Ladies and gentlemen, please welcome General Manager Sales, IBM Systems, Stephen Leonard. So good afternoon everybody and welcome to Edge 2015. Let's join me in giving the band another round of applause, though they're an excellent way to get us kicked off. So this year at Edge we've got more than 6,000 attendees representing more than 60 countries. What a phenomenal turnout.  This year we've tailored the information so that you can use it right away. Executive Edge is a two-day summit featuring breakthrough innovations and technology announcements, business success stories, top-tier executive one-on-ones, and of course, as always at Edge, lots and lots of opportunities for networking. Technical Edge features four and a half days with over 900 technical sessions, geared for all-scale levels and covering a comprehensive range of solution areas, client case studies, best practices, hands-on labs, and of course, again as always at Edge, on-site certifications. And for business partners, we have Winning Edge providing in-depth updates on exciting new product capabilities and real-world solutions to help organisations successfully implement digital strategies. And of course, we always start the way we mean to carry on at Edge. We're going to have some fun as well. You'll be able to see our band St Paul and the Trumblones later tonight and we'll also have the music of Grace Potter and the amazing magic of Penn and Teller. So, let's get started. I'm pleased to introduce Tom Rose-Emilia, IBM Senior Vice President of IBM Systems. Tom will build the foundation for the rest of the conference, providing insight into what we're seeing happening in the market today and the future. Join me in welcoming Tom. I'll translate what Steven said into English so we can all understand it, right? Thank you. From how many countries? I'm very pleased to be with you all. Thank you to all of our clients for being here. Thank you to our business partners, to our sponsors, to the analyst community that's with us here today as well. I'm very pleased to be opening Edge and talk about the digital transformation. Now, we talked about infrastructure and now I'm going to switch gears completely and talk about mobile and what's going on in the world and how that matters to every one of us every day from what we see. Digital is changing everything. Mobile is changing everything. And these unprecedented disruptions that are happening in the industry, they're happening to me, they're happening to you. They're happening with us. They're happening to us and they're happening because of us. The revolution that's going on in the world is driven by people, people embracing technology at unprecedented speed. We've never seen all of these things happening at the same time. A couple of data points for you. By 2016, there will be 26 billion connected devices. 26 billion. Today, there are over a billion people on Facebook. Wow. You think about connected cars. I bought a car last year, my wife and I did. It's a hotspot. It connects up to eight devices. It's only got two seats. Well, there's kind of two in the back, but nobody sits back there. So, eight devices. Imagine the world and they're saying now that 75% of the cars will be Wi-Fi enabled by 2020. So, everything is going mobile, digital. And we have to embrace this because if we don't, it will pass us by. Some amazing statistics out there. By 2017, 7 out of 10 of the largest retailers will have local GPS systems within their stores. They'll know with your permission where you are. Your course through the store, where you lingered, what you purchased. All of that is available. In fact, it's amazing to me to see 2.5 quintillion bytes of data created every day. 90% of it is not analyzed. And a lot of it is perishable. It's really not useful to look back at it a week later or a day later. It has to be in the moment. It has to be something that we sense and respond. And we're going to talk about banking and the impact of mobile on banking. We're going to have a good example of that with a client that's going to speak. But this is also generational. I see parts of the world where people are doing more than half their banking originating from a mobile device. And it's only going to get to be more. My 20-year-old son doesn't know a world where there wasn't an internet. When my wife and I were talking the other day about life before the internet, he was looking at us like we had three heads. He doesn't know that world. So 82% of millennials banked mobile. 82%. So it's going to age. We're going to age into this and we're going to see profound change. What we see with each mobile transaction is that it generates many more. Back in 2004, on average it was one transaction a day. Now it's 37. But that's the mobile transaction. What happens on the back end? In the partnership we've been doing with Apple, we see lots of things happening in the back end. You get the immersion experience at the device, but the connections are enormous. In fact, if you look at an example of somebody making a purchase decision, they click approve or they click buy. They make a purchase decision and what goes on. Well, first off, along the way we had all the customer analysis going on. I apologize, a little bit small. But you're identifying yourself as a client. They know your likes. They know your habits. They know what you bought last time. There's all kinds of information. And you might also like this. You might also like that. So there's a lot of information they have about you as the client. Then the product is the product in stock. How much is the product? Should I put it on sale? All the product information. And then I've got all the information about how you're going to pay for it. Is it a credit card? Is it apple pay? Is it something else that you're using? Is it PayPal? How are you going to pay for this? So the payment has to be initiated as well.  And we see lots of examples of people doing fulfillment from stores. There are retailers now that will ship you something that comes from a different state because it's aging in their inventory and they want to get it out. And they'll fulfill it from another place. Macy's does it. Lots of people are doing it now. So the fulfillment is actually not just how long is it going to take? What can I promise you for this information? That was one click. One approve just generated a bow wave of transactions. And we need to be ready for that. Now, analytics. I mentioned 90% of the data never gets analyzed, never gets looked at. But analytics is also changing everything from marketing to operations to finance the new business models. Every one of us needs to be studying that data to really understand what's going on. Lots of people have data. We want to get to actionable insights. What can I do with the information? What decisions can I make? What's the next best offer that I can give to a client? And if things can happen fast, I can make really good decisions. As an example, if you call in to customer support and they have you on the phone and they can learn something very quickly, they could do something about it. If they learn it in five minutes, it's irrelevant. And by using technology like flash, people are dramatically improving their experience of how quickly they can get that information and make sense of it. But it's the analytics that they have to do in order to do fraud prevention, in order to do credit checking, in order to do loan scoring, in order to do anti-money laundering. All of these things are done with analytics. So preventing fraud is paramount for us. We're really helping people do that every day. Our power systems as an example is a tremendous analytics platform for us. Multi-threading, all kinds of technology. The z announcement that we did earlier this year, the z13 inline analytics at the time of the transaction. So before you say approve, let me check and make sure this is in fraud. And how many of us have gotten the message on our phones? Is the fraud alert, press one for this or two for that? Right? It happens real time. It's amazing how quickly that information comes available to us. And so we see lots of examples of people doing analytics for fraud. Also for security. Security is a board level issue for all of us. We have to report to our board of directors. Most companies are demanding that you come in and say, what are you doing about security? Every day, cyber threats occur. Every day. And when a retailer gets hacked, banks have to step up and replace all the credit cards. So there's all kinds of information that's available out there. Healthcare, very scary information out there. It's got to be protected. And the old way of doing this was perimeter. Keep the bad guys out. We have to now assume they're in. They're in. In fact, some of them are employees. That's really hard to keep the bad guys out when they're already in, when they work for you. What we're doing is analyzing patterns of behavior to see what's going on. Is this normal or is this abnormal? So security is also an analytics problem. We can analyze that data and understand if Tom does this at 2 o'clock on a Monday, normal. 3 a.m. on a Saturday, not so normal. So we can identify bad behaviors and stamp them out before things go wrong. Also, we've got all kinds of security built into our products, like the z13 with real-time encryption for everything, everything that's in there. Now, I want to talk a little bit about the hybrid cloud. I believe that we are seeing it every day, the emergence of these mobile devices on a system of engagement connecting to a system of record. And when those two things come together, good things can happen. So the mobile transaction lands somewhere. In-flight rebooking, reservation systems need to be updated. All kinds of things happen. And what you see is on your iPad or your android phone or your iPhone. That's where you're experiencing it. But there's an awful lot going on behind the curtain. And so that's where the integration has to come together. It's not just about a mobile experience. It's also about the workflow that that kicks off. When we first did our Apple application on in-flight rebooking, if some of you had some delays getting out here, and you may have missed the connection, wouldn't it be great if the flight attendant with his or her iPad could say, oh, let me get you rebooked. You're now going to make your connection. We're going to push this message to your phone when you land. Then you don't have to be panicking, worrying about it. When we first did that application, we had about 40 steps involved. We worked with Apple. They said, no, three steps. We got it down to three steps. Now, the 40 things are still going on. It's the workflow. A part of our workflow engine in our middleware, in our web sphere middleware. It's the rules that are there, part of our ODM product. It's all of the connections that are being made between the system of engagement for mobile and the system of record, where things have to happen once and only once. I need rollback, play forward. I need ha, and I need dr. I need all of those things on a system of record. And then the systems of insights, feeding the data, real time, So that people can make good decisions. So all of these things come together in the hybrid cloud. Now, some of you may have a different definition of hybrid Cloud. That's the one I want to leave you with, which is this Combination of so e systems of engagement and s o r system Of record and all the integration that goes on between Those two with a lot of our middleware. Your it infrastructure can empower you. Customers are expecting this. Your customers are expecting this. My customers are expecting this. They want it. They want to be known. They want to have an integrated Experience has to be insightful. Our systems have to be open. They have to be scalable. Trusted systems out there so it's in all of our interest And thank you for investing your time to be here this Week to learn more about how infrastructure really matters As we enable all of these great technologies and landing on Our systems now leading organizations are doing this And you're going to hear from a lot of these leading Organizations here got lots of customer presenters. I've got a couple with me, but organizations are doing this. If you're not your company, your competition is they're Outdoing all these things who was an interesting discussion We had this morning about two retailers. I won't say who it was, but they're pressing the button On their website to see which one comes faster. And I got to tell you the way we made that sale at That retailer was by putting flash in. They got 100x improvement in flash in their website reaction Just by putting in flash. That's the kind of profound Change we can make with technology. So the question is are you ready? Are we all ready for this profound change that's going on? Now I mentioned clients and I want to start with travel Port and they're not with us today, but we have them on Video. Travel port you may know is a Reservation system. 120 million tickets last year. Lots of messages. 800 million messages generated as part of This online reservation system. But let's hear the travel Port story from themselves. So please roll the video. We are the technology and content provider behind some of The biggest names in the travel industries. The way that travel products have been evolving is pretty Dynamic and that has been also stimulated by the way that People use technology in order to procure the travel Products they want to buy. Increasingly mobile and also Social applications as well as traditional browser and Desktop application. Our innovation is fed by the data And content that we get from our partners like travel Port as a digital company you have to move a lot faster You have to be open to more change. You have to be Ready for evolutions in the marketplace. We're seeing more and more transactions coming from Mobile devices. The level of activity on our servers these Days is tenfold what it was when we first started. We are moving information from four corners of the Internet and getting it back to the consumer as quickly As possible. Travel Port processed transactions in The order of 900 billion system messages last year In order to generate 120 million airline tickets 60 million hotel room night reservations And 76 million car rental days. We're a global company. We operate in 170 countries There's not a minute in the day that somebody is not Searching for and booking travel. So it's imperative that We're able to service our customers at all hours of the Day. A couple of weeks ago I had to book some travel For our son to plan and look cross tournament. My wife and I talked about it. We hadn't done it. At the very last second I was headed out the door for a Trip and literally on the way to the airport I booked His travel to that lacrosse tournament via my mobile Phone. So again it is self enabling the end consumer Of travel to be able to book their travel at any time. We haven't found anything that can do that with the Same level of reliability security and speed Than the mainframe. One of the strengths for the Mainframe in our infrastructure is its ability to Process a high volume of transactions with the Sub-second response time. Just because we're doing so Many more transactions than we used to doesn't mean We're allowed to take any longer. Redefining travel commerce is really travel port Responding to the way that the travel industry is Changing. I love the travel port story. I got to visit them down in Atlanta at the Last year and lots of challenges. I was wrong. It's 900 billion messages in order to generate 120 reservations. So great story from travel Port. Thanks to them for sharing it. Now i want to move on to upmc in the healthcare field. I was talking about upmc a couple of years ago. We were talking about helping them avoid the data center Build out that they were looking that was staring them in The face was going to cost them 70 million dollars. That's why i always find a space doesn't matter Until it really matters and i have to actually build a New building. Now we're helping them with their Storage. They predict by the end of 2016 they will have as much data that would be in Bibles stacked from the earth to the moon. That's a lot of bibles. That's their data. 21 petabytes of data. We're helping them. They are using a lot of our storage products. But specifically they're really interested in increasing Their utilization with virtualization and they're Also using compression. Compression for them is Huge and they have not had to buy any additional Storage for 15 months. That's not good for me but It's really good for them. They avoided the storage Purchase by being able to compress their data. And as they stare at what's coming at them with electronic Medical records it's only going to get harder. So we're helping upmc really cut their costs on storage. Eddie slot for those of you know is an egyptian mobile Provider. I thought this was fantastic because They improved their speed of fraud detection by 37x. Again with the use of flash. So your mileage may vary. Sometimes it's 30x. Sometimes it's 50x. Sometimes it's 140x. But it's x not percent. That's a huge gain. Huge gain and the fastest way to get That gain as well. They increase their cpu utilization. They improve their operation as well. So Eddie Salad is another good story. Now I want to share With you the story of Benorte and Jorge Sanchez The director of transformation. Don't you love that title? I want to be the director of transformation. That's a great title. He is in Mexico. He's not here. Why is he in Mexico? Let's get him on the screen. Can we pull him up? Jorge how are you? Fine how are you all? Good. Be a technology. We're bringing Jorge from Mexico here. Now the reason why he's in Mexico is because We like when things deliver early. But Jorge's wife had a baby a couple weeks early So he decided it was a good move to stay home. So congratulations to Jorge. I wanted to share the story of Benorte or have Jorge do it. They are a leading provider Financial services banking in Mexico. They were founded in 1899. They are older than IBM. That's amazing. So tell us a little bit more about Benorte and how you Have been driving the team through this digital transformation. Why that was needed and what you were trying to achieve? Of course. Thank you very much for this great opportunity With us. Well Benorte is the third biggest bank in Mexico. And it's the only one with only Mexican investors. It's an important fact that you will have to know. Benorte has 30 million customers, 7,000 ATMs and 1,400 branches. About our clients, 5 million of our customers visit our ATMs Monthly and 2 million of our customers uses our Online banking solution. 1 million are mobile banking users. So that means 10% of our customers are going mobile nowadays. As you said we have in 2013 the most important Transformation process that the bank ever had. For the first time in the history of the bank We're trying to have the bank that we ever dream of And we're doing with you with IBM. We know we can change our core from one day to another But we do create a multi-channel architecture That allows all the services, security, business rules Data about our customers to be all in the same place. With this all the channels are operating with the same backend And the clients having a consistent usability experience Across all the channels. Now what we have now In the introduction is the multi-channel architecture We all have the analytics giving our advisors The correct data about our clients. The client origination process in the branches is now working And we're in the deploy phase for our customers For online banking solution. We're working now, as you said, in the transformation process To make the most important usability experience For our niche channels that are mobile and atms for them. Thank you. And how is mobile technology Changing the banking experience? You mentioned this growth And i think we're going to see it grow even more. What kind of changes is it having on the experience that Your customers are as they interact with benorte? Well, the mobile channel is a very important piece in our Strategy as a bank. For instance, we have four million customers That they receive their payroll with us. We don't know any of them. We don't know a name. We don't know an address because the enterprises And different business are not ruled that they have to know This kind of information about this kind of employees. They just give them a debit card and they start to pay the role. So these four million customers, the only interaction that Has with us, with the north is going monthly to the atms To draw all their money. Now with the mobile strategy, We're trying to push them to make almost 70 kind of Transactions that they can do it in their mobile. And this will make these four million customers more profitable Because they keep some money in the bank and then They have the possibility to administrate their money more wisely. And this is what we are trying to achieve. These four million customers to be more profitable. But the two million customers that are using our online Or mobile banking solution to enrich their mobile experience By giving them the chance to make even more Adjust banking, for instance, payments. Identify themselves at the branches, ATMs, or why not The call center using a mobile token or mobile OTP Sending notifications as NVA, NBO that you were talking about This earlier. This is a great opportunity for us To improve the mobile experience. And of course, inside Van Norte, and we'll talk about this a little bit later, It's about the world management application that we are Trying to do with you. So our advisors can give The appropriate advice to our world management, The world persons that they need and what they want to use. Thank you. And lastly, Horey, can you describe some of Your current projects that you're doing with our technology And why infrastructure matters to you? Yeah, of course. Every bank or industry Classify their clients in different segments. One, three, ten. Having a robust analytics that We're building with IM in this matter. This analytics engine can actually know our customers As persons, as individuals, and we can advise them Correctly, not just to offer another credit card Or an insurance that the client doesn't need, But offer them the products or services that they Really are going to improve their lives and let them Achieve, I don't know, their life goals and so So I think analytics is one of the very important Things that we are taking advantage of the IBM Infrastructure. Excellent. Thank you, Horey. And congratulations again on the Delivery early and good luck to you and your family. And we really appreciate you spending the time with us today Here in Las Vegas. Thank you, Horey. Please. Now, I told you a couple stories. I showed you a video. I wanted to share the story from Benorte from Mexico via Skype. And now I have a client who's here From center point energy. So I'm going to ask Steve Pratt to join me on stage. He's the cto of center point. Come on up. There he is. Now, for those of you who know, center point is based in Houston and they've been doing some amazing things with Smart meters, the whole internet of things, and also the Grid, and really making the grid digital so that they Can see what's going on, outage tracking and all that Kind of information. So I wanted Steve to share with All of you this story of his digital transformation and What's occurring at the utility industry, what impact it's having Or potential impact on your clients. Steve, please. Well, thank you, first of all. Center point energy is an Energy delivery company. We move natural gas and we move Electricity from one place to another. So I know that sounds Like a very simple thing to do, but it does have its Challenges, not the least of which is ensuring the Safety of our customers, ensuring the safety of the Public and ensuring the satisfaction of our customers. This does require a digital transformation. It requires a lot Of instrumentation to make that happen. And this falls along Three planes for us. First, it's about the internet Of things. Second, it's about data. And third, it's about analytics. With respect to the internet Of things, we really have two things. We have intelligent Meters. Actually, we have 2.3 million intelligent Meters and we have tens of thousands of intelligent grid Devices. So when we think about the internet Of things, those are two very important things to us. They create data and they transmit data back to us and Give us an indication of the health of each of those devices. From a data perspective, before we had intelligent things, We did not have nearly the amount of data that we're Able to ingest and evaluate. We've increased the amount of Data that we look at over the last five years by 2,500%. As a matter of fact, we actually create one terabyte of data A day which is subjected to analytical interrogation.  And one of the big advantages we have is the entire Organization now sees data as an asset, not as a liability. Third area is the analytics area. We are an operational company. We have, as I mentioned, millions of devices out in the Field which provide for two-way communication, intelligence. All of this data comes back to us in near real time. As a result of having that data in near real time, we Can evaluate, run analytical interrogations against this data And make business decisions much faster than we ever have done Before. What all that means for us is our Customers are more satisfied and the public or really anybody That comes into interaction with center point energy is safer. Very good. Now you may be surprised to learn that Steve's actually using IBM systems as part of this journey. And so I'd love for you to share with us how you're using our systems today. So we do have a few IBM things. One of the things that we Really wanted to make sure that we did as part of our innovation is Achieve a higher level of resiliency. We actually went through A long period of merging information technology with operational technology. Operational technology has a very, very high availability requirement. So anything that we merged to our operational technology had to Provide the same level of resiliency as our operational technologies. We have our mainframe. We have many power systems. We have IBM's enterprise systems management technology. We have IBM storage. All of these things for years and Years and years were providing a platform of resiliency for us. So it was very easy for us to support our operational technologies With the same level of resiliency as we were able to do with Our informational technologies for many, many years. I guess the best testament to this is that we have innovated To the extent which we are now building a backup data center. And we could have chosen any technology we wanted but everything We're putting out there is IBM technology. So good for you guys. Thank you so much. We really appreciate sharing your story. Thanks for being here. So it's good to know that center point does power, right? So that's a good thing. Actually, if you could just Join me in thanking all of our speakers, our customer Speakers here today, i'd appreciate that. And if you want your chance up on the stage, then let's talk. Let's share a story. And we'd love to hear from you And how you're innovating at your companies. And it's always good to hear from the clients. Now, you've heard a lot of stories about banking, about utilities, About airline reservations, about phone companies. I shared some retail stories with you. All of these things have a common theme. And that is the technology and the digitalization, the Transformation of all of our industries is happening. And it's happening real time. And the question i think we all have to ask ourselves is Are we ready? Are we prepared to take that next step? I've got all four of my general managers here today. Middleware is marie week. She's going to be sharing some of The messages with you later. Z systems is ross mori. Storage is jamie thomas. And power systems is doug Baylock. All four of the gms, plus my head of Sales, obviously, is here. Head of marketing is here as well. So we've got lots of folks here for you to talk to. And they're going to talk about some of these product Announcements we're making today. We've talked about power with steve. Powers we're announcing the 850 and the 880. This is the first four core, four socket system, i should Say, delivered for commercial at this level in the power eight family. This is a tremendous technology from us. And as i said, we're seeing all kinds of benefits in analytics And transaction workloads as well. We're also announcing some areas in storage that jamie will be covering. Or she covered some of it this morning in a standing room only crowd. That was great. Spectrum control storage insights and Big storage technology. Now this is actually interesting for Me because it's about being able to partner with a company like iron Mountain for your backup systems. And so we're partnering with them as a managed service provider, Not just for your documents, but also for your online storage. We've got flexible software licensing models for hybrid cloud And one of our sponsors rocket is making available their Mainframe data access service on blue mix, which is our Pass, our platform as a service platform. So important for all of you to see this week, these couple of Days, chock full of content on what's coming and what we're Investing in around storage, around the mainframe, around Our middleware, right, and around power. And i should say that as of today, we have 127 members in The open power foundation, so that continues to grow as well. So i'm here to partner with all of you for a stronger and a Better outcome for all of us. So thank you all for taking the Time. I'm going to turn it back over to steven. Well, thank you tom and it won't surprise anybody in the audience That that's not the first time that tom's made reference to My accent and the two and a half years been working Together. So thank you. Now tom did. I was genuine. So tom clearly explained what's Happening around the digitization of all industries. In fact, many of the examples that tom talked about, whether The airline industry, the banking industry, the energy Utility industry, what they actually do in their business Isn't changing. Taking an airline flight isn't changing. But how you take it and how you experience it is Changing. How you experience a company is changing. And that challenge that we're facing has been faced not just Within our companies, not just how do we help our customers Experience differently our businesses from the digital Transformation, but it also transcends to our employees And of course us as individuals as citizens. Digital transformation affects all citizens, not just us But all citizens of the world. And IBM has been a great Corporate citizen of the world for over a hundred years. And I'm pleased to introduce Jen Crozier, IBM vice president Of global citizenship initiatives. And she's joining us Here today to talk about IBM's competitive grant programs For cities. So please join me in welcoming Jen. Thank you everyone. In 2011 we reached out to city leaders Around the world and asked them a simple question. If you had a team of six IBM executives and technology Leaders working with you at city hall for three weeks, What issue would you have them work on? What's the most pressing thing you'd ask them to tackle? Write up a proposal, send it in. We'll pick the best ones And deliver our best skills for free. We called it the smarter cities challenge and we committed To send teams to 100 cities around the world, representing A $50 million philanthropic value. Why? Well because we at IBM were already seeing disruptions In the world of computing. We saw megatrends like cloud Big data and changes in the way people were engaging Disrupting every industry around the globe. At the same time we saw mayors under an unprecedented amount Of pressure. Shrinking tax revenues, population Explosions, aging infrastructure and increased expectation Of what it is they could deliver to citizens. They hungered to learn how to do more with less And we felt that we could help them. One of the first cities to win a smarter cities challenge grant Was Stevens hometown of Glasgow. The city of Glasgow at the time When city council leader Gordon Matheson wrote to us Had a 35% of Glaswegians living in fuel poverty. Now the World Health Organization defines fuel poverty As a household spending more than 10% of its income on fuel. In short, that meant that over a third of the citizens Of Glasgow, specifically the elderly, those with chronic Diseases, single parents with small children Could barely afford to heat their homes. Energy prices Were on the rise and a very cold winter was on its way. They applied for a smarter cities challenge grant And it was delivered. Hundreds of IBMers competed To be a part of the team. Five were chosen. A fellow grit who led big green innovations For all of Europe. A mother from Kentucky With decades of experience working with large energy Companies like Centrepoint. A Canadian consultant Very savvy with a Harvard degree in 30 years Of public sector experience. They met for the first time On the ground in Glasgow. And like all smarter cities Challenge teams, they spent their first week Listening and learning. They interviewed energy Companies, business leaders, regulators and citizens. They went out to homes and talked to senior citizens. They learned how to read power meters and stared At very complicated energy bills. They scanned Tons and tons of data. And then they went back To their home where we had them living together Like college students and stayed up until the wee hours Of the morning. Comparing notes and bringing Together decades of expertise and networks So that they could come up with some recommendations The city could use. At the end of the three weeks They presented those recommendations. A smart grid Technology so that the city could more accurately Monitor energy usage and do custom based pricing. Predictive analytics about energy consumption So that they could invest in the right places And get the best return for the most vulnerable Populations in the community. And a mobile application For citizens themselves who didn't know which appliances Were using the most energy at which time of day And so they didn't know which ones to turn off. The mobile app helped. After the team left town Gordon Matheson announced a one million pound subsidy For elderly citizens across Glasgow. That was then followed by a grant from the technology Strategy board, 40 million pounds to further advance This work. And today, 44,000 Households in Glasgow are better able to heat Their homes. Now that's just one example Of a smarter city's challenge plan. Over the last four years we've had more than 600 Mayors from around the world apply for this grant. We've delivered teams. We didn't stop at 100. We've now delivered to 115 cities around the world Representing a value of almost 70 million dollars. And the teams have been extraordinary. They've tackled topics from health care, childhood asthma Economic development, transportation, public safety Education and on and on and on. And I could talk all day about the results. The way that we've helped the city of Johannesburg To reduce crime. The 100 million dollars that Valpariso got in infrastructure money based on those Recommendations. The food trucks loaded with Fresh produce in Birmingham, Alabama that are Right now driving out to lower income neighborhoods That have previously had no better place to eat Than a convenience store. Together we are changing the face of cities. And so today I am really excited to make three Big announcements about the Smarter Cities Challenge Program. First, Watson. Now by now everybody in this room knows about Watson. Watson the Jeopardy Champion. Watson who's studying at Memorial Sloan Kettering To combat cancer. Watson the father of the New era of cognitive computing. So you can imagine my delight that the members Of the next round of Smarter Cities Challenge teams Will all be equipped with Watson analytics and draw Upon this incredible cognitive computing resource To help cities solve problems. Second, Twitter. You all saw Ginny Rometti last October announce IBM's new partnership with Twitter. And I'm pleased today to extend that partnership Philanthropically. Twitter has agreed to give Grants of data both historic and current to Three of our Smarter Cities Challenge cities this year. It will be on the topic of their grant. And I got to tell you, Twitter data is amazing stuff. It can help us to predict transportation patterns. We can talk to citizens real time about how they Feel about policies and programs. It can help to coordinate emergency response in the Middle of a disaster. And so to my friends at Twitter who are watching this on live stream, Welcome to the Smarter Cities Challenge community. We're glad to have you. Third, today we announced the next round of Smarter Cities Challenge winners. A little bit of context. Earlier this year, over 100 mayors submitted Applications to us for this grant worth about A half a million dollars. We have spent the last few months my extraordinary Team reviewing these applications, interviewing Mayors around the world and trying to find Which ones were the best fit for Smarter Cities Challenge. To all of the mayors and their teams Who are watching this on live stream, thank you for the Time and energy you put into those applications. It was an extraordinarily competitive year and we salute You all. So it's time to announce the winning cities. And I'm going to ask all of you here at edge to help Me by getting those mobile devices back out and In homage to our partnership to Twitter with Twitter in lieu of applause, please join me in Congratulating the amazing mayors and cities Through Twitter. Let's begin. Alhabad, India. As many of you know, last year Prime Minister Modi Announced his plan to build 100 Smarter Cities Across India. IBM is thrilled to support the Prime Minister In tackling waste management and supporting a More sustainable India. Amsterdam in the Netherlands. IBM will help the city of Amsterdam in creating a Plan to support startups and the sharing economy. Athens, Greece. We'll work with the city of Athens to help reduce Traffic congestion by improving parking and Creating car free alternatives. Denver, Colorado, United States. IBM congratulates newly reelected Mayor Michael Hancock. We look forward to working with you and your team to Coordinate services for homeless populations. I understand we have a few people here from the Great City of Detroit, Michigan, United States. Twitter and IBM are delighted to announce an Award to the great city of Detroit to help on Urban recycling, debris and blight to help Rehabilitate properties. Huishou, China. IBM congratulates Huishou and looks forward to Working with them on tourism management. Melbourne, Australia. Congratulations to Lord Mayor Robert Brown and his Team. I know it's early in the morning and you're watching This. We are thrilled to join Twitter in helping you with Disaster preparedness. Rochester, New York, United States. Congratulations to Mayor Lovely Warren. We're pleased to help you coordinate assistance For families and children living in poverty. Our next winning city is Sanisidro, Peru. Where we will help the city to reduce traffic Congestion and associated pollution. Santiago, Chile. A city that has seen far too many earthquakes, Landslides, floods and fires. IBM is proud to help you prepare for the next one. Secondy, Takarati, Ghana. IBM will help this city to expand its tax base To prevent corruption and support higher productivity. Surat, India. Helping to integrate urban planning across agencies. Taichung, China, Taiwan. Improve road safety and reduce congestion. Visig, India. Where we will help the city to establish a disaster Command Center for flood and cyclone prone areas. And Zushu, China. Where we'll help to optimize transportation For this regional hub. Now there's one more city. And I am delighted to have the mayor of that city With us here at IBM Edge. This mayor graduated from law school in 1971 And broke barriers by becoming the first African American law professor at his school. He and his wife Ruby have together raised six sons. And he then became the mayor of Shelby County. He's a bold leader and has improved the quality of life For his citizens by supporting neighborhoods, Young people, employment, crime reduction, Government transparency and more. His administration has earned national recognition For their remarkable revitalization of the city. He left town after a big grizzly's wind To join us here at Edge. So please join me in congratulating and welcoming Mayor A.C. Wharton from the city of Memphis, Tennessee. Thank you, Jen. And thanks to the IBM family for choosing Memphis for one of its smarter cities Challenge grants. But before I go on, let me really thank The folks who are in the trenches. The men and women of the Memphis Fire Department Led today by Chiefs Andy Hart and Chief Genuswaite. Give them a round of applause. They're the ones who, thank you. As has been noted, we've heard about IBM's offerings in banking and energy. But there's one field in which there are no lines And that's emergency services. And as Jen just noted a minute ago, That local governments are under tremendous pressure. It's not about more, more, more in terms of resources. It's about better, better, better. And that's where IBM comes in. Because our resources are limited. So we have to do so much more. Let me tell you the real life challenge That Memphis is faced with. And of course, Memphis is no different From other major cities in this area. 120,000 calls to EMS in a year's time. 25,000 of those calls were later determined Not to be truly emergent calls. Yet we were following the old method of you call, we haul. No method whatsoever of triaging out those calls. Life could be on the line, but how do we know? This is a situation which may be true with most of you.   But IBM knows the world. And this is where the challenge grant comes in. They bring the resources from around the world Who have faced similar challenges. So taking all this, the data that we have About these calls, many of whom are frequent flyers We call them. We have no way of collecting, analyzing And storing that information. We know, for example, that Mrs. Jones Each month when her position changes Her prescription, she may get dizzy About the middle of the month or whatever. We know that she panicked, she calls EMS. We have to go. But what if we took that knowledge of Mrs. Jones? What if we found out about her medicine And had a nurse there to do the dispatching But no, wait a minute, Mrs. Jones Are you still getting your medicine changed? Yes, when did you, I was yesterday And I just changed my medicine. Oh, well I tell you what, let's do this, let's do that. Imagine what a difference it would make. Not only is the citizen better served And I always say at this juncture Because whenever technology comes in Particularly in emergency services Citizens automatically assume that they're getting ready To take something away from us. No, we're getting ready to give you Something better. You have an actual nurse who's looking At your medical record there Who can walk you through this As opposed to sending out the EMS. You have nurses who may visit your home Before you get into a situation Where you panic and call EMS. But to do that, we can't do this Just for everybody. This is what we have to have An expert leading us through this And this is where IBM comes in. So not only will we improve technology But the most important thing is We will improve services to citizens. That's what government is all about. So again, we welcome this opportunity. You're going to see a big change there In Memphis, Tennessee, but more importantly We're willing, we stand by, we're right In the center of the country to export To other nations and cities That's what we learn in Memphis, Tennessee. So thank you so much to IBM. So again, our congratulations to Mayor Wharton. Isn't he terrific? And all of the city leaders around the world We're excited to build a smarter planet with you. Now, none of the accomplishments That we've just talked about would be possible Without technology. And here to describe some of those technologies In more depth, IBM Vice President Of Marketing, Dion Newman. Well thank you, Jen, and congratulations, Mayor And to all of the cities, congratulations. Really amazing. Smarter cities is something we're really passionate about At IBM. Here we are in Las Vegas. Hosts to 41 million visitors every single year. 62,000 local hotel rooms. And that's just on a normal day. This past weekend there was anything But normal here in Las Vegas. Because people like these were descending on the city. And they were coming here. And that's not me dressed up here. They were coming here to see bands like Metallica. Or as they say in the music industry, Metallica. They were here for the Rock in Rio Music Festival. Now this is a little festival that was born in Brazil, exported to Spain, and for the first time ever Was here in the United States. And this past weekend was Rock Weekend. And next weekend is the Pop Weekend. So we have Ed Sheeran and Taylor Swift And Bruno Mars and others all coming here to Las Vegas. Six stages, over four days.  In a venue with a capacity of 81,000. So I want you to imagine something here. Imagine that you're the city manager of Las Vegas. And I pity you there. That's a big job. You're the city manager of this little town of 600,000 people. And your job is to keep people safe. And to get them moving around the city in an effective way. Now the good news is that Las Vegas and cities like it Now have new tools to manage this type of situation. Not just business as usual, but also mammoth events like Rock in Rio. So let's all meet the IBM Intelligent Operations Center. Or what we in the IT industry would of course abbreviate to the IOC. This is a very powerful solution that helps civic leaders do things like Anticipate issues using predictive capabilities. It allows them to react to crises using real-time monitoring. The IOC uses the very best of cloud technology, mobile technology, Social analytics, and of course world-class security. This thing is built on top of our world-class tools such as Cognos and spss, the website portfolio, Worklight for mobile, cplex as well. It's built on world-class systems like IBM z and our new z13 on power Systems powered by our power eight technology. And of course leveraging our full storage portfolio. I'm going to share with you a couple of the views and give you an idea of the Capability of these systems. So firstly, a couple of the views we have. We have an overall dashboard which allows you to control what's going on. We have a weather window here. We have traffic. And over on the left here, for me, over on the right for you, We have stadium management. So let's first zoom in. And we'll take a look at the IOC dashboard first. I'll give you a little demonstration of how it works. From here you have a wealth of function at your fingertips. You have a complete panoramic view of the entire city. So well before the rock fans arrive here in Vegas, you'll have a clear View of how everything is running. So you'll be able to see transport and permits. You'll be able to see operators in the city, 311 city call center calls. And you'll get a city-wide view of all of your agencies. Now, if we look at the dashboard for a moment, you can see that a 311 call Has just come in regarding a parking violation. Okay? There's also a damaged fire hydrant that really could cause Problems for us during rush hour. More importantly here, I see there's a car accident on Las Vegas Boulevard which is definitely going to cause traffic jams And might even delay metallica's tour bus. That would be a big problem. We can really see everything that we need to see here from Notifying emergency officials to rerouting the traffic that you Can do directly from here because the show needs to go on here. It's all right here, a true panoramic view of anything that Could happen in the city on a daily basis. And all of it is a user-friendly interface which is designed for Non-it personnel. Okay, let's take a look at some other capabilities. Let's have a look at weather. That's my audio gag for the day. Hope you enjoyed that one. Vegas boasts nice temperature most of the year, although it Does have real weather here. They get desert windstorms. They've had flash flooding that can be a real problem. And there's even been snow in this city. So if we dive into the weather capabilities, there's a few things You can see here. We use predictive powers of data analytics. And we can look for potentially dangerous situations and start To plan ahead for these. Let's move now to traffic management. Take a look what traffic can do for us. Another one there. When you've got tens of thousands of people coming into the city, Traffic management is really critical as well. Now with the ioc, you can see some simple color coding And that allows you to get the snapshot of how the traffic is Moving around. There's monorail data in here as well, also shown with color Coding. And you can see that there is traffic camera data that is also Live. This allows the city manager, in this case you, to be proactive And divert traffic around bottlenecked areas and move Traffic to other routes. Now let's finally look at stadium management. With the ioc, there's some really powerful real-time data That we can get here. We can manage the entire stadium 24-7. And we can use video analytics to count fans standing at different Gates, to adjust crowd flows, and to alert stadium personnel if Anything needs to change. Any event or incident can be immediately sent to the right Personnel for action. So for example, on the screen here, we're showing a security Breach at gate f4. We're seeing facial recognition in action which can help us Identify problems that might be about to happen or are Happening. And if anything goes wrong, straight away, you can go into Your operating procedures, which are right at your fingertips, And you'll be able to alert the proper personnel. So there you go. That's a good little overview of what the ioc is capable of. The fans have come and gone. The city is returning to what they call here in vegas normal. And you've done your job, which is great. Now most city managers do not have to deal with something The size of rock and reo. But every single city does need to keep the citizens safe, to Keep operations running smoothly. And we have taken repeatable patterns and insights from our City clients and created solutions that can be put together At a lower cost, very, very quickly, and with fast time to Value. So as you can see, we make cities smarter and we do it By connecting them in better ways. Now i'm really pleased to have one of our clients here today, Vodafone. They're one of the largest telecommunication companies in The world. And they're connecting this ioc technology and other solutions From ivm with their advanced mobile technologies to bring Together a connected city initiative in spain. I'm very, very pleased to have here the corporate product And solution sales manager for vodafone to tell us more. Please welcome Alicia. Thanks, dion, for inviting me to share with everybody what we Are doing in spain. Let me show you a picture first. This is new york in the late 20s. And this is new york city today. Can you spot any differences? Well, i can spot at least two. First, this is a black and white picture. And second, this was taken before the economic crisis. Can you see any similarities now? I can see many of them. In the 20s, as a large city, new york city had problems with Mobility, with scarcity of food, with security and health Problems. And these are pretty much the same challenges we have today In our large cities. Ladies and gentlemen, good news are that our predecessors Found ways of solving these challenges. And we will solve them too in very short time. Today, there are more than 1,000 cities that are more than Half a million inhabitants. Would all these local leaders be able to solve these issues In an independent, creative and resource consuming manner? This thought fostered the conception of Vodafone Connected City. Vodafone Connected City is aimed to towns ranging from 2000 to 200 people. We have found that medium towns confront similar Problems to large cities. And they have an additional handicap. Their budgets are shorter even more after the Economic crisis. Vodafone is proposing a cloud-based system replicable In all the cities. It will be instances of the same services. And the towns would have no need for large investment. They can pay as they use for the services, which are Modular and flexible. Delivery time is really short. And the setup is immediate. We just need to install some switches and some sensors. And that's it. And we are helping them to deal with the complexity of Managing the city services. So what are the ends of this initiative? First, efficiency. Second, sustainability. And then, a liable city. These three challenges are pretty much the same that Romans have in Rome in the times of the Roman Empire Or that New York City had in the 20s. So what's new in our 21st century is that we have to Develop e-government and enable participation of citizens Through mobile applications or other means. At the moment, we are performing a trial in two towns In the south of Spain in Andalucía. And we have set up five applications. First, street lighting control. Then, waste collection management. And third, building efficiency. These three applications are pretty much the same that New York City would have needed in the 20s. And then, for the new challenges, we have an application Called Human Vitality, which is aimed to simulate Local commerce and invigorate life in city center. And finally, citizen participation through mobile services. And of course, these two are focused on improving life quality And e-government. Alvar Aalto, the Finnish architect, said that Nothing is as dangerous in architecture as dealing with Separate problems. As we split life into separate problems, We split the possibilities of making good building art. Personally, and not only I agree with this, But I think that complex problems can't be tackled If we separate them into pieces. What we have found today is that in Spain, Other projects that have been developed so far For smarter cities are isolated projects. The problem of our new proposal is precisely The integration of other applications into one single platform. This platform, of course, is based on IOC, Which Dion has just shown you before. I have a friend that some weeks ago told me That if we make decisions for every single thing We do in our lives, at the end of the day, Our brain is exhausted. So it's better to have routines for daily decisions That help us to save our brain For the really important urgent issues. And this is the same thing for organizations. If we have preloaded decisions and preloaded groups of data That has been analyzed, we can save our scar resources For better and urgent issues. And please always keep in mind that our scar resources Are our people even more than any other thing. IOC provides with a unified vision for automatic actions Or to prompt data to take human-driven actions. In this project, Vodafone is using its IoT platform And we are connecting thousands of sensors all around the city. And IBM is providing hardware, software, and services. So why did we choose IBM? First, set system. Set system is giving us real-time processing, Live scalability, and enhanced information security features. Second, software. We already spoke about IOC But we are also using maximum for asset management And mobile first for the mobile software. And third, the strategic partnership we have signed with IBM. IBM themselves are the best choice we could do Because they are providing us with a good R&D department In Spain and in the rest of the world. Third, second, they are number one provider of smart city software And they are already working in 800 cities. Third, we found that IBM was one single company for all we needed Hardware out-of-the-box software and also custom development of software. Fourth, we have support in the local market. And next, we can replicate this project in other Vodafone companies around the world. Vodafone defines its strategy as selective innovator in services. However, we are not supposed to become or to turn into a software company. And this is the next thing. We are establishing, along with the platform, We are establishing, together with the Andalusian government, With a cloud, we are establishing a cloud business center For developing software applications. With this, we are aiming to things. First, to have small software companies tackling niche applications That may not be of interest for large software companies. And second, we are developing new enterprises in Andalusia, Which is really good. And these companies will be using BlueMix. BlueMix is the platform-as-a-service software of IBM. And this provides nearly free, with no investment For developing applications from scratch. Loudset said that walls with windows and doors form a house. But the empty space within it is the essence of the home. Technology is an empty building if it's not to serve human well-being. Smart Cities is one of the best opportunities we have at the moment For making the world a better place to live for our mankind. Ladies and gentlemen, let's build a public home Within the empty space of our cities. Thank you very much. Okay, well, first of all, thank you to Alicia. That's a great presentation. I really like that quote. The information technology is an empty building, Unless you know what it is you're trying to put inside. What the essence of what you're trying to create. And I guess you could use that analogy as why we're all here. Why we're here at this conference. And why we're sharing all of these stories. Really, in order to help us find ways of creating the essence And not creating empty buildings. So are you ready to transform your IT infrastructure To provide a differentiated customer experience? That's a great question that we should be asking ourselves. I know that from our point of view, we believe that IBM Can help you get started on your digital journey Or help you advance that digital journey that you're already on. Tom talks about the three important shifts Helping to accelerate digital innovation. Mobile, analytics and hybrid cloud. Now, I would guess that on returning home next week You'll be expected to be demonstrating that you're taking Some actions from what you've heard And what you've learned here this week. For mobile, there's no doubt in your roles You play an important enabling function in your organization To deliver the best customer experience. Imagine, just imagine a retailer who wants to provide An offer to a customer just as he or she is considering An item at that moment in time. Once they leave the store or they exit the app It's too late. It's a missed opportunity. And therefore mobile requires an IT infrastructure That is scalable to handle spikes and is trusted To deliver a customized experience. Let's now think about analytics. Your expertise, your expertise is critical In providing your organization insights Just when they're needed. Let's take a healthcare example. A healthcare professional needs the best information To create an evidence-based treatment plan quickly. Analytics require an IT infrastructure That provides rapid results and insights into data in real time. And finally, how do you best build or enhance Your infrastructure using capabilities from inside Your organization and outside your organization? That's where hybrid cloud comes in. And it requires you to act as a trusted broker Of services in an efficient manner. For example, where should you develop and run workloads? What are the security implications of putting customer And employee data into a public cloud? Hybrid cloud requires an IT infrastructure that is open Integrated and available while at the same time Improving the economics of IT. Many think of mobile as smartphones and apps. But we all know that the most important work is done Under the covers of the IT infrastructure. And your organization needs to deliver the best Possible customer experience. However, and some of our speakers have talked about it And we all know that this can be challenging. Now Tom mentioned every mobile transaction Kicks off as many as 100 transactions behind the scenes. The travel port numbers were staggering. Tenfold the load on the back-end servers. Successfully handling this volume requires systems That are enabled to meet mobile demands. And there's no better way to handle future demand Than using the IBM Z system family that scales As your mobile demand grows with the ability to handle Thousands and thousands and thousands of users. The Z system family can integrate transaction And systems of engagement applications Running over 30,000 transactions per second With the highest level of security. We can help you shorten the time to connect Your mobile apps with your back-end transaction Systems today. Our new mobile test drive for Z system Assists with the composing of blue mix apps Connected to back-end systems of record. Let's turn to business leaders asking you to support Real-time decisions from real-time data. And you having to know the right infrastructure And deploy the right infrastructure So that you don't slow them down. Making sense of mountains and mountains of data Requires very powerful servers and storage devices Designed specifically for analytics workloads. A combination of extremely fast processors, A lot of memory and high bandwidth, And scalability is what it takes. The new power system e850 four-socket mid-range system Integrates these capabilities resulting in powerful Cost-efficient solutions for memory intensive applications And in-memory databases. And it's just as important to feed that processing system With data assets needed. We purposely designed the IBM flash system Family with the capability to ingest data At the speed required to deliver analytics results When you need them most. New cloud-enabled business models require a truly Integrated and scalable enterprise with infrastructure Spanning multiple clouds, data centers and environments. Use of clouds is shifting beyond the early days Of handling peak overflows and dev test applications. Your organization is likely looking at ways to connect On-premise IT with public clouds to handle mobile And other new applications. An important element of success with hybrid cloud Is the use of open standards to run your applications. All of IBM systems are enabled with the latest versions of Linux And IBM supports a range of software offerings Built on open technologies, Apache, Eclipse, OpenStack, Cloud Foundry, Hadoop, Spark and many more. This provides you with the best range of flexibility and Choice now and in the future. No one else supports a variety of open standards that IBM does. Now, let's hear from an organization that has Successfully faced many of these challenges and is Using their IT infrastructure to help them Maintain a competitive advantage. Please join me in welcoming Brad Elmanhurst, IT director of engineering systems at the Boeing company. Brad. Hi. I'm Brad Elmanhurst. I'm a director of IT at the Boeing company. My responsibilities include leading engineering systems And Boeing South Carolina site IT leader. Some of you might know that Bill Bowen, William Bowen created Bowen, founded Bowen in July 1916. Bill's vision was to take people from one place to Another via plane. And I assume most of you guys got here that way, Fulfilling his vision. Over the time, we've had many, many leaders that have Taken strategy to action in the Boeing company. We've created many products. Matter of fact, you'll see a lot of them back here. And I'd probably pay more attention to that than me. But with that, we've created from a B-52 Bombers to the 747, which was an engineering marvel To the 777, to the latest 787 composite airplane To satellites, to Apache and Chinook helicopters, Missiles, and even like F-18s, the Blue Angels. Joining Bowen, our current chairman and CEO, Mr. Jim McNerney, came to carry on that 100-year vision To life and implementing and driving a specific strategy So that he could set the foundation, not just for the first 100 years, But the foundation for the next 100 years. The strategy supports many different products and many different things. For example, rate. Some of you might know that for the 737, we put out 40, 737s a month. Also, we're expanding our platform for the military side of the house. That in promoting productivity, innovation, and a motivated workforce to have that happen. Every company, every company has to have a business and technology strategy And make that operational. IT is a nervous system in many companies. It isn't Boeing. It's so critical that it's operating and it's efficient. I started the Boeing company 30 years ago. I started, I hate to say this, started programming in COBOL on the mainframe, JCL, and Rex. I worked on a system. I don't know about that. I worked on a system that was a master scheduling system for the Boeing company. It's what scheduled the airplanes to be built. Since that time, we've gone to distributed systems using IBM Middleware. We've used the servers, the optimization. We used the BI technology to understand dashboarding on what's operating on all of our planes in BCA. Also, the technology has changed so much since then. If you look at what we're doing today, you know, having engineering systems, we have some visualization technology that you can, like example of a plane going down in Malaysia. We can see every part of that plane so they find something, we can bring it to us. You can fly through technology. You can, as you're customizing your plane, you can see exactly what type of TV you want to put on the back of the chair.  What I want to talk about a little bit now is connecting strategy to action. And to me, connecting strategy to action is about connecting strategy to people. When you connect strategy to people, teammates have a purpose. They understand what they need to do to help bring that technology into place so that your company can provide better business value. I went to college for one reason only, to play soccer. When I stepped on the soccer field, the very first training session, I realized that everyone had the same goal. That goal was to win a national title. Training sessions were all about that, the way we trained, the way we thought, the way we did everything we believed we could win the national title. Unfortunately, in my first year, we lost in the playoffs. The next day, I got up and I decided I need to go out and train because I have to do something better to make the team have a chance to win a national title. I also knew there's only 365 days in the year, and every day I didn't train, I'd lose that day. Everybody has a role. Everyone's got a contribution for the big goal for your company, and we need to focus on that. We also need to compete every day. Competition is about making yourself better. So, I've also coached soccer. When I coach soccer and players come to practice, I ask them, what do you want to achieve today? And if they say, well, I don't really know, then all their dealers are getting dropped off at practice and getting picked back up. Same thing at work. When I talk to the Boeing employees, I ask them, what do you want to accomplish today? What's your goal for today? Are you going to improve a process? Are you going to network and learn more things? Are you going to make someone feel better, feel valued? And by doing that, having that goal helps everyone stay connected to the business and they understand where they fit. So, people feel valid to have a purpose to keep the business. It's also very important that you tie strategy, people, and competition. That allows people to focus and connect to the strategy which in turn drives results.  Let me ask of all of you. Every day, you're at this forum, you're learning about all this great technology. When you go back to work, set the goals for the people, set your goals for yourself. Bring it all together so when you get back to the office, you can figure out how to make your company more successful. Because at Boeing, we are proud. We've entered 100 years and we're looking forward to the next 100 years. Also with that, going back to college, all that hard work did pay off. We ended up winning the national title. So, thank you very much. Okay. Well, thanks to Brad and thank you to all of our speakers. I have had the privilege of actually being at Boeing's facility in St. Louis and watching an F-15 take off for the first time. The thing that made that was most remarkable about that was that there was a human being who was willing to go out and step in this aircraft. They'd never flown before and run it down the runway at several hundred miles an hour just to see if it would fly or not. So, it was quite an experience watching that. But it did make me believe, as an engineer, and I was trained as an engineer too, just the amount of engineering that has to go into something like that and how IT plays a role in making that happen. And it really is about making the right IT infrastructure decisions and creating competitive advantage for your organization, which is really what Brad talked about. Now, Tom started today our session by challenging us if we're ready, if we're ready to handle the rapid changes in the economy that have been driven by digital technologies. And I think it's important for us to carefully plan for that future, not just for today's needs. We heard about exciting new capabilities from IBM to help you successfully navigate some of these challenges. And then we next look beyond businesses at the effect that digital transformation is having on cities and citizens, on you and me. Once again, congratulations to all the 16 cities chosen to participate in the Smartest Cities Challenge. And of course, thanks to Mayor Wharton of Memphis and his team for joining us today and sharing their story. In tomorrow's general session, we'll shift from the issues of today and help you think about making the future possible, what it looks like, how we get there, and what we can expect. So take advantage of Edge 2015 to learn about how industry leaders are succeeding in digital business because of the infrastructure decisions that they're making today. How you can get started on your own digital transformation or accelerate the digital transformation you're on with the latest IBM systems technology and sets of capabilities. And finally, why IBM is committed to be your strategic partner for your digital business journey. Thank you and enjoy the rest of Edge 2015. And primarily in the Houston area, our tagline is your doctors for life. We knew throughout the project, when we looked at the scope for virtual desktops, there was going to be a need for storage. The total amount of storage that equals about four petabytes in raw capacity. Today, virtual desktops are used in a multitude of business units. Today, we have the contact center, we have nurses stations, we have reception areas, we have some people in IT that are using virtual desktops. When it comes to the things that are critical to business, what else you see when you're playing practice is medicine primarily in the Houston area. When we looked at the Flash 840, we knew that we needed to make some changes and do some upgrades for some of the storage that was out there. Today, virtual desktops are going to be a need for storage. Today, we have a solution for virtual desktops. Because of the eye over petabytes, and raw capacity can be serviced concurrently. Today, virtual desktops are used in a multitude of business units. Today, we have a contact center. We have a great amount of performance for us. We have a great amount of respect for you. That's balance. It's not just the vendors talking to them. It's the community. It's analysts. It's technologists. It's customers, practitioners. So they get a full perspective that's unfiltered.


Okay, we're so glad to be back with Lou Plurici. He's the CEO of Aprink, an Energy Policy Research Think Tank in Washington DC. He's got so much going, so much on his plate, and yet he has time to talk with us. We're so delighted. Hi Lou. Hi Jay, great to be here. So we're going to divide this show in two parts. The first part is we're going to talk about isolationism and we have named that part of the show. What is it? Isolationism as a hidden cost of American energy independence. Which is really an important discussion these days because we don't think of the consequences of our foreign policy or non-foreign policy as the case may be. And so we ought to explore that at least on this one, you know, drill down level of energy to see what affects our policy, our foreign policy is having. And so Lou, I'd like to ask you to give us your thoughts about that so we can examine the trends that are going on. Yeah, so one of the interesting things, I don't know how much of the audience really is following this, but the United States and kind of in Mexico, you know, the North American production platform, we've talked about it before, is now a net exporter of oil and gas to the world market. So it's true that we import lots of crude oils and energy from different parts of the world, but we also export a lot of finished products. But if you do the balance is North America, particularly in the US, is now a net exporter of oil and gas to the world market. And that's a good thing. In many ways, it creates a lot of the North American production platforms with about a trillion dollars a year, a quarter of the world's oil production, less than a quarter of the world's oil and gas consumption. But one of the interesting aspects of this is that, and I think longly, lots of political leaders and our last two presidents have the sense that the world beyond the United States is less important than it used to be. And the Middle East, we don't leave them as much as we used to, that we're not as interconnected, at least the belief among our political leaders is we're not interconnected to the world and as dependent on the world as we used to be. I think this is wrong. This is wrong technically and also long as a matter of US national security. The liberal order, if you call that free trade, the growth of democracy is there in the world because the United States is the area. We have two big oceans on each side of us and that means we need allies. And I think if we start to, I think I want to pull from some recent work by this French philosopher that as the US withdraws, what he calls the five kingdoms, begin to vie for global power. This is Russia, China, Turkey, Iran and radical Islam. I think the other aspect of this is that some of Trump's action, though, is really an extension of what Obama was doing. And the American people don't like to be engaged in this war, in endless conflicts, in which there doesn't seem to be any immediate resolution. So in a way there's a kind of fatigue setting in and this is adding to this view. So now, but once again, I think it's important not to take two kind of black and white view of this. The US does, has engaged in very aggressive policy to counter the Russians in many respects. We have actually provided lethal weaponry to the Ukrainians to deal with the Russian invasion and intervention, something Obama refused to do. The US has taken a relatively hard line on Iran, in fact, rejecting the Electoral Agreement, but also the pullback from Syria is disturbing, the inability to successfully conclude a trade agreement with our non, let's say, authoritarian ally, Pacific Rim. All these are adding to a sense of, I think, moving towards isolationism, as we've become more secure with our energy independence here at home. Well, let's look at that one by one and see how those countries could affect our energy policy. If we go sideways with some of them, we're going to have a much more significant effect on our energy policy and our independence, our energy independence. So for example, you know, can we take them one by one? Let's take Russia. Let's assume for a moment that we are going to go sideways. For one reason or another, whether it's whether it's Trump, whether it's Russia, whether it's a whole perception of isolationism or our worldview, collectively our worldview, and we are no longer friends by any stretch with Russia. So how does that get into our energy independence? So when you think about Russia, I think the biggest energy issue now is the so-called Nord Stream 2 pipeline. And in fact, both the Obama and the Trump administrations have argued to the Europeans that they should be quite cautious about this project. And if you know about this project, right now, Europe gets a substantial quantity of its gas, not as much as much people think, 30 to 40 percent from Russia. But most of this gas transits the country of Ukraine. Under the Nord Stream 2 project, this gas from Europe, I mean from Russia, would begin to land in the European continent on in Germany by crossing the Baltic Sea and completely bypassing Ukraine. So in one hand, it would provide a new transit route for gas supplies to Europe. On the other hand, it would further isolate Ukraine from the European community, which today is a major bulwark against Russian expansion and influence in the European continent. And I think both, you know, both, you could argue both Obama and Trump have made a strong pitch to the Russians to go cautious with this project, not to proceed. The Russian behavior is inadequate. But the Europeans have been reluctant to accept this view. And the Russians also see this as a way to continue their influence in Europe. Well, let me interrupt by just asking this. So there's obviously a strategy here of isolating Ukraine, of depriving Ukraine, of having that gas go through Ukraine. And the revenue from it, yes. That's an attack in some way on Ukraine. But can you tell us, you know, assuming that Russia would ultimately like to, you know, take Ukraine over so that it is no longer a buffer between NATO and Russia, how does bypassing Ukraine with the supply of gas to Germany by way of the Baltics, how does that help Russia, you know, ultimately deprive Ukraine, marginalize its economy, you know, convince its people, its government, they have to surrender to domination by Russia? How does that, can you connect that up? Yeah, so I think, I think it's a, it's a person will deny the Ukrainian much needed revenue. It is, to some extent, the Ukrainians do have some leverage over the Russian. You could argue the Russians have leverage over them in many respects, but from a point of view of Russia's access, Russia's access to the Western European gas market, Ukraine is essential for them. It is the only major route. Yes, there are alternative routes for some gas supplies through Turkey, the so-called, you know, you know, blue stream projects to come across the Baltics through Turkey and up through the Southern Corridor. But Ukraine is the bulk of US gas supplies that come from Russia, generate a lot of revenue for Russia and also generate revenue for Ukraine. The Russians are spending an enormous amount of money with the help of the West of German to build an alternative route. And I think the US and some of the Eastern European nation states have argued in Brussels, look, this is a mistake. The Russians are not stable enough, not reliable enough. You shouldn't do this. And I think you could argue that US, US gas supply, which is becoming much more prolific in the form of LNG, represents a counterweight to this, that this LNG is available to the Europeans. But for many reasons, the Europeans are not feeling comfortable enough with the US alliance and second, I think, not feeling threatened enough about what the Russians can do to that long term. So this sounds like if Russia wants to build a relationship, an economic relationship, a relationship of economic necessity with Germany and Western Europe, then this aids that. If Russia wants to get into a position where American energy supplies and gas whatnot from US to Western Europe is not as important, is under competition from Russian gas, they're doing that. So it sounds to me like this is this all the our isolationism, our treatment of our former allies in Western Europe is and Russia's moving into the vacuum, so to speak, is changing the way changing our influence and our energy market in Western Europe in favor of the Russians. Am I right about that? Yeah, of course, it's always, it's never quite black and white. The Russians are, I mean, some of the Eastern European countries have built LNG receiving facilities, and we, yes, the Russians will benefit from this project. But the benefit from that is not disappearing overnight. The US will have some capacity to provide supplies as a leverage. So and the Europeans do have a highly integrated pipeline market now. So yes, it's a kind of mixed bag, but basically, you know, my view is or my view is the behavior of Russia does not suggest it's a reliable partner and that the Europeans should feel confident enough to tell the Russians, look, this is probably not a bad project. It probably makes a lot of sense.  You're engaged in all this kind of disturbing and disruptive behavior in Ukraine and other parts of Eastern Europe. And so we're not going to proceed with this project. And by the way, we don't need to proceed with this project. We can, we can draw our supplies from other parts of the world, including the US. So why is Germany do this? Germany is overriding that kind of objection. Germany in its self interest sees this as a benefit to Germany. Call it a nationalism of sorts. You know, every country on its own. That's that's that'd be Trump's philosophy. And they're saying it serves us. You know, don't don't tell us what to do. It serves us. We want to have this pipeline come through the Baltic and serve us. This will give us whatever comfort we require will give us sufficient comfort to spend the infrastructure and to be the gateway to the rest of Western Europe for Russian gas. Probably enough, you know, the Europeans have spent a lot of money on renewables. They're trying to wind down their use of coal. Their own domestic supplies of natural gas are declining. You know, different parts of Germany are, I mean, in the Netherlands, there's an anti fossil fuel trend and element that's limiting their development to produce more North Sea oil and gas onshore in the United Kingdom. The interest in proceeding where they seem to be some interesting potential to do hydraulic fracturing continues to have a lot of opposition. So this is viewed as a way to substitute for declining supply of indigenous resources throughout the European continent. So it's a it's a hidden cost, though. How does that work? What changes? So the hidden cost is, I think that in if you went back to the 70s or the 80s, where the U.S. was very dependent on import, in which we got the formation of the International Energy Agency, and there was an engagement with the allies. Look, we're all in this together, right? The U.S. and we have to stick together. The alliance is absolutely essential. And when we do that, we should come to a joint agreement on our mutual energy security because we are obligated to each other if there's a major oil disruption, if there's a major disruption in supplies to help each other under the International Energy Agency. And you know, I agree, it's not exactly a black and white. There's a gray area here. But I would have, I think in an era where the U.S. was more dependent, we would have been in a position with the Europeans to say, look, let's roll this out for a while. Let's see how this plays out. Let's see if we can get the Russians to behave a little bit better before you proceed with this project. And we did do that, as we remember when we had the sanctions in Russia, and actually this is right after Jimmy Carter, the Reagan administration, when the invasion of Afghanistan took place. And we limited the supplies of gas from Russia. Well, let's take a short break, Lou. Come back. I would like to talk about how this works on a parallel basis in China, who also want to talk about competitors or rivals, as you, as you like, we'll be right back after a short break. Lou Pugirisi of e-prime. Aloha and welcome to At the Crossroads. I'm your host, Keisha King. You can catch me every Wednesday. Alive at five. I'll see you there. Aloha. I'm Wendy Lowe and I'm coming to you every other Tuesday at two o'clock live from Think Tech, Hawaii. And on our show, we talk about taking your health back. And what does that mean? It means mind, body, and soul. Anything you can do that makes your body healthier and happier is what we're going to be talking about, whether it's spiritual health, mental health, fascia health, beautiful smile health, whatever it means. Let's take healthy back. Aloha. Aloha. This is Winston Welch. I am your host of Out and About, where every other week, Mondays at three, we explore a variety of topics in our city, state, nation, and world, and events, organizations, the people that fuel them. It's a really interesting show. We welcome you to tune in and we welcome your suggestions for shows. You got a lot of them out there and we have an awesome studio here where we can get your ideas out as well. So I look forward to you tuning in every other week where we've got some great guests and great topics. You're going to learn a lot. You're going to come away inspired like I do. So I'll see you every other week here at three o'clock on Monday afternoon. Aloha. Okay, we're back. We're back with Luc Plurici of April. We are having this most interesting discussion entitled isolationism is a hidden cost of American energy independence. Okay, and we talked about Europe and there's more to talk about there because that's an ongoing issue and it's very dynamic. But it's also worth talking about what's happening in our relationship with China, which has degraded over the past year or two. And now we are having tariff battles and trade battles and we're having tech battles and cyberterrorism battles and is a real friction going on between the US and China, which is really not so good. And that's part of this isolationist mentality we have in the White House and also in the country, in the base anyway, in the country. And so, can you describe our relationship with China on energy and how this changes a little? Before we get to that, I think we should sort of describe a little bit how energy independence, how it changes the perception versus the reality for a second. Historically, the right way to think about the sort of energy security problem facing the United States was we lived in a world in which, particularly for oil and gas, which is extremely important to the national economy of the United States, lived in a world where there was a concentration of low cost resources among unstable parts of the world. And that posed, this was mostly the Middle East, but not just the Middle East, and that posed two risks to the United States. One, relatively few number of players could get together and raise the price and extract wealth from the United States. Or two, they could go out of business for a while, spike the world price and cause a lot of damage to the national economy. Now, that actually hasn't changed that much as we're a net exporter, but it does make it better. If we're a net exporter and the price goes up, theoretically our government could just recycle the money. It's not like they're extracting wealth. We're actually getting a lot of the wealth into the country. We're not paying it to foreigners, we're paying it to ourselves. So I think that has created a sense of Congress and administration look. Why don't we have to deal with all these crazy people in the Middle East and other suppliers in the world, you know, they're a pain in the neck. You know, it's too much effort. We have a big Navy. Let's stop doing that. And because we don't need to do it. And that sort of flops over into Asia as well. Now, I think it's a little different than with the Europeans in that. Yes, I would say if I were making a criticism of Trump, China is a problematic player in many ways, right? But the way to deal with China is not to disengage from our alliance in the Pacific Rim, but actually to strengthen them because China is going to be much more receptive to changes in policy into becoming a responsible member of the Pacific Rim. If the U.S. is in a strong alliance with Japan, Indonesia, South Korea, and I do think that the sort of isolationist or the America-first behavior towards Asia is particularly troublesome because it makes it harder for us to address these central threats from China. So on the other hand, China is a growing user of commodities. It's not a major exporter of commodities. It is a huge industrial finished goods export economy. It needs large supplies of oil and gas from the world. And part of the reasons China has become more outward looking, more aggressive is because those sea lanes and communications and those things, they feel a certain threat from that. So you have to build out of the Chinese Navy. But we should not forget, we and our allies in the Pacific Rim have a much different value structure than the Chinese. And basically to hear the democratic principles, principles of open and free trade, open discourse, this is not what's happening in China under Xi. Well, it's interesting that if the U.S. goes isolation on this and creates the vacuum, just as there is a vacuum in Europe and Russia is falling into it, the vacuum in Asia, China is falling into it. And China, it's an easy trip for China to take. But query at the same time, and we talked about this in the break, at the same time you have one belt, one road. You have China using its economic twist to influence all the countries along the one belt, one road all the way to Europe and Africa. And so I guess what I would like to know is does the one belt, one road initiative give China influence to obtain resources, including energy resources from all the countries along the way, all the way to Africa, all the way through the Middle East? Does that give China another market from which to obtain consumable energy? So in theory, yes. But in practice, the Chinese, this is where the opening is for the sort of liberal democracies of the Pacific Rim. The Chinese have mishandled many of these belt and road initiatives. And the countries, even India, Bangladesh, Pakistan, Sri Lanka, are beginning to look at their relationship with China in a more suspicious or more let's say skeptical manner. Because some of these projects have been highly uneconomic. They have left the countries with large debt that they can't easily, they can't easily serve it. It's quite interesting if you look in Venezuela now, the new so-called interim president, Guaido, who is challenging Maduro. The Chinese and Russians now are on, yes, they're supporting Maduro, but they are also reaching out to him and saying, you know, when you take over, don't forget, you owe us a lot of money. Sure. So I do think once again, there's an opening. I don't think, I think it's unfair to say, well, you know, Trump is just some crazy cowboy who has, as I say, most of my problems with Trump are more style than substance. He is trying to do different things that make sense. He just doesn't have the kind of sort of integrated strategy and selling that strategy to our alliance, you know, our allies in the Pacific that I would like to see. It sounds like there's really a general principle involved here, and I would ascribe to it, namely that when you engage, when the United States engages with the world, as we have mostly since World War II, where we've set the global order, so to speak, the liberal global order in the world, a moral order of essential kindness and caring, that order has returned to us. It returns economically. We have economic benefits out of being a nice guy. Engagement yields economic benefits. But then you say, well, we've decided not to engage. We've decided to isolate ourselves. We've decided, you know, to withdraw from being a leader in the world order and not to set the standard anymore. When we do that, it seems to me, and the economics of energy is only one element, it seems to me that there are economic penalties to pay across the board, energy and other things, that we lose the economic benefit of being a world leader. Engagement has a value. Engagement has an economic return. I agree, and I once again, I don't want to overdo it. I don't want to overdo it because I do think I can point to, for example, the U.S.-Japan cooperation on LNG is a very effective program that's going to show the reliability of the U.S. as a supplier of new supplies of clean energy or cleaner energy throughout the Pacific Rim. A lot of the work we're doing at NATO with our allies, I mean, I think you have to step back and think about this very carefully. We have deployed troops and equipment throughout Eastern Europe. We are engaged with Japan, South Korea, and some of our other allies from the Pacific on strength and political, military cooperation and energy cooperation. Part of this is, if you're also going to be the moral leader, you have to step up on human rights, the detainment and the isolation of the Uyghurs in China, the growing sort of autocratic tendencies of Xi Jinping.  And I think that that is a missing part of U.S. foreign policy. Well, that actually opens to my last question to you, Lou. My last question is, if I made you, if I made you the president, if I made you the American government, I'm working up to that. What would you do here right now, today in 2019, in order to take advantage of our our possibilities here in the world? Yes, so I think, you know, part of what's missing is a coherence to the policy, right? I don't think it's bad to sit down with the South Koreans and tell them, look, you should pick up more of the cost of the base. Actually, that's been going on for a while. I think part of the thing is to begin to give our allies a sense of our predictability that we have a long run vision of where we want to be or we want them to be, that we're in this together, that, you know, this America first stuff. Yes, of course, U.S. is pursuing its own interests, but the pursuit of U.S. interests are recognized as tied to the success of our long-term allies, particularly in the Pacific. It's very important. You know, and this, you know, the U.S. isn't, by all standards in the world, an enormous economic success story. You know, you're up to date. I just want to say that from your lips to God's ears, Lou, that, you know, that's a kind of thinking we should all be engaged in. And we have to recreate, if you will, the kind of engagement we used to have. We should go forward. We are still the greatest country on earth, and we have to connect up with all the other countries in the world and take leadership, and it will adhere to our lasting benefit. Yeah, and I think actually the one thing that needs to happen now is we need to find a mechanism to engage a lot of brain power in the U.S. with our allies in Asia and in Europe and Latin America and begin to think about, okay, what does the world order look like, need to look like in the future? What do we need to transmit in terms of information and the building blocks to the next generation? We can't sort of just say, well, we have despair over the turmoil in American foreign policy because actually it's not, you know, it's got a lot of good features to it. It's a question of giving it some more coherence and sort of building the capability and understanding, educating the American people. So as the next administrations come into power, that they begin to grasp some of these things. Well, Lou, you know, this is a thread I'd like to cover going forward. There are so many things to discuss, so many implications to connect with us, and I hope we can do that on the shows coming soon. Absolutely. We are loaded. Our plate is full, Lou Puglieri, CEO of E-Pring. Thank you so much for joining us. Okay, Jay, thanks so much.