud y Gwasanaeth Brydor, affects is crucial and obviously I might be leaving and then finally there's time, what about the impact on the EU itself which not a lot of people are thinking about. Well, I think the deal is not as irrelevant as many people say it was. Whatever happens it was after that argument. It does crystallise a shift in the EU's thinking on benefits so that the ECJs where yng Nghymru yn ddefnyddio y Llywodraeth Cymru'r Éa eu bod yn ddefnyddio lŷosol mewn ddylanfod gwirio a os ydych yn ddeall pan ymweld hefyd yn byw i ymddangos fel y byw. Mae'r meddwl ddefnyddio łaf yw trefyn o dreamodd cyfle oherwydd mae'r ddweud o gweithio frechu y blaen ac mae'r fawr o feaeth arlaedd eraill. Mae hwn yn parw ydyn ni yw llyfr llefydd yn ddefnyddio eich ysgol iawn o ddeall o'r ddweud o gweithio frechu cyfle o ffrygu'r ddweud o'vew yn ddefnyddio'r daith. Felly mae'r gweithio ar gyfer y Llywodraeth. Mae'r gyfnodol syledd yn bwyd. Mae'r gyfnodol yn ymweld yn ddechrau eu gofod ddiddordeb yn y Llywodraeth Gallwch Ddwygogol. Rwy'n gweithio'n ddig RESALFALИY, ac mae'r meddwl am yr cyfle dda i'r gyflwyno-igol o gyflymu pan-lalufio'r Gweithio Europeane. Llywodraeth i'n gweithio'r Rhaglen.  Mae'n gweithio bod Gweithraedd cyfl CC yn ddod yn Sufietteau, a mae'n cyfrifiadau trafodaeth a'r hufydllfa. If you add together the Schengen optite, the GEOJ opt in the Euro optite, the sort of optite from the Charlotte Department of Rights, and now the optite from the Everclystic Union, the UK is quite a peculiar EU member state, very different from other countries, not in the Euro. So, in a way, is that somebody put it to me in the Council Minister's a few days ago, we have a three-tier, tier EU part, the Eurozone, the Europarts who are at least in theory mostly pre-ins, and then the UK. I don't think that matters rather the UK or the EU, because there's so long as the UK remains a member of the EU. And then the third thing I think is interesting about the deal is setting down some quite serious principles for the relationship between the Eurozone and the non-Euro countries. This is the bit that George Osborne, our Chancellor, cared most about, and it's a very technical, some very bitter argument between the British and the French in the middle of the night, the final studies on the 18th of February. But setting down principles like non-Euro countries don't have to pay the bailites of Euro countries, that the Euro group mustn't start taking decisions on matters which should be considered by the wider ecofin at 28. The idea that the rule book for the banking union, there should be a common rule book for all the countries in the banking union, and that the country is not in the banking union, but those not in the banking union don't have to follow the rules so closely, that was actually the source of the most important argument between the British and the French at the summit itself. I think this is my personal view is that most of my own country is not in the Euro, not John the Euro for a very long time indeed. That goes against the club of the theology of Brussels, which is to say that everybody except the group from Denmark with John the Euro is back soon. So I think that therefore I think the relationship between the outs and the ins is quite important and it's important to get the principles right, and as you know the British have a genuine worry that caucusing of the Euro's own countries could damage the interests of the city of London or more generally the single market as a whole. I think the British got most of what they wanted there, and if they stay in the EU this will be a source of much discussion in the future. A lot of the arguments were sort of settled with a score draw between the British and the French, and if the British stay in they'll come back again when the capital markets union takes off. Should the big one regulator for the whole capital markets union or capital British have their own regulator for their most capital markets union, that's an argument to come that possibly treats his change with the developments in the Euro zone and these arguments will come back again. So that's why the deal is I think quite interesting. It's not featuring very much in the referendum campaign. Cameron thought that his deal would lead to a buzz in the opinion polls in favour of staying in, because he thought that he could convince the British people that he had to transform the EU, that he was an alchemist who would turn lead into gold. He failed in that ambition, partly because he hasn't transformed the EU, partly because the Euros get depressed, gave the deal such a drumming that the British people are not even prepared to give many crates at all. He said yes for the modest, if quite sensible reforms that in my view he achieved. He made a strategic error in my view, which was for the sake of holding his party together, which has been his number one occupation for a very long time, the sake of holding his party together, he really wouldn't make the case for the EU until quite recently. He didn't try and shift public opinion until quite recently. He missed opportunities like the review of EU competencies which carried out in 2014, 36, I'm going to forget, I'm going to be very important in this report. Well research detailed reports on EU transport policy, EU research policy, EU animal health policy, looking at what the EU does in beneficial to Britain or not. These reports concluded, guess what, just about everything the EU does is fairly beneficial to Britain on balance, which wasn't the resultatory Eurosceptics hoped for, they got very angry about these reports. Therefore to placate them Cameron Berryburn, the first batch of six was published, I remember on the day that Prince William's son was born, that's not a coincidence, the press went off grief on them. The last batch of reports was published in December 2013 or 2014, I forget which, just on the day that Parliament went into recess I remember that play as well. Again no effort was made to use these reports to shift public opinion to understand that EU was beneficial. Cameron was only doing all the referendum campaign, he's left it a bit late because the referendum campaign started effectively on the day of the site on 19th February. Public opinion was then roughly half and half in favour of membership or leaving membership and it's still roughly half and half so he's left it a bit in my view and his concern is to keep Tory party together which is an understanding concern. But this meant that he couldn't prevent himself from saying that he was good per se, his line was that he was not good, it's pretty ghastly but with my wonderful reforms I'll make it good and that's not a very convincing line. To be fair to the Prime Minister he's now, he's now, he's come out all guns blazing now, he's trying extremely hard, I say he should because if he loses he's out within probably more than days. So the referendum itself, I'm going to list the six reasons why the in campaign might win, the six reasons why the out campaign may win. You may notice that I think the arms campaign has stronger arguments working in its favour, I fear, I hope I'm wrong of course because I'm fit in. Let me start with the in campaign though. The best argument we have is what does Iote need? They can't tell you. I talked to Matthew Elliott, the boss of Vote Leave. He said he's not prepared to tell you what Iote needs because it's not his job to work out what Iote needs, it's the job of the British government post the referendum to get the best deal possible for Britain. Britain's just strong and poor at one country, they've really laughed so much they'll give us a good deal. But it is difficult I think that they don't tell you which of the various models they would go for, of course they don't agree on which model they'd go for and I'll come back to that. Secondly, most of the serious politicians are for in. Boris Johnson is very popular, extremely popular politician who's for out but he's a joker and he's not very serious and he's all over the country. He himself said that his views on the EU have been, he's been careering around like an out of control super market trolling. That was his own description of his own views on whether he should support membership just before he came out. So arguably Cameron is a very good salesman and is fairly trusted in respect of Unlidled England and the fact that the out campaign, apart from Boris, doesn't have any serious hitters other than Nigel Farage who is a good communicator but obviously he's very toxic to many voters is I think a problem they face. Third factor, there is a bias to the status quo in most referendum campaigns, there's historians of referendums we've told you. We saw this in Scotland a bit, the last minute people prefer the status quo. Fourthly, this may not be a strong argument but the government is making the case that we need the EU for our security. This is a new argument that nobody ever made in Britain until last autumn. I'm not sure it's too very convincing because most British people think that NATO provides their security and the spy services do as well. They've never heard of the Europol, they don't know what the Europe in the West is and they don't really understand that the EU plays quite an important role and say Russia policy by imposing sanctions on Russia because of Ukraine and so on. So I'm not sure if this argument is going to be very convincing but the government is trying to make it. It may work with a few people. Fifthly, outside interventions. I think they can help. I think that Irish political leaders can make a difference because they are respected as very close partners, allies of the British. If they say we would like you to stay in because of common economic interests and common security interests, I think flushing those in England will miss them and I think Obama plans to come to England and say something along those lines too and I think that will be quite helpful. Maybe if other European leaders intervene it will be less helpful. Final point for helping in Scotland. Obviously as little as Sturgeon has said Brexit will hasten the day when there's a second Scottish referendum to which the Eurosceptics say well of course it won't so long as the oil price remains low. First of all we don't know how long the oil price will remain low and secondly I don't declare it to be on Scotland but I'm not sure economic factors are necessarily the ones that matter the most but quite a lot of Scottish voters I think. Issues of identity may be more important. So the more intelligent thought that will flow from voters in Britain may hesitate to take a step that could lead to the break of the United Kingdom. Well let me switch to the arguments on the other side which I think are very hard for you. Firstly the devil has the best tunes as far as I'm concerned. The Outs campaign have beguiling fairly simple arguments that appear to be easy to make in a simple sign way. Do you want to pay 10 billion pounds of international health service or to the Brussels bureaucrats? Do you want to control your borders or not? Do you want your legislators and your judges to be British or foreign? Then they make the trade point. When people like me say if you leave the EU you couldn't lose access to the civil market they say rubbish look at China, America, Canada and Argentina. They all trade with the EU so they have access to the civil market and they're not members of the EU so of course we can go on trading. They align the difference between a civil market and a free trade area which of course if you try to explain that to them it's very hard. I couldn't do it in less than three minutes but by the time I've done that I've lost the audience. So the evidence is staying in the EU are all complicated economic, numerical, boring, rational and hard to explain. This is our problem. Second advantage of the out-of-campaign now, they have to press on this now. The most influential British newspapers, the Mail, the Express, the Mail, the Tel Aviv Express, probably the famous influential Mail, strongly you're a skeptic, unbelievably biased in the way you report things, particularly the Daily Mail which is soviet in the way it reports it. It blames most of the world's problems on the EU. You only have to open it to get shocked. Even a hard one for the Germans like myself is quite shocked by the Daily Mail. I think media analysts have been saying for years that written media doesn't matter anymore. It's all social media. I don't believe that written media matters hugely to the political classes. It's given cover for so many Tory Eurosceptic MPs to come out for out. It's made them feel comfortable, it's made them feel like other people on their side. I'm afraid it affects the way the BBC report. The BBC bends over backwards to be neutral. It's under so much pressure all the time. It gets thousands of emails every day complaining about its pro-EU bias. Last Sunday, for example, Andrew Maher interviewed Boris Johnson and interrupted him quite a lot of times because he waffled Boris. Immediately there was a Twitter storm that Boris was interrupted 47 times in the previous week that Prime Minister was only interrupted 23 times. This proves the BBC's bias.  They attacked the BBC the whole time with a very deliberate reason, which is that they think the BBC will decour into not making the same mistake again. Next time the BBC will make sure Andrew Maher's told a lot to interrupt so often. I fear some of this may work, so if you watch the BBC's reporting, they'll have some serious support by a very serious economic statement saying jobs will be lost. To make it balanced, they have to find some second-rate article that nobody's ever heard of that says jobs won't be lost, and they'll give the second-rate article that nobody's ever heard of equal status to a very reputable thing. That's how it works. So I think the press does matter. Thirdly, the strength of the campaigns. The out-campaigns, there's several of them, but they have unlimited money donated by millionaires and millionaires and hedge funds. They have a lot of resources, a lot of expertise, a lot of very brilliant people running their campaigns, and I wish I could say to them about the in-campaigns, but I can't. They're under-resourced, under expertise, if there's such a word, and they're not, at the moment, very inventive in regarding what the other lots say. The man, the team running the main out-campaign vote me, ran the those-a-b referendum campaign. They run other campaigns, Dominic, Cummings and Mathieu, and they're extremely clever and extremely proficient, and I wish we had people like them on the other side. And number 10, frankly, has looked a bit out of control as well, not in control of things. Number 10 believed that Boris and Go would come out for in. They believed that he sent it to ADMPs, and the Tory party would come out for out. They were wrong on both counts. Let's hope they get better. Fifth point, the Labour Party is in a pretty awful state of mind with a Marxist leader who's basically anti-EU, but pretends he's pro-EU for an easy life. He's not putting energy, resources, money, effort into making the case for Europe. Many of his front-benchers will do so, but this is a problem, because Labour voters are distinctly more pro-EU than Tory voters, but they're not being mobilised. The trade unions also are not mobilising their members. Most trade unions are weakly to in, but because staying has become Cameron's project, and you're lastly right to be conservative, they're reluctant to help Cameron. I think a lot of trade unionists and trade union organisers are sitting on their backside while they're doing their thing. My fourth point, my fifth point, the business lobby is going to be less strong than I thought they would be. They have been covered also into cowardice in my view. Many of them are reluctant to speak out for in, even if they are for in because they don't want to upset stakeholders, shareholders, customers, suppliers, not enough directors and so on. So any 36 of the FT's biggest 100 companies, the FT 100, came out in a recent letter. Last point, my most important one, the EU is in a handful of messes, isn't it? We all know that. Those of us who like the EU would have accepted this in regards to the many ways the Euro crisis has not resolved. The refugee crisis, despite what happened last night, is certainly not resolved, and every time the EU is in a mess, it helps the out campaign. They say, do you want to stay in this awful organisation that is out of control, which is acrimonious, where they can't reach agreement with what to do, and all these refugees who see flooding into Germany, they all get German passports in two years, then they'll come to Britain instead of jobs. Then Turkey's going to join the EU in five years, and 70 million terms for the market is through your jobs. A lot of people believe that because they've been in the press. So that's why, as we've gathered, I'm not very optimistic about the outcome, but it's certainly too soon to be sure what will happen. And what about the impact on the UK if Brexit happens? The five main models of post-Brexit, the one that is best for the economy, of course, is Norway. It's Norway's part of the signal market. But as you know, it pays into budgets, it takes free room to labour, and it has no say on the rules. That's why I don't think it's politically viable, because any British government with post-Brexit would not accept free room to labour, because it believes that you, because you don't like free room to labour. So Norway won't be on the options, it won't be on the cards. Normal Switzerland's the EU would not offer a Swiss. The Swiss model is broken down. The Swiss model of bilateral agreements through which the Swiss will adopt EU rules and regulations, but without accepting the software, the rule that we were able to adjust this information, doesn't do with bilateral treaties with the EU, is broken down. The Swiss had a referendum on rejecting free room to labour with the EU two years ago, and they voted against this. But they can't implement that referendum result, because if they did, they would lose access to the signal market and they would know it. So the Swiss people's verdict has not been implemented. I don't think it will be. But the EU itself believes that the Swiss model isn't working. It wants the Swiss to accept a role of the ECJ. The ECJ are duplicating free room to the Swiss. The Swiss don't accept that, so the model is broken down. Thirdly, the most likely option probably is the free trade agreement, the Canada option. Britain would negotiate as much of access as it could in the way that Canada has done, but if you look at the Canada deal, it's still largely about tariffs. It tries to go beyond removing tariffs to removing some non-tariff barriers, but not very many. Canada will not have access to loads and signal markets. For example, public procurement of Canadian companies are not allowed to compete in European public procurement contracts and will not be allowed to. The car industry has no mutual recognition of each other's standards. Financial services are not covered. So the Canadian deal would be pretty bad for the British economy, but it would be better than the fourth option, which is WTO membership, which is basically no FTA, no particular deal with the EU. I have WTO rules which limit how high your tariffs can be. I know that Oxford Economics will shortly be publishing an analysis of the economic costs of all five options that I haven't come to think of yet. They concluded that the WTO membership is the most painful option for Britain, and it would lead to a GDP loss of 4% of British GDP. They haven't published that thing yet. I'm just giving you one. The fifth option, which is perhaps not very broad, is the Turkish option, which is customs union. The Turkish customs union of the EU doesn't have a say on the tariffs that the EU imposes on the rest of the world. It has limited access to some parts of the market, but not very many parts of it. I don't think that's a very satisfactory option. All these options, all five options, would not give Britain access to the FTAs that the EU has negotiated in 53 other countries. We would lose our trade deals that we now benefit from. Of course, the skeptics deny that and say that some of the other convention means that international treaties continue if one country leads part of another country. I think that most of the EU let's think that we would lose the benefits of these deals. Britain would have to negotiate the rules from scratch during the two years under Article 50 of the EU Treaty that you're allowed to negotiate with Brexit with the exit. Difficult to negotiate 53 trade agreements from scratch to cover us, because Britain doesn't have any trade negotiations. They're all far in 1973 with the EU as the Irish ones were. Of course, we have to negotiate our own trade agreements in the future with others from scratch, so we have to negotiate with the US. The Americans have said that the trade rep is sailing in Washington. We're busy with teaching that Britain wants to have to have its own deal, but that's fine. We'll have to wait until the end of the queue. We've removed the leverage of the EU, which allows Britain to negotiate quite good trade agreements through the EU. In the short term, the main economic consequence of Brexit would be a massive sterling crisis. We're seeing that we're ready. The pound has gone down 8% in recent months. It went down 2% the day after Boris Johnson said it was coming up. Of course, that's not entirely bad if economy is the same, but it's other than we equal. If it goes down too far, it gets quite bad. There would be a short term crisis in which, if it hadn't just before the vote, it could help to push the vote towards an end, in fact. I think all these options I've described are very bad for the city of London, except for the Norwegian option. That I think is still quite bad for the city of London, because the other four options would not allow the city the so-called single passport, which means that Goldman Sachs comes to London as a big subsidiary in London, from which you can do business all over Europe, selling products, advice, shares, bonds, whatever. Without being regulated by other European governments, that's the so-called passporting. The city of London is a success, and much of it, not all of it, quite a lot of it is built on this passporting. That is very much part of the single market, and I can't see any of the options I've mentioned, except for Norway, allowing Britain to stay part of the single market. I should have said the Swiss option does not be with some access to the European financial services market. Financial services will, by all two exceptions, are excluded from the Swiss option. But even with the Norwegian option, of course, for the city, the rules will be written by the rest of the EU, which would be a bizarre situation if the UK holds the greater part of the EU's financial services market, but the rules will be written by the other, by the member states of the EU. We would apply them in the city if we wanted to enjoy the passporting arrangements, which would be a very bizarre situation, hardly sustainable. I think the city would be particularly badly hit by Brexit, particularly badly. So it's no coincidence that the investment banks are speaking out strongly of favour membership, but if that helps our cause, I don't know. The Goldman Sachs is with us, and let's hope it does. Some of the hedge funds are against, because they don't like the limits on their bank's bonuses and the other rules that the EU proposes on them. I'm almost coming to the end of this section. I'm not falling, taking too long to speed up. A big problem for the UK economy with post-Brexit would, of course, be free-roomed labour limitations, because, as I said before, whatever happens post-Brexit, we would not allow unlimited free-roomed labour with the EU. It means that when a foreign bank in London or a British manufacturing firm in the Midlands wants to hire a Frenchman or a German or an Irishman to come and work in his or her company, you'll have to get a work permit, just like hiring an Indian requires today. Probably you'll get some of them through and some of them you won't get through, but I know this. I tried to hire an American to work for my big town. It was so bureaucratic and complicated. I gave up at the end. It takes at least six months. It's difficult and complicated and they don't always let you have to do the work. So that'll be a real cost of the British economy. The biggest cost of all, I think, is just foreign investment. Already the CBI will tell you there is a reduction in FDI, foreign director investment, into Britain, because of the threat of Brexit. If Brexit actually happens, there will be a loss. People are interested in Britain for many reasons other than access to the symbol market. That is a seriously important reason for the financial firms, for the car manufacturers, for the pharmaceutical firms and for some of the business advice services. Final section, I'll do this in two minutes. What happens to the EU itself if we can use it? Well, I don't foresee a dramatic shift in the economic philosophy of the EU. I mean, a lot will of course be less economic. We're different without the British to push for free trade and the symbol market, but not dramatically, because there are others like the Irish and sometimes the Germans and the Nordics who share Britain's broadly pro-market perspective. So I wouldn't expect a dramatic shift there, although the Germans think they'd be a bit of a shift and one of the reasons why they're so keen to keep us in. Foreign security policy, obviously the British are important contributors to British EU foreign policy. They are central contributors to EU defence policy. Defence policy without the British would be much less serious than it is, and foreign policy would be weakened. Defence policy could well evolve in an anti-NATO direction, because one of the jobs the British do in the EU is stop the creation of operational headquarters being set up that could rival or damage what NATO does. I think the bloke of standing with the EU would be greatly damaged if the British left. That's the sort of the intangible loss of the EU soft power. I think the Justice and Home Affairs area would be damaged by Brexit. This is bizarre given that Britain is not ashamed of them. We have an octite from JHA, a peace and judicial cooperation, but actually where we do take part we're very big contributors. If you talk to Europol, the British feed more intelligence into Europol than any other member state. It's not a coincidence that the man running Europol is Rob Wainwright of Britain, or the man running Europe just until recently was Mike Kennedy another Brit. The British have been very positive, particularly also in some countries terrorism operations. I think those areas would suffer. I think Marine Le Pen said not long ago that if the British leave, it would be like the Berlin Wall of Fall in 1989. I think she's right. It will be a big step in European history. The narratives have become disintegration, not integration. I think your skeptics all across the continent will be boosted, strengthened, they'll have a swagger in their stride, they'll feel they can win, and the prospect of Marine Le Pen winning the French presidency will be high. People will start to think it could just happen. Maybe not likely, but not completely impossible. I think this is obviously very bad for those of us who think the EU for all its force is a good idea. And then the final consequence of Brexit, which I think will be the German question that comes back, is the thing that everybody talks about, sort of in private, nobody talks about in public. Throughout the history of the EU, one country has never been preeminent before. For most of the EU's history it was Germany and France, then for a while the Tony Blair was Britain and Germany and France. For the last five or six years Germany has dominated the EU to an extraordinary degree. It's unhealthy to Germany and unhealthy for the EU and many sensible Germans know this very well. This is a product of the British being increasingly centre-tached, the French economy being weak and Holland being a weak leader, the Commission being a weak institution, and Germany having a relatively strong economy. In most ways very successful and effective leader in over the Merkel. But I do think of the British League that the whole question of Germany's preponderance becomes a much bigger problem for the French and the Italians. I was in Italy recently and they are very well aware of this and that is the number one reason why the Italians are terrified of the prospect of Brexit is because they think, as one said to me, we don't want to be left alone in the room in the French and the Germans. So I think it kind of destabilises the power relationship.


The timing of this partnership is crucial and its success in catalyzing climate action in agriculture and food security is very important. We find great pride in launching and continuing the Food and Agriculture for Sustainable Transformation Initiative. As it was conceived and launched in Charmesheikh, it seeks to implement concrete action that would result in improving the quantity and quality of climate finance and act as an accelerator to transform agri-food systems to deliver a triple win for people for climate and nature. The partnership will focus on the food pillars, enhancing capacities to access climate finance and investments, building knowledge and capacity and providing policy support and dialogue. COP28 Presidency also views FAST as one of the key elements and partner that will deliver the promises of the Emirati Declaration. When FAST was launched, the most important element to it is that we are going to address the bottleneck of scaling up for sustainable transformation in agriculture and that is finance. With its action and coordination focus, the FAST partnership is an exciting and valuable initiative. We also welcome the important focus FAST brings to agriculture and global climate discussions. And we would like to thank the FAO and Government of Egypt for their ongoing work in this initiative and bringing us together. It is our express honour to take part in the FAST partnership board. We commit to engage the creativity, energy and indeed the present and future of youth and food systems to implement climate mitigation and adaptation. Agri-food systems hold enormous potential for building adaptation, resilience, mitigation and food security. And the diminishing trend of both agri-food and adaptation investment is a missed opportunity to equip farmers with the knowledge to enhance their resilience and adapt to climate change impact. Together we are writing a new narrative that plays agri-food systems at the core of climate change negotiations as a powerful solution that needs adequate investment. Thank you.


Okay, well, hello here. Thank you for attendance. Sorry for the technical problems we just had and the delay. Let me present you Peter Ganten. He is CEO of the Univention GmbH in Germany since 2001 and the chairman of the Open Source Business Alliance since 2011. Today, Peter will talk about obstacles for small and medium-sized enterprises. His theory is that in large enterprises, it is widely known that open source and free software is a good thing, but for small and medium-sized enterprises, there are still many open questions. And today he will tell us about some potentials for small and medium-sized enterprises which advantages open source software has for those companies and which challenges we have to face. So please join me in welcoming Peter Ganten today. Thank you. Thanks a lot and hi everybody. So my name is Peter. I want to speak about, as has been said, about the obstacles small and medium-sized companies have with open source software and I want to share some of my ideas what can be done about this. I make my living as the CEO of Univention, the company I founded back in 2002 who of you has heard about Univention already and knows what we are doing. That's roughly the half. For those who did not raise their hands, we make an open source software for organizations to manage their identities and to manage the access of their identities to a lot of different software systems like open source software like Samba or KVM or Ubuntu, groupware systems like Open Exchange or Sarafa and also a number of proprietary systems and proprietary cloud services like, for example, Google Apps for Business or Microsoft Office 365. I forgot to show you that slide. Our core product is a Univention corporate server and you can think of it as a complete solution providing identity management, system management. It is quite scalable, but it is also used by many small businesses. We have, meanwhile, around 4,000 organizations worldwide working and using this product. A lot of them are small businesses. A lot of them are, a lot of our customers are small businesses, but I have to add that we make most of our money with larger organizations which manage tens of thousands of identities with our products. A special group of those are school authorities who in many times manage hundreds of thousands of identities of students and teachers and their access to infrastructure in school and in schools like Wi-Fi, like computer rooms but also cloud-based applications and so on. So what is the problem with open source software? What is the problem with open source software and small businesses? Hasn't open source software already won? I think most of us know that all the Fortune 500 companies or all the DEX companies in Germany, all of them use open source software and many of those use it in a strategically way. And also if we look at the big success story of our technology sector, of the information technology, we can see that companies like Google, Facebook, Amazon that they use open source software wherever they can. I know that this does not mean that they are contributing. Everything they do, like they write, like for example we do, but to be fair, they at least use open source operating systems, databases, web technology and most of the cases, they are good contributors to the projects they are using. And this is really a great thing because it brings free software as a whole forward and it brings the industry forward. So the large companies are using open source, the internet technology companies use open source and even our beloved enemy, if you like, Microsoft, more and more behaves like an open source company and commits itself to open source in more and more cases. I would not say they are an open source company but what you really can see is that they are very actively looking at this and scrutinizing everything if they can engage there or not. So maybe we can say bye-bye enemy here, I have to say that. So it looks like everything in mind in IT now knows that open source is the way to go but if we look at our plumber, our physician, our tax consultant or if we look at medium-sized companies like the many suppliers to the automotive industry we have here in Germany or logistics companies, food companies, we only randomly find open source software. Yes, there might be Firefox on the desktop. Yes, someone might use VLC but a strategy to use open source wherever it is possible almost never. And these companies, they are small but together they form at least here in Germany and I think in many other European countries. I know that in the US it is a little bit different. They together form more than 50% of the economy as a whole so it is really a huge sector. So why don't we find open source strategies in these companies? I think you can put it in two different ways. The first possible way is maybe a little bit mean. You could say they are ignorant of sustainable IT strategy and they combine this ignorance with short-term profit seeking but maybe a little bit more realistic version of this would be that the benefits of open source software are just not apparent to them and that it is often economically not feasible for them to use open source software. That of course sounds counter-intuitive. Isn't open source free to download after all? I mean why does it economically make no sense? Now suppose you run a metalworking company. You have maybe 50 people, foreign sales, 2 in marketing, 5 more in accounting, HR and other administrative jobs. The rest are engineers, turners and welders. Of course you need information technology. You need file servers, print servers, email, web servers. You would need something to manage your customers, your accounting and I think that's just the basic stuff every organization needs. Additionally you probably need some industry-specific software like in our example CAD software. And all of this especially the non-industry-specific stuff for sure can be done with open source software in an excellent way. There's telephony software like Asterisk, AugerMindschaft, file print, web servers are part of any all-purpose Linux distribution and I could go on with this list for a very long time. So it is possible, but there seems to be a problem. What is the problem? Plugging all these different components together is really a huge, huge task. And you need user management, identity management, you need mail services. These have to be secure as you don't want to be, don't want to make your company the door for all the spammers of the world. You need to combine this with group where you have to customize the ECM system and the CRP system and so on. And that really takes a long time and costs a lot of money. I would say taking the stock open source software and combining it to something which really can be used and really can be maintained would take weeks if not months. If you look at those Linux desktop projects like for example in Munich or the failed ones at the German Office of Foreign Affairs, you can see that this is really true. Those projects decided to build everything from scratch based on popular Linux distributions like Debian or Ubuntu and it took them years to get something running. And this effort is never affordable by small and medium sized companies. And also we have to remember once you are finished that's only the start of the work. You have to, once you are in production you have to support your users, you have to fix bugs, you have to roll out critical security updates and you have to update the software as a whole all of the time to satisfy your users' needs, to satisfy security requirements and also to maintain compatibility with the outside world with other services and with file formats. And this requires a lot of integration testing and that also cannot be done by small businesses. Now imagine our owner of this metal working company who was told that he should use open source software because it's free to download. He ends up with maybe one, maybe two people who have to maintain his stuff, two experts which are hard to get in the market and are expensive. He won't save money and I think you also will not think that he is now more independent of external influences of other vendors like he has been before. It does not make much sense for him. Unfortunately I really have seen a lot of those cases. Sometimes we were brought in with our integrated product and it was hoped that with this product open source could be saved in these companies. But typically that was too late. It was not possible to explain why our version of open source software now is better, easier to maintain and in the end not that expensive than what has been done before. These companies really were burned by open source software and my message here is we really should stop burning valuable open source software at innocent SMEs by pretending it is free. It's not free, we instead should really concentrate on the real benefits of open source software like vendor independence, more security, the ability to change it yourself. And yes, these benefits really come with costs. As a side note that is one of the reasons why we at the open source business alliance still prefer to speak about open source software and not about free software. Of course we know that this is, we all mean the same thing here and we know the difference between free beer and free speech for sure. But for an owner of our metalworking business here, if I speak about free software, he will think it's free of costs and it is not and that is really a problem. So we should take the responsibility if we are enthusiastic for an open source software and think twice if it really makes sense to use it when we speak to a non-technical responsible person in a small business. Often enough, luckily, this question can be answered with yes, that's the good news. And then of course we should do it but if we are unsure, we really should resist. As they say in sales, one happy user speaks to two other users, one unhappy user speaks to seven or more about his mis-success with open source software and we should try to avoid this. I'm always astonished that almost everyone in IT has heard about the problems at the German Foreign Office. Everyone in the public administration, I speak to, has heard about this and everyone has heard about problems with the Linux desktop project in Munich and tells me about them, especially if they are not true, they move really fast from mouth to mouth. But almost no one has realized that the internet, all those huge internet companies have been built with open source software completely and that this is really a huge success. As they say, bad news travel fast, good news are still being written down somewhere. But there is open source software and SMEs, right? There's Firefox, there's VLC, there's more and more LibreOffice in small and medium enterprises and the question is, so why is it successful? I think the main reason is not because it is open, that is a good thing for these companies. The main reason is that it is really easy to install, easy to access, easy to use. It does what the user wants it to do and it is well maintained. And luckily also for our metalworking shop, they are great easy to use solutions available and I'm proud that my company makes one of those. But even if it is open, if it is there and if it is available, the price is not the central point to make a pro open source decision. I've omitted some of the slides here that is a slide someone from my company made to show how complex the internal workings of such an environment are. I won't comment on this. These are the costs and I would like to underline now the fact that cost is not the central point here by one of the most important lessons we at our company have learned in our history. That was when Microsoft announced that they will discontinue their Microsoft small business server. And then the Heiser Verlach, those of you from Germany for sure know the Heiser Verlach, they make Heiser online and the CT, they approached us and said to us, hey, with your product we can make the perfect alternative, the perfect software to migrate to as an alternative to Microsoft's small business server. And we thought, wow, they are backing us, they print, they now print 300,000 issues of the CT with our software and write about it. And we put really a lot of effort into this and thought this is the chance of our life now. But from the marketing perspective, that was really a success. Many downloaded the software, tried it, many got us to know, but commercially it was, I have to say, really a flop. Our business model at that time was that similar to the Reddit business model, the source code is free and available on the open source license. We used the AGPL, but if you want to access updates and if you want to use the binary product as it is delivered, you have to buy an enterprise subscription. And through this Univention Corporate Server CT edition, we just sold only a few licenses for the enterprise subscriptions. We really had expected something different and asked our customers and they told us, well, yes, it's cheaper, it works, but you know the price difference is not that high to Microsoft. So we will better stick with them. And then we told us, but our service is better. And they said to us, yes, that might well be and that has to be the case because we do not expect any service from Microsoft, but should we use your product, we will expect the best service you can deliver because if there, should there happen anything, you really have to make sure that it will work because we take a huge risk to work with something else as Microsoft. And that, of course, was a dilemma for us which we couldn't solve. We couldn't drive on the one hand, the price is down to be really more competitive and on the other hand, deliver a better service. The conclusion to this again was do not compete on the price. Our conclusion from this was we make the product available for free completely, including the binaries, including the maintenance now. Every small business and every other company now can use it, download it, assess or update servers. And now it is free as in free beer. And I have to say, this really has been a huge success now. Week for week, more and more companies worldwide use our products. We measure the access to our update server here and it really goes up week for week. There are many small businesses amongst them, but a lot of those would not pay us anyway so we are really not losing anything here. But on the other hand, we get split in the market and get market awareness and a lot of medium and larger companies get to know us and they really seldom discuss the need for enterprise subscription with us. It is nearly impossible for a large organization to run an identity management system which was just downloaded from the internet without an external vendor being responsible for us. So they are paying us and so the model works quite well. So that means the software has to be free if it wants to be successful, besides being easy to use and easy to manageable. It has to be secure and services, of course, may cost money. Interestingly, this is the model, the proprietary world now adopts also. Look just at Microsoft Windows 10, for example. They make it freely available now too but of course they charge for their services. But still, we should look back at the question, why don't small businesses want to pay more for open source? They get more, right? They get the right to change it. They get vendor independence. They often get an overall more secure software. So why don't they like to pay more? I think one of the reasons for this, so these are some other larger companies, one of the reasons why they don't want to pay more for open source software is that the risks associated with proprietary software are huge but they are not found in the balance sheet. An exploit through an proprietary router can ruin your business. If you are a small hospital and you have to pay ransom to someone to use your PCs again, and if there would be my data on these PCs, I really would have a problem to go to this hospital again. So this is really critically. And in other scenarios, for example, if you work with toxic chemistries, you would need an insurance. You would find this insurance here in the balance sheet.  And I think we should really think about this if this makes sense. Or if risks in the software stack have also somehow made visible financially, because it is a financial risk in the end. So what can we do about this? I think the good news is that most small and medium-sized businesses are privately owned. And these private owners have really a high interest in a long-sustaining business. So they are aware of these risks. If you explain them, on the other hand, unfortunately, they often do not understand much about IT. So we really have to speak to them and to explain these risks. Secondly, we should bring these risks more into the public discussion. As we have seen, small and medium-sized businesses are really the most important part of our industry, of our economy. And we depend on them. And we should really think about if these major part of our economy should depend on just a few companies and their arbitrariness, if you like. We should think about that. As we have heard, the software itself really has to be easy to use. It has to be secure. It has to be integrated in a nice way so that small and medium-sized enterprises can work with it. And if we have achieved this, openness will always be a plus. We can always win with this. And the last point I want to make is that we really have to insist that critical infrastructure has to be open source as it has to be secure. And if we think about critical infrastructure, we often think about the stuff the government runs or the stuff really large companies run. But most of the critical infrastructure is run by small businesses. Think of smaller hospitals, think of ambulances, also water supply companies, sometimes even electricity companies are not that large companies. And we need a discussion on how secure and independent of external influences we want those infrastructures to be. So thanks a lot. I don't know if we have time for any questions. Okay. Thank you very much, Peter, for this interesting presentation. Now we have a short five-minute question and answer round. Any questions over there? Just a moment. Hi. Thanks for your presentation. I think it's very crucial topics you talked about. And there's one particular thing that I'm a bit puzzled. And hopefully you can give me an idea because it has been puzzling me for ages, maybe. And it has to be with the advantage of the vendor independence. You talk that free software is not cheaper, but it has other advantages. But then what is exactly the advantage of the vendor independence? Is it not to avoid the vendor locking and in that way to make the maintenance a bit cheaper? So it's not that economical advantage or is there other things? I think that the point with vendor independence is not, it is for small businesses, valuable if something bad happens. If you have a good supplier who does it work very well and doesn't charge you too much, in the end for the small and medium-sized business, it will not make a huge difference if it is proprietary or open. But now, if the vendor decides to change something, you have options or you do not have options. I remember some customers which were using Microsoft forefront server as their security gateway and one of those in a very large project and then Microsoft decided, well, we discontinued that product. There was no other possibility than designing the whole project new and it costs them hundreds of thousands of, because it was really a large project here, of euros. And this is on a smaller scale true for small businesses too. On the other side, if you were a business which has used open office and open source product and now Oracle, which happened, decides we are not interested in this anymore. We discontinue it. It is open source. Someone else can step in and go ahead and start to maintain it. And there have many cases been in the past where this really happened. It only happens typically if there are enough users, if it makes sense. But if there are enough users, you can be quite sure. And I think this gives you long-term safety and this is one of the risks you typically buy an insurance for. Because also hopefully not every year someone breaks into your company and steals something, you still have to hedge for this. And these are risks with proprietary software too. And the companies don't hedge for it. And I think this has to be discussed at least. Did that explain it? Okay, great. Any other question? Hi, one thing I'm not totally clear about is in the beginning you said big companies use open software more and more. But then in the small companies, actually I don't see that much of a difference in big companies, they still use Microsoft Office, I'd say 99% so. Did you now more focus on infrastructure in this talk or can you clear this up? At least I'm not totally clear about it yet. Yes, I think open source has been very successful in many areas. It started with server operating systems, then came databases, then came middleware, web technology. And I cannot imagine a large enterprise building a new web service for its customers using proprietary products for this. It really happens not very often. Sometimes they still have it, they have the knowledge there, but you really have a good chance to succeed and to convince them to use open source software there because it really makes sense. We have not been that successful in the desktop space yet. I mean, this is true for large companies and for small companies too, but if we look on the server side, on infrastructure, yes, open source is considered in most large companies, nowadays, and it is not considered in most small companies nowadays. And I think that is the difference. Okay, one more really quick question if there's any. Okay, well, then very thank you very much, Peter, and also to the questionnaires. Thank you.


Next, we're going to hear from another user who's using OpenStack in production and looking at the future of their cloud strategy, and they want to share some of that with us. So we have Neil Sato and Kentaro Sasaki from Rakuten. So come on out. Nice. Nice logo. All right. Okay. Anyway. So it's an honor to be here, to be in front of a great community. Today, we want to share our experience of OpenStack at Rakuten. And just to give you a heads up, we're not – we haven't really played around that much. Actually, we got it implemented in production ready. We're currently working with the site operation members to get the production system on there. And so it's – we're still at the early phase. But I was hoping that by sharing our experience of OpenStack with the people who are still considering to use OpenStack to give sort of encouragement to start working on a presentation. Okay. So let us introduce about Rakuten. For those of you who live in Japan, you might already know what we do. But for those of you who are outside of Japan, I'd just like to quickly introduce what we do. We've been providing e-commerce business for – since 1996 and slowly – rapidly expanding. So you have more of a general internet company. And we've been in the business for, like I said, 20 years or so. Now it's up to about 18,000 employees. We've got a few thousand engineers working all over the world. And what we are providing is what we call a Rakuten ecosystem. It's to provide one-stop access to a wide range of internet services. That's more of a marketing term. So starting with the e-commerce business, we expanded the other e-commerce business like travel on the right side, media portal, digital goods as well. And also recently, a lot of revenue is coming from a financial area of the service, such as credit card, banking, securities, life insurance. And we even have telecom service that we are managing right now. And domestically here in Japan, we have approximately over 100 million users or customers, we call them. And in the transaction volume, we're getting to close to 10 trillion Japanese yen. And we're not sticking just domestically here in Japan. We're actively expanding overseas. You might have heard our name before, I may not, but if you're in North America, you might have heard of a company like Buy.com or eBay. And in Europe, Price Minister in France, Play.com in UK. And these are a company that we've been acquiring in the past. Some are rebranded as a Rockton service. And we also expanded our service to e-book business by acquiring Kobo in Toronto, Canada. And there's some media business such as Vicky and Wucky are the other companies. And recently, a pretty large acquisition that we had was Viber, messaging and voice over IP service. So to support so many of these services, we as global operations have been providing a private cloud solution to the internal customers. And we started out back in 2010 using Zen as a hypervisor. And we got about 2,000 instances. We had a little glitches here and there, a lot of lack of understanding how the hyper version works. So we decided to switch to VMware. This was in 2012. And this actually came out to be pretty good. It was very stable. We didn't see major downtime with a VMware setup. Now I think the slide says 20,000, but I think we're all the way up to about 21,000 instances right now. Now this year, actually, we started digging more into OpenStack. And this year, we got the OpenStack setup. I'm going to pass the microphone to Kentaro, who will explain more about the technical aspect of it. So let me explain how OpenStack is working and what we expect to do by using OpenStack. Anyway, so as you can see, something red are the servers, which run OpenStack services and stuff in green. And the circle shape are the other servers, which do not depend on the OpenStack. So the only one or two services run on each server, so it means that we are using much more servers than a sort of architecture example, what we assume as the standard design. And all of our compute server has local SSDs and run KVM 2.0. And we have a huge real FS cluster for grounds back end. This is an internal developed open source object storage, which has Amazon S3 API. And actually, we don't use the layer 3 networking, so the driver of what we use is run plus open free switch. And since there is still under consideration so far. We have three regions and five of it is on. So basically, we have a sort of environment, which are development, staging, and production. So we define them as the region. So actually, we have not introduced a block storage service, but we also have an experience about the traditional enterprise storage. So we're going to introduce a cylinder by using some sort of the storage. And also, we have not began something about the implement network management. So we're going to implement something like this stuff. And full automation is a very important strategy for us. So we definitely need to be working on using the API. So I believe that using the API is the only neat thing to do in terms of using the open stack. So the next hero is going to sum up. Go ahead. So we really love open stack, although we've been just scratching the surface of what open stack is capable of. But I think the important part about committing to open stack is about contribution, including Ken Taro and the other teams, my other members in my team, are contributing to the open stack community. And I think I don't like to use the word like responsibility or obligation, but I think it's a philosophy of open source project is to get involved and be part of the community. I think I've been in this business and I've also contributed an open stack, I mean, open source project and I really enjoyed it. And I see a lot of future in this movement. So if you're looking forward to working on open stack here in Tokyo, we're hiring and I'm supposed to throw that in because HR told me to do so. Or with Jackson, right? Yeah. Anyway, so thanks a lot. We're looking forward to working with everybody in this community. Thank you very much. That was amazing. You know, I just realized that the Japanese travel book I checked out of the library was a little out of date because I'm the only one wearing a suit. So you got to do your research, people.