>> Announcer: From around the globe. >> (upbeat music) It's the cube with digital coverage of IBM Think 2021 brought to you by IBM. >> Hi, welcome back everyone to the Cubes coverage of IBM Think 2021 virtual. I'm John Furrier, host of the cube. Got a great guest, Rick Smith, CTO of IBM Anthem client team. Rick. Great to see you. Thanks for coming on the cube. >> Yeah. Thank you, John. Nice to see you as well, virtually. >> First introduce yourself, what you do there, what's going on on your plate these days, honestly, COVID, we're coming out of it soon. Take a minute to introduce yourself. >> Yeah, so I've got about 15 years in the seat with Anthem. Previous to that I worked at Pretty university as the CTO in Indiana. So haven't really left, but started working with Anthem as a technical architect, eventually moved into the CTO role and have been part of, you know, a long journey with them that started at a managed services agreement in 2005. And here we are in 2021. So I've been through a lot of changes they've made to improve themselves and move into digitalization. And certainly the changes we've made too to accommodate that as we went through the years. >> Awesome. Well, thanks for that setup. I really want to dig into this expansion of project Cirrus. You guys have had a multi decade partnership with IBM and then last year you launched this expansion, project Cirrus. Can you describe this project? And what does it mean? And this new term I've heard, enterprise hybrid cloud as a service. Sounds very interesting. >> Yeah. So that's my term. I'm hoping you made it patent or something like that. But the reality is you hear our CEO talk and say that 75% of corporate workloads are not in the cloud yet. Right? And Anthem is no different, right? So they starting to go into cloud and those kinds of things. But they said to us, you know, "Hey, we've got a long series of excellence with you from a delivery perspective, reliability perspective is kind of the bedrock of what we do, but we don't want to be in the data center business, right? And we want to transform and move to cloud. We want to become a more of an AI company and these kinds of things. And we said, well, we think we can actually put together a program... Excuse me, program for you to allow you to do that, right? And so we formed something called project Cirrus which is really an expansion of our partnership. So if I look back, John, we did about 80% of the end-to-end delivery for Anthem from a managed services perspective. In other words, they did a few pieces and we said, we think we could improve that if we had the entire 100%. And so project Cirrus was about, you know, extending from 80% to 100%. It was also about taking a series of applications that were important to them and actually say, we'll actually take them on and transform them 100% all the way to cloud and take advantage of new things. It was about a commitment to closing those data centers, right? So they have five strategic data centers. And about 24,000 hosts that we said we will actually commit to getting those, you know, getting you out of the data centers and moving those to either IBM cloud or close to IBM cloud if you will, I'll come back to that in a minute. And we'll also build something called ATEC, Anthem Technology Excellent Center, if you will. And that's near and dear to my heart because that's sort of my baby, right? So it's a transformation engine and we can talk a little bit more about that in a second. But he said the key to this for us is that, if we look at our trend line, John, over the number of years with Anthem, when we started about 2007 looking at this data, we've grown the number of hosts. We've had to manage, over 600% during that time period. But we've driven down high priority incidents by over 90%. So think about that. You know, this is really important for them to have resiliency and stability in their organization. You know, huge acceleration number of hosts, but drive down the a P zero incidents, if you will. And they said, we need to maintain that and continue to improve upon that. Right? >> Yeah. >> So Cirrus was a commitment to take that further, right? Start driving AAN, AI into the operations, if you will in everything that we do. So Anthem is transforming to do AI and machine learning for their members. We're committed to transforming and doing the same kind of thing on our operational side if you will. >> Yeah, that's awesome. And I think one of the things that's interesting that jumps out at me just as you're talking, first of all super exciting that project you got out there, a lot going on to unpack, but let's do that. I mean, what I hear you saying which is getting me kind of all triggered in a good way is you got transformation going on and innovation same time. You're innovating with this new enterprise hybrid clouds of service concept. You take in more efficiency, you're doing the classic transformational things, making things more efficient, all that good stuff for agility, but it's actually innovative. So this idea of an enterprise hybrid cloud as a service is pretty innovative because now you're talking about things with AI and scale that come into play, right? So you got the setup, you got it moving into being innovative but scales right there. What is this enterprise hybrid cloud as a service? Because is it just agility, is it the AI piece? Where do you see that going? >> Yeah, that's a great question. Right? And you're a great stuff, man, Johnson. (Smith laughs) So again, Anthem's not ready to move all of their workload to cloud, right? And we recognize (indistinct)is going to be out of the data center business. So how can we take non traditional workloads, right? Get them close to cloud, right? Get them very close to cloud, get us out of the managing the data center and actually allow us to move seamlessly from non traditional workloads into cloud. And so what we did was something we think is very innovative. This is the enterprise hybrid cloud piece for me, right? 'Cause normally hybrid cloud says, you have a client data center location and you have cloud. We marry the two together. We said, you're not going to have a data center location anymore. We're going to have our data centers, you know, IBM cloud. And we're actually going to put some dedicated space right next to cloud. And when I say next to cloud, I literally mean within a few feet. And we're going to bring these non traditional workloads there, we're going to take the network operation brain and bring it there. And we're going to allow you then to basically be able to move seamlessly from that to directly into cloud and improve operations at the same time. There's other a side benefit to this too. The other unintended sort of benefit is that what any organization, right? That you find stuff in the data center that hasn't been looked at for a long period of time, right? Application teams haven't looked at it, et cetera, et cetera. We're literally touching every single host. Right? So this gives us an opportunity to also work with our teams and find things that really can just be thrown away. Right? And this is great because we're actually making them more efficient, optimizing the cost structures as we go about it. >> Yeah. I mean the operational model changes me. You mentioned that just that whole point about you're kind of doing some discovery on apps, this becomes kind of sets the table for AI ops which is just code word for day two operations or full cloud native environments, which now you're seeing cloud native include legacy. Yes. Because you can put containers into the mix and you can then create these integration points that you don't have to kind of get rid of the old to bring in the new. So the dimension of what's going on here is pretty interesting, right? When you start thinking about that, "Okay. I can modernize the same time as connect two existing systems." >> That's exactly right. And we put the things very close to one another. And if there's any concerns over data security compliance or healthcare regulated industry, of course, we can have the workloads located in the best location to ensure that security is in place. Right? So that's what's beautiful about it, right? We can kind of hit every layer that's possible from having it just as secure as completely privatized to going directly over to public cloud or connecting the two together as we go along. >> Well, you're definitely a pioneer. I love that enterprise hybrid cloud as a service. I think that's something that's relevant. We're living in a hybrid world. I mean, the cube, we used to go to events now it's virtual events, but when now the events come back, they're hybrid events. Every company is experiencing this phenomenon on hybrid something, not just technology. The ops got to adapt, so super cool. You mentioned something that was your baby. I want to get back to you. And you said you want to talk about, I want to just bring that up. This Anthem technology excellence center is your baby. ATech I think you said for short. >> Yeah. We call it Atech for short. And really, John, we said that it's got to be more than just taking that other 20% that we don't run today. And we're doing some very innovative things moving non-traditional workloads. Like I said, all that kind of stuff was very cool, right? But we need a transformation engine, right? And we need the ability to transform skills. Like upscale the people at Anthem as well as IBM, right there on the account team, it's a big account. We want to think of new ways to work together. Right? Traditional managed services is like, what? Someone cuts a ticket and says, "Give me X by her seat." Right? That's the traditional model. And we said, that's not good enough. We need to collaborate better together. And we are willing to redefining how we form our teams to work with Anthem. Right? So if we want to form, for example, a product ownership team that builds it, runs it, maintains it. And that team has Anthem plus IBM together. we're going to use ATEC as a vehicle to design that and drive it and make sure they have all the skills they need within that group to do that. Right? That's new ways of working together. And it's also to drive things like site reliability engineering, right? Cloud service management operations, make sure that Anthem has the right training, make sure we work together on these kinds of things. So it's really kind of an exciting thing. And it's intended to be a co-created model, right? So we actually work with the Anthem, we co-create using IBM garage methodologies and then the idea is to coast staff it, but it's tended to be a thin layer of world-class engineering. That's really the whole point of it. And yeah, I'm super excited about that. As you move forward, yeah. >> While you're speaking our language, the cube we'd love the co-creation we do with media. It's always fun to create content together. And sometimes in real time put it together like we're doing now. And it creates a bond. I mean, I got to bring this up because this is becoming more and more obvious. And now mainstream, the notion of co-creation, the notion of ecosystems and ecosystems really meaning network effect and integrating with other parties, right? Companies and our systems. If you look at the underlying business model as a systems management software bottle. Okay. So with that, these ecosystems, the network effect. If you build together, you stay together. I mean, this is a different mindset. It's different dynamic. It's a different relationship that companies are now looking for in what used to be called suppliers. Are you supplying something? Are you building together? Right. So this seems to be the theme. Can you expand on this new trend? >> Right. And get away from the strict racing, this person does, this person does that. Instead, we build a team together that has all the skills necessary and that team owns a product life cycle. They build it, run it and maintain it. And that's changing the way we deliver services from IBM perspective significantly, right? Because that's not our traditional model but that's what we're doing. So we're really out in the front end, on the front edge if you will. Changing that model completely. And it's one of the most exciting things for me, you know, as far as going forward. >> You know, this whole idea of partnerships has always kind of been there but now it gets modernized and uplifted if you will, to a new level. And it really is about watching each other's backs too when you have that kind of... 'Cause we're talking about like pushing the envelope on probably the biggest confluence of tech trends I've ever seen in my career. And I've seen many big waves, you know, from the different revolutions and inflection points. Now it's sort of all coming together, right? At scale too, it's happening very fast. I mean, the change over is happening in years that once you took decades before. So it's really is a team approach. >> Yeah. There's no doubt about it. And I see it every day in the work we're doing. And it's like, for example, at Atech where we're working with the data scientists at the Anthem, we're thinking of new ways to build things they've never done before. We're hoping to enable their science, enable the things they want to do for digitization standpoint, the same token I'm taking, you know, a data scientist and putting them on the operation side too. Right? So we're doing both these kinds of things together. And really I didn't say this before, but this whole thing is about driving automation, right? Driving down, no human touch, soft service, automation. That is kind of been the linchpin of this. And I also want to say John, that doing this all during a pandemic, you know, we signed our new agreement together with them at a quarter, at the end of March in 2020. And we went live in August 1st with all the changes, the extra 20% capacity to over 300 plus applications completely, started Atech from co-creation in a pandemic. And we both agreed as a company, I give great credit to our client and to the numbers involved that everyone set up front and during March. The pandemic's not an excuse to get anything done. So, we're going to go forward and make it happen. That's probably the thing I'm most proud about. That was just... It's crazy when you think of how big the project was and do pull it off during a pandemic. >> Yeah. There's going to be two sides of the street and this one, this pandemics over the ones who made it through and refactored and or innovated. Cause it's not just about being and having a tale, it's about taking advantage of the situation and the ones who didn't do anything. Whether they were in the cloud or not, that's not to me. That's not the issue of you're in the cloud you had an advantage. >> It's not. Right. >> But there's going to be two sides of the streets. And I think the one thing that the pandemic has shown us and I'd love to get your reaction as a final comment here is that when you pull back when the pandemic, it showed all the scabs, it shows everything. And you can see what's obvious and it becomes a forcing function. Necessity's the mother of all invention as expression goes so you can see what's worth doubling down on and you can see the productivity gains and that becomes clear. >> Yeah. Yeah. And I think there's good and bad with everything, right? Pros and cons, like you said, and you know, one of the cons I think is the having to schedule all interactions is definitely a con, right? Because when you spend time not only with the client virtually but in person, you do get the advantage of having, you know, chalk talks and things like that. They're not scheduled. Right? So that's definitely one of the cons side, but one of the pro side is it did provide some focus, right? Kind of extreme focus and on what's important and allowed us to, you know, I think dove some bonds with the Anthem leadership team and the application teams doing it virtually over cameras like this that maybe happen at a larger scale than they might have normally been because the pandemic kind of allowed us to do that and made that happen. >> Great stuff, Rick, great insight. Great to have you on the cube as always. Great to talk tech, talk business, talk about the transformation and innovation and the cloud scale. Thanks for coming on Rick Smith, CTO of the IBM Anthem client team. Thanks for coming on the cube. >> You're welcome. Thanks John. >> Okay. Cube coverage of IBM Think 2021. I'm John. For your host of the cube. Thanks for watching. (soft music) (upbeat music)

(upbeat music) >> Announcer: From around the globe. It's the cube with digital coverage of IBM Think 2021 brought to you by IBM. >> Hi, welcome back everyone to the Cubes coverage of IBM Think 2021 virtual. I'm John Furrier, host of the cube. Got a great guest, Rick Smith, CTO of IBM Anthem client team. Rick. Great to see you. Thanks for coming on the cube. >> Yeah. Thank you, John. Nice to see you as well, virtually. >> First introduce yourself, what you do there, what's going on on your plate these days, honestly, COVID, we're coming out of it soon. Take a minute to introduce yourself. >> Yeah, so I've got about 15 years in the seat with Anthem. Previous to that I worked at Pretty university as the CTO in Indiana. So haven't really left, but started working with Anthem as a technical architect, eventually moved into the CTO role and have been part of, you know, a long journey with them that started at a managed services agreement in 2005. And here we are in 2021. So I've been through a lot of changes they've made to improve themselves and move into digitalization. And certainly the changes we've made too to accommodate that as we went through the years. >> Awesome. Well, thanks for that setup. I really want to dig into this expansion of project Sirius. You guys have had a multi decade partnership with IBM and then last year you launched this expansion, project Sirus. Can you describe this project? And what does it mean? And this new term I've heard, enterprise hybrid cloud as a service. Sounds very interesting. >> Yeah. So that's my term. I'm hoping you made it patent or something like that. But the reality is you hear our CEO talk and say that 75% of corporate workloads are not in the cloud yet. Right? And Anthem is no different, right? So they starting to go into cloud and those kinds of things. But they said to us, you know, "Hey, we've got a long series of excellence with you from a delivery perspective, reliability perspective is kind of the bedrock of what we do, but we don't want to be in the data center business, right? And we want to transform and move to cloud. We want to become a more of an AI company and these kinds of things. And we said, well, we think we can actually put together a program... Excuse me, program for you to allow you to do that, right? And so we formed something called project Sirius which is really an expansion of our partnership. So if I look back, John, we did about 80% of the end-to-end delivery for Anthem from a managed services perspective. In other words, they did a few pieces and we said, we think we could improve that if we had the entire 100%. And so project Sirius was about, you know, extending from 80% to 100%. It was also about taking a series of applications that were important to them and actually say, we'll actually take them on and transform them 100% all the way to cloud and take advantage of new things. It was about a commitment to closing those data centers, right? So they have five strategic data centers. And about 24,000 hosts that we said we will actually commit to getting those, you know, getting you out of the data centers and moving those to either IBM cloud or close to IBM cloud if you will, I'll come back to that in a minute. And we'll also build something called ATEC, Anthem Technology Excellent Center, if you will. And that's near and dear to my heart because that's sort of my baby, right? So it's a transformation engine and we can talk a little bit more about that in a second. But he said the key to this for us is that, if we look at our trend line, John, over the number of years with Anthem, when we started about 2007 looking at this data, we've grown the number of hosts. We've had to manage, over 600% during that time period. But we've driven down high priority incidents by over 90%. So think about that. You know, this is really important for them to have resiliency and stability in their organization. You know, huge acceleration number of hosts, but drive down the a P zero incidents, if you will. And they said, we need to maintain that and continue to improve upon that. Right? >> Yeah. >> So Sirius was a commitment to take that further, right? Start driving AAN, AI into the operations, if you will in everything that we do. So Anthem is transforming to do AI and machine learning for their members. We're committed to transforming and doing the same kind of thing on our operational side if you will. >> Yeah, that's awesome. And I think one of the things that's interesting that jumps out at me just as you're talking, first of all super exciting that project you got out there, a lot going on to unpack, but let's do that. I mean, what I hear you saying which is getting me kind of all triggered in a good way is you got transformation going on and innovation same time. You're innovating with this new enterprise hybrid clouds of service concept. You take in more efficiency, you're doing the classic transformational things, making things more efficient, all that good stuff for agility, but it's actually innovative. So this idea of an enterprise hybrid cloud as a service is pretty innovative because now you're talking about things with AI and scale that come into play, right? So you got the setup, you got it moving into being innovative but scales right there. What is this enterprise hybrid cloud as a service? Because is it just agility, is it the AI piece? Where do you see that going? >> Yeah, that's a great question. Right? And you're a great stuff, man, Johnson. (Smith laughs) So again, Anthem's not ready to move all of their workload to cloud, right? And we recognize (indistinct)is going to be out of the data center business. So how can we take non traditional workloads, right? Get them close to cloud, right? Get them very close to cloud, get us out of the managing the data center and actually allow us to move seamlessly from non traditional workloads into cloud. And so what we did was something we think is very innovative. This is the enterprise hybrid cloud piece for me, right? 'Cause normally hybrid cloud says, you have a client data center location and you have cloud. We marry the two together. We said, you're not going to have a data center location anymore. We're going to have our data centers, you know, IBM cloud. And we're actually going to put some dedicated space right next to cloud. And when I say next to cloud, I literally mean within a few feet. And we're going to bring these non traditional workloads there, we're going to take the network operation brain and bring it there. And we're going to allow you then to basically be able to move seamlessly from that to directly into cloud and improve operations at the same time. There's other a side benefit to this too. The other unintended sort of benefit is that what any organization, right? That you find stuff in the data center that hasn't been looked at for a long period of time, right? Application teams haven't looked at it, et cetera, et cetera. We're literally touching every single host. Right? So this gives us an opportunity to also work with our teams and find things that really can just be thrown away. Right? And this is great because we're actually making them more efficient, optimizing the cost structures as we go about it. >> Yeah. I mean the operational model changes me. You mentioned that just that whole point about you're kind of doing some discovery on apps, this becomes kind of sets the table for AI ops which is just code word for day two operations or full cloud native environments, which now you're seeing cloud native include legacy. Yes. Because you can put containers into the mix and you can then create these integration points that you don't have to kind of get rid of the old to bring in the new. So the dimension of what's going on here is pretty interesting, right? When you start thinking about that, "Okay. I can modernize the same time as connect two existing systems." >> That's exactly right. And we put the things very close to one another. And if there's any concerns over data security compliance or healthcare regulated industry, of course, we can have the workloads located in the best location to ensure that security is in place. Right? So that's what's beautiful about it, right? We can kind of hit every layer that's possible from having it just as secure as completely privatized to going directly over to public cloud or connecting the two together as we go along. >> Well, you're definitely a pioneer. I love that enterprise hybrid cloud as a service. I think that's something that's relevant. We're living in a hybrid world. I mean, the cube, we used to go to events now it's virtual events, but when now the events come back, they're hybrid events. Every company is experiencing this phenomenon on hybrid something, not just technology. The ops got to adapt, so super cool. You mentioned something that was your baby. I want to get back to you. And you said you want to talk about, I want to just bring that up. This Anthem technology excellence center is your baby. ATech I think you said for short. >> Yeah. We call it Atech for short. And really, John, we said that it's got to be more than just taking that other 20% that we don't run today. And we're doing some very innovative things moving non-traditional workloads. Like I said, all that kind of stuff was very cool, right? But we need a transformation engine, right? And we need the ability to transform skills. Like upscale the people at Anthem as well as IBM, right there on the account team, it's a big account. We want to think of new ways to work together. Right? Traditional managed services is like, what? Someone cuts a ticket and says, "Give me X by her seat." Right? That's the traditional model. And we said, that's not good enough. We need to collaborate better together. And we are willing to redefining how we form our teams to work with Anthem. Right? So if we want to form, for example, a product ownership team that builds it, runs it, maintains it. And that team has Anthem plus IBM together. we're going to use ATEC as a vehicle to design that and drive it and make sure they have all the skills they need within that group to do that. Right? That's new ways of working together. And it's also to drive things like site reliability engineering, right? Cloud service management operations, make sure that Anthem has the right training, make sure we work together on these kinds of things. So it's really kind of an exciting thing. And it's intended to be a co-created model, right? So we actually work with the Anthem, we co-create using IBM garage methodologies and then the idea is to coast staff it, but it's tended to be a thin layer of world-class engineering. That's really the whole point of it. And yeah, I'm super excited about that. As you move forward, yeah. >> While you're speaking our language, the cube we'd love the co-creation we do with media. It's always fun to create content together. And sometimes in real time put it together like we're doing now. And it creates a bond. I mean, I got to bring this up because this is becoming more and more obvious. And now mainstream, the notion of co-creation, the notion of ecosystems and ecosystems really meaning network effect and integrating with other parties, right? Companies and our systems. If you look at the underlying business model as a systems management software bottle. Okay. So with that, these ecosystems, the network effect. If you build together, you stay together. I mean, this is a different mindset. It's different dynamic. It's a different relationship that companies are now looking for in what used to be called suppliers. Are you supplying something? Are you building together? Right. So this seems to be the theme. Can you expand on this new trend? >> Right. And get away from the strict racing, this person does, this person does that. Instead, we build a team together that has all the skills necessary and that team owns a product life cycle. They build it, run it and maintain it. And that's changing the way we deliver services from IBM perspective significantly, right? Because that's not our traditional model but that's what we're doing. So we're really out in the front end, on the front edge if you will. Changing that model completely. And it's one of the most exciting things for me, you know, as far as going forward. >> You know, this whole idea of partnerships has always kind of been there but now it gets modernized and uplifted if you will, to a new level. And it really is about watching each other's backs too when you have that kind of... 'Cause we're talking about like pushing the envelope on probably the biggest confluence of tech trends I've ever seen in my career. And I've seen many big waves, you know, from the different revolutions and inflection points. Now it's sort of all coming together, right? At scale too, it's happening very fast. I mean, the change over is happening in years that once you took decades before. So it's really is a team approach. >> Yeah. There's no doubt about it. And I see it every day in the work we're doing. And it's like, for example, at Atech where we're working with the data scientists at the Anthem, we're thinking of new ways to build things they've never done before. We're hoping to enable their science, enable the things they want to do for digitization standpoint, the same token I'm taking, you know, a data scientist and putting them on the operation side too. Right? So we're doing both these kinds of things together. And really I didn't say this before, but this whole thing is about driving automation, right? Driving down, no human touch, soft service, automation. That is kind of been the linchpin of this. And I also want to say John, that doing this all during a pandemic, you know, we signed our new agreement together with them at a quarter, at the end of March in 2020. And we went live in August 1st with all the changes, the extra 20% capacity to over 300 plus applications completely, started Atech from co-creation in a pandemic. And we both agreed as a company, I give great credit to our client and to the numbers involved that everyone set up front and during March. The pandemic's not an excuse to get anything done. So, we're going to go forward and make it happen. That's probably the thing I'm most proud about. That was just... It's crazy when you think of how big the project was and do pull it off during a pandemic. >> Yeah. There's going to be two sides of the street and this one, this pandemics over the ones who made it through and refactored and or innovated. Cause it's not just about being and having a tale, it's about taking advantage of the situation and the ones who didn't do anything. Whether they were in the cloud or not, that's not to me. That's not the issue of you're in the cloud you had an advantage. >> It's not. Right. >> But there's going to be two sides of the streets. And I think the one thing that the pandemic has shown us and I'd love to get your reaction as a final comment here is that when you pull back when the pandemic, it showed all the scabs, it shows everything. And you can see what's obvious and it becomes a forcing function. Necessity's the mother of all invention as expression goes so you can see what's worth doubling down on and you can see the productivity gains and that becomes clear. >> Yeah. Yeah. And I think there's good and bad with everything, right? Pros and cons, like you said, and you know, one of the cons I think is the having to schedule all interactions is definitely a con, right? Because when you spend time not only with the client virtually but in person, you do get the advantage of having, you know, chalk talks and things like that. They're not scheduled. Right? So that's definitely one of the cons side, but one of the pro side is it did provide some focus, right? Kind of extreme focus and on what's important and allowed us to, you know, I think dove some bonds with the Anthem leadership team and the application teams doing it virtually over cameras like this that maybe happen at a larger scale than they might have normally been because the pandemic kind of allowed us to do that and made that happen. >> Great stuff, Rick, great insight. Great to have you on the cube as always. Great to talk tech, talk business, talk about the transformation and innovation and the cloud scale. Thanks for coming on Rick Smith, CTO of the IBM Anthem client team. Thanks for coming on the cube. >> You're welcome. Thanks John. >> Okay. Cube coverage of IBM Think 2021. I'm John. For your host of the cube. Thanks for watching. (soft music) (upbeat music)