#110 Securing the Supply Chain
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on Wed Oct 19 2022 17:00:00 GMT-0700 (Pacific Daylight Time)
with Darren W Pulsipher, Thomas Horlander,
In this episode, Darren talks with Lieutenant General Thomas Horlander, who recently joined the Intel Public Sector Team, about the microelectronics supply chain and national security.
Keywords
#securesupplychain #cybersecurity #supplychain #chipsact #policy #process #compute
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In this episode, Darren talks with Lieutenant General Thomas Horlander, who recently joined the Intel Public Sector Team, about the microelectronics supply chain and national security.
Thomas joined the army in 1983 after earning his bachelor’s degree in finance and deciding that the private sector was not for him. He joined the army for what he thought would be a three- to five-year career and ended up with 39 years of service, with his final position as Army Comptroller. He retired about a year ago and joined Intel.
Thomas is inspired at Intel by the great people, culture, and meaningful mission. He appreciates the fundamental role that Intel plays in everyone’s everyday lives and the opportunity to influence the country’s future.
When Thomas joined the army in 1983, microelectronics was embryonic; they didn’t even have computers. As a young officer, he worried whether he had enough D-cell batteries to operate radios. So Thomas considers himself a “digital immigrant” since he has experienced the evolution that happened with silicon.
Society and the military are now dependent on silicon, and the supply chain around microelectronics is critical: it’s a national security issue. Thomas says the microelectronics industry shares center stage with the oil industry as a center of gravity regarding national and global security and economic stability.
In the military, the vehicles and weapons systems are all microelectronics-enabled. They allow the military, for example, to be more precise and lethal with less weight, a more accurate locating system, and more reliable communications.
Our dependency on microelectronics spurred the recent Chips Act. While the need was apparent before the Ukraine crisis, witnessing what Ukraine has been able to do because of microelectronics spotlighted the necessity of securing the supply chain.
Thomas has been a student of national security his entire career, and he looks at it more holistically than just defense and the role of the armed forces. To him, national security is good governance and the rule of law. It’s a good and functioning economy, practical academia, health care, and, of course, the armed forces. And almost all of the professions across American society play a role in providing national security. From this perspective, just about every fiber it takes to provide national security relies on microelectronics.
The Chips Act was necessary, Thomas says, because of the massive imbalance across the ecosystem of the industry. At the same time, not the ultimate solution to the redistribution of balance, the Chips Act is an essential first step and will impact national security. When you unpack the core activities of the microelectronics industry, from where the rare earth elements come from to who makes the equipment to design and manufacturing, it’s apparent what an incredible mosaic of activity this is and why it’s so difficult to have a clear picture on all of it. A microchip might change hands ten times in a manufacturing process.
COVID, in many ways, exposed this complicated and fragile supply chain when, for example, factories were shut down in Malaysia, Ireland, or China because of a COVID outbreak, and all of a sudden, you can’t ship a car because it doesn’t have a chip in it. Most people don’t realize the significant global imbalance that currently exists. Only eight percent of silicon is manufactured in the United States. Seventy or eighty percent is manufactured in Southeast Asia, precisely three countries: China, South Korea, and Taiwan.
With this knowledge, it is evident that rebalancing the global supply chain ecosystem and returning capacity and capability to the United States is of the highest importance. No industry should have single points of failure, a concern in the microelectronics industry.
The federal government, the defense industrial base, and the ecosystem are all starting to see this problem, and the Chips Act is representative of this recognition that we have to do something. Thomas knows six companies right now that have said they will be investing in fabs on US soil in the next eight to ten years.
One of those companies is, of course, Intel. Intel is currently building fabs in Ohio, Arizona, and New Mexico. Re-domesticating capacity and capabilities in the microelectronics industry are necessary for national security but will bolster the local economies and provide opportunities for workers, invigorating whole communities.
The infusion of capital investment from the Chips Act is fundamentally essential because this is a race against time. Thomas is optimistic about the industry’s future and the action being taken to assure a bright future and continued innovation.
Podcast Transcript
1
Hello, thisis Darren Pulsipher, chief solutionarchitect of public sector at Intel.
And welcome to Embracing
Digital Transformation,where we investigate effective change,leveragingpeople, process and technology.
On today's episode,
Securing the supply Chain with former
Lieutenant General Thomas Horlander.
Thomas, welcome to the show.
Great to be here, Darren
And thanks for having me.
I look forward to our discussion today.
So, Thomas has joined usrecently at Intel, joinedthe Intel Public Sector team.
Another great hire.
We've hired quite a few former militarythat had just brought so much depthto our team.
And Thomas, you were in the Army,
Lieutenant, Lieutenant General.
Tell us a little bitabout your background.
And so the you know, the audience canget to know you a little bitwell.
So, Darren I joined the Army back in 1983after I had got my bachelor's degreein the great state of Washington and
I when Iwhen I joined when I joined the Army,you know, we were going throughthe country was going throughsome some tough economic times.
And, you know,
I come from a military family.
My father served inboth the Korean and Vietnam warsin the United States Air Force.
And I basicallygraduated from college with a bachelor'sdegree in finance, thought
I was going to have this blossoming careerin the private sector.
Things are pretty tough.
So I quickly realized thatliving back at home with my mom and dadand sleeping in the same bed
I did when I was 12 yearsold, was not what I had aspired todo with my life.
So I sought out the military and Ijoined, went to basic trainingand then officer candidate schooland started a career that I thoughtwas going to be about 3 to 5 years long.
And it turned out to be 39 yearsof service. Wow.
So, I mean,
I just recently retired last year,as you said, as a three starlieutenant general.
I did a lot ofwork in the field, artilleryas a younger officer in combat, our field.
And then at about year 18,
I became a controllerand served in that capacityfor the final 20 yearsor so of my life with my final positionbeing the Comptroller of the Army.
And I retired out of that position herejust about a year ago today.
It was the 1st of October, a year ago.
And so love the Army loved serving.
You know, a lot of people come upand thank you for my service, but
I just like to tell everybody
I was the lucky one to get to wearthe uniform and serve our countryfor as long as I did.
Well, I'm going to I'm going to echowhat many other people have said.
And thank you very muchfor your dedication toto our country and serving today.
Yeah.
We want to talk a little bit todayabout supply chain.
And because you were the controller,the the Army,you know a lot about supply chain.
You know a lot about.
You know.
About I mean, if I say so,you know, a lot more than I do.
And andalso, we've got this chip sackthat was recently passed.
Tell can you tell the audiencea little bit about how the chip sac playswith our national securityand with our Department of Defense?
Yeah. Sofor me, I would tell youas I joined.
So let me just back up for a second,
Daryn, and tell you, you know,as a as a retired guardand I knew I didn't want to be retiredand just stay at home,and I did want to pursue a second career.
But I wanted somethingthat was really meaningful.
I wanted
I wanted to get with a good organizationthat had a really a meaningfulmission, great people.
And I would tell you, I struck gold.
I absolutely struck goldwhen I got a phone call from Greg Clifton,which started the process of mebeing able to join the One Intel team.
And what a privilege, what a pleasure.
I would tell you, I absolutely love it.
And I would tellyou, you know, it's it'ssuch a great opportunityfor me to continue to contributeand to serve our fellow countrymen.
I can tell you,
I wouldn't have said this 30 years ago,but I think it's in my DNAnow that I want to do that.
And I would just tell you,being with Intel,
I just I love every day great teammates.
What a fantastic culture that thisorganization has and fantastic leaders.
And I really consider myself fortunate.
But, you know, I guess what I tell you isit does not surprise meafter these six or seven monthsthat I've been with this teamas towhy Intel is an iconic industry leader.
And so I really
I really consider myself fortunate.
And what I really inspires meis that Intel playsis fundamental role in everybody'severyday lives, not just day to day.
I mean, you can't get up in the morningwithout some kind of microelectronicsright there at your every move.
But it's also that we get an opportunityto influence the future of our country,the future of the worldand our children's future.
And so I guess what I tell you isand you're going to laughwhen I say this, but I would just say,how wonderful was that?
Oh, there you go, Pat.
Pat will be ecstatic thatyou tied Our Lady our newest branding in.
Right. How wonderful that.
That's awesome. So.
I would tell you, you know, I'm excited.
I love this. Butit's so interestingwhen I think back over my life and I thinknow it's not that I'm this old man,but when I think back over my lifeand you and I are about the same,probably about the same age.
Yeah.
When I joined the army there.
When I joined the army,we didn't have computers.
We didn't havewe probably had microelectronics,but it was such in a an embryonic stage.
It was probably in just a very remotepocket of our society or in the world.
I can remember as a young man,you know, our copying machinewas this ink drumthat you used to crankand remember notes, roll it.
And it would spill on this piece of paper.
And that's how that's how you made copies?
Yeah, we had single channel radios.
We used to connect wirefrom one radio to the other.
And, you know, todaywe talk about microchips.
But back then, my big worryas a young officerwas, did I have enough these cellbatteries to operate the radios?
So when youthink about how far we have evolvedand I would tell you,of course, my professionwas in the United States military,but I would tell youall segments of societyjust kind of evolved togetheras we discovered thesethis wonderful thing called siliconand all of our technological advances.
But, you know, I remember the days of
I remember the day one of my first dutyassignments in South Korea.
And I rememberwe used to sit there on Sundaysand go to thisthis building where AT&T had these booths,and we'd get in lineand we'd wait for the booths.
And I think you had like 10 minutesand you could make a stateside phone calland we'd get in the booth.
We call them mom and dad,or our loved ones would say,
Hey, it's me, I'm here,everything is okay,and that was the extentof telecommunications back in those days.
And now, of course, we sit here todayand we just speed dial on ouron our cell phone and.
Get a video call.
Yeah. And it's a video call.
Around the world.
So it's absolutely amazing.
And you heard me joke about this.
So people like you and me, you.
And I rememberwhen we got our first computer.
Oh, yeah. I remember the day.
You and I are digital immigrants.
Okay? We are not digital natives.
We're. We're older than that.
But I remember the day that I boughtmy first computer was probably around 1995and I bought a 286 and
I thought to myself, Good God,look at this monstrosity.
And for some of you out there,this isn't like a boxyou could very easilyput in the back seat of your car.
Okay, this thing was huge.
It weighed £50.
You bought a monitor.
It was deeper than it was wide.
That one weighed about £50.
You took it home and you asked yourselfthe question, oh, my goodness,where do I put this thing? Right.
So here we are 30 years laterand we're not saying, Oh my goodness,where do we put this thing?
We scratch your head and we say,
Oh my gosh, where did I put that thing?
Yeah, so I have a question about that.
So we've becomehighly dependent on silicon,highly dependent ontechnology as as a society.
Is the militaryjust as highly dependent on silicon?
Oh, absolutely. So I mean.
I mean, that's a big deal then,because our our supply chain aroundmicroelectronics is nowhighly important.
It's a national security issue.
So I like to tell people we have evolved.
So to the point where the market we'remicroelectronicsshares center stage with the oil industryas a center of gravitywhen it comes to national security,global security, economic stability.
I mean, it is replete acrossevery fiber of society.
You know, when you talk aboutyou hear our CEO talk about itubiquitous compute, well,it touches everything.
So and when when you talk aboutthe military,
I would tell you, our vehicles,our weaponssystems are all microelectronics enabled.
Micro microchipsenable us to be more precise, more lethal,less weight, faster, fix a more accuratelocating system, betterand more reliable communications.
The list goes on and on.
I mean.
Well, and we're seeing that actuallyin the war in Ukraine right now.
Oh, absolutely.
Right.
I mean, it's amazing that the Ukraine'sbeen able to do what they've beenable to dobecause of microelectronics.
Lots of takeaways and lots of great thingsto learnabout by seeing how how that unfolds.
They're over there in Ukrainewith the conflict, with Russia.
So I have a question around that.
Do you think that really spurredon this chipact that we see that was recently passedand so why were so concernedabout getting the Chips Act passed?
So I knownot necessarily the Ukraine conflict.
No, but just in general, our dependency.
Of the Chips Act was was considerednecessary long before that.
But certainly when you step backand you look at the global imbalancethat we currentlyare experiencing across the ecosystem,you know, I think and andlet me read catch my answer.
So let's talk about national securityfor just a second.
Okay.
So I've been a studentof national security my entire career.
That's what we doas professional military officers.
But whenwhen you talk about national security,a lot of people want to immediatelymigrate to a discussionabout defenseand the role of the armed forces.
But I would tell you, in a countrylike ours, if you want to talk abouthow do you ensure that you protectour national security interest,there are a lot of thingsthat go into that, Darren.
It's good governance, the rule of law.
It's a proper and functioning economy.
It's having an effective academia,its health care,and of course, it isthe armed forces of the United States.
So what I would tell you is our doctors,our teachers are constructionworkers,firemen, police officers, intel engineers.
Big shout out to them, right. All right.
And just about almost all of ourprofessions across American societyall play a role in providingfor the national security this country.
We don't think about it like that,but I really. Don't.
I like that perspective.
But imagine an America that doesn'thave a good education systemor a good health care systemor a good law enforcement system.
Right.
Imagine an America like that that wouldthat woulddirectly impact our national security.
So when you talk about that, you got totalk about it in a more holistic way.
And so for me personally,you know what I think about the Chips Act.
If you share in what I just told you,then you'll understandthat just about every fiberof what it takes to providefor the national security of this countryrelies on microelectronics.
Yeah, it relies on microelectronicsvery heavilyin that lovely thing we call silicon.
I tell you what, I wish I would havegotten involved in this back 35 years ago.
It must have just been so neat to watch.
Oh, yeah, yeah.
Watch these amazing mindsand these engineerscome up withhow how they were able to do that.
I'm just I'm inspired by it, to be honest.
So now now when youwhen you talk about the Chips Act, right.
And this this incredible imbalancethat we have across the ecosystem, across,you know, our microelectronics industry,
I kind of look at this over a broadercontinuum, a continuum of time.
Right. This has amazing potential.
And it absolutely does have an impact onthe national security of our country.
And so much so we evenhad some of the leaders in the Departmentof Defense actually engaged with Congressabout the importance of the chipset.
So it's a very important, in my view,very important first step.
Okay.
This is not the be to how we redistributethis this this balanceof capacity and capabilityin the microelectronicsindustry.
I rolled up my sleeves and startedlearning about this and what I discoveredand I had I'm tell you right now,
I absolutely no ideathings are like this even a year ago.
But what I discovered is whatan incredibly integrated industry this is.
And youand I talked about this before, butone day your competitoris company X and the very next daythey're your partner.
Right.
And when you try to unpack thewhat I like to call the continuumor what we call thethe the core activitiesof the microelectronics industry,whether it's design or manufacturingor it's assembly testing and packaging,and who makes the equipmentand where the raw materials come from.
And where does the rare earth elementscome from?
When you start to when you start to unpackis that you start to realize whatan incredible mosaic of daily activitythis is and why it's so difficult.
Why it's so difficultto havethis very clear shaped pictureon all of the activity that takes place.
I mean, so and so these microchips changehands five and ten times, right?
Yeah.
So I'm glad you brought this up because.
Yeah, because what's interesting aboutthis whole thing isand you mentioned it,no one really understoodhow complex the supply chainis to build a computer right now.
Just telco grid hitbecause what COVID exposedwhen everyone needed a computerall of a suddenand then some factorieswere shut down in Malaysiabecause they had an outbreak of COVIDor a factory in Ireland,because there was an outbreak of COVIDor China or wherever it was.
All of a sudden, I can't ship a carbecause it doesn't have a chip in it.
Or you can and it sits in a parking lotuntil those ships come in.
Right, exactly.
So I think COVID really kind of exposedthis global supply chain.
How complex and fragile it really is.
Yeah, it's certainly
I mean, maybe certain segmentsof the industry in our societyknew that there was this this.
Very small, I think idea.
But I think very small.
And I think you're right that the pandemickind of exposed that, you know.
But so right now
I would tell you and exposed
I had no idea about the global imbalancethat we currently have.
Yeah.
What is it, 8% in the US,
And yeah, I've heard different numbers,but I think ballpark is we're talkingcome out of Southeast Asia.
And you know,that's fundamentally three countries,
China, South Korea and Taiwan and Taiwan.
Yeah.
When you when you start to learn aboutthat, you you quickly realize thatrebalancing the ecosystemof the global supply chainand returning capacityand capability to U.S.and friendly soil is absolutely tantamountto being able to rebalance what we have.
No industryshould have single points of failure.
Like I thinkthis microelectronics industrydefinitely has some areaswhere there is cause for concern.
But but I'll tell you, it's exciting,right?
And it's refreshingbecause what I've been observing is
I've beenobserving the ecosystem,the federal government, the defenseindustrial base, all of them are startingto recognize this problem.
You know, the CHIPS Act is is obviouslyrepresentative of people'srecognition that we had to do something.
And I also would tell you,you know, watching the otherthe big companies in this industrythat are now saying, hey, you know,we need to relook our business modeland where we have certain thingsdone across this continuum of of thatthat that microelectronicsecosystem that we have, we need to relookthat we're starting to see.
And I think the chip jacketkind of helped helped with this.
But we're starting to see
I know of six countries right nowthat have said they are going to beinvesting in fabs in the on on USsoil herein the in the next 8 to 10 years. So.
Well in one of those of course, is Intel.
Let's talk a little bit about Ohio,but not just Ohioand Silicon Heartland now,but Arizona and New Mexico.
It's amazing the amount offabs we're building right now.
Sure. Sure.
There are the investment that we put inand what it means to those economies.
You know, what it means to opportunitiesof young of young kidswho really want to havesome kind of a professionin the microelectronics industry.
Read the masticating capacityand capabilitiesin the United States of America gives.
You know, it's what you the Unitedthe United States is really birthupon is opportunity. Right.
And so to give them that opportunity,it's just another great,great thing about taking thisjust making this effortto read The Master Key,much of much of the microelectronicsindustry here in the U.S.and friendly so.
Well and let's talka little bit about Ohio.
Ohio, we're building two fabs rightnow, already cut.
Ground right back.
With a plan to build eight fabs.
Isn't that exciting? It's exciting.
Each fab is $15 billion.
That's a man.
That's a lot of money.
That's a big.
Moneybetween 12 and 15 billion and. Right.
And the number of jobsit's going to bring into the area,not just hired by Intel, but also.
Other.
Industries that are movingthere as well to support.
That whole community.
Right.
I mean, that I saw this Darren.
I saw this with military installations.
Okay. Oh, yeah.
A lot of times the the surrounding cityor community, you know, livedand breathed by what happenedon that military installation,the size of the population,the infrastructure that was there.
I absolutely see that.
A similar thing happening with with,you know, what's going to happenthere, the new silicon heartland like it.
This is this is really fascinatingthat it's come to this point
I guess that wemaybe we were lulled to sleep a little bitin as far as, you know, manufacturingin the United States.
But I think we're well,
I think I think we woke up.
Yeah, I would say I don't think anybodyever said, all right, here's the plan.
We're going to have a global economyand 80% of all the microelectronicsare going to come outof these three countries. So
I don't
I don't think that was ever the intent.
And so which brings me to a point.
And I even heard our CEO kind ofsay it in Eastern.
We're a bit in a race against time.
That's why the Chips Actwas so fundamentally important.
Right, was to have this infusionof capital investment, to be able to startto build these fabs and to re domesticateour capacity in the United Stateson a shorter timelinethan what would otherwise have been.
You know, who knows how long it would havetaken this to build the size of the fabor fabs that you just described therein in the silicon heartland in Ohio?
Yeah.
In fact, what's really coolabout those fabs going in,they are 18 angstrom fabsthat are going in.
So those that don'tknow, that's 1.8 nanometers.
Those are the nodes that are going inand 1.8 nanometers that's really small.
To put that into perspective,for a lot of people,the corona virus is 72 nanometers wideand we're doing transistors at 1.8nanometers.
It's like fabs that's that's mind blowing.
That's unimaginable.
I know.
It's so for those of youthat think that, you know, Intelis, is an old non innovative company,you don't know what you're talking about.
Yeah I tell you what,
I never thought that for 1/2.
You know, there are some people that do
I it's it's amazingthe stuff that the stuff that we doevery day.
Yeah so there and therein lies a gooda good point though isbeing ableor having people understand the fullcapacity and thefull capabilities of a company like Intel.
You know, we describe it as this iconicfounder of microelectronics,but what they do today is it'sjust as impressive as what we used to do,you know, 30 plus years agoat the beginning of this thisthe building of the of theof the microelectronics industry.
So, you know,it's it's really important for peopleto step back and take a look at that.
I mean, what is we have 20,000 softwareand hardware engineers in this company.
No, just just 20.
Well, software. Okay, just software.
If you start adding our hardwareand silicon engineers.
Yeah, it'sabsolutely it's absolutely amazing.
And you know, I see that and I hear that.
And I think to myself, yeah.
Do people realizejust how not just how important that isto, you know, the country,but to the world, right.
To the world and to, you know,those things that I spoke about earlier,our national security, global securityand stability of our markets,that is so fundamentally important.
That's why I'm so inspired and why I'mso happy to have the opportunityto to, you know, be on the Intel teamand hopefully contribute.
Oh, believe me,we're so glad to have you on teambecause you bring in such a newperspective that's helping usto sell at a higher level,to really talk about bigger picture thingsand to drive new ideasinto our technology. So,you know, Thomas, welcome to the team.
It's been wonderful. Yeah. What?
What a treat.
I tell you what.
I tell you what you know, whenwhen after you have a careerlike I did in the military.
And you want to joinyou want to join another teamand you want to keep servingand you want to keep contributing.
I tell you, I couldn'thave asked for a better opportunity,a better next chapter right in my life,and to be able to do something like thisand and serve with everybody.
I'm just so inspired by the leadersthat I get to work with. Wow.
I mean.
Yeah, there's some really goodwe got some really good guys.
Really good leadership.
And you know what I feel like.
So me being the digital immigranthere, I like, I like the cultureand I like the people and the patiencethey show me when I scratch my head.
When you start talking about Nanothis and see on that, you know, I really
I really appreciate everybody, you know,with open arms and coming to terms.
Let me let me teach you this.
And it's really it's really a great it'sreally it's really greatfrom from beginning to end.
I'm just really fortunateto be able to do this.
I couldn't have ever imagined havinga better a better opportunity than this.
So thanks.
Thanks.
A thanks to all the leadersand everybody there.
Well, hey, Thomas,thanks for coming on the show today.
It's been very insightful andthanks again.
I'm sure we'll have you back on inin six months or a year.
And you're going to be like a totalsilicon expert.
You'll be here,you'll be design in chips by that time.
Yeah. Hey, Darren.
So before we before we kick off,
I did what I didn't want to makejust a final comment,if that's okay with you. Yeah, yeah.
You know what the other thing I, I,you know, there's there's thisthis is frontmicroelectronics is front and centerright now in a lot of discussions.
Right.
And I would tell you,one of the things I find really refreshingand is that it is front and centerin a lot of different forums, in defenseforums.
Right,in discussions about national security.
And sothat really makes that really makes meit makes me feel good, right,to know that more and more every daywe start to seenot just the country's leadership, butall of the all of the professionsrecognize just how fundamentally importantthe microelectronic industryis to all of these professions.
I mean, think about think about somethinglike telemedicine.
Think about think about, you know,
I have a daughter in college, right?
My daughter during the pandemic,she continued to attend college.
How did she do that?
I tell you what, she did it virtuallythrough through her computer.
So, I mean, when you when you step backand you think about all of that.
Well, what I'm really I'm really refreshedand I'm really happy about is,you know,and I'm really assured thatthat everybody isis has really put their armsaround this thing and recognizejust how fundamentally importantthat it is to to our countryand to the world that you havea functioningecosystemin the microelectronics industry.
I tell you, that is tantamount tantamountto our national securityand global security.
And so I feel pretty good as I'm learningmore and more, but I feel pretty goodwhat I what I've seen a lot of peoplea lot of people do to recognizeand to take actionwhen it comesto the microelectronics industry.
So I really wanted tojust kind of leave the conversationon that point that we should feel goodabout what everybody is trying to do.
Oh, no, I totally agree.
I see a bright horizon aheadand some really, really coolnew innovation that's going to drivea lot of changes in in the world.
And we get the cool thing, Thomas.
We get to be part of it.
Oh, no, I know. Isn't that awesome?
I'm I just.
Yeah, I'm pinching myself, you know,it's a great it's great feeling.
So, so sure.
Thank you.
Just thank you from the bottom of my heartfor having me.
And not just for this podcast,but the the know the numerous thanthe numerous times that I've been ableto attend some of your training eventsor you just coach me on the side.
I really appreciate that.
It means a lot to me.
Well, like I said, thank you for comingon the show and welcome to the team.
We're glad you'rehere. You. You only make us better. Sothank you for listening to Embracing
Digital Transformation today.
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