00:00good morning everybody this is Steven
00:01Sinofsky and we're here with another
00:03edition of the a16 podcast this time
00:06joining me this is gonna be a first for
00:08us and we're hoping to have a lot of fun
00:10here is Aaron Levie the co-founder and
00:12CEO of box and we're to talk about
00:15modern productivity and the
00:18transformation of IT and we also really
00:21want to start off by talking about a
00:22white paper that the folks at box just
00:25did called mapping the information
00:26economy and it's a tale of five
00:28industries fascinating fascinating white
00:30paper and I think everybody should go
00:32and that was a sincere fascinating that
00:35you just know you can see there was no
00:37eye rolling no it's actually you know I
00:40looked at it and you know what you guys
00:42did was so cool because you you first of
00:44course everything was anonymous and
00:45private and all the people involved knew
00:47that you were doing this but you you
00:49looked at how people were using box and
00:51across like some crazy number 225
00:54thousand businesses 25 million users and
00:582.5 billion times quarterly they were
01:01interacting with content it's a lot of
01:03data and yeah like I think about the
01:04products that I designed they're just we
01:05never had that trying day and I'm a guy
01:07who loves telemetry so what did you
01:09learn in just in terms of being able to
01:11to use that kind of data about how work
01:13is done in a modern way yeah so that's
01:15the the numbers that you just decided
01:17are the sort of scale of our platform
01:19and what we did was we zoomed into a few
01:21different industries and started to talk
01:23to clients that we're using the products
01:25in different industries and try to
01:27understand how does an enterprise use
01:31information in this new world and it's
01:34you know really easy for us in Silicon
01:35Valley to sort of generically talk about
01:37enterprise software and how enterprises
01:38use their data but actually by industry
01:41you tend to see very very different use
01:43cases and very different workflows
01:44around collaboration around how data is
01:47consumed and worked with so everything
01:49from financial services being sort of
01:51very top-down very sort of you know
01:55closed networks and not sharing a lot of
01:57data all the way out to sort of media
01:59and entertainment industry or software
02:01industry where there is a lot more
02:02collaboration where there's a lot more
02:04sort of much flatter structures of how
02:07work gets and internal angst
02:09- yeah internal and external and and we
02:11found surprises along the way I think we
02:13we think of you know the the tech
02:15industry is being very mobile well it
02:16turns out construction workers are
02:17actually far more mobile than than those
02:19of us in the tech industry so there's a
02:22lot of interesting ways that the data is
02:24data is consumed and worked with in the
02:27enterprise that we were able to discover
02:29and I think what it what we also found
02:32was a lot of enterprises are still going
02:35through this process of reimagining what
02:37their workforce is going to look like in
02:38the future and what are the what are the
02:41software tools and platforms that
02:42they're going to need to actually
02:44accomplish the business outcomes that
02:46they're that they're looking for that's
02:47going to be a radically different set of
02:49tools than what they may be used five or
02:51ten years ago yeah I think that in a way
02:52that's sort of the most the most
02:54fascinating thing is you know it forces
02:56all of us when you when you see a paper
02:57like this and you know we get so
02:59immersed in the in the software world
03:01like just what it's like we're all
03:02software people you know mostly people
03:04listening work very closely in the
03:06software industry the interesting thing
03:08is is we do get so wrapped up in that
03:10industry that we forget that that other
03:12industries have a whole different
03:13timeline and actually it's not really
03:15just their their resistance or seeking
03:18out a change it's just that they have
03:19different priorities like you know if
03:21you were running a car company 25 years
03:23ago like IT was not like the most
03:26important thing on your mind
03:27like you would hire people and it would
03:29be an important function but so is
03:31finance and human resources but you were
03:33like supply chain is everything or if
03:35you know whatever industry we're in like
03:37software wasn't quite the most important
03:39thing and now we're seeing it like fact
03:41the way that I used to talk about it was
03:42was like you could go to Detroit and you
03:44could see these three car companies and
03:45basically we used to think what really
03:47differentiated them was you know how
03:49they did software inside like the tools
03:51and of course they all ended up with
03:53kind of a simple set of tools right and
03:55then the incremental difference over who
03:57had 99.9% uptime of running their email
04:00at 99.99% time and the resources that
04:03they devoted to that extra nine just to
04:06run the same software you basically
04:07differentiate it if you could deploy us
04:10ap better than the next guy right right
04:12and and keep it running yeah and so in
04:15of sass like that that whole thing just
04:17completely changes and you've always
04:18been talking to a bunch of customers all
04:20the time but you just got back and
04:21you've been going through a bunch of
04:23different kind of industries what are
04:24you really seeing about this whole you
04:26know this kind of dramatic shift in the
04:29focus of a CEO level person yeah well so
04:32it's it's pretty ensuring so if you
04:33connect the the evolution of software
04:36and technology with just literally the
04:38evolution of the economy and I think
04:39what we would consider the core economic
04:41drivers of the US and the globe they
04:45actually mapped very closely and I think
04:47you've you pointed this out kind of over
04:49the over the years where you know if you
04:52go back 20 or 30 years we were in an
04:53industrial economy and that meant that
04:55scale mattered more than anything that
04:57meant you know economies of scale
04:59mattered more than anything that meant
05:00that you had to centralize as many
05:01resources as possible to get efficiency
05:03from those resources you wanted as much
05:05standardization and as few defects as
05:07possible that applied to the products
05:09that you built but that also applied to
05:10the technology that you built up and to
05:12power your organization and so you know
05:14to the Detroit example you know if you
05:16were in IT the job was to build scale in
05:19your data center and in your operations
05:20and you know run your ERP better or at
05:23least as good as the the next automaker
05:25in your field and that was how you
05:27competed and all of a sudden just in a I
05:30don't know three five seven year period
05:33we have infinite computing from Amazon
05:35we have everyone has a device both in
05:38their pocket in their bag at their home
05:40and and and so you have the the infinite
05:43ability to get access to information and
05:45to work on a new platform so you have a
05:47whole new set of consumer technologies
05:49that we're using and there's also a new
05:51demographic entering the workforce that
05:53was literally born with the internet so
05:55when you combine all of those things the
05:57the Industrial Age IT model starts to
06:00break down where if you're spending all
06:01of your time you know building better
06:03uptime of your ERP system when actually
06:06the way that people are working is so
06:07radically different because they're more
06:09distributed they're more mobile they
06:10have to collaborate more then you're not
06:12really going to be able to produce
06:13competitive advantage in this sort of
06:14more Information Age that we've moved to
06:17and so what we're finding with with
06:19enterprises is that that recognition is
06:21now becoming more and more apparent and
06:23and it's requiring enforcing a new
06:26delivery of IT where you go from this
06:29world where where again you know if you
06:31if you had ten thousand CPUs that was
06:33your competitive advantage well now you
06:35can just buy those ten thousand CPUs on
06:37demand from Amazon and you're probably
06:38better off letting Amazon Microsoft
06:39Google all compete for your dollars than
06:42you going building them out yourself and
06:44then by the time you deploy them Moore's
06:45Law site of another Moore's Law cycles
06:47has already occurred and you've you've
06:49lost like you know your investment so
06:51that's the the big shift and the
06:53implications are massive on the IT side
06:55and they're driving a whole new wave of
06:57I think you know software as a service
06:59companies and startups to build for this
07:01new economy a new way of working and it
07:03has massive implications on the
07:04businesses themselves and when you go
07:07you know east of Fremont the I think the
07:10thinking around you know digitalization
07:13is is is still something that needs to
07:17happen in a much broader way and and
07:19that's gonna relate to both you know the
07:21upside of of digitization and IT as well
07:24as the downside of the the internet and
07:26all the the new risks that are out there
07:28that you know CEOs and leaders have to
07:30pay attention to yeah don't you think
07:32what I think if so much thing about you
07:33said is how how it shifts the focus of
07:36of IT you said from systems to users it
07:38also allows IT to focus much less on the
07:41deployment and management and scale and
07:43reliability and security which of course
07:45the idea of competing with with you know
07:48the googles and Amazons and the
07:49Microsoft's on security if you're you
07:51know an appliance maker in the Midwest
07:53like that's a really where are you gonna
07:55hire those people how could you possibly
07:56compete but also the focus instead on on
07:59what I t's role is with just information
08:01itself within a company and how how do
08:04they really think about the role of
08:05information cuz if they think about it
08:08strategically then now they can go wow
08:09we have all of our employees what
08:11they're doing is creating collaborating
08:13and sharing our own intellectual
08:15property in our own competitive
08:17advantage and what's the right way to
08:19really interact because of course what
08:21over the past ten years or so with this
08:23new demographic if if they don't pay
08:25attention then and they make it harder
08:27for people to use that system that they
08:28put in place in the industrial age then
08:30people are just going to ignore it and
08:31all of a sudden corporate assets are
08:33flying around on Gmail they're
08:34collaborating with their partners using
08:36ad hoc tools and so I think that's what
08:38what's so interesting about the white
08:39paper about the SAS model and just about
08:42the way that IT can really participate
08:45in a in an uplevel and much more
08:47value-added sort of way yeah the the
08:49kind of two things to pull from that so
08:52the first on the first part of what
08:53you're saying that we were just at a
08:55major kind of top ten pharma in life
08:58sciences company in the Midwest and
09:00we're meeting with the CIO and the VP of
09:02infrastructure and they're there
09:04obviously already biased toward this
09:06direction their box customer or they're
09:08there they're excited about the kind of
09:10future of the cloud and the VP of
09:11infrastructure has a sign in his in his
09:14office that says no infrastructure so
09:16that that is where things are going
09:19where his job is not to build out
09:21datacenters and be you know someone that
09:23understands you know the power
09:25consumption and and CPU utilization and
09:29and you know the operational side of
09:32infrastructure his job is to is to go
09:34get the you know best-in-class cloud
09:36providers that that are going to produce
09:38the kind of scale that he needs for the
09:40operations that he's doing and and not
09:43actually being the in the hardware
09:44business and that's that's a pretty
09:46dramatic shift if you think about that
09:48role and even the role broadly of the IT
09:50organization and it's interesting
09:52because a lot of a lot of you know what
09:55we tend to do in Silicon Valley sort of
09:56take things to the the immediate logical
09:59conclusion but not necessarily the
10:01derivative after that so our immediate
10:03logical conclusion is well if everything
10:05is delivered as a service then there's
10:07no it-- jobs in nineteen anymore but
10:09that's that's a little bit myopic
10:10because that's not thinking about what
10:11are then the next stage of things that
10:13the VP of infrastructure and the CIO of
10:16a company that is going to be more
10:17information driven right what are they
10:19going to be doing in the future and the
10:20future is going to be we were talking to
10:21one customer imagine a world where once
10:25you have your infrastructure delivered
10:27and once you have these this new
10:28baseline of platforms maybe it's workday
10:30for human capital manage
10:32maybe ads and ask for customer support
10:33maybe it's Gmail or office 365 for email
10:37we're obviously hoping it's box for
10:39content management that's the new
10:40baseline now imagine a world where you
10:42have an API into your information in
10:44every single one of those platforms and
10:46the new role of IT is to think about
10:47well I have all of this information that
10:50is in the form of intellectual property
10:51and assets that I can now go you know
10:53produce you know n number of new use
10:55cases around that weren't possible
10:57before and so you start to think about
10:58your information as not something that
11:00just people are transacting on but
11:02actually as the assets of your business
11:03which that means that the CIO and it's
11:05and their organization should be
11:07thinking of well how can we better use
11:09that information some cases it'll be big
11:10data if you're in the appliance or
11:12industrial business then you're
11:13producing a lot of data with the
11:14telemetry you now have in other cases if
11:16it's a more knowledge worker driven
11:18business like a consulting firm then
11:19every project you do is producing IP in
11:22both of those cases someone and some
11:24organization needs to be responsible for
11:26producing better productivity and better
11:29results because of that information
11:30that's super cool because like one of
11:32the things that I think is so
11:33interesting about this transition from
11:34the Industrial Age if if you look at the
11:35white paper and you see the different
11:37kind of segments of usage one of the
11:40things that jumps out for me is that the
11:42Industrial Age view of things would it
11:44was okay you're in a certain segment
11:45like fin serve or Pharma and and so you
11:48know your uses are different so then you
11:51go well we need content management for
11:53our our vertical and then in the
11:55Industrial Age that meant somebody was
11:56gonna go and build a vertical solution
11:58for you which then would try to jam all
12:02of the company's assets into this one
12:04vertical approach but consistently over
12:07the years those would get relegated off
12:08to the side and then they can't get
12:10updated because they're they're hard
12:11they're big they're heavy they're
12:12expensive then each of the companies
12:14that provides that is dealing with
12:15customers at different points and a life
12:17cycle and all of that complexity and so
12:20what kept happening is that these they
12:21would build up these these very fragile
12:23sort of like jenga's of software and
12:26then people would would just go and use
12:31and use email attachments or things like
12:33that and one of the things that I think
12:34is is really interesting about what you
12:36said about api's is you you can take
12:38something like like a box and people can
12:41use it in a broad and horizontal way
12:44that works on their phones that works
12:45with partners works with customers you
12:46overlay the administrative controls but
12:49then that next level of IT that
12:51information management comes from
12:53building unique applications for your
12:55organization that can truly be a
12:57competitive advantage because they they
12:59let you think differently about how
13:00you're gonna use that information
13:02whether it's mining the information or
13:03sharing it or collaborating or reusing
13:06it or finding it so you have all these
13:07cool API is that that are a very
13:09different level yeah it's interesting
13:11and I don't think we've thought about
13:12this before but so right now this is
13:15like a news you know live this is a live
13:17idea happening okay we all had the
13:18whiteboard now specking out of the next
13:20to the next iteration of box this is the
13:21future of the cloud right now what we're
13:23about to say so it is interesting so
13:26maybe the way to think about it is for
13:28the first 30 or 40 years of IT right
13:31most of our time was spent on just
13:33getting the input to work like all of
13:36the infrastructure all of the software
13:38all the technology just to even get the
13:40data now that is trivial because of
13:42software as a service because of mobile
13:44because of these platforms so getting
13:46the data has become you know the orders
13:48are magnitude easier and so the next job
13:50is really what do you do with it and and
13:52so now all of the time should begin to
13:54shift to once I have simpler platforms
13:57that give me you know comprehensive and
13:59authoritative information what do I do
14:01to create value on top of that and so I
14:03you know maybe the next era really is
14:05just about what is it that you're doing
14:06with your information as opposed to how
14:08are you getting your information yeah
14:09and I think what's so interesting is is
14:11that if we just took a step back like
14:13most evolutions of information
14:16technology ends up taking this sort of
14:17path like for a long time
14:19IT was all about infrastructure just
14:21like getting all the computers on a
14:22network yep or then first getting all
14:25the computers in there then getting them
14:26all on a network and then what happens
14:28these resources they peak and then they
14:30sort of recede and so what we're seeing
14:33right now is and your your recent tour
14:36through a bunch of customers sort of
14:37confirms that that like even at what we
14:39and Silicon Valley would call the most
14:41state industries of the world they're
14:43starting to really see this this whole
14:45world change in terms of where that goes
14:47it's it's actually really exciting
14:49because the the thing is is you know we
14:51we tend to you know we tend to see the
14:55early adopters in the in the valley and
14:56and we sort of say well why can't
14:59everybody adopt this fast and it's
15:00because like they're running the
15:02businesses that produce our drugs so
15:04that that you know keep our you know
15:05highways you know safe that allow us to
15:08actually have like a refrigerator that
15:10works and that's where they spend all
15:11their time and so they don't want to
15:12dramatically work out all of the systems
15:15that they've built up over the years and
15:16what's exciting those is that everyone
15:19is recognizing that there are going to
15:22be areas that change it's not that every
15:24single process and piece of software and
15:26piece of infrastructure has to move to
15:28the cloud or become mobile it's that
15:30there's a net new area of work that's
15:32happening or opportunity that that will
15:34align the more of these principles and I
15:36think we finally have CIOs which is
15:38important for the valley because that
15:39means that the budget is there who
15:42realized that this is where things are
15:44going and and it's actually a pretty
15:45exciting time if you are in one of these
15:48blue chip businesses and understand this
15:50because the potential of combining these
15:53two worlds is incredibly exciting as a
15:54small example we were with a a
15:57manufacturer of sort of signals and
16:02sensors in the municipal and sort of
16:06safety space and this is a company
16:08that's been around for over a hundred
16:09years they make the the sirens and the
16:11lights and the a lot of the equipment to
16:13to figure out where traffic is flowing
16:15and and if you just think about like
16:17that is the that is the like the device
16:22that will be the industrial Internet and
16:25things device more than something around
16:27our wrist like the ability to wire up
16:29the world with better telemetry and
16:31better information and this is a
16:32business that has been there for over a
16:34hundred years and they got really good
16:36at building these things and now they
16:37have a CIO and a head of innovation that
16:40realizes that they can do exactly what
16:42GE just did on jet engines and bring
16:44that to completely other areas and and
16:46and processes of the of the world so you
16:48know I think leaders are getting this I
16:50think that there's a probably maybe an
16:54emerging and you know still early amount
16:57of probably education and curriculum and
16:59ways to think about these things but I
17:01think you can start to see the examples
17:04of what the world might look like in you
17:05know 10 or 20 years cool
17:07well thanks Erin there's been Steven
17:10Levy and Steven you're with another 8016
17:12Z podcast on SAS and sort of the
17:15changing workplace and the information
17:16economy thank you thank you
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