And eliminate jerks. Pledges to dober as it improves its work environment. First to our lead. Ibm is focusing big on the growth in the cloud, which makes 17 percent of company revenue. We caught up with ibms ceo Ginni Rometty and ousted what it is about ibms loud that sets it apart from the fears competition. It is the platform for new business. One is it is enterprise strong. Enterprise strong, but you have got to prepare for the future and there are two more things about her clout that are very distinctive. One is it is data first architecture and it is called native at its core it is cognitive at its core. You have got to put innovation i and all the time, a pipeline. Today we also announced production on the ibm cloud. That up stranded sections that ups transactions at 10,000 the second. That is what we need to do. And we are the First Quantum computer available on the cloud. You have to do it on the cloud. You cannot do this on your premises. At the point is enterprise strong, you have to have security better than anything else. Yes, be around the world. Be those things. Data first, youve got to protect the clients insights, not distribute them. When you look at the consumer guys out there, what they do is take data and really it is how they monetize it. The value for our client is in their insight. We can give them data for sure and tell them that data is not intermingled with someone elses. We are not monetizing them. We can show you how to protect it. That is data first. The third part is this idea of cognitive at the core and that is locked in. And what is different, you see ai is a small piece of it. You think about something. With all of the data in the world, 80 of it is not virtual. Onhink everyone thinks it is the internet. 20 is not. That to me you will, everyone will be cognitive. The cloud at the moment is 17 of your revenue . 70 . 17 . Wanted towhere do you be . We do 90 with the largest banks in the world. We run 80 of the biggest airlines. When you look at the telcos, 90 , 90 percent of the credit Card Transactions come through us. It is bringing them into a future world. Caroline will it build your revenue . Our globalthat in technology business. Many people say that is Running Services for other people. That will go down. It hasnt. We have been building our backlog. What i think is a bit of a will build many new things on the cloud, but they have reasons they keep other information they have invested in big systems and data. The big thing we have to do is building hybrid cloud environments as well as be the best public cloud. We are in both of these worlds. Caroline will the revenue that you are garnering from the cloud drive Revenue Growth in coming years . It will, it will. Revenue it grew 35 . When you look at the cloud, our watson, thatenue, is what we call strategic imperatives. That part of ibm, that has been growing 13 . , complementedbm by work we do in our core franchises, which may not always be growing, but they are really important. We are investing in the areas where we are investing to grow. Caroline china. Yes. Theline talk to me about partnership. Will you always have to be partnered with someone in china . We have a very Large Business in china. We run all of ibms business there. We have been there well over 35 years. 35 years in china. Very wellestablished brand. Very wellrespected brand. The banks are the most sophisticated Financial Operations in the world and require volumes that are very difficult to manage. Great attitude and agility and skill and wanting to report. And as well they have a huge business that will be on this cloud. They will be a partner in the cloud. And it will be a great footing, i believe. They have a very big english system in addition to the clients ibm has. Ecosystemhe large around wanda coming together. I look forward to that being a very successful partnership. Come, marctill to benioff, the king of the deal, says the window for the deal is closing. And reminder all of our programs on Bloomberg Technology are Live Streaming. Check us out 5 p. M. In new york, 2 p. M. In sanford scope in san francisco. This is bloomberg. Caroline we continue our main cloud ibms business with a system called interconnect. Some 20,000 ibm customers gathered in las vegas and ibm announced it is partly up with salesforce. Thereby offering a horrid vance data analysis. We caught up with the ceo marc benioff. When i asked him what ibm wants provide from salesforce that it does not already have . You just moved to san francisco. Those crazy hailstorms we had last week yeah. Ne yeah, we manage the Top Five Companies with salesforce. These Companies Want to notify customers to put their cars in the garage. We will save them a lot of money and the combination of ibm and salesforce lets is do that. Whats and is going to tell the weather, hey, the hail is about to come and we can notify those customers, get that car in the garage. The rest is magic. Are a company that built your own products. Was it just such easy, low hanging fruit to go with what is already on offer . We had technology with salesforce, but is very tightly integrated with our core platform. It has been available to all of our 150,000 salesforce customers all over the world. The opportunity with watson is to bring a general purpose platform that is programmatic so customers can implement our solutions with what watson can do. Caroline where else in the product line . Where is the low hanging fruit . Where is the demand coming from . , almost every industry can be much smarter. You find employees are able to extend their capabilities through Artificial Intelligence. With salesforce einstein, for example, we see people being more productive than ever before. They know exactly who to call on, when to call on them in a prioritized way. That is all done by einstein. Just announced a partnership with a w s aws in australia. Where geographically are they eating up Artificial Intelligence . You see that across the world. Software is eating the world. Ai is starting to percolate into that software across the world. Alle are seeing ai inside of these different jobs and work streams. The advances in ai, i think, have far exceeded our industry expectations. And vendors like salesforce and also ibm can extend and complement our solutions with this amazing technology. Intelligenceine area deep learning as well. You probably saw two weeks ago cocacola announced they will build these coolers that have cameras and them, and they will be able to do realtime inventory management. So when people take those coax out of the cooler, trucks are rolled to the stores knowing that they need to replenish those supplies. Does it mean for your bottom line . What does it mean for your topline Revenue Growth . What does ai build into that . Salesforce is already in the Top Five Software Companies in the world. We just delivered a phenomenal quarter. I think it is the best quarter for revenue. We exceeded our expectations. A lot of that is being driven by ai. It is being driven by a lot of major trends that we assigned ourselves to very early. Because our customers are really moving to those for trends. That is how we have created extraordinary growth. The fastestgrowing of the Enterprise Software segments and will be the number one segment in the Enterprise Software industry by 2021 and we are the number one vendor in crm. We are uniquely focused on sales, marketing, analytics, commerce as well. You just mentioned how ai will be affecting jobs. Does the world realize how much different they are going to make live with jobs . That is why went to washington. Im really focused on that issue. The workforce is going to dramatically change. Lot bying to be driven a Artificial Intelligence and these changes. New jobto start doing development before that changes. I called for a moonshot based on a lot of the things we have learned from countries like you were based in germany and switzerland. We can bring that to be united dates and improve the quality of our workforce. Government our u. S. Listens and creates that moonshot. There are so many opportunities to educate people, especially in the united states. There have been phenomenal opportunities. Commuting colleges, universities, our k12 systems. There are so many people ready for these next generation jobs. I look at the things that we try to do bringing veterans into our. Ompany and retraining them in the bigger picture, salesforce will create 2 million add 400 billion to gdp by 2020. We are really focused on creating these new jobs and getting people ready for salesforce jobs. I think apprenticeships are the key and also automation and oneonone. You have been acquisitive company. Does that remain the case . The last year, i think i was super clear that there was no dow that was really oh and really open. Demandht a Number One Company and commerce and we deliver demand solutions so much. Toadidas will do 1 million 2 million on the ecommerce platform. We have an incredible productivity tool. A lot had happened. As you know, this year, the markets are roaring. So the m a windows have narrowed. Because they narrowed, i just a see us doing a lot of m a this year. Salesforcehat was ceo marc benioff. Coming up, overhauled a held a news uber conference. All the details next. Still to come, avoiding being hacked. That includes chinas baidu. You more about combating hackers, next. This is bloomberg. Caroline now it has been quite the week for uber. Continued pro crises, the right hailing giant held a rare conference call. Their plans tout read them culture that has been rocked by scandals. What scandals . Jeff jones and three other employees headed for the exit. Over proprietary information and of course the Sexual Harassment suit. Our correspondent was on the call in joins with more. Asit was sort of advertised we are not going to make any news and they said some interest inc. They said they would have a diversity report by the in of the month. Eric holders report on their Sexual Harassment allegations would hopefully yelled by the end of april. They made commitments. The hr said they had a cult of the individual and they needed did change that. The head of hr cory the head of hr report to their own organization as a cult . I think they said they had good values, pull yourself up by your own bootstraps, and that creates a culture where one superstar is more important than the morale of a team. Just unusual for company to do i mean, companies have problems. But this airing of the dirty laundry in public just does not we know. The uber it is a company consumers have a close relationship with, so i think there is a big obligation to own up to your customers. Salesforce talking to corporates. They need to explain to riders and drivers. Drivers were a big theme on the call, saying they are going to trytry theyre going to to improve the product to make their lives easier. Cory when you have a business where you do not own the stuff, youre really demanding the attention of both customers and providers. These guys are leaving college every day. Exactly. Ubernk what guys forget is won it to start this year obsessed with brand. That is why they wanted jeff jones, a marketer, to be the president. It was all about brand and it was destroyed the first three months of the year. Now rachel holt, one of the top executives call, ivaquin from the guess. This is jeff jones i guess not from the call. That seemed like it was really that really seems like its referring to something went down. A biting comment. Clearly he disagreed with travis kalanick, the ceo, a couple issues. I sourced at some of them. The tipping issue, he supported tipping drivers. The other was safety on the platform. He had concerns. The Leasing Program encouraged less safe drivers to join. There were a number of clear debates within the company in which they seem to be taking different sides. Caroline now to accompany out with earnings this week. Consent posted fourthquarter earnings that missed estimates. Operating costs are surging and tencent 10 sent faces competition. They are adding more space to re people on its we chat service. 60 from themped year before. I think investors are ok to take a hit on the Profit Margins at this point because they are seeing a lot of growth and other revenue streams. They are not just relying on the old Growth Engine of mobile gaming. They are expanding into payments, into new content and the video business as well. Aroline when you look at profit of 47 , most would die for that sort of number, not be upset by it. Of the video. E is that where we are seeing this, in . Management reiterated over and over why video is so important. There are pretty significant losses. Cent, alibaba, they are funneling billions of dollars to create content. They realize that taking the loss in the shortterm is worth it. Video is such an important way to get advertising dollars, suspension dollars, and to hone people into their ecosystem. Good content drives users and like amazon, they know that content will drive more people to the platform. Caroline i am fascinated by the new mini programs. It is an app within the wechat program. How much is this catching on for wechat, and how much of a threat is it to apple and the app stores . It got attention because, as you said, it seemed to be a the apple store. We did not get at 10 of data on the metrics. They said the purpose of this is not to make it easier for users. You can scan a qr code and then the mini app pops up within wechat. They say this type of ecosystem has created more downloads within the app store as within the app. Barrier a pretty high of entry to get someone to download something. They can access it through wechat, and if they like it, they will download it, too. Caroline most Chinese Companies are taking measures to avoid any data breach, including chinese giant i do. We have the story from beijing. Idus head of cybersecurity knows he has a fight on his hand. Sackers passed by baidu security every day. In the most serious case, a gang was put together to steal their prized automated technology. Shows what definitely know ineone tried to hire someone the underground market to steal this from us. Reporter cyberattacks can come hacking automated bots or international gangs. They are backing what might be called ethical hackers like the blue lotus team. [indiscernible] reporter they showed me how they could open up my phone. Try a site like youtube. Com, and then we see hacked by blue lotus. Reporter it is one way to keep chinas best i. T. Minds onside and there is a growing demand for ethical hackers. Find weaknesses that can be dangerous and then report them to Companies Like apple and google. Du has also paired up with some of its competitors alibaba. Ent and we must help each other. We are not enemies. They are the enemy. Threats are only expected to increase in chinas tech giants are in it for the longhaul. Tom mackenzie, bloomberg, beijing. Caroline still ahead, googles add prices spreads with ad prices spreads. This is bloomberg. Welcome back to the best of Bloomberg Technology. Im caroline hyde. A controversy erected last week after the londonbased Times Newspaper reported some ads were running with videos that promoted terrorism. The worlds six largest advertising and Marketing Company pulled itsads. The crisis went global after marketers including at t, verizon, and Johnson Johnson polled spending as well. Google promoted its policies and many advertisers were waiting to see further details or results ads again. Cing i think theres a couple of things. In the political limit we are i end theres a lot of sensitivity around eight beach, our rounds terrorism. And there has been growing noise in the industry about google ad Facebook Google and facebook. And now they kind of see an opening and they are really seizing it. Caroline and jpmorgan is also taking ads off you too. Itfirst to you affected the u. K. The worry was this could have global repercussions. It clearly does. How much do you worry about the Stock Performance therefore . Toi think it is subject headline risk. You will see more brands concern. Ting their so far, google does not appear to understand the gravity of the situation. On some levels its mindboggling. On others it is not surprising because its very googley, i guess. It will continue for a while. They will solve it eventually. Boycott not about the per se. We will never notice that. We will never see it in the numbers, unless it did persist for weeks on end. Every advertiser is going to have a conversation with google about using the strategy, whether the strategy is about moving money into digital, not spending intot google and facebook. The conversation is all about brand safety. Google is completely on the defensive for the next three to six months. That will hurt their ability to expand the business at the pace that they would have. Out ane lets take it step and lets look at the display ad business. This is not the search is this of google. This is not the major cash cow. Affect advertiser spending generally . Search, as you said, is googles read and butter. It represents three times what is bent on video on youtube. So, search in the u. S. Is about 37 billion this year and about 78 of that is on google. They are by far the dominant player. It is about a third of what search represents overall and google has about 20 of the u. S. Digital video advertising. We are talking about egg dollars. This does come at 8 eight dollars. This does come at a critical time for google. As brian was saying, they are trying to expand the conversation. They are trying to draw the tv advertising dollars. Draware trying to themselves as a haven for tb style advertising. Search business is something that they know how to do. They know it better than anyone else. But video is something that certainly google and youtube have a major presence, but there players who other are buying with the same advertising dollars, s