Congress and trump to administration will repeal and replace the a. C. A. And key players to watch in the months ahead. Be sure to watch washington journal beginning monday, december 26, at 7 00 a. M. Eastern. This is one of the things i think the American Public often gets impatient about. They believe they have this trump card, this great military that can defeat anyone. But its not true. It is an extraordinary military, its very powerful, but it can only win in certain situations and can only really destroy things. It cant build a new order in its place. Sunday night on q a, mark danner talks about his career and the challenges facing the u. S. War on terrorism in his latest book spiral trapped in forever war. We dont want to produce more militants. They want us to overreact. They want us to occupy muslim countries so they can build recruitment. They want us to torture people. They want us to do things thats going to allow them to take their case against us. Sunday night at 8 00 eastern on cspans q a. Virginia rommetty was the eaker at this years churchill club. This is a Silicon Valley business and technology forum. It begins with the ceo karen ucker. Ladies and gentlemen, please join me in welcoming ceo of the churchill club, karen tucker. [applause] karen tucker hello. Thank you, thank you very, very much. My name is karen tucker, and i am ceo at the churchill club. Welcome to the 2016 annual dinner as we proudly present virginia rometty, chairman and president of ibm, and promod haque. Senior managing partner at northwest venture partners. Theyll exchange views on a range of topics from cognitive computing to business transformation to other things that they see as very important for future innovation and economic growth. After their discussion, we will have a few moments to take questions from the audience. We wish to thank ibm for their partnership making this possible. Lets give them a hand. [applause] karen tucker if you are tweeting, please use the churchillclub so that everyone can follow along, and there are other Twitter Codes in the ulletin. So she is a major force in the Venture Capital industry, having invested in over 70 companies, over 40 billion ver that time. Early in his career after earning a phd and mba, he went to work for a Large Company called bmi medical, which pioneered cat scanners, ct scan. And he put in time at a startup, recruiting as a coo and ceo. That gave him a very special insight into what companies and start having locked into hose issues himself. And though they attended at different times, they both went to Northwestern University in illinois. [cheers and applause] karen tucker the two first met before virginia took the helm as ceo, and promod has followed her since that time. Please welcome virginia rometty and promod haque. [applause] virginia rometty i very much appreciate that you pointed out we were at northwestern at different times. [laughter] virginia rometty t virginia rometty i very much appreciate that you pointed out we were at northwestern at different times. To, you know, n interesting evening here as we talk about, you know, some interesting things that are transpiring in the tech industry, and you know, new kind of innovations we have made. It is my pleasure to, you know, be in conversation with virginia rometty here. Virginia, as you know, has had a great career and accomplished a lot of fascinating things at ibm , and in fact, you know, i was looking at your bio a little bit. He started in 1981 you started in 1981. [laughter] virginia rometty we are getting off on a good foot. To 35 haque so close years. Virginia rometty it will be just early five last year. Promod haque what a remarkable career that ginny has been able to accomplish, just fascinating. Ceo inknow, appointed january 2012, correct . So prior to that, ginny was as, you know, the Group Executive for all the sales and marketing and strategies. I think i met you at that time. I think it was some event happening in new york, and you and i ran into each other and began to talk about virginia rometty it might have been our centennial. Promod haque i think it was. So i think a lot of fascinating things that jenny is involved with, and then especially since being ceo, you know, sort of a pioneer so to speak in the area of cognitive computing and utilizing the ibm workman program and technology to apply it to a lot of different vehicles and also, you know, sort of really do some fascinating things in the area of security as well as transformation of businesses, and a whole host of other things we will talk about. Ginny, it is my pleasure to be in conversation with you here. Virginia rometty thank you, promod. Promod just landed from india a few minutes ago . Promod haque a couple of hours ago. A few board meetings, and then a Company Involved in Artificial Intelligence and analytics. Virginia rometty you could have your shopping cart out telling me about his companies. Promod haque so ginny, you have been doing a lot of stuff in the area of cognitive computing, and you know, as the street says, you bet the company or the future of the Company Going forward on watson and on cognitive computing in particular. It would be interesting to get perspectives on how you see that impacting society, the use of cognitive computing. Virginia rometty i will provide you some context. It is a big bats, but it is not a risky that. This goes back a risky bet. This goes back, oh, we started almost two decades ago. It is something we can identify with. We got going down this path, and we dont think of it as a product. It was a time when we said, we look out and see a world where we would need all this data, whether it is maybe it was sensors or images, something that will grow and grow and grow. We had a lot of discussion over, the systems of today cannot deal with it, but and this is where the word cognitive came from. We do have carpeted cognitive overload. People will not be able to deal with this. Important. Ved i believe this is what will happen. The cognitive overload, you have got to develop something that would never program. You have to have them understand and learn and come up with their own answers. They would learn over time, which i would say, if this is one Technology Worth more in time that less in time, it would be the first. It would not be a product. We see it as an era. That work went up until the time we did jeopardy, which some people might be familiar with, when we had watson do jeopardy. Watson was our manifestation of the technology. But it was a believe this would be an era, you would have these systems, because you would have no choice to deal with all of this data, and more important, to resolve the tough problems, and you asked for context, you have to be able to solve things, you need this technology to solve it. It is why it is one of the first things you started with on health care, which is we undoubtedly picked one of the most difficult areas, but i absolutely believe the time is right. I did not know you worked for a Health Care Company back in time. Now i know why you are always asking me about this. Now this all makes sense. So health care, but i must say, and i just noticed it on the program, i think in the front, i really believe that if it is digital today, it will be cognitive tomorrow. It will be pervasive. You can become a cognitive business, in the technology era. We can talk about hydraulic processes of ibm and where we apply this and where we change what we do. Society, we will, with these technologies, there is not a doubt in my mind that we will impact things like health care, the environment and jobs. We will talk more about that. He just go through a whole list. It will be an era of man and , and another reason why we call it cognitive, ai has got some sometimes negative baggage associated with it. We think of it as augmenting intelligence. I have given all of the experience in what we have seen, we actually did a bit of account now. 100 Million Consumers are being touched by watson, going to a billion next year. It is a twoway relationship. I am very optimistic about this, and for good reason. Promod haque you know, there is a lot of talk about ai and Machine Learning and, you know, a lot of companies are being seen from time to time, developing, you know, ai is the platform they are building and someone. So on. You also see Larger Companies building it. How is watsons approach and ibms approach and cognitive computing different from, you know, what Microsoft Might be doing or what alphabet might be doing . There is noetty doubt if we go back in time even when jeopardy unleashed again, ai has been around for decades. I think at one time, i was in Artificial Intelligence i dont think i was a specialist. In my early, early career years. I would go to parties, and my husband who does not work for shouldwould say what i say . I said, just say you are an ad specialist. To today,tforward some people call it the ai winter coming out. You have got everybody talking about, because it is the same problem, all this data, how to make something out of it. Everyone has approached it. As a company, fastforward to today, every client, we get the privilege of seeing so many, but if you think about what will be the competitive differentiation, and i will come to us in a minute, but every one of you still saves data. It will be the basis of competitive advantage in some way. So we looked at that and said, where can we separate from some of the others out there . We separate in three ways. One is this point about the goal being cognitive what man does. This is about helping you do your best, or it is about taking care of things so you can do what you are meant to do, which we say is fascinating through doctors. We are pushing through a million patients. We are watching how doctors interact with this technology. Originally, anyone who ever works with technology with doctors, have you ever does it always work . No, it is difficult. I have always patients, i have number of patients x number of patients. They are coming into a world where some of the medical data will double every 75 days. What will you do . That is impossible, but what i watched we have been for many runs on this in history, Technology Comes in, they are like, i cant change what i do, i dont have time, but what watson said was almost like a collegial relationship between the man or woman and this. Has shown us. T i have watched this with lawyers, doctors, underwriters, engineers, it is the same even callcenter people. The same kind of thing. This goal, that is what this era will do, man and machine. These are not just machines you jump dump data on them and say, oh, i am a doctor now. They have to learn. As a child, you would start, are these related . No, then you keep going. Man and machine is where we differ with others. The goal that we are augmenting what each of us does in our life. The second is the biggest business thing that differentiates us from others, and we have i have to tell you, it took us time to get this right. If you really believe this is your basis of competitive advantage in your businesses, how can i be sure that the insight you have belongs to you and not someone else . We have architected the cloud system, but it is such that, by the way, your most voluble data, everyone has access to what is public. Comes with what marrying it. This is like accumulative business, and you will see the resurgence of companies that take advantage of this. If i am a company, i bring in my data, analytics, we bring in watson and data, but the insight, we can guarantee the insight goes to you, they dont train this data for someone else to use. Part of why that is, i dont have a search legacy background. Some companies have a search, and is like a big pool of data that is a knowledge database. This is not what this is. I think it is an important business but model difference. Business model difference. I know how it ends, if that is not a good ending, i trained the data with mine for someone else to use it, i want the value of all that accumulated years of my data. The second big thing i do think this is, you will think what decisions you make and how you do it, knowing who owns the data and who owns the insight is a really big point and where you can do with this. The third one is, i also think we are in an era where so much of this is about an ecosystem. A big, you open ecosystem. This morning we did a developer conference, i cannot remember where i was. Innovation hager does that remind anyone . Did i make up that name . I was thinking i was an innovation hager. But we had 1500 developers there. The open ecosystem says you make what the consumable, breaks it up into pieces so they i met people, and that i had not built things with. You do not have control and an open system like that in an open system like that. One man was 19 from stanford, and he built something called do not pay. . , so i said, what does it do he said, using watson, it is a form of a robo lawyer. When i came to the United States from the u. K. , i kept getting parking tickets. My parents called and said they would quit paying for these parking tickets. Tohe had to figure out what do about this. I am thinking to myself, dont park where you are getting parking tickets. I am sure thats what the parents said. He put together cognitive intelligence on how to fight parking tickets, and it has gone viral. Said, got, i think he 250,000 customers, and his rate is 50 of winning, fighting on these tickets. He asks you a few simple questions, and then you fill out your legal document. He started with parking tickets, he has now moved on to fire your landlord and he has got a whole set of these things. These are all legal, correct . He said yeah, because you do not believe you part illegally. Parked illegally. Now he is working, he has got another big group around refugees and how to have them get legal documentation. I think it is an excellent, great example. Promod haque that leads me to my question on that. Talk about this entrepreneur using watson you know, as you watson,life with cognitive computing platform, youan start ups utilize know, some of the capabilities of watson and then actually build apps and other applications and solutions . Virginia rometty i am going to answer it in a broader context, because this is not a commercial on watson for anything. Subliminal, but did not mean it that way. I think everybody in your own business is here, you are thinking about, how do you form an ecosystem . This is true whether you are a bank, you could fight or embrace tech. Many people are choosing to embrace and a good way. Everybody has got this point of view of some platforms whether it is micro level or big. If you are going to build a platform, it should do a couple of things. One, you need to give them access to something they cannot get access to anywhere else. Sciencease, we use the of watson, the science of the cloud, we have invested the past 12 months, or even the past nine months, 12 billion. You cannot get it elsewhere. So give them access to science. The second thing you have to do for any kind of a platform here is, you have got to help people be better than not working with you. We are offering them all sorts of ways to certify as a cognitive developer. They have got to be top coder. You would know some of these things. You can get a nano degree in it. The new concept is all out in this. The 30th, help make them commercially third is help make them personally successful. And we have got the Worlds Largest service company, they bring hundreds of partners out for solutions. Channels are what people are looking for when they are looking for innovation. Those rules fit on how to help a startup. Bitesize junk, and of course free. That is the thing they all want is free for some period of time. [laughter] promod haque any other thoughts . Virginia rometty on startups . Promod haque or the whole cognitive thing . Virginia rometty this point about being able to solve problems i do not think we could solve today. The stand between basic everyday, because i believe every decision you make in the next five years in personal are really big, you will be assisted by some kind of technology, i believe for all of us, that will be true. I look at some of the basic stuff where we are doing work on right now with sesame street and United States teachers association, the first wave is rolling out of lessons plans for kids. On the everyday side. I dont know if you have ever looked at third grade math lessons anybody have a third grader . Anybody remember her grade math . I did it, that is atrocious. You would never know how to match a learning plan to how this kid learns or even if it was a good plan. So we set watson on a third grade math. Started with thirdgrade math. It was to match your child learning style to the lesson, the right lesson plan, so throwing 500 years by all teachers next year, then we run into other subjects. On the other side, i would say that point on health care, i really, we will probably do [indiscernible] do anyone in health care, one or two, 34, five. Promod haque 20 of gdp is sent spent on health care, 3 trillion a year. Virginia rometty it is the waste and inefficiency, but it is the outcomes, 60 minutes did a segment on washington three weeks ago. Unbeknownst to us, we doubt and interviewed different hospitals and the like, and it was for genomic sequencing. For us, it is an amazing sequence segment. Doctors that work with professionals, any professional, technology. They said, we went through the genomic sequencing, and ,housands of cases, patients watson came up with exactly what my doctors did at the tumor board. So when you know about complex cancer cases, you do general mixed sequencing, they do the termer tumor board and read your possible treatments, but in 30 , we found more. That was the ability to match. We are now treating more patients outside of the u. S. Than in on college advising. Cancer all of the breast matching with watson, and we announced quest who has announced 50 of the doctors, cancer cases in the country if you want to genomic sequencing done, it will be done. This is really moving quick. [speaking simultaneously] virginia rometty both for cost and for outcome. Promod haque in the venture community, we are seeing lots of startups with Machine Intelligence, learning space, cognitive computing virginia rometty but you do need data. Promod haque this is right. When you think about it virginia rometty not just publicly available. Promod haque when you look at what people call the Digital Economy, one of the things we talk about in the Digital Economy is that didnt data is the currency. When you think about it, data is the currency in the Digital Economy. How you put that data work is what is going to differentiate Companies Going forward, right . You have currently sitting there, you could invest it in a cd and maybe make 0. 3 , or you can find an intelligent way to raise that money. Same thing, you have got data, but if a company does not know how to utilize the data it has to his advantage, that is the cognitive computing concept. Virginia rometty when you and i first met, i point this phrase that data would be the next the worlds next natural resource. Promod haque that is correct. If you use it correctly. You justrometty if think about the natural resources, the value does not necessarily go to who owns them. This is true about oil or, you go to africa, all the raw iterials, but who refined got value, and there are poor countries that have rich natural resources. So this will be true companies. Promod haque lets move on. Lets talk about [indiscernible] you have done a lot of work in that space, and i know ibm is doing a lot of work in of luck chain. If you could take a few minutes virginia rometty anybody know block chain . The audience is experts. Put your hands back up. How many believe it will have a big impact. Oh, more went up even. That is even better. Promod haque how do you think it will Impact Business . What are the verticals . Virginia rometty i have a bunch of agreers in here. They will add something to this conversation, but this to me is one of those i can remember, i have a funny story about it. This goes back, i dont how many years ago. Im in my home office, and this would have been, i guess it was thenning about all of cryptic rinses, bitcoins, very early on in bitcoin, all this chatter about it. I start looking around as i want to learn more about it. I do research online, i stumbled upon this youtube video. And it is it goes on for 20 minutes. ,ut it is very interesting clipboard after it describing how it is not bitcoin but how block chaining, the underlying technology, works. It was lengthy, but i watched the whole thing, it is from ibm. Excellent, so anyway [laughter] virginia rometty i saw that, but it was right. So this was the beginning of my experience with block chain. I really believe for any supply chain, any supply chain, where there is inefficiency, which is every supply chain there is, any amount of tabor, uncertainty, you will apply black chain. A lecture idea of that is in beautiful and when one links to the next, that is permanent, cannot be changed, but it is distributed. You could have i and we have willsaid that block chain do for trusted transactions with the internet did for information. I did this oped in the wall street journal yesterday, and i said, if you do today what you knew about the internet in 1995, what would you do to friendly . Differently . I think you should ask that question on block chain. We had several hundred pocs going on with clients. But here was the thing that almost miss me more. In my own company, i have dozens of block chain projects going on, and i did not force any of them. That is a signal. Embracedg they have it. We have probably 40 billion of financing a year, and they took a simple process, dispute on invoices for financing. This was not singapore, this was another country, tax rate, whatever it is. So they put our ledger up of the whole financing business pretty fast up on block chain, and the disputes go to the friction goes to nothing. Protect t and pretend you are the Worlds Largest shipper, hitting goods out of africa or wherever, you are talking huge amounts of efficiency. I would add one other thing you have got to have to be the difference. We must i must put a plug in here for open source, you will have to have a sort of foundation that everybody uses that is trusted, the same one, or you will get islands and never get the benefits. The hyper ledger project is the Fastest Growing open source project out there, and we have contributed to it. It is established growing open source project, limited foundation. That is why i think it is important for the foundation. Promod haque private block chains as well as public. Virginia rometty does not matter. Governments will want permission, and it will need visibility. Promod haque which vertical do you think will be the early adopter of block chain, based on what you see . Virginia rometty i think the supply chain of tripping shipping, trade will take a big time, but we have many in the bank. Promod haque i was going to ask you virginia rometty like tokyo mitsubishi, msg, any kind of contract between two parties that they can make a strong contract, there is a lot of that. Trade finance, but you could do it for i have got compliance. Anything you have is a record, a transaction like parties today, so you will see first trade finance, financial [speaking simultaneously] promod haque and then governance, risk, and so on. That is interesting. Good, lets move on. Virginia rometty [indiscernible] promod haque from adventure perspective, we think it is a little too early for us. Virginia rometty you could be early. [laughter] promod haque so i think, you know, i think the sense is in fact, reports indicate it will probably be another four or five years before really takes off. So we will see. Virginia rometty you keep doing your thing, i will do my thing. [laughter] virginia rometty i really believe this is one, it is hard because it is not that difficult to implement alongside your current distance, you can do it. We just did the big announcement with walmart for food safety. We and walmart are doing good safety with block chain in china on pork where they have had issues, and that is what this is about. It will be going pretty soon. Promod haque lets talk about security, Cyber Security, there is a Huge Investment area for corporations, enterprises, inventor Companies Venture cavities. Companies. Yourself ines like Cyber Security and someone. How do you see the landscape, how do you see cognitive computing impacting this . Virginia rometty how many of you spend time on the topic of cyber . Almost every one of you that run the company. Obviously it does not matter, every day, because the bad guy gets smarter, so we are all doing something. It is a business as well. We are the largest Security Company out there. The secret of it, i think, you all not be surprised, this is world so complex on this topic, you have got to assume whatever you do, the bad guy is in already. The answer will be related, you will not be surprised, some sort of massive realtime analytics where you are constantly looking for something slightly astray, whether that is in data, relationships, behavior, trade surveillance, whatever it is. So the future is going to be one, you can put a cloud in, because they are more standard, they are more secure. We need it in this country, and we did get legislature, still needs to get through the senate, to have sharing, because the good guys have got to brand together to band together to fight the bad guys. So if you share, you have got to do it knowing you will not be liable. You have got to be able to do it without a penalty. So our government, there were some representatives from very good legislation on information sharing. Now needs to get through the senate. I am hopeful it does before the year, before the Congress Goes out. That is the kind of second part, this collaboration piece, but the third is the part all of us, i think, in my best analogy, it is like an immune system and helps us to run. All of us have germs, and what does it do . Give germs act out, this if germs act of, the immune system the immune system goes to work. That is out you have got to run it how you have got to run it. He find it, wall it off to a does not affect everything else, that he goes to the next level, and it is a fantastic analogy, because that is why the cdc and who got to create for health. What does the centers for Disease Control or the world health if there is an outbreak in one place, quick, distribute information, stop it so it does not get to other countries. It is like no different from a virus. We have got to follow that work. So you will continue to see companies pop up. We do it. We have one for Cyber Security that goes live first quarter. You cant find enough professionals in your company here at forget that part of it. I think there is Something Like 80,000 security blogs a month written. I mean, really . And then to be able to know which even to apply to you, that is the kind of thing i think is the future for security. So for future investing in companies that are like we are all around, by the way, that was our approach as well. We put a foundation in so people can write stuff using our data. For myselfe personally, we have been very involved in the whole Cyber Security ace for many years. We have close to 15 active companies in the space today. , think that is the way we see you know, Machine Intelligence, artificial learning, Artificial Intelligence and so on coming in. Virginia rometty i do think the hard part is, the average client has 80 products from 40 vendors. Promod haque i agree. Virginia rometty that is like putting a different allowance albany on every door. On every door. Allowance company on every door. Promod haque you have got to look at threat actors on one hand, then people trying to defend, and is a risk because the actors are statesponsored, left funded and other ways. They are not sitting there. There is no innovation going on, and in fact one of the things we are seeing is the conventional means of Cyber Security in the past, things like Antivirus Protection and incident response, but newer stuff that came out, you have got sandboxes, right, and you sort of put the traffic in the sandbox and see what goes on, but what has happened is threat actors figure out sandboxes, and they find a way to invade sandboxes. You have got malware that is in bypassingally sandboxes, and with a certain. Mount of labor, it goes into and the amount of information, as you pointed out, signatures that are created today, thousands and thousands of signatures, and that is where cognitive computing comes in. It learns from it, keeps learning, keeps adapting, it figures out what is going on, that provides a bunch of insight. And then it augments the Security Experts that are sitting there, so you dont eliminate them, but you give them the ability. It is hard otherwise to look at, oh my goodness, i have 1000 incidents, how do i make sense of all of that . The ability to use Machine Learning to be able to draw insights out of that and keep learning virginia rometty this is the reason why you cant over regulate this area. We have been participating, trying to get healthy regulation. If you over regulate, we are so busy filling out over regulation forms, the bad guys know what we are working on. That is a real issue. And the other part, has everyone had a chance to see what the dark web really is . Promod haque scary. Virginia rometty if you havent, i am serious, we in fact just opened at something called the cyber range. It is the only real one of its kind, first of its kind, cyber range. It has got all of these i dont even know how to describe how it is hermetically sealed, but in there is the dark web. It will take clients in, you realize what this is, you can buy anything for anything. It is very organized, extremely professional. It is hierarchies. There are organizations perfectly set up, Service Level agreements on anything you need to get. I can guarantee this credit card will work five times before it does not work. ,r if you do not understand it to see it, it just gives you a tiny glimpse of the commercial side of the dark web, not even the worst side of what you are up against. If you do that, you understand why this, the answer is analytics more than anything. Promod haque it is amazing, and this is the perfect example of Cyber Security where you augments the capabilities of the human being, Machine Learning and all of the, you know, cognitive analysis and so on, allows someone who is a cyber expert sitting there, it increases productivity. It allows them to be more effective and productive. And especially, you know, as you move forward even these days, five years out, you know, there is a challenge with respect to finding the right skill sets. Virginia rometty there is a big problem. Promod haque so therefore, the ability to augment the productivity of the existing workforce that one might have, to be able to increase their productivity is a big thing. Virginia rometty the estimate for security jobs is over one million. Promod haque it is huge. That is where Machine Learning ,nd cognitive computing augmenting existing technologies and augmenting, you know, the human that is sitting there making decisions and so on, just opportunity for cost savings as well as, you know, jobs that need to get done. Virginia rometty he has a lot of pages in front of him. I dont know where this is going. [laughter] promod haque ginny, you have been involved at ibm, you have seen many, many phases of technologies and innovation that have happened over the years, how companies and societies get transformed and businesses have to transform. Over the years, ibm has done a great job. Talk a little bit about looking to the future, transformation of businesses, whether it is, you know, customers or humans transforming into what ibm is doing. Virginia rometty you have learned a lot too. Promod haque i have. Virginia rometty i want him to share i will answer, but i want him to share i found a fascinating list of things he said about which kind of Companies Make it and dont make it. I dont remember, but [indiscernible] back to rometty so what, Lessons Learned or observations, maybe . Because i guess, one, sometimes people say to me, what would you people say, what would you advise a Young Company . I think we would say, some of the things i would say about myself. It does not matter. I look, we are 105 years old. Anybody with companies in that era . Anybody in the room . That would make me. Ok. [laughter] virginia rometty we are 105. Haveou have had time and i had time to reflect on this, we were in the middle of this transition now, one at a five years in tech. The competitors when i started unisis, were cr, honeywell and they are around, but not part of the industry anymore. Promod haque deck. Virginia rometty ok, just three of us remember. But they are gone. So my point, there is a different set of lessons to transcend multiple arrows, because other companies, you can make it through one or two, but there is Something Else about 4, 5 and six. And if i thought that and as a team, if we thought about ibm and the lessons we have learned that he make it through these, and you leave some of them, others go through. They are different. I think we are the only one that has made it through multiple arrows of Technology Eras of technology. And there are always things that come back to my mind. One is the idea that know what most in your and what must change. I am reminded of it, because people say what is ibm now . What are you . Stayedthe thing that has constant, what we are is solutions to society and businesss most challenging issues. Promod haque correct. Virginia rometty that one thing have stayed constant. That idea of not defining yourself as a product, even though we have talked about watson, but if we come back in 25 years in the it will be Something Else. The lesson of do not define yourself as a product. If you define yourself as a solution it will free you to do other things. The other piece would be, and i know this is hard, do not protect your past. I think that, even in my tenure, we have divested over 8 billion of businesses, 50 acquisitions, spend on average 6 of all of her revenue in rnd every year. So, the idea that you need to let go of something is a hard thing, but if you dont then you will ride them down. Then you cannot change, it is too late. So the idea of do not protect your past, but even for a Young Company, right . This is changing fast. That would be my second lesson learned. And my third is something i have talked a lot about it i think it is true and interesting at this point in time, it is true for people, companies and countries, this thought of growth and comfort they never coexist. Promod haque right. Virginia rometty you need to get comfortable with being uncomfortable. Promod haque change is always threatening. Virginia rometty it is. And even if you shut your eyes, assuming they are not already shut. [laughter] virginia rometty think about women in life you learned when in life you learned the most, probably a time when you are put at risk, that is when you did. I think companies and people must get used to it, dealing with the uncomfortable. Being uncomfortable. It is almost soothing, to know that when you are really nervous about something, you are really learning something. You are channeling the energy, whether you are a person or country or company, the entering nduring lessons. And we are still moving through things. But firmly, firmly now this era of us being a cognitive solution in the cloud company, that is here. Promod haque that is true. And having funded a lot of companies, companies that get too comfortable with the status quo and do not want to change because it is threatening, they do not last. Virginia rometty sometimes it sneaks up on you. Promod haque and at the rate of innovation is a lot faster. Virginia rometty there is no doubt. Promod haque therefore the lifecycle of products is shorter than it used to be. He used to be able to design something and sell it for 10 years, now the pace of innovation is so high and so fast, it becomes obsolete a lot faster. Virginia rometty many people use the word agile, we spend a lot of time, any of us that run businesses, you need to think about how you do work, because of innovation cycle is so fast, it must be for Big Companies too, this idea that you colo cate people, that a multidisciplinary teams, you do it in a big firm as well. I probably moved, we as a team had about a billion dollars of real estate projects going on and he must reconfigure work spaces by bring different skills together, we are probably one of the largest Agile Development in the world. Promod haque i think it is time to open it for some questions from the audience. Virginia rometty my health care guide, i think. Promod haque we have a microphone back there. Virginia rometty i hope he was agreeing with me. [laughter] virginia rometty i cannot see him from here. As i am really fascinated by this vision. But i am also really scared. Im not concerned about jobs in 15 years, i am scared at some point a. I, or cognitive technology, will try to come for the world. The question is, what were doing now in security to prevent these kinds of developments . Virginia rometty this is, there is a couple of ways to answer it. There is misconception about the topic. I told you the goal, man and machine. It starts with the approach you take to it. Second, the technology for self learning at massive scale do not exist today. So the stateoftheart that these are taught, these machines are taught, the services, they are taught. This is between man and these systems, either statistical algorithms, that you teach. It is not something that is self learned. These are taught. The second part of the thing is, that to my comment about the Business Model for data and it is important to know that you own your data and the i. T. Ip from that. That is an important point. Instead of focusing all of that in two places in the world, that is not the world i want to live in, i want to live in diversity. So i think that kind of a Business Model helps that issue as well. Promod haque great. Any other questions . Ok, right there. What do you think about im sorry, what do you think neocortex model and mimicking that so you can infuse not only cognition but eventually . Virginia rometty i think the point that you can mimic we do a lot of work, on brain inspired computing right . For many good reasons by the way, to do things like perception and your ability to have much safer roadways and things around there. Anyink these technologies, individual one, if you try to put together what man does in all of the pieces in the we are not at that point, and we will not be for a far foreseeable future. Let me book and end the different points, i think there are issues of ethics that must be paid attention to. And we are part of and we formed the a. I. Partnership with google and facebook and others to say, you need to take seriously the issues that come with the ethical side of Artificial Intelligence, in this case, not that you have read it, a very good paper i think the white house did, the office of science and technology, that frames these issues and what public debate and policies are required to have these technologies really do what we started come of bringing goodness to society in the tradeoff. So i think, i do not mean to short count it, i think there are issues with where they are today and in the future and we should Pay Attention to these really valuable questions. Promod haque one more question. Right there. Get the mic. Hi. I am alex. Bm has gotten more patents than any other company in the world. Do you envision dedicating some of those patent technologies, like elon musk has done, with tesla. Dedicating those to the public . Virginia rometty we have. Many times in our lifetime we have dedicated them and put them out there for example. That has happened many times. These have not been kept with us. I cannot remember the percentage but many times, we have given them to the community. So, and i assume we will continue to do that. So we do both. I think that is how many people who have, many not many, but intellectual property, looking at both sides of that. Promod haque i think we are going to have to close here, because time is running out. Karen, if you would come up. That may make a quick comment. With your perspective and the debate about jobs and so on, this is the way i see it. Lets give an example, call centers. A lot of callcenter jobs have been outsourced to different parts of the world. The reason for that is, you can get that job done for one third the cost and so on and so forth. Now, take a look at the callcenter individual here in the u. S. And if we augment the callcenter person with Machine Intelligence and cognitive computing and make that person 23 times more productive than he was on his own before, he or she, that job can stay here. Spent in the gets local gdp. I think that is what we must think about. Cognitive computing, which is Machine Intelligence empowering and augmenting existing human beings, and increasing their productivity, will lead to tremendous amounts of benefit for the country. So that is the way i look at cognitive computing in the future, whether it is call centers or other kinds of jobs, but i think it will make a big difference. Anyway, if you want to, here come up here. Karen i want to thank her speakers our speakers very much. [applause] karen before you leave, we have a very small gift for you. A tshirt of course. Virginia rometty excellent. Alright. Virginia rometty thank you very much. Promod haque thank you. Karen a recording of the program will be available on the church hill Club Youtube Channel shortly. I hope you find it to be a useful resource. And dinner will be served now. You have been a terrific audience. Enjoy the rest of the evening. [applause] expense washington journal live every day with news and policy issues that impact you. Center for Public Integrity reporter liz ashley white talks about the politics kind the Opioid Epidemic and the center for the study of the presidency and Congress Senior fellow James Kentfield on his book was explains how the u. S. National Security Apparatus has adapted to fight post9 11 terrorism. Be sure to watch washington journal at 7 00 a. M. On thursday morning. Join the discussion. Depthday, january 1, in will feature a live session on the presidency of barack obama. We taking your questions during the program. Our white house our Panel Includes white house , a Princeton University repressor professor and a Pulitzer Prize winning journalist