FedEx is an $87 billion business with over 560,000 team members around the world. At that scale, how does Rob Carter, FedEx CIO, approach business agility to stay ahead of the curve? In this episode, I speak with Rob Carter about what he has dubbed “the dominant architecture,” which allows industries to scale and has proven throughout history to increase global value creation exponentially. For technology leaders, this dominant architecture is now comprised of critical technologies like multi-cloud, containerized modern applications, AI enabled edge computing, and soon, blockchain. It is these technologies–and a shifting mindset that allows distributed teams to leverage them effectively–that is the driving force behind the next wave of innovation.
FedEx is an $87 billion business with over 560,000 team members around the world. At that scale, how does Rob Carter, FedEx CIO, approach business agility to stay ahead of the curve? In this episode, I speak with Rob Carter about what he has dubbed “the dominant architecture,” which allows industries to scale and has proven throughout history to increase global value creation exponentially. For technology leaders, this dominant architecture is now comprised of critical technologies like multi-cloud, containerized modern applications, AI enabled edge computing, and soon, blockchain. It is these technologies–and a shifting mindset that allows distributed teams to leverage them effectively–that is the driving force behind the next wave of innovation.
Rob Carter on LinkedIn: https://www.linkedin.com/in/robcarter1/
CIO Exchange on Twitter: https://twitter.com/vmwcioexchange
Yadin Porter de León on Twitter: https://twitter.com/porterdeleon
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Rob Carter:
What I said was, "Look, we're not going to go full-in native on any of the clouds that we're touching." They all have rich services that are proprietary to that cloud platform. We said, "Look, our platform service was oriented to portability across those clouds, including our own private cloud that was part of the hybrid."
Yadin Porter de León:
Welcome to the CIO Exchange Podcast, where we talk about what's working, what's not, and what's next. I'm Yadin Porter de Leon. FedEx is an $87 billion business, with over 560,000 team members around the world. At that scale, how does Rob Carter, FedEx CIO, approach business agility to stay ahead of the curve?
Yadin Porter de León:
In this episode, I speak with Rob Carter about what he has dubbed the dominant architecture, which allows industries to scale and has proven throughout history to increase global value creation exponentially. For technology leaders, this dominant architecture is now comprised of critical technologies like multi-cloud, containerized modern applications, AI enabled edge computing, and soon, blockchain.
Yadin Porter de León:
It is these technologies and a shifting mindset that allows distributed teams to leverage them effectively, that is the driving force behind the next wave of innovation.
Yadin Porter de León:
Rob, these are interesting times that we're living in right now, and it's not something that we're looking backwards anymore or we're looking forwards anymore. And there's optimism, there's excitement about what opportunities and possibilities that we have in order to sort of tackle some of the challenges that seemed almost intractable months ago.
Yadin Porter de León:
And with that in mind, when you're thinking about lofty things like technology and innovation, and the global changing dynamics that are moving forward, I mean, the population of the planet is grappling with getting its footing right now, what's that technology perspective that you have when it comes to what's that next step in innovation?
Rob Carter:
I think the reality of the current situation is, we all got slingshot into the future by at least four or five years. Many of the trends that we're working through, including massive e-commerce volumes and a more connected world, both virtually and physically, were coming at us. They were just coming at us slower than what happened as we entered the pandemic. And so we sit in this really interesting place, the nexus between the physical world and the digital world.
Rob Carter:
So the physical networks are humming at incredible velocity right now, trying to keep up with the demand that's been generated. And so we had built, and continue to build, capabilities that matched that kind of demand, but we thought we would be where we are now in 2025 or 2026. And meanwhile, the physical networks, as we all know around the world are very stressed, because there was only so much capacity. And the capacity has been really taken to the limits across all forms of supply chain, but it gave us a really strong sense of purpose.
Yadin Porter de León:
And I think that's one interesting thing that fascinates me too, is that sort of constraint. There was sort of this expansion as we're growing, and then there was this contraction and almost like someone turned the spigot off of flow and commerce through, and then all of a sudden it came back through with a vengeance, with a huge force, but there wasn't necessarily the same physical capacity that it was before.
Yadin Porter de León:
So now, we're right at this moment where we're kind of playing catch, but also there's opportunity to rethink and reimagine what that new approach is to delivering on some of those capabilities that we did before. And give me a sense of what you're thinking is that opportunity and what your approach is to the way in which we can start to address that?
Rob Carter:
Well, frankly, when this all hit, there was no way to fake it. You were either prepared from a technology standpoint to deal with the kind of new needs that the world was expressing, or you weren't. You couldn't just craft new things.
Rob Carter:
So the strategies that we'd been working on really came into play. We'd been expecting an explosion in e-commerce. We'd been expecting healthcare to become a much more critical kind of point to point set of services. And so capabilities like those were part of the arsenal, but the underlying technology that was so critical to that was the ability to scale it.
Rob Carter:
So when the explosion happened, I mean, literally, hundreds of kilotons of PPE shipped around the world, hundreds of millions of doses of vaccines that had very critical timeframes that they had to be delivered in and temperature controls. All of those capabilities were in place, but they had to scale. And they had to scale based on modern technology, because the vertical technology of the past, the sort of big processor technology that legacy systems are built on, only scale so far.
Rob Carter:
And so what we had done over the decade leading up to this was we had toppled all that onto its side, everything we were doing to support this was horizontal scale out technology that really could be multiplied simply by putting more of it in place, spinning more of it up.
Yadin Porter de León:
I love that you put that in the perspective of scale, and I want to dig in little bit, because the pieces, the components of that really fascinate me, and how you created that ability to have that scale. And also, I want to talk about everything from innovating and platforming on sort of a maybe multi-cloud architecture and then rolling all the way to modernizing those apps on that platform, to all the way to the edge, which of course is where the rubber literally meets the road for you is, could you talk about where you are now and sort of where you see that moving forward is, are you in multiple clouds? How's that help with scalability? How does that translate into the way that you build applications? And how does that reach the edge? Just all of that, Rob, just all of that.
Rob Carter:
We have an intensely hybrid environment, it's hybrid multi-cloud with a lot of edge. So just to use the same terms and throw it back at you, it's a huge part of the architecture that we had built. But I got to say that this is what I call dominant design.
Rob Carter:
So we recognized right around 2009 or 10, that there was a new dominant design in technology, that the technologies that enterprise companies had used to get them that far weren't going to be able to compete and deal with the world that was emerging. And here's what I mean by that. So the odds in 2010 of a startup who might want to compete with us on a data oriented and digital framework, the odds of them using a mainframe computer as any part of their estate was exactly zero. There was no chance that-
Yadin Porter de León:
I can imagine that VC funding conversation would be really, really difficult. Like, how are you going to do this? What's your scale? We're going to use a mainframe.
Rob Carter:
Yeah. But it's still a real deal in enterprise computing today. People are still dealing with these kind of monoliths that are out there that are entirely different than scale-out cloud native technologies. And frankly, VMware was a huge part of this, because we were at this nexus where we're having to say, we've got to expand data center capacity. We've got to do some things. All these applications that ran standalone were going to take a lot of space.
Rob Carter:
And it dawned on us and on me at that point in time that the dominant design technologies were all scale out, highly virtualized technologies. So that was the first part of the journey was topple all those monoliths and put them, re-platform them on cloud native scale-out technologies, but do that in a hybrid way. The first generations of that were pretty close to all in our data centers. So we were just replacing these kind of big unit processor things with scale out X86 technology that was highly virtualized.
Yadin Porter de León:
Let me pull on a couple threads there too, because I think it sounds really fantastic. I mean, it's where I think a lot of technology leaders want to go, but there is, as you were well aware since you went through it, there's a lot of real challenges with that. Let's say like, great, we're going to be hybrid, we're going to scale across different clouds and the data center, but then there's, well, how do you then manage these sort of heterogeneous environments that may not necessarily talk to each other? Is there a way to work across them? Is there a way to secure across them? Maybe you could sort of talk about how you wrapped your head around it and how you got your team and rallied your team around that piece.
Rob Carter:
I definitely believe that the world that we were emerging from, where technology had accumulated across several decades of innovation and pressing the envelope with technology, frankly, I think it was intensely more complex than the clean nature of what I would call API first cloud native service-oriented capabilities, where you were building modular, durable assets that were reusable that formed specific fun functions rather than deep vertical applications that were out there.
Rob Carter:
So many things had become more common rather than less as the cloud era emerged. And so we were able to build some technical tenants. We were able to communicate them very effectively to the team that said, "Look, these are the driver of where we're going." And we built a shared mental model around exactly what that system's model would look like as we went forward. And it was applicable in our data centers, it was applicable in cloud deployed technology. And it was also applicable at the edge.
Rob Carter:
So as you think of those three things, we built out a strategy that said, look, we're going to straddle between our owned and premise based technology and cloud technology, but we're going to do it in a way using containerization and other common design elements where frankly, you can use it in either place and use it effectively and deploy it effectively and orchestrate it and provision it in ways that are rapid and simple, compared to kind of standing it up uniquely time and time again, as we had done in the past.
Yadin Porter de León:
So it sounds like it was just a big change in mindset and the way that you approached the problem, rather than, like you said, standalone monolithic, and this has been a theme that's gone throughout the decades, but is now, right now, a time where certain pieces of technology have come together, certain talents have come together, and certain catalysts within the marketplace have come together for you to accelerate that moving forward?
Yadin Porter de León:
And do you feel like that path of scalability, acceleration, mind shift, do you feel like that path is now more open than it was, less free of hurdles than it was? Or do you feel like there's a complexity, there's still tough challenges of security of management? What does that road look like that you're on?
Rob Carter:
Yeah, it never gets easy, that is for sure. But I feel like I almost have to do a little more justice to this dominant design concept because it's such a critical thing. And I don't hear a lot of engineers talk about it, but almost any technology you can think of, whether it was automobiles or electricity or the rail, the rail is one of the easiest ones to think of, because in the middle of the 19th century, there were nine different gauges of rail around the country.
Rob Carter:
They were all owned and they were specific to the Illinois central and the Southern and the Burlington and the Northern, and they had different gauges of rail. And then ultimately, they all centered on a common gauge of the rail four foot, eight and a half inches. If you go out to any rail in the US and stretch a tape on it, you'll see center to center on the rails, it's four foot, eight and a half inches.
Rob Carter:
Well, that allowed this explosion of commerce and industry because you no longer had to stop and unload and offload at these juncture points. I think that's very much like the place that technology was as it had emerged on so many different platforms with so many different proprietary frameworks for deploying networks and storage and compute.
Rob Carter:
And then along with the cloud era and the service orientation that came with apps and capabilities, we saw this gravity to a common gauge of the railroad. Well, I'll tell you, if you don't jump on to the common gauge of the railroad, the result is that there's tumbleweeds rolling down main street I mean, you got to, you have to jump.
Rob Carter:
And so what we recognized and what I hope many of my peers will get really anxious about is that if you're not building and moving as fast as you can towards the dominant designs of technology that exist in cloud today, which by the way, span different public cloud implementations. I mean, it's all the same at its fundamental baseline level. So, that's what we did. We jumped on the new gauge of the railroad and we moved quickly, recognizing that standing still was simply not an option.
Yadin Porter de León:
The dominant design idea fascinates me because it does. And I love the railroad analogy because it really was a huge barrier, and from a technology standpoint, there definitely this feeling that there are different technologies still vying for dominance. And you have this wonderful evolutions by like TCP, IP, X86, all these things came along and just revolutionized and put everyone in the same platform.
Yadin Porter de León:
Now that you have the dominant platform, for some it's still murky, because you still feel like there's this evolving technology landscape, but there is convergence, there is, like you said, there is dominant. And where are you seeing the core pieces of that dominant design that people should be? One is sort of public cloud, multi-cloud hybrid, because you're moving fast, like you said, you're moving fast towards that. And do you see it evolving right now? And do you see another component of that dominant design emerging and that you feel like you're going towards or running towards or building towards?
Rob Carter:
Well, there's no crystal ball that says exactly where technology's going to be or going to land, but it's really important to recognize that your goal isn't to be perfect and make perfect choices, it's to be less wrong every day. And so-
Yadin Porter de León:
I like that perspective because that's like when you take the bar as a lawyer, there questions that say, what's the least wrong answer? And that's almost kind of like your conundrum as well as a technologist, what's going to be the least wrong or what's going to be the most right?
Rob Carter:
Having that shared mental model that I described earlier that was based on these technical tenants that were saying, look, everything's going to be API first. Everything's going to be services and microservices, the more granular and course grain that we can make to capabilities that support our business. Look, our business is shipping, it's address, it's label, it's rate, it's route, it's fundamental services. It's not giant vertical applications that mash all that together and tangle it up. But that was what all you know of the first generations of technology did, they built big vertical applications.
Rob Carter:
We had to decompose those into durable assets that could be repositioned and reused in multiple applications. Address was a great example. Over time, we had collected address in many, many systems that were out there, that were running the estate. What we did in the modernization work was said, look, address, address is a service, address is a fundamental thing. So we built a core foundational service, and this is a big course grain service, enterprise foundational service called Address and all applications now pointed to the same address engine made for a more consistent customer experience. It made for just a more efficient way of delivering and checking the validity of addresses, changing addresses, knowing where things are.
Rob Carter:
That's just one example of us saying, look, the future is going to be about capabilities, which kind of relate to apps as opposed to applications which are giant mashups.
Yadin Porter de León:
I like a couple different things there. One is the services piece and one is the app versus application. It's almost just a way of sort of a nomenclature and sort of a nod to the fact that this is not going to be monolithic. This is actually going to be like a service. This is going to be durable. This is going to be portable. And I think that's a really interesting way to look at building applications.
Yadin Porter de León:
And so when you start to think about this, isn't just like, hey, let's containerize things for agility, it's like, well, what does that actually even mean? But let's take actually something real, it's something that's really core to the business and let's create a service out of it. And well, how do we create a service out of it? Well then, containers is a tool, then multi-cloud is a tool.
Yadin Porter de León:
And then maybe you could speak to how that durability and that portability works from across clouds. Some organizations are like, why do I have to be in more than one cloud? Why can't I be in one? And then how does that help the way ... how does more than one cloud help the way that I build applications and their portability and durability? And how does that translate to connecting that scalability to the edge where a lot of activity happens in your world?
Rob Carter:
Well, and this was kind of controversial on my team and what I said was, "Look, we're not going to go full-in native on any of the clouds that we're touching." They all have rich services that are proprietary to that cloud platform, but frankly, this is how we became so involved and pivotal in PCF. We said, "Look, our platform service," and then ultimately PKS was oriented to portability across those clouds, including our own private cloud that was part of the hybrid.
Rob Carter:
So the ability to use PCF as a platform service and not over reach and overstep into every native service that was offered on every cloud, because that's how you get lock in. And I've been a technologist for a long time and lock in is every supplier's favorite game. If I can make it sticky, then you got to keep using it.
Rob Carter:
And so my least favorite thing in my entire career across these, now approaching 40 years, is ripping something off of an old platform and doing all of that work just to get it repositioned on another platform, because you're generally not adding business value at all when you do that. And so my team loved some of those services. They were some of the best services ever designed for technologists, but we said, "Look, we're going to abstract our way off of the very detailed services that the cloud providers offer."
Yadin Porter de León:
That, I feel like, is one key component of one of the things a lot of technologists are doing looking forward is figuring out what is that way forward without getting that lock in? What is that way forward with gaining [inaudible 00:20:24] portability and durability that they're looking for?
Yadin Porter de León:
But then one of the things I think that we touched on earlier, which is what's that challenge that then stops organizations from doing what you're doing at full speed? Things like the security, things like the manageability. I'm sort of developing on these different platforms, but I don't have one way for my CICD pipeline to be able to deploy onto this cloud and then have it move to that cloud and platforming for that type of flexibility, like you just talked about, seems like one way to start addressing that platforming for innovation, for portability, for durability, seems like that's that layer that allows you to sort of cure B cloud agnostic to be environment agnostic and just develop in one place, deploy in one place and have those applications exist. Is that part of that dominant design? Is that part of our organization should be moving towards?
Rob Carter:
Well, I do think it's an emerging part of dominant design and Kubernetes is kind of at the core of it and whether it's Tanzu or PKS or whatever, instantiation of container that companies are using, it's what really allows portability.
Rob Carter:
But the main answer to your question is twofold for me. One is organizations underestimate, and I'm talking about the business and technology, they underestimate the risk of standing still. So there's not this burning sense of urgency because the stuff they have kind of works. I mean, they may have diluted themselves into saying, well, and it's really hard and expensive to shift all this architecture.
Yadin Porter de León:
And humans are creatures of habit and that extends through lines of business leaders, it expands to all of those different pieces. And that organizational momentum is real. The struggle is real. You're pushed, you got to push against that.
Rob Carter:
And the opposite of underestimating the risk of standing still, because that's like standing on a beach not knowing there's a looming tsunami getting ready to sweep over the beach, but on the other side of the equation, they overestimate the risk of moving forward. I mean, it's like, well, that's expensive. That takes too much time. It's fraught with peril, it's going to take all these in scope socks applications and we're going to have to ... I mean, there's all these machinations that go on in everyone's head, business and technology, about the risks of moving forward.
Rob Carter:
We've worked really hard to recalibrate those risks, to really kind of paint a picture for the business. Look, it is very risky for us to stand still. And while there may be bumps in the road as we move forward, it's less risky to do that than it is to wait for annihilation.
Yadin Porter de León:
I like the framing of that too, because it is that duality of underestimating the risks of standing still overestimating the risks of moving forward and change, because I know we're all change verse as human beings.
Rob Carter:
And the second part of it is, is that we just have a fantastic team. And so once we were able to create a little contagion around these modern technologies, we've got a team of folks that just really thrive on architecting and building. So, architecture matters a lot and you can't just have an accidental architecture. You have to be purposeful in that.
Rob Carter:
So all these notions about these technical tenants and the design of services and the componentization and platforming of all these capabilities came out of the minds of our great team and architects. And we documented it, we drew it, we put it out to the teams and that created change energy by the teams. People wanted to be doing that work and not just kind of stuck with the things they had been doing.
Yadin Porter de León:
Nice. Because I think that speaks to another piece, which is inspiring the best people to do their best work. And that's one of the fuel for that forward motion and is attracting that talent and retaining that talent and bringing everyone together. So I think it's great that it's this virtuous circle where you're not only doing the great work, but you're also attracting people and retaining people to continue to do even more great work.
Yadin Porter de León:
And so looking forward too, so now you've sort of got this inspired team looking forward at some of the challenges that are faced in the future. You've got supply chain issues right now. We're at a unique point from a global commerce perspective. How are you looking at that opportunity? Like you said, you're not standing on the beach waiting for that tsunami. It's like you were already moving forward.
Yadin Porter de León:
So part of the work that you've done already was in anticipation of situations like this, explosions of commerce. How is that the way that you're approaching things moving forward to address some of the supply chain issues, to tackle some of those new challenges that everyone's facing?
Rob Carter:
It's fundamentally what I would call digital density and optimization. So the networks of the world, ours and everyone else's, are finite resources. You can push as much in there, but as soon as they start to get backed up, there are huge challenges getting them moving again. I think everybody can see that particularly in the ports these days and just the challenges with that.
Rob Carter:
But with AI and with great analytics and with all kinds of work around route optimization, I mean, being able to see early on the shipments that we're moving into the network, having the big e-tailors give us immediate visibility to the things they were going to hand us long before ... not long before, but I mean, hours before it even hits the first vehicle that we have allows us to then plan optimal routes, plan downstream, create digital density because we can utilize analytics to create more efficient routes, better ways of handling things, because things move through our network at different speed.
Rob Carter:
There's healthcare and vaccine shipments that move absolutely positively on the express air freighter network and have incredibly high need for time sensitive deliveries. We put IOT sensors on those devices that allow us to watch them as they move, not just scan them at particular points, but literally watch them as they move through the network and all the way to the endpoint of delivery.
Rob Carter:
But there are other things that can be slowed down. And so it's not simple, it's a complex set of algorithms that say, we can afford for this to move slower because it's got to make room for these high priority items, healthcare and other critical supply chain items.
Rob Carter:
And so our networks aren't as clogged up as the things that everybody has seen at the ports and things like that, because we have fast cycle logistics in everything that we do. Now, we are having some challenges because there's so much volume hitting the network, the more clogged up the slow networks get the more people rely on our network. And it's really hard for us to put a sold out sign up.
Yadin Porter de León:
So this is the big question everyone's asking. So Rob, is there going to be Christmas this year? Is Christmas coming?
Rob Carter:
It's going to be challenging. I don't want to paint some kind of rose colored picture of it. There are many things that are at ports in some form of transit that are stuck and that's going to cause shortages. We can all see that, whether we go online or walk into a store, but the things that are moving from those final distribution points out to the consumers that need them. I mean most of us are still seeing quite a bit of that working as it's supposed to.
Rob Carter:
Yes, there are on the margin, there are more problems and more challenges, including in our network than there normally are, because there's just too much capacity and not enough ... I mean, too much demand and the capacity, including the labor challenges that we and everybody else have had make it difficult to handle all of that demand.
Yadin Porter de León:
Yeah. I know. And a couple different things that you had mentioned I think were key in that, that I get excited about when you talk about AI and you talk about the algorithms and you talk about, well, some things can be slower. Some things need to go a little bit faster. Could you explain how is that ... because that is really, that is their story. AI is a layer where you take from the edge all the way to the cloud and then back again, all the way through the applications that you were talking about earlier too.
Yadin Porter de León:
So if you could explain how much inference happens at the edge versus what needs to go to the cloud and then come back. Some things like something moving through, like you said, these scanners, these trackers and these IOT components that are moving through the network and being tracked in real time, they can't necessarily do inference out there. Or sometimes they can't wait for the cloud to come back and give them an answer. Where does those things balance from the cloud to your apps, to the edge pieces?
Rob Carter:
Let's do talk about edge a little bit because we have ... there's so many things emerging on the edge for us right now. We have these huge sort facilities that we have, have 10, 15 milliseconds to make sort decisions, which is really fast. I mean-
Yadin Porter de León:
Wow. Yes, that is quick.
Rob Carter:
So imagine belts moving it between four and 600 feet per minute, stuff's flying through these six-sided scan tunnels, and immediately after it goes through their sort decisions that are being made based on that, well, that takes localized compute. And so edge, high performance edge computing out at these big facilities and not just to support that, but also to support, as you mentioned, the IOT devices, the sensors that are out there are producing a thousand times more inputs than the scans were in the past. So a scan at a way point is one piece of data. And I'm not talking about RFID sensors, I'm talking about broadcast sensors, ones that can be pinged that have their own ability to communicate in the facilities through the wifi.
Rob Carter:
They're not being interrogated like an RFID antenna, they're battery powered sensors that are sending out information, that creates an incredible amount of data. And that was an edge point where that data had to be curated at the edge, simplified and then sent up to the cloud. So that shows a piece of connectivity, but that was a significant Tanzu kind of application there where we had deployed some of that all the way to the edge, but then created the central processing capability in the cloud to be able to keep track of and interrogate exactly what's going on with those shipments.
Rob Carter:
So, gosh, it's pretty complex, and I hope I'm not just kind of spewing it, but and then comes autonomous vehicles. We have a lot of autonomy getting ready to happen out on the edge with the same day bot and little tuggers and things that move around these facilities that are [inaudible 00:31:51].
Yadin Porter de León:
I've seen those, those are pretty cute.
Rob Carter:
Well, I think they're really going to be impactful in the world, because you think of a 3000 pound car and a human being bringing you your pizza, it's not green, it's not efficient. It's not economical. There are a lot of things to that, but these little bots, if you think of them as being dispatched from that very same pizza place, they can hit the neighborhood in a five mile radius, do it very efficiently and just call you when they're out front and you go out and get it.
Yadin Porter de León:
I think that's just fascinating, because it's like there's, interestingly, where we talked about emerging technologies and sort of first applications for a lot of these, for robots and AI and some circumstances you realize, well the first maybe big application for AI and voice recognition is Alexa playing me the music I want. So, it's a DJ. And then the Roomba, vacuuming our floors, the first robot. Lasers were exciting, what do we do with them? We use them for grocery scanning.
Yadin Porter de León:
I mean, having pizza delivery, it seems like something that is sort of maybe benign and something that we used to be used to like, oh no, a human gets in a car and then they put a pizza in the trunk and then they bring it to us.
Yadin Porter de León:
Well, now why wouldn't we have an autonomous vehicle create that experience instead of having somebody physically get in a car and grab something and put it in our hands, and that sort of then translates to a whole host of other things.
Yadin Porter de León:
So where do you see that last look forward, where do you see some of those other emerging technologies having a place, things like you've talked about previously, like blockchain, having a place in the way that, not just the way that you do things from IOT to edge to cloud, but how other companies can start to look at these things? How you just explained how AI can come to the edge and back, and then create sort of a lot ... handle that volume of data, handle those tiny little split second decisions. Do you feel like blockchain and others pieces need to ... CIOs and tech leaders need to look at those and start to think about how that needs to be integrated into their environments?
Rob Carter:
Well, blockchain is clearly something that has a huge relevancy to supply chains. So we were essentially the inventors of custody chains, custody chains that from the point where we first took a package into our custody at the pickup through the network, many different way points, and then the proof of delivery when we dropped it off at your doorstep or at the business or at the hospital, that was a custody chain. And when you track a package, you can see that custody chain in action.
Rob Carter:
Well, blockchain in supply chains really has potential to go way beyond that. It has potential to go all the way back to points of the production, the provenance of things. You think about pharma is a great way to think about it. Well, how do we know that the pharma that's moving through the supply chain is authentic? How do we know it's provenance? Where it was made, when it was made. What are the kinds of things that can create a custody chain throughout its life cycle until you're at home and needing it and using it.
Rob Carter:
And so that's just one example, but organic foods and high value luxury goods that are knocked off left and right. I mean, how do you know that that watch or that bag is real without some sort of custody chain?
Yadin Porter de León:
Trust is like a huge ... and maybe this to you, I don't know if you see this as trust, almost trust as a service, trust is one of the most powerful and most valuable resources. And you see this as being a blockchain, potentially creating trust as a service.
Rob Carter:
That's a brilliant way to say it, it really is, because it is about trust. It's about saying, I can trust this, because it's also immutable, it's not something you can go in and change once those chains have begun. But here's where we come into the blockchain space with a completely open framework in mind, that can't be a FedEx blockchain. That's not meaningful to the world. What it has to be is an open blockchain for critical participants to go in and update the points of entry that create the movement of that blockchain through handoffs and through life cycle in ways that you simply can't do using tracking systems like ours or EDI or something like that.
Yadin Porter de León:
Rob, that might be the next standard railroad gauge is that open blockchain for trust.
Rob Carter:
Well, we don't often spend a lot of time saying we think things should be regulated, but we spend a lot of time with US customs and border protection saying, "Blockchain is the answer to some of the battles that you're fighting. Blockchain would allow you to keep fentanyl out and blockchain would allow you to keep fakes from, and even deep fakes from working their way into retail systems." And so we have their attention on this, and we think that there's probably a regulatory move of foot that uses blockchains to be that kind of authoritative border crossing information that allows you to get just more accurate information about what's exactly crossing the borders all around the world.
Yadin Porter de León:
No, I think that's a phenomenal opportunity. And I'm personally too am fascinated with blockchain and distributed ledger technologies as it's referred to in other venues, and really see a lot of potential there, also see a lot of technical challenges, like everything that's come to the fore.
Yadin Porter de León:
At this point though, I think we're kind of coming to a point where we like to wrap things up and sort of distill things down to have a way in which we could say, this is some of the perspectives that we have, and this is how we're going to talk about them to those who are listening and those who want to go back to their e-staffs and other team members. So we have this segment of take it to the board.
Speaker 3:
In short ladies and gentlemen of the board, costs are down, revenues are up and our stock has never been higher.
Yadin Porter de León:
So when you're looking at dominant design, I think some great pillars of the conversation, dominant design, we're looking at the risks of standing still versus the risks of moving forward and looking at what's the next emerging component of that dominant design, whether it's emerging technologies. How do you recommend others take that conversation to the board and then convince them that this is the way to move forward, that we can do it securely, that we can do it in a way that services the business, that we can do it in a not non-disruptive way, but minimally disruptive way. How would you frame that board conversation?
Rob Carter:
Well, storytelling is incredibly important and something that's underestimated in our profession. We think that we can just kind of tow the line of saying, here's the technology and here's how much it's going to cost. And that just doesn't work. All in the middle of what you just described is something that I call ugly pictures. And so one of the things that we don't do a very good job of is showing the reality of what we're trying to get our arms around with our own legacy estates today.
Rob Carter:
So all of this journey started with a really ugly picture of complexity and interfaces and slowness in delivering value for the business with increasing complexity creating increasing cost and slowness. And so those ugly pictures were something I shared with the board. I put them right up there and said, "Look, this is isn't going to get better unless we bend the curve, unless we engineer our way out of this, unless we decompose what was fundamentally an accidental architecture."
Rob Carter:
It had happened over decades. There was a collection of things that had piled up into a big heap, because technology had emerged over those decades and we were always is deploying technology, utilizing it for advantage, but it had gotten too complex. And I wasn't afraid to show that. Even if they said, "Well, that's your fault as well." In fact, Fred called that picture, our CEO called that picture hurricane Rob. I mean, because I drew this, I had the team draw this map of all the systems and all the complexity, all the hotspots, and it looked like Katrina coming on shore. I mean, it was intense.
Rob Carter:
And so that woke up the imaginations of the board and the senior executives and said, look, this is a high risk thing. If we just keep piling onto that, as opposed to engineering our way out of it, which wasn't cheap or easy, but it was less risky than just believing we could just sort of nurture the existing thing and make it work for us in a future that was clearly on a different dominant design path than all of that stuff.
Yadin Porter de León:
That's a beautiful way to architect that. I like that accidental architecture, accidentally multi-cloud, accidentally all these different things too, because it was, it's sort of the momentum. I think that's a fascinating way to portray it as not being afraid to open the doors of the data center and the architecture and say, "No, look, this is what we're doing right now. And we've always done it this way, or we maybe sort of shift a little bit, but we need to shift faster."
Yadin Porter de León:
And that may be some of the conversations too, is "Yes, we're starting to move, but we're not moving fast enough in the right direction and still going to get us into a place where we're going to be at a very, very risky component to." And what would that last sort of piece of advice to those listening to, from a storytelling perspective, because as a storyteller, I love that analogy. How do they tell that story? And is it that way where they really shed that fear and then show everyone what it's like, show them that ugly picture. Is that the story that everyone needs to tell?
Rob Carter:
Yeah. I think that new generations of it ar still emerging, and I still love to tell those kinds of stories. I mean, I literally showed the board the evolution of gauge of the railroad and the evolution of the electrical plugs in the wall. I said, "They didn't all used to look like that." I mean there was a big battle as electricity emerged and plugs in the wall were totally different current. I said dominant design took hold of it. And now we all just make the assumption it was always that way, that that plug or that jack or that at rail or that road always worked that way.
Rob Carter:
Well, the same thing is true for technology is just more nascent. I mean, the technologies that we're talking about are 50, 60, 70 years old tops and they're still evolving, but there's a clear path to dominant design that's out there now, unlike the early days of mainframes and mini computers and so many different brands you could name that were all proprietary from the network and the operating system up. That's not true anymore.
Rob Carter:
And you can tell that story, you just need to use context that's different than just the technology. Use context from history that says, hey, it's happening again right in front of our eyes. We need to be on the common gauge of the railroad, not where the tumbleweeds are going to be rolling down main street.
Yadin Porter de León:
Nice. And that's one of the lessons that history teaches us, to not repeat it. Just because it doesn't look exactly the same doesn't mean that it's not repeating. Actually, people like to say that history doesn't repeat itself, but it rhymes. And I think that's the case with a lot of different things.
Yadin Porter de León:
So Rob Carter, thank you so much for joining the CIO Exchange Podcast. It's been a fascinating conversation.
Rob Carter:
Thank you, Yadin.
Yadin Porter de León:
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