Hey, everybody. How you doing? Good morning. We're going to talk a little bit about digital transformation, types of innovation, and more importantly, why this is so important. Why is identity the center of this digital transformation? It's going to be a very important piece because we're going understand where this is happening.
Now there's a stat that we use all the time. 61% of the Fortune 500 merged, acquired, gone bankrupt, fallen off the list since 2000. That's a huge number of companies falling on the wayside. And that's really because they weren't able to figure out how to make digital transformation
Work. And as you know, this digitization requires a number of things. And one of them that's so core is the ability to manage identity because that's our interface across customers, suppliers, partners, and more importantly, employees. When we put those together, that's how we build that marketplace an ecosystem to get there.
And the companies that are actually innovating are the ones that are succeeding. They're winning. They're taking almost 70% of the market share. They're taking almost 70% of the profits. That's the difference and when you're identity solutions are seamless, when your security is in place, when you have the ability to build a digital business model, that allows you to succeed.
So let me show you the difference between what's happening with incremental innovation and transformational innovation. And all this requires is really where you are an identity. So this notion of being disrupted or be disrupted is true. Are you ready? I'm going to put something on the screen. I want you to yell out tell me what you see. Are you guys ready?
Yeah.
All right, three, two, one. What is this?
Walkman.
It is a Walkman. Anybody know what year that came out in?
80s? '81 I heard '82. '79. That just means you guys are really old in this room. OK. I'll be honest. You won't believe it, but I am 51. Now when this puppy came out in 79, I cut lawns for a living, right? So I cut lawns as a high school student to pay for college. And I waited, I think six years or five years for the next incremental innovation. Tell me what was the next big thing from Sony? Yell it out loud.
[INTERPOSING VOICES]
It's minidisc. Oh, Discman. Yeah, Discman. Well even better than that, are you guys ready? Three, two, one the double cassette Walkman. Two sides. You could bootleg one of the cassettes on the other end, rechargeable battery. It's awesome, right. OK. That's what incremental innovation looks like.
Now we all know what this was, right? IPod came out. I think the iPhone came out in 2006 or 2007. Anybody? Anybody know? Well this was interesting. It was really a disk drive that actually played music. OK, kind of cool. It saved the entire company, right? Apple would be completely dead without it.
And their next innovation was huge, right? The iPhone came out. But think about what the iPhone did. It destroyed 27 business models, right? Where's your Compass? It's on the iPhone, right? Where's your music? It's on the iPhone. Do you need a digital camera? No. Do you need a camcorder? No. It is there. Flashlight manufacturers disrupted by the iPhone. Do you keep a flashlight? No, you don't.
27 business models all disrupted. And when we think about the digital world, I mean the ability to actually pay. Just Apple Pay alone is really one interesting mechanism. That is identity in action. That's our ability to actually recognize who it is. And the level of security. Now in a digital world is so important. Now, of course there are the companies that are trying to compete. Samsung is going after Apple, fine, on the high end. But at the end of the day, that kind of innovation is hard to do.
Now to get there, what we really have to think about is that where identity plays a role in your business, right? I mean we're always worried about attack surfaces. We're worried about is that the person on the other end? All these things are important. And what we want to make sure is how do we actually fit identity into your business model?
And so we always start with a conversations what are you trying to achieve? what does that identity do? What does it allow you to do? What are you trying to make sure? Is it about a permission? Is about an entitlement? Is about a role? Is about a benefit? Is about access? Is it ability to collaborate? When we put identity together, that's how we get there.
Now the next thing that's important is how do we ask the right business questions? Because when we're actually engaged and interacting, we have to ask what types of information and insight we need. What does that person get to do? What does that individual get to do? And what kind of things that we want them to connect with? Who do we want them to connect with? What other people should connect with them? Ooh, I'm popping. Nope, not me, OK.
And the other thing that we want to do is also think about how we take that information and insight and use it to actually bring more information together. This is where dynamic feedback comes into play. Because one of the things that we're starting to do is we're looking at how identity and data come together. And when identity and data come together, we have the ability to start building patterns, recognizing how data fits into information flows.
For example, we've got all this information, but if we can't put it against all this data, if we can't put it against an information flow, it doesn't make sense. Procure to pay, hire to retire, ordered a cash, right, interesting, campaign to lead. When we put all this stuff together, we start getting better insights. And what we want to do over time is take identity context data to figure out how to get to better decisions. We want to avoid false positives. We want all false negatives. And we want to be able to figure out how that actually comes together.
So anyways these fundamental technologies are there, right? And what it's really about is our ability to actually take that information, ask the right business questions, which are analytics, then we start automating that capability. How do we bring this information and insight together? And then of course, more importantly, how do we actually apply AI and ML over time?
Now in order to do that, one of the big sources as required is identity. And what we do is take identity context and data and we bring that all together. The goal here is to really build the business graph. We all talk about AI, generative AI, where that's going to happen. Where ability is actually take the context of identity understand what business processes are here, what attack surfaces are around, how do we actually connect and actually create new opportunities, how do we actually mitigate a risk and prevent something bad from happening, how do we connect this to maybe a device?
We think identity, we think humans in the future it's machines, machines to machines and machines to machine connectivity. We also think about what identity does to help you understand what's happening in an environment. OK, It is definitely not the mic, something is happening when I walk. So you get the idea as to what happens and how we actually put all this together. And that's really an example. So I'll put something up here. I want you to tell me what this is.
Toaster.
It's a toaster, yes. Who here fills out the warranty card for their toaster? Raise your hands. Was one guy in the back, right? Was there one guy in the back? Yes, what's your name? Say it again. Eric, why do you fill out the warranty card for your toaster? Because you're paranoid. There's always one person in the audience.
Now imagine the toaster manufacturer. What is the first phone call like to the toaster manufacturer? Is it hey, this toaster's amazing, I want to buy three of them? No, that never happens. The first phone call is like hey, your toaster doesn't work. Your toaster burns my toast. Your toaster doesn't burn my toast, right? Your toaster sucks, right? That's the first phone call.
Now this is a $40 toaster. Only one person in this room that I can tell has registered for the toaster to put it all in the warranty. We don't know who that is. You don't have the identity of a toaster of a machine on the back end. So how do we know what's going on?
So if I could get you to actually connect the toaster to the internet, establish some kind of identity to this device, which is the toaster in this case, I can start figuring out what's going on. I could figure out, hey, why do toasters in Denver do better than toasters in Houston? Anybody? Altitude. Yes, yes, altitude and humidity. Are you the guy that answered all the questions earlier? OK.
That's everyone.
It's in the app. All right. And so that's actually a good point. Now why do toasters in New York break more than toasters here in Miami? Anybody? No, not the New Yorkers. What else? Bagels. They get jam, right? And so once we establish identity on a device, not that we're authenticating the device and making sure that's the right device to connect but you get the idea, we can actually start looking at performance data. We know what components work, what features are being used, what features aren't being used. We're getting more insights and information on the device.
This is one example of device, not human access and identity, but machine access to machine. And once we know things like this, we can actually build an underwriting model if I can get you to connect the toaster to the internet. So if I said look, you connect the toaster to the internet. We're going to monitor it, 48 hours repair, over the air update, 72 hour replacement if we can't fix something, would you not connect your toaster to the internet and register? A few more people, right?
Now if you do that, now I can actually take that underwriting data and do something interesting. For $0.75 a month for the next five years, I'm going to be able to give you toast as a service. Think about this. Right? Even better, you've got a subscription model built on there.
Now if you know anything about how toasters are sold, you buy them in the store. The manufacturer sends them there. The manufacturer actually has no clue who is on the other end. So that first phone call was horrible. You had no idea who they were. They were mad at you. You had a $10 margin on your toaster, which you charge on a $5 contact center offshore, right? So you're already down $5. And you don't even know who the customer is.
But we can solve that, we can suddenly do things like direct to consumer and of course declasse. And just by solving identity and context here, we can actually deliver on five business models, the ability to figure out customer experience monitoring on the toaster, the ability to do remote field service, our ability to then offer a subscription business model toast as a service. And more importantly, we can go direct to consumer and deliver on cross-sell. That's pretty powerful. And that's why it's so important. You're going to see more of that.
Let's talk about the human condition, mass personalization at scale. The business model for identity and mass personalization at scale is how do we actually deliver at our service, better experiences without being creepy. What's the most important part? Without being creepy. And so when we think about that, we'll talk about context is one of the most important things. Your identity, your location, the weather, your heart rate, what business process you're in, those are all important context clues.
The second thing is really how do we actually make choices. Remember Choose Your Own Adventure books? Those were great, right? Start on page one. You make a choice, you end up page 32. Or if you choose something else, you're on page 70. If you're somewhere else, you're on page 100. You come back, and sorry the end. Oh wait, I'll flip back.
In the digital world, every choice is an A/B test. We have contacts. We have contacts. We have the journey. We know what's about to happen next. And when we put all those together, we can actually do what we call intention driven design.
Anybody remember Wayne Gretzky? Yeah. Ooh, look at that, big hockey audience. Well, Wayne was a professional hockey player. And someone asked his dad why Wayne an amazing hockey player? And the answer is he skates to where the puck will be. Now that's profound. How do you know where the puck is going to be? Well, intuition, expertise. You make a guess, and you say look I'm going to go left. More likely than not, he's probably correct.
And by being able to have that level of intention driven, we're going to make a decision. We're going to take what we know and make a guess. We're able to deliver a mass personalization at scale. Context plus choice plus intention driven design allows you to make that choice. And that's where identity comes in.
Let me give you an example. Here's another way to look at this. We're in a 50 story skyscraper. It's two in the afternoon. We walk into the lobby, 27 point facial analysis. Gait analysis says, hey it looks like the guy on the 15th floor. Makes sense. It's 2 PM. What should happen next in the building for building security?
Well, you know it's the guy on the 15th floor. He's walking in. Send the elevator down. Why make him wait? That's what you want to do an employee experience. And if you can at least do that, something very interesting happens.
So I'll get down there and there's a 95% chance I walk into the elevator, right? I'm going to choose 15. Makes sense. But wait, my boss, she's on the 50th floor. And I've been trying to set up a meeting with her for the last five days. My Outlook calendar kicks up and says, hey she's free, you're free. Choice number two pops up. Would you like to meet with your boss? She's on the 50th floor. There's an 80% chance to take that offer. Pretty cool, right? This is identity context in action.
But wait, even better, there are free donuts on the fifth floor. Do they choose choice A, choice B? Or hey, choice C is the wild card. It's an A/B test. And it all ties back to my identity and my workplace to say, hey, what is he going to do? Now honestly, I'll pick up the donuts and then take it to my boss. That's the answer.
But how we deliver on that becomes the equation. Now that I have identity in place, I can deliver on mass personalization at scale. I take the digital exhaust, which is when I walked into that lobby of the building, I had the ability to figure out that looks like someone on the 15th floor. As soon as I swipe my badge, OK, I now have access privileges to there. It also lit up my Outlook calendar to see what was going on.
So fine, context 2 PM, context person walking into a building, context he just swiped his badge. Oh, wait. Check the Outlook calendar, service up some information. Let's engage with them in the collaboration. And I'll show up on the console or show up on my mobile device. Might even show up in the glasses that I'm wearing. Those are the channels. Those are the immersive experiences.
Then what we can actually deliver is personalization at scale, right? Using anticipatory analytics, I make a few guesses. I say look probably going to is floor 15, makes sense. But let's go serve up some catalysts, and then give him some things that are going to give him choices to see what he really does.
Choice one pops up. OK. 95% chance going to this floor. Choice two pops up. Might go see the boss. She's on the 50th, 80%. And choice three is a wild card. I just want to test to see what he's doing. Once we have all that information, we bring that together and we actually look at the cadence. Is this a one time thing? Is it a repetitive thing? Is it dependent on another process? How do we bring all this together?
And once we have that, we can actually start learning from that. We can figure out patterns and over time we can establish security protocols. We can establish preferences. We can make things easier for the individual on the back end. Everything from login all the way to employee experience all the way to how you interact when you pay, it's all being delivered.
In the digital world, identity is the most important thing. And how we actually use it and apply it to business models, not just on the human scale but also on the machine scale, become very important. And so when you look at not just security and you start thinking about business benefits on experience, you start thinking about business benefits in terms of what it means for everyone in your ecosystem. That's why it's important.
Now here's the challenge. CISOs. Who in the room's a CISO? Raise your hand. Who in the room works for a CISO? OK. The challenge is the CISO Office has to be very careful. That's their job. And so how do we balance privacy with anonymity? What's required to do that?
Do we need everything out there from a consumer? Do we have enough to establish? Can we use zero knowledge proofs? Can we use zero knowledge trust? What do you do? How do we balance that? And that's one of the top issues CISOs are trying to figure out on the external side. Now on the internal side, yeah, we know exactly who you are, right? That's a different story. But as we start looking at stakeholders across the system, it becomes important.
The second piece is because of remote work, we have to reduce attack services. Because of all the different threats, we're trying to reduce our attack surfaces. Anybody ever see that picture where like nobody knows who's on the other end of the computer, right, that you're talking to? And if you've noticed what's been going on with generative AI and stable diffusion, there are a lot of deep fakes. Like you might not even know who's on the other end.
And have you seen that scam that happened the other day? Where someone calls up and tries to do a video call with you, and then ask you five questions, and then they take those five questions and use those videos to blackmail you. Anyone see that? Yeah. It's real. It's pretty crazy.
Now think about me. I'm speaking publicly all the time. They can make any video of me at this moment, right, and say I'm so-and-so, right? And add that to remote work, add that to additional conditions, add that to all the different ways you can enter the enterprise, we have an issue in the proliferation of attack surfaces. So what's the answer? Shut everything down, right? That's not going to work. No one will get any work done. And that's why we're at massive risk. So if we can actually find any way to reduce the attack surfaces or reduce the plane of control, that's a win. And how do we do that?
Now the second piece is most people's identity systems and their security platforms are not together. So who's got that situation, identity and security platforms are not on the same platform? Raise your hands, right? So a lot of people normally. You guys are being shy. Nobody wants to reveal what they're doing. But that's OK. Totally get it, right? But when you have that, that's another piece of the puzzle that you have to manage, another area of integration that you have to address. And it's not easy, right?
And in most companies, we know there's at least 15 other systems running. They're supposed to be working with each other. And I say supposedly loosely because a lot of it is all the stuff that you guys do in between. It's your hard work in terms of managing that environment and making sure everything is put together that allows it to happen. That is human error. That is human error ready to happen. And what we want to do is avoid that.
Now here's the bigger challenge is we're using humans to combat attacks that are being run by bots and machines. What do you think that's going to look like? We lose every time, right? It's a machine to machine battle, right? And if you're combating machine scale and machine identities and machine hacks with humans, you're going to lose. And that's the challenge. And so what can we do to actually make that better?
And then of course, people want things easy to use. They don't want to have to remember and change their password every three days. I have no idea what my combinations are anymore. Does that happen to you guys? Right? I mean, I can't tell you. Is it one capital, two special characters? Wait, these letters are repeated. They're not repeated. Wait, but I used that three months ago. Wait no, I can't use that again. But we need that level of vigilance, right? And so how do we make that balance? CISOs are in the middle of trying to solve that.
And so this is why it becomes important to think about where unified identity comes into play in the future. We know that the worlds of B2C, the worlds of B2B, they're completely dead. It's interactions between individuals. It's interactions between individuals and machines. And it's what we call machine to machine. That is going to keep popping up over time. And how we manage that is almost every device has its own identity. Every individual has its own identity. That convergence is about to happen.
Second thing is we all want identity the way we want it. And that is not easy to deliver. There are so many different possibilities. And the more we can actually streamline this, the better off we are, the less human error we actually achieve, and more importantly, the less amount of risk. So how do you actually deliver on that?
And then, of course every digital engagement requires some level of unified identity to make it happen. I showed you this two examples, one with machines and the toaster and one with actually walking through the lobby in terms of an employee experience. All these are part of the bigger picture around digital. Because once we digitize things, we have tons of data. And using that data, we can continue to refine things. We can actually start using it to address things like prediction and prevention, which are very, very important.
And let me explain why all this comes together. Because as we take that data together, we can actually start turning to some business outcomes that help with identity and in terms of that information. Right? So when we first start out, we get overwhelmed. We get tons of information that are tied back to identity. We try to figure out what make sense out of it. That's overwhelming and that's perception.
The second step there behind that is our ability to actually reduce that and get a warning, get an alert, a notification. Now over time, we take those notifications and we start saying make me a recommendation, make me a suggestion. And then over time, we automate those recommendations.
In that digital world, we're taking all that data and information and insight and applying machine learning and AI, so we can start to automate at scale. And when you have that automation in place, we can then start making predictions. We can estimate what might happen. And we can start reducing our attack surfaces by looking at prevention.
That's really where the heart of this is. We can get to that point where the data we're capturing along the way in a digitized environment allows us to get smarter and allows us to prevent future attacks. That's where the win is. And that's why this identity, relationship to context, data, and digital engagement is important.
Now context is giving us the ability to think about where the future is going to be. And that's our ability to think about how we bring new worlds, new experiences together, how we actually make things more personalized, how we make things much more relevant to the user. And then of course, we have to figure out how to make that balance between identity and privacy.
These are the challenges, right? And we actually put that together, then we can actually start by starting from a position called privacy by design, not privacy by chance, privacy by design. And this is what allows us to actually bring this to life. We start at the beginning, first principles. We build privacy principles. We build trust principles. We built our ability to think about where identity comes into place, where access and management comes into place, where our governance models coming into place. And that way going forward, it's so much easier.
And that way when you're in the middle of an acquisition, a post-merger integration, you're in the middle of actually redeploying or putting your software into place, we now have the ability to start there as opposed to working backwards. That is the challenge and if we can do that. And so we actually think that there's new ways to get here as people figure out how to build business models around orchestration, how to figure out how to manage your own identity, how to interact with other stakeholders with your customers, partners, suppliers, and employees.
So what's going on here? Well, the big trends that we're seeing really are the fact that there's a convergence in terms of stakeholders. Users need to access in the most convenient way they have, but we also have to balance the security requirements. The trick to get here is unified identity. It's our ability to put this at the heart of every engagement. And then of course, the more context we have, the more we can actually deliver on the use cases.
Identity is one of the more important pieces of context, but also weather, location, time, where you are on your journey, where you are in your different processes. And then of course, we have to figure out how digital businesses and unified identity come together. And then we can actually start managing that to balance what we're trying to accomplish with identity and of course with privacy.
And of course as you're designing, you want to think about that future. Start with privacy by design. How do we build that to make sure that things are trusted? And then of course, you can start building new business models as you use identity much more strategically. Right now, we're using it because it's defensive. What we want to actually do is move from a reactive state and get it to a proactive state.
Now who in the room are considered identirati Anybody know what that means? That is identirati There you go. People have been in this space for a very, very long time, right? So we actually think that identity now moves from things that are being geeky to something that's much more chic. So how do we balance what users want and what people in the security world are trying to do? And so we need to balance how we make things simple but also how we make things safe.
The second thing is, how do we make things seamless that also make them secure? And there's a little bit of actually an integration aspect and automation piece to do that. And how do we actually solve one offs, which are situational requirements perhaps how we deliver across the business spectrum in a standards based way? And then the last piece is how do we go from self governance where people are actually doing it on their own to something that's scalable across a single plane across the enterprise? We see that as kind of the future of what's about to happen. And more importantly, we see that as kind of what's changing and transforming in the world of identity.
All right so real quick. We saw 61% of the Fortune Five-- That's not me. 61% of the Fortune 500 have been merged acquired and gone bankrupt. More importantly, we're actually seeing the need to actually increase our ability to be innovative. There's incremental innovation, which was like the move from the Sony Walkman to the double cassette Walkman. We've got transformation innovation which is when we actually change business models.
We think in a digital world and as you're building digital business, identity is the heart of it. We normally look at it from a security perspective. Think about the business benefits. Think about what we're trying to accomplish, especially as you're trying to change employee experience, customer experience, as you're trying to change new ways you work with your stakeholders. How do you treat your partners? How do you treat your suppliers?
We know that cybersecurity threats. We know that the threats across the world are actually increasing, not decreasing. And while we're actually trying to reduce attacks surfaces, we keep changing the game by creating more points of failure. And so we have to manage that.
Now the honest truth is we can't manage that on our own at human scale. And that's why we need to start doing things at machine scale. That's where software comes into play. Your role in terms of security and identity becomes even more importantly as we put these together in business model. So thank you very much. So we'll get a Q&A.
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