Linglong He
CIO, Quicken Loans Inc., Detroit • Employees: 17,500 • Mortgage Volume: $400B (2013-2017)
Why She’s a Champion of the New Economy
When Linglong He joined Quicken Loans Inc. in 1996 (originally Rock Financial in Livonia), there were seven people in the IT department in Bingham Farms. When the department was relocated to Livonia, she and her team literally moved the server. But in preparation for Quicken Loans’ move to downtown Detroit, a new data center was set up, which has since been expanded several times. Today, as CIO of Quicken Loans, He oversees a staff of 1,900 people across multiple disciplines. From setting up the IT department downtown to helping launch Rocket Mortgage in 2016 to overseeing technology initiatives across the business, she says one of her most passionate efforts is serving as chair of Experience IT. The group, made up of several technology leaders, provides continued education, work experience, and job opportunities for IT professionals and college students. “I grew up in China and got my undergraduate and master’s degrees in civil engineering, (and) there wasn’t an opportunity to start your own business there like you can in the United States,” says He, a board member of the Asian Pacific American Chamber of Commerce in Farmington Hills. “Since moving here, I really like working in a team environment, staying on the cutting edge of technology, and helping the next generation of IT professionals.”
What was it like growing up in China?
In China, all of your room, board, food, and everything (is) paid for, and there isn’t the entrepreneurial environment that you have in the United States. When I moved to the U.S., I attended the University of St. Thomas (in St. Paul, Minn.), where I earned a master’s degree in software engineering. I worked several jobs at the university, including the library, and in restaurants. I also worked in the IT department and was an editor for a monthly magazine in the manufacturing department for the school. I was the troubleshooter, so when a printer broke down, I would fix it. I also kept the audio visual equipment working, the TVs, and, of course, the PCs. It was a tremendous cultural change. I had a strong foundation in math and science, and I could read, write, and speak English, but communication was difficult. Over time, I picked up on things and learned to appreciate everything. The other thing was I had to learn to drive. In China, I rode my bicycle everywhere. I’m still a slow driver, but a good driver. I also learned how important a diverse culture is, because you get to learn different perspectives and see more wide angles (in the U.S.).
How did you arrive in Michigan?
I had an internship job and was hired by First Bank in St. Paul, which is now US Bank. I spent two years there as a programmer, and I was promoted three or four times in one year because I had a strong background in math and programming. I worked there for almost two years, and then my husband came to Michigan, due to a job. He brought my resume with him and helped circulate it around. We had a baby when I moved here, and I started working for the Mid-Michigan Physicians Group in Lansing, but it was 70 miles one way to work, and it quickly became difficult to raise a baby and have to drive so far. I had applied for a position at Rock Financial, which had its IT department in Bingham Farms — so that was a lot closer to Novi, where we lived. I was hired as a programming developer.
What was it like during the period when Rock Financial went public in 1998, was sold to Intuit Inc. in 1999, and then was acquired back by Dan Gilbert as Quicken Loans Inc. in 2002?
It was a good learning experience to see the changes the business went through at that time. There was a three-hour time difference (between Rock Financial and Intuit), so
sometimes they would schedule a 5 p.m. meeting and it was 8 p.m. here, which extended the day. In turn, the computer systems they were using were different from ours. When we became Quicken Loans in 2002, I was director for data systems engineering. I was originally hired as a programmer for coding, but over time I became responsible for our technology infrastructure — meaning the data center, databases, the server, the network. Everything was more hardware-related. At that time, there were 352 people in the IT department, out of 2,800 people overall. When we moved downtown (in 2010), the technology sector wasn’t very strong in Detroit and it was dominated by automotive. When we moved, I also worked on business intelligence.
How did the move go?
The best thing we did was to build a data center downtown. We flipped the switch, so to speak, seamlessly, rather than physically move servers. We have a very strong team, and at that time I was responsible for all of the technology. I had to make sure nothing crashed, and I made sure all the systems stayed up and running. That was job No. 1. I had a phone beside my pillow so if there was a problem, I could address it right away. I still sleep with my phone because you have to keep the train running, given technology drives the business. Prior to becoming CIO (in 2010), I worked within the business, but now I not only make sure everything is working properly, but I look ahead to see how to transform the business for the better. I’m glad to say the move went very well. We worked on the move eight months ahead of time, and we had a backup data center for redundancy.
Quicken Loans has since built a new data center in Corktown. What drove that investment?
It was done for growth and capacity. It’s a state-of-the-art facility, and as we introduced Rocket Mortgage (selling home loans online), as well as the work we do in the cloud, we need the extra data capacity. In February 2016, we launched Rocket Mortgage (via a Super Bowl advertising campaign), and it has been a phenomenal addition to our portfolio. If you have all of the necessary information, you can get approved (for a mortgage) in eight minutes. We had something like 500 people working to bring that up to speed, with a lot of different teams involved, including vendors. We started working on it in December 2014, and we continue to refine the process to make it even better.
How is Quicken Loans doing in terms of providing IT capacity and preventing cyber attacks?
I can’t talk too much about cybersecurity, but it’s very important to us. As for capacity, we have quite a bit. One of our related companies is Rocket Fiber, though it is a separate company. Two of the engineers (Randy Foster and Marc Hudson) were on our team, so it was gratifying to see them (along with Edi Demaj) take that company and really make it successful. We have innovation sessions every Monday afternoon, and that was one of the innovations that sprung forward. Overall, we have a really good plan to share technology ideas across the Quicken Loans Family of Companies. A lot of times I get asked what it’s been like since I came to America, and I say it’s so important for people to be themselves, always carry their own sunshine, and bring value to the table.
Mark Hillman
Co-Founder, MadDog Technology, Birmingham • Employees: 70 • Revenue: NA
Why He’s a Champion of the New Economy
Raised in upstate New York, Mark Hillman didn’t have to go far to land a job. His father and uncle owned a poultry business, and Hillman’s responsibilities in the family enterprise included processing chickens and turkeys, as well as working out front in the retail store. “I started working there when I was 8 years old, and at Thanksgiving it was a lot about logistics because you had this big burst of business,” says Hillman, co-founder of MadDog Technology in Birmingham. “While it sounds like manufacturing, the key to the business was customer service. It was a small operation with six people in normal mode, and then 20 people when we got busy.” While a student at Clarkson University in Potsdam, N.Y., Hillman worked at restaurants busing tables and washing dishes. His work ethic proved valuable. He bought a car and largely paid for his education. “From there I landed a job at Texas Instruments in Houston, but I mostly stayed in Dallas,” Hillman says. “I worked on semiconductors on the marketing side, but it was very technical. I was with Texas Instruments for 16 years, and toward the end I worked in the IT department. From there, I knew the CIO at EDS Corp., and they had become part of General Motors, so that brought me to Michigan.” At GM, Hillman held a number of IT director positions before being named director of supply chain IT operations, followed by director of global computing, where he oversaw the automaker’s data centers throughout the world. “In 2008, the auto industry wasn’t in the best shape, so I joined Compuware Corp.,” he says. “GM was a lot of work, and a lot of fun, and at Compuware I did product management — but most of it was working on the investment side, and going to Wall Street and making pitches to the people who ran investment portfolios.”
How did MadDog Technology get started?
In 2013, Peter Karmanos Jr. was in the process of retiring at Compuware (as chairman), so I went up to his office and said, “C’mon Pete, you’re not going to retire and do nothing. Let’s do something fun.” He said he’d been thinking about what to do, and he wanted to find industries that hadn’t fundamentally changed yet, even with all the hype of the internet, and then look for ways to change the game. We call it disruption today. The cloud is one of biggest business transformations anyone has ever seen, especially at the enterprise level. So we launched Resolute, where we collect performance data, say at a sports arena or a manufacturing business. We analyze the data and then look for operational efficiencies or ways to reduce energy costs. We also talked about how we might disrupt the mortgage industry, and we talked about the health care side. In addition to getting Resolute going, we launched a venture capital firm. It’s now fully subscribed, and we’re putting investment in software companies that are in the early stages of development.
What’s the strategy for MadDog Ventures?
At a fundamental level, we pick business sectors that have a significant opportunity to be disrupted. We have a mortgage technology business called Lenderful, and Deliver My Ride. The mortgage business has gotten really interesting, and credit goes to the Rocket Mortgage team (part of the family of companies at Quicken Loans Inc. in Detroit). They taught the world how to shop and buy a mortgage online, and they’ve done an incredible job reshaping how a consumer shops for a mortgage. The difference between Lenderful and Rocket Mortgage is that they’re a lending company, or a mortgage company that does loans online. We’re a software company, and we don’t compete with them in any form or fashion. We provide a platform that allows banks and mortgage companies to have a digital facing offering on a large scale. It’s a traditionally boots-on-the-ground business, but now with Lenderful it’s done online with digital traffic and converting it into sales. Toward the end of the process, a mortgage professional completes the last steps (with a customer). Soon after we started, we quadrupled the number of loans in a month, and we’ve been doing that for two years.
Who are some of Lenderful’s clients?
We have large mortgage banks like Flagstar Bank (in Troy). They’re one of the top five mortgage banks in the country. They’re not typically known as a large bank, but their asset base is amazing and they have a pure mortgage business. The company went from the dark days of offering traditional mortgages, and now they’re a digital business that moves very quickly in an industry that is conservative-based. We have other clients, as well, and we’re keeping an eye on Amazon, because they just sent a tremor in the industry by announcing that they’re getting into the mortgage business.
How does Deliver My Ride work?
That’s an earlier-stage company. Think about all the online presence out there in the automotive space, and everything steers you back to going to a showroom, whether you’re buying a new or a used car. Our premise is that people are super busy, and they know how to buy things on the internet. What we do is provide information on new and used cars for sale, both competitively and transparently. People maintain control during the online shopping experience; they can compare vehicles, see offers from multiple dealers and multiple brands, and they don’t have to talk to a salesperson. They don’t have to go to six or eight dealerships. Whether you’re a busy professional or a busy mom, you can see everything including the prices, taxes, the different features, and colors. For the consumer, it’s a very simple process, and it provides dealers with a modern buying experience to sell inventory on the lots. The best part is the customer doesn’t go to the dealership; we go to their house with their paperwork. It’s the kitchen table model. In some cases, you can buy a car on the site and we can deliver it to you the next day.
With several companies to manage within the MadDog portfolio, how do you maximize efficiencies?
I started out as a co-founder, and I personally run Lenderful as the CEO. Our lead partner for Deliver My Ride is Mike McInerney. We all participate in the VC fund, and different people have companies they lead. We help each other out, and we meet formally every month and people go through what they’re working on, and that sparks a conversation if someone has experience in a certain business sector or knows an expert they can call on for advice. At times, we meet every week. We just had a conversation about looking at investments in the autonomous vehicle industry, which is really exciting. We’re looking at changing the trajectory of a business that wouldn’t normally be done without our help. We have eight companies overall, and with the VC fund in place, we’re now looking for incremental investments. The general target is early stage software that can be implemented to make a large disruption in a large market. We’re also looking at more fintech investments, we’re looking at the health care space, the green energy space, and the autonomous vehicle space. It’s exciting.
Dan Irvin
Founder and CEO, 123Net, Southfield • Employees: 130 • Revenue: NA
Why He’s a Champion of the New Economy
Dan Irvin was introduced to the telephone business early on, and his days of experimenting and installing voice transmission systems, however rudimentary, served as a prelude to founding 123Net in Southfield, which operates the largest independent data center in Michigan. It also installs high-speed fiber lines for internet and phone service, and provides wireless services. “My next-door neighbor where I grew up in St. Clair was a phone technician, and I used to get wire and stuff from him and would build walkie-talkie systems between my home and my neighbors,” Irvin says. “We had buzzers and we could buzz each other, and we could talk to each other. I was 10 years old or so.” After attending Oakland University in Auburn Hills and earning a degree in electrical engineering, Irvin studied physics at the University of Michigan in Ann Arbor. He also played and taught tennis, and taught a computer programming class . His first job was with General Electric in Southfield, where he worked on helping U.S. Steel retrofit its mill on Zug Island for an electroplate galvanizing line. Two years later, he was working for GE’s aviation division in Cincinnati, at a plant that built jet turbines for commercial and military aircraft. “That’s when I first started working on the internet. It was around 1989, and we would use it to communicate with our customer, the U.S. Navy, and we would send test results and other specifications,” Irvin says. “It was low-level protocol. You’d put in a couple of addresses and a file name, and you’d be able to copy stuff.” In the early 1990s, he moved back to Michigan and worked as a contract engineer on electronic steering for TRW, and on networking and database projects for Chrysler. In 1995, he launched 123Net to provide wholesale dial-up service for various internet service providers (ISPs).
What was the original business model for 123Net?
I ran the business out of my house for 10 years. We worked with other ISPs in Michigan and out of state, along with a few T1 customers (fiber), but mostly it was dial-up services. I figured out early on the best thing to do was to get closer to customers by owning more facilities, whether it was offering phone services via actual fiber or wireless. We had our own phone switch, so we could provide local service to anyone in Michigan with our own equipment. We competed with Ameritech back then. We leased fiber at that time, and then the leases turned to ownership. Today, we have hundreds and hundreds of megabit service. What was put in the ground 25 years ago (fiber) is still very much serviceable today, (but) we don’t know how long it will last; copper (lines) are still somewhat useful. We’re 99 percent in Michigan with fiber, and we lease a very small amount of fiber in Chicago.
How much has your business grown?
With our fiber network today, millions of millions of bits of voice traffic is generated each month. We also carry a tremendous amount of internet traffic. Since the day we started, the amount of bandwidth has increased every year. Where today we have 1,000 T1 lines in service, we started with one. Customers are getting 10g and 100g (data speed), and now we’re offering terabyte connections (1,000 megabits per second). That’s a tremendous amount of bandwidth, and we have two terabyte connections in this building (Southfield headquarters and data center). We have a purchase order for two more connections, and we’re working on another one. Not everyone needs that kind of speed, though. I can’t tell you who our two customers are, but those connections will continue to be needed in our region and elsewhere as we move more into mobility and autonomous vehicles. It works over regular fiber, and we put equipment at either end of the fiber line to make it work. It takes about a year to complete a project like that.
How is the Detroit Internet Exchange doing?
We launched it in 2014. Prior to that, all of our internet traffic was being routed through Chicago and Ashburn, (Va.), and then back to Michigan. With our exchange, now 60 percent of local traffic is routed through members of the exchange, which includes Google, Netflix, Rocket Fiber, and more. What that means is you spend less on transit providers and you increase network speeds, reduce hops, and lower latency. In the summer, we plan on announcing some things that revolve around the exchange that will deliver the internet 100 times faster than today and make it 100 times cheaper. The traffic doubles every two to three years, so this will help us get way ahead of future needs. Plus, the ports of the Detroit Internet Exchange are available at no cost.
What’s the biggest sector of your business?
We have teams that install fiber, and a major thing that differentiates us from other fiber companies is we build it for the customer and turn it over to them in lieu of paying Comcast a monthly rate. We provide fiber for a one-time cost and the customer can use it and have unlimited bandwidth. That business is doubling each year, and it’s about 60 percent to 70 percent of what we do. We have 600 buildings that we built fiber to. We’re also looking to get into CBRS, which is a backpack-sized piece of equipment that can be installed on top of a building or a telephone pole. It’s also called small cell technology. I can go someplace and put up this small cell, and sell access to my customers. It gives you fast speed internet and cell service. This will change the game for us. Wherever there’s a big cell tower now, you’ll see 20 to 30 small centers go up in different locations. It will provide for the introduction of 5G (data service) and the Internet of Things, give you 10 times the bandwidth, and on smaller devices. You’ll see a lot more small cells in the next five years, but you’ll still need large cell towers in rural areas. I can provide and install a small cell for less than $10,000.
What else are you working on?
This summer, we plan to launch something that will change the way consumers connect and interact with the internet. I can’t say too much, but we think it will be revolutionary. I would add that while we’re a small company, when you compare us to large telecom companies, we don’t charge people for using the Detroit Internet Exchange, which is pretty cool. We’re the 40th largest exchange in the world, and we have the largest data center in Michigan. It’s a 20-megawatt facility that’s independently owned, and anyone can come and get services. We had 20 employees four years ago, and today we have 130 employees. That tells you how much we’re growing.
Jason Vazzano
​Co-Founder and Co-CEO, Vectorform, Royal Oak • Employees: 150 • Revenue: NA
Why He’s a Champion of The New Economy
Jason Vazzano has been an entrepreneur nearly his entire life. Growing up in Detroit and Rochester Hills, he recalls visiting his grandfather’s machine shop on Detroit’s east side and learning the tricks of the trade. “He would take me to auctions, and he showed me how to stay calm and not get excited, how to buy equipment at a discount, and how to take that equipment and make money on it either by fixing it up and using it, or by selling it to someone else,” Vazzano says. Fascinated by the digital space, Vazzano earned money in middle school and high school by helping people set up or repair their desktop computers. During his freshman year in college at the University of Detroit Mercy, he launched a web development company at a time when businesses and individuals were starting to learn how to take advantage of the internet to generate sales, boost operational efficiencies, and seek out new market opportunities. “From that experience, I realized I wanted to do more than build websites,” Vazzano says. “Our co-founder and co-CEO, Kurt Steckling, was in the same year in college (at Michigan State University) as I was, and we came together and launched Vectorform during our senior year. I actually gave up an internship position as a software developer with what was then DaimlerChrysler (in Auburn Hills).”
How did you develop a business model for Vectorform during a downturn in the digital sector?
We started out in 2000, right in the middle of the dot com bust, and we always joke now about our good timing. It was good timing because companies were still interested in using the internet to improve their operations and potentially drive more revenue. We believed in the ability to use the web to generate growth, and the ability to transform the way companies did business with new endeavors like e-commerce, merging various technologies to improve efficiencies, and developing web-based applications. I always was passionate about being an entrepreneur. The idea for the name of Vectorform came about because we liked the idea of vectors, which is the most efficient path to any point, and then the form it could take in terms of developing a universal path to drive efficiency through technology. We literally started out at Kurt’s family’s mini-storage facility in Davisburg, and we were using multiple storage units for the various projects we were working on. A lot of businesses start in a garage or in a basement, and it’s pretty rare to start out in a storage unit. After nine months, we moved to downtown Detroit, right on Woodward Avenue and John R (18 John R). At the time, Sophie Tatarian owned the building, and she taught us a lot about running and operating a business. We were in what we called train car space, because the floor layout was 20 feet wide by 100 feet long, and the building had one of those old elevators. We became known for the rooftop parties that we’d throw during the fireworks. It was the most cost-effective way to recruit at the time.
How did you grow the business from there?
From 2000 to 2006, we opened offices in Germany and India. At that time, we were working with a lot of organizations and using web applications to automate their business. In 2006, we started working with Microsoft in Seattle on their emerging Surface product, which everyone knows today as a large, multitouch, tabletop computing platform. We added design and engineering experiences that Microsoft used to unveil the product in 2013 at the Consumer Electronics Show in Las Vegas. We also worked on the consumer facing components for Microsoft’s retail stores. For a time, we were renting an estate and farmhouse in the Seattle area while we were working for Microsoft. It was a pretty amazing time, almost like a band getting away from it all and recording an album. We eventually opened an office in downtown Seattle. Another project we did was build an election coverage platform for MSNBC that they used during the 2008 elections. (Host) Lou Dobbs used it for a month, and we’re proud to say the platform never produced any errors. That really helped put us on the map, and then we started getting work with different companies like Disney, The New York Times, and Fortune 500 corporations. For Disney, we helped them with their mobile experiences and developed apps for Nokia cell phones.
Do you still work with Microsoft?
Yes. We work with them quite a bit, with the HoloLens team and their mixed reality offerings. We have a virtual lab set up at our global innovation center (and headquarters) in downtown Royal Oak. With various equipment and virtual glasses, designers, engineers, and technologists can immerse themselves in another world. We use it to simulate what can often be dangerous working conditions, so repair people can go through the motions of fixing an electric line or installing new equipment before they do the actual installation or repair. You can also use HoloLens to design and develop new products and test them extensively before going to the marketplace. With the headset on, you can create holograms so that you can see, for example, how a product goes down an assembly line. From there, teams can develop the most efficient production process possible while also minimizing the impact of repetitive labor. We also developed apps for Google Glass, which was a lot of fun.
Have you worked in the field of the Internet of Things?
That’s another one of our passions. How do you leverage emerging technology to transform a business while, at the same time, use that to improve the value of companies and drive new efficiencies for consumers? At DTE Energy, we worked with Dave Meador (vice chairman) and Steve Ambrose (vice president and CIO) to bring that concept to life. I should add that in the early days, we made a decision not to work with auto companies; rather, we first gained traction by working with an array of companies in different industries so we could learn what made different business sectors tick. With all of that knowledge base, we now focus on emerging technology and leverage it to develop new platforms for companies like DTE Energy. We worked with them closely to develop a brand-new company called Powerly (in Royal Oak), where we developed a robust energy management app that allows you to measure and control your energy use, as well as control home and office devices like lighting, sound, and visual equipment to drive efficiencies. We’re now selling that technology to other utilities. In addition, we set up Vectorform Innovation Consultancy to drive innovations with Fortune 500 corporations, large businesses, mid-sized businesses, and smaller enterprises. The key is we help companies bring products to market faster, help them disrupt themselves, and help them from being disrupted. We’re now working with OEMs and Tier 1 suppliers on defining the future of mobility that will bring about the new mobility economy. With autonomous vehicles, how can the automakers differentiate themselves and get a leg up on the tech giants? We have a lot of great ideas to get there.
Phil Abraham
Founder and Chairman, CloudFace, Northville • Employees: 10 • Revenue: NA
Why He’s a Champion of the New Economy
In 1979, when Kmart Corp. was based in Troy and was the second largest retailer in America, Phil Abraham developed a program to operate the company’s supply chain operations on a computer. No one had ever thought of using a computer program to manage retail goods across the distribution channel, and while the enterprise was small at first, it would quickly become a $200-million business for Kmart (which became Manugistics). From there, Abraham, founder and chairman of CloudFace in Northville, worked at Domino’s Pizza Inc. in Ann Arbor Township to develop a digital platform for the pizza maker’s global supply chain. He also worked at General Motors Co. in Detroit, where he created an online platform that reduced costs and simplified automotive supply chain management. That project would later become Covisint Corp. (now OpenText). “I was always fascinated by computers, and that was way before the internet came into being,” Abraham says. Today, he’s considered the world’s foremost expert in understanding and operating in the seven-layer conceptual model — called the Open System Interconnection model, or OSI — that characterizes and standardizes the communication functions of a computing system. Put more simply, the internet operates via a seven-layer platform. The lowest level is referred to as the physical layer (all of the hardware equipment, such as digital processors, that today are the data warehouses that make up the cloud), and above that is the data link (the wires that connect the processors and other equipment), followed by the network, or layer three (connecting all of the data links). Layers four through seven provide for the reliable transmission of data via data processors and the network to the application and presentation of a website. Most of the business world, as well as hackers, operate in levels three through seven, according to Abraham. “No one understands how to make revenue moving (data) from three through seven to two; that’s my area of expertise, and has been my life’s work.”
You launched cloudface in 2014. What are you working on today?
By understanding that layer two of OSI is where the most accurate data can be found on the internet, we can protect companies and individuals from being hacked because the data that passes there is unadulterated from software systems. Software operates in layers three through six, and seven is (where you are) when you type in a web address and a website pops up from layer six. But, like I said, layers three through six are where you find hackers who gain access to a business or individual’s data. Our biggest focus is the health care sector. We’re currently working with large hospital systems all over the country.
How does cloudface work?
On the health care side, our approach is to use our proprietary technology to drive significant cost reductions while improving patient outcomes. By boosting patient outcomes, you boost (insurance) reimbursements. You have the four walls in a hospital where doctors and nurses work, but we go outside the four walls to the end-to-end supply chain, from the manufacturer (of drugs, medical devices, or medical supplies) to the distributor, to the group purchasing organizations, the hospitals, and the insurance companies. At Loma Linda University Medical Center in California, we helped them become a blue zone (a high concentration of healthy people). Essentially, via our technology, we were able to eliminate the middlemen and have hospitals connected to drug companies and medical device-makers to drive down costs.
How did you make it work?
Hospitals make most of their money in orthopedics and cardiology. At Loma Linda, we were able to drive out 80 percent of the costs in those two fields. It also streamlines the entire system so doctors can do more procedures, spend more time with patients, and drive better outcomes. We also work on cybersecurity. Not a lot of people talk about ransomware and how you can prevent your business or organization from being hacked, (which potentially leads to paying) a ransom to get your data back. We improve patient outcomes, protect you against ransomware, and improve the supply chain process (by) using layer two. Now we’re talking to companies like Cisco, because they make a lot of the equipment that makes up layers one and two with things like routers. We’re proven and we’re referenceable.
What else do you provide in the health care space?
We created a solution to unbundle complex warranties and contracts that cost millions of dollars. A large Catholic health system was spending $1.9 billion a year in these purchased services, and we developed a way to drastically reduce the cost and complexity. For example, if something goes wrong and a piece of medical equipment needs to be repaired, under these warranty contracts the cost of repairing that equipment could be based on the time of day. At night, it would be a lot more expensive. We eliminated quite a bit of that process, and those savings allow the respective hospital to put that money back into their system to improve patient outcomes, buy new equipment, and expand.
Amazon, Berkshire Hathaway, and JP Morgan Chase recently teamed up to reduce health care costs. What are the challenges?
Those are three incredible companies, and the challenge is that health care is very complicated. There are entrenched bureaucracies among many group purchasing organizations, and they don’t want to change. There are all kinds of markup fees and profit-making incentives and constraints, which have nothing to do with patient outcomes and everything to do with people lining their pockets by adding markups as drugs and medical devices move from the manufacturers to the hospitals. You don’t need the middlemen, and a shakeup is coming. When you have Amazon, Berkshire, and JP Morgan looking at it, there will be changes. Somewhat related, you now have Amazon and Walmart offering doctors and hospitals the ability to purchase equipment and supplies through their online sales platforms. We have the technology that could really help all of those companies accomplish so much more in reducing costs and boosting patient outcomes.
W​hat are you doing in the automotive space?
In the same way we protect the medical industry from hackers, we can eliminate hackers from getting inside connected cars. We’re working with OEMs and suppliers to make the connected car secure, but it’s far-ranging. Consider a hacker has gotten into a hospital’s computer network, and then the hospital sends invoices to an automaker for reimbursement and the hacker travels along. Now the hacker is inside an automotive company, and from there they might infiltrate the automaker’s connected car program. I’d like to see GM and Ford really lead on this, because it would be a big win for the regional economy. It’s a brand-new economy in terms of preventing hackers and reducing costs, and it’s right here in Motown with our technology. We’re the gatekeeper on what gets into connected cars at the outset, so the good data can come in and the hackers can’t get in. Like brakes or seats, CloudFace is another component on a connected car, and we prevent hacking.
