>> live from San Francisco, celebrating 10 years of high tech coverage. It's the Cube covering Veum, World 2019 brought to you by the M Wear and its ecosystem partners. >> Welcome back to San Francisco. Day three of our coverage here on the Cube Of'em world 2019. I'm John Wall's Glad to have you here aboard for our continuing coverage here Day Volonte is also joining me, as is the sartorially resplendent Eric Herzog, cm of and vice president. Global storage channels that IBM storage. Eric, good to see you and love the shirt. Very >> nice. Thank you. Well, always have a wine shirts when I'm on the Cube >> I love in a long time Cuba to we might say, I'm sure he's got the record. Yeah, might pay. Well, >> you and pattern, neck and neck. We'll go to >> the vault. And well, >> since Pat used to be my boss, you know, couch out a path. >> Well, okay. Let the little show what IBM think. Maybe. Well, that's OK. Let's just start off a big picture. We're in all this, you know. Hybrid. Multilingual. This discussion went on this week. Obviously, just your thoughts about general trends and where the business is going now supposed to wear? Maybe we're 23 years ago. Well, the >> good thing is for IBM storage, and we actually came to your partner and titty wiki Bond when our new general manager, Ed Walsh, joined. And we came and we saw Dave and John at the old office are at your offices, and we did a pitch about hybrid multi cloud. Remember that gave us some feedback of how to create a new slide. So we created a slide based on Dave's input, and we were doing that two and 1/2 years ago. So we're running around telling the storage analyst Storage Press about hybrid multi cloud based on IBM storage. How weaken transparently move data, things we do with backup, Of course. An archive. You've got about 450 small and medium cloud providers. Their backup is a service engine. Is our spectrum protect? And so we talked about that. So Dave helped us craft the slide to make it better, because he said, we left a couple things >> out that Eric >> owes you. There were a few other analysts I'm sure you talked to and got input, but but us really were the first toe to combine those things in your in your marketing presentations. But >> let's I'd love to get >> an update on the business. Yes, help people understand the IBM storage organization. You guys created the storage business, you know, years and years and years ago. It's a it's a you know you've got your core business, which is column arms dealers. But there's a lot of Regent IBM, the Cloud Division. You've got the service's division, but so help us understand this sort of organizational structure. So >> the IBM story division's part of IBM Systems, which includes both the mainframe products Z and the Power Server entities. So it's a server in storage division. Um, the Easy guys in particular, have a lots of software that they sell and not just mainframe. So they have a very, very large software business, as do we. As you know, from looking at people that do the numbers, We're the second largest storage software company in the world, and the bulk of that software's not running on IBM gear. So, for example, spectrum protect will back up anyone's array spectrum scale and our IBM Cloud Object storage are sold this software only software defined as the spectrum virtualized. You could basically create a J. Bader Jabo after your favorite distributor or reseller and create your honor. Rates are software, but the all of the infrastructure would actually not be ours, not branded by us. And you call us for tech support for the software side. But if you had a bad power supplier fan, you'd have to call, you know, the reseller distributor said this very robust storage software business. Obviously you make sure that was compatible with the other server elements of IBM systems. But the bulk of our storage is actually sitting connect to some server that doesn't have an IBM logo on it. So that's the bulk of our business connected to Intel servers of all types that used to include, of course, IBM Intel Server division, which was sold off to Lenovo. So we still have a very robust business in the array space that has nothing to do with working on a power machine are working on a Z machine, although we clearly worked very heavily with them and have a number of things going with him, including something that's coming very shortly in the middle of September on some new high end products that we're going to dio >> went 90 Sea Counts All this stuff. Do they >> count to give IBM credit for all the storage that lives inside of the IBM Cloud? Do you get you get credit for that or >> not get credit for that? So when they count our number, it's only the systems that we sell and the storage software that we sell. So if you look at if we were a standalone company, which would include support service made everything, some of which we don't get credit for, right, the support and service is a different entity at IBM that does that, UM, the service's group, the tech support that all goes to someone else. We don't have a new credit >> so hypothetical I don't I don't think this is the case, but let's say hypothetically, if pure storage sold an array into IBM Cloud, they would get credit for it. But if you're array and I'm sure this happens is inside of the IBM, you don't get credit for it. >> That's true interesting, so it's somewhat undercounts. Part of that is the >> way we internally count because we're selling it to ourselves. >> But that's it. >> It's not. It's more of an accounting thing, but it's different when we sell the anybody else. So, for example, we sell the hundreds of cloud providers who in theory compete with the IBM Cloud Division >> to you Get credit for that. You get credit for your own away. That's way work. But if we were standing >> on coming for, say, government, we were Zog in store and I bought the company away, we would be about a $6.3 billion standalone storage software company. That's what we would be if we were all in because support service manes. If we were our own company with our own right legal entity, just like net app or the other guys, we'd be Stanley would be in that, you know, low $6 billion range, counting everything all in. When we do report publicly, we only report our storage system because we don't report our storage software business. And as you notice a few times, our CFO has made comments. If we did count, the storage software visit would be ex, and he's publicly stated that price at least two times. Since I've been an idea when he talks about the software on, but legally we only talk about IBM storage systems. When he publicly state our numbers out onto Wall Street, that's all >> we publicly report. So, um, you're like, you're like a walking sheet of knowledge here, but I wonder if you could take the audience through the portfolio. Oh, it's vast. How should we think about it? And the names have changed. You talk about, you know, 250 a raise, whatever it is the old sand volume control. And now it's a spectrum virtualized, >> right? So take us to the portfolio. What's the current? It's free straight for. >> We have really three elements in the portfolio, all built around, if you will, solution plays. But the three real elements in the portfolio our storage arrays, storage systems, we have entry mid range and high end, just like our competitors do. We lead with all flash, but we still sell hybrid and obviously, for backup, an archive. We still sell all hard drive right for those workloads. So and we have filed blocking object just like most other guys do, Um, for an array, then we have a business built around software, and we have two key elements. Their software defined storage, and we saw that software completely stand alone. It happens, too, by the way, be embedded on the arrays. So, for example, Dave, you mentioned Spectrum virtualized that ship's on flash systems and store wise. But if you don't want our raise, we will sell you just spectrum virtualized alone for block spectrum scale for Big Big Data A. I file Workloads and IBM caught object storage, which could all of them could be bought on an array. But they also could be bought. Itjust Standalone component. Yes, there's a software so part of the advantage we feel that delivers. It's some of the people that have software defined storage, that air raid guys. It's not the same software, so for us, it's easier for us to support and service. It's easier for a stack developing have leading it. Features is not running two different pieces of software running, one that happens to have a software on Lee version or an array embedded version. So we've got that, and then the third is around modern data protection, and that's really it. So a modern data protection portfolio built around spectrum, protect and Protect Plus and some other elements. A software to find storage where we sell the software only, and then arrays. That's it. It's really three things and not show. Now they're all kinds components underneath the hood. But what we really do is we sell. We don't really run around and talk about off last race. We talk about hybrid multi cloud. Now all of our flash raise and a lot of our software defined storage will automatically tear data out, too. Hybrid multi cloud configurations. We just So we lead with that same thing. We have one around cyber resiliency. Now, the one thing that spans the whole portfolio of cyber resiliency way have cyber rebellion see and a raise. We have some softer on the mainframe called Safeguarded Copy that creates immutable copies and has extra extra security for the management rights. You've got management control, and if you have a malware ransomware attack, you couldn't recover to these known good copies. So that's a piece of software that we sell on the mainframe on >> how much growth have you seen in that in? Because he's never reveals if you've got it resonating pervasive, right, Pervasive. So >> we've got, for example, malware and ransomware detection. Also, Inspector protect. So it's taken example. So I'm going to steal from the Cube and I'm gonna ask Dave and for you, I want a billion dollars and Dave's gonna laugh at me because he used a spectrum protect. He's gonna start laughing. But if I'm the ransomware guy, what do I do? I go after your snapshots, your replicas and your backup data sets. First, I make sure I've got those under control. And then when I tell you I'm holding you for ransom, you can't go back to a known good copy. So Ransomware goes after backup snaps and replicas first. Then it goes half your primary storage. So what we do, inspector protect, for example, is we know that at Weeki Bond and the Cube, you back up every night from 11 32 1 30 takes two hours to back you up every night. It's noon. There's tons of activity in the backup data sets. What the heck is going on? We send it out to the admin, So the admin for the Cube wicky bond takes a look and says, No server failure. So you can't be doing a lot of recovery because of a bad server. No storage failures. What the heck is going on? It could be a possible mount where ransomware attack. So that type of technology, we encrypt it, rest on all of our store to raise. We have both tape and tape and cloud air gapping. I'm gonna ask you about that. We've got both types of air gapped >> used to hate tape. Now he loves my love, right? No, I used to hate it, But now I love it because it's like the last resort, just in case. And you do air gapping when you do a WR gapping with customers, Do you kind of rotate the You know, it's like, uh, you know, the Yasser Arafat used to move every night. You sleep in a different place, right? You gonna rotate the >> weird analogy? You do >> some stuff. There's a whole strategy >> of how we outlined how you would do a tape air gap, you a cloud air gap. Of course you're replicating or snapping out to the cloud anyway, so they can't get to that. So if you have a failure, we haven't known good copy, depending on what time that is, right. And then you just recover. Cover back to that and even something simple. We have data rest, encryption. Okay. A lot of people don't use it or won't use it on storage because it's often software based, and so is permanent. Well, in our D s platform on the mainframe, we can encrypt with no performance hit on our flash system products we can encrypt with no performance it on our high end store. Wise, we have four models on the two high end stores models we could encrypt with no performance penalty. So why would you not encrypt all your debt? When there's a performance penalty, you have to sort of pick and choose. My God, I got to encrypt this valuable financial data, but, boy, I really wish it wasn't so slow with us. There is no performance it when you encrypt. So we have encryption at rest, encryption at flight malware and ran somewhere detection. We've got worm, which is important, obviously, doesn't mean I can't steal from wicked Bond Cube, but I certainly can't go change all your account numbers for all your vendors. For sake. of argument, right? So and there's obviously heavily regulated industries that still require worm technology, right? Immutable on the fine, by the way, you could always if it's wormed, you could encrypt it if you want to write. Because Worm just means it's immutable. It doesn't. It's not a different data type. It's just a mutable version of that data. >> So the cyber resiliency is interesting, and it leads me to another question I have around just are, indeed so A lot of companies in this industry do a lot of D developing next generation products. I think, you know, look a t m c when you were there, you know, this >> was a lot of there. Wasn't a ton, >> of course, are a lot of patents and stuff like that. IBM does corps are a lot of research and research facilities, brainiac scientists, I want if you could talk about how the storage division takes advantage of that, either specifically, is it relates to cyber resiliency. But generally, >> yes, so as you know, IBM has got, I think it's like 12 12 or 15 research on Lee sites that that's all they do, and everyone there is, in fact, my office had to be. Akiyama didn't labs, and there's two labs actually hear. The AMA didn't research lab and the Silicon Valley lab, which is very close about five miles away. Beautiful. Almost everything. There is research. There's a few product management guys I happen, Navid desk there every once. Well, see a sales guy or two. But essentially, they're all Richard with PhDs from the leading inverse now at Al Madden and many sites, all the divisions have their own research teams there. There's a heavy storage contingent at Al Midan as an example. Same thing in Zurich. So, for example, we just announced last week, as you know, stuff that will work with Quantum on the tape side. So you don't have to worry about because one of things, obviously, that people complain about quantum computing, whether it's us or anyone else, the quantum computing you can crack basically any encryption. Well, guess what? IBM research has developed tape that can be encrypted. So if using quantum computer, whether it be IBM or someone else's when you go with quantum computing, you can have secured data because the quantum computer can't actually cracked the encryption that we just put into that new tape that was done at IBM Research. How >> far away are we from From Quantum, actually being ableto be deployed and even minor use cases. >> Well, we've got available right now in ibm dot com for Betas. So we've got several 1000 people who have been accidents in it. And entities, we've been talking publicly in the 3 to 7 year timeframe for quantum computer crap out. Should it? Well, no, because if you do the right sort of security, you don't but the power. So if you're envisioning one of my favorite movies, I robot, right where she's doing her talking and that's that would really be quantum in all honesty. But at the same time, you know, the key thing IBM is all about ethics and all about how we do things, whether it be what we do with our diversity programs and hiring. And IBM is always, you know, at the forefront of doing and promoting ethical this and ethical. Then >> you do a customer data is huge. >> Yeah, and what we do with the customer data sets right, we do. GDP are, for example, all over the world were not required by law to do it really Only in Europe we do it everywhere. And so if you're not, if you're in California, if you happen to be in Zimbabwe or you're in Brazil, you get the same protection of GDP are even though we're not legally required to do it. And why are we doing that? Because they're always concerned about customers data, and we know they're paranoid about it. We want to make sure people feel comfortable with IBM. We do. Quantum computing will end up in that same vein. >> But you know, I don't worry about you guys. I were about the guys on the other side of the fence, the ones that I worry about, the same thing Capabilities knew that was >> on, of course. And you know, he talked about it in his speech, and he talked about action on the Cube yesterday about some of his comments on the point, and he mentioned that was based on Blockchain. What he said was Blockchain is a great technology. They've got Blockchain is no. IBM is a big believer in Blockchain. We promoted all over the place and in fact we've done all kinds of different Blockchain things we just did. One announced it last week with Australia with the Australian. I think it is with their equivalent of Wall Street. We've done some stuff with Merrick, the big shipping container thing, and it's a big consortium. That's all legal stuff that was really talking about someone using it the wrong way. And he's very specific point out that Blockchain is a great technology if used ethically, and IBM is all about how we do it. So we make sure whether be quantum computing, Blockchain, et cetera, that everything we do at IBM is about helping the end users, making sure that we're making, for example, open source. As you know. Well, the number one provider of open source technology pre read had acquisition is IBM. We submit Maur into the open community. Renounce Now are we able to make some money off of that? Sure we are, but we do it for a reason, because IBM believes as day point out in this core research. Open computing is court research, and we just join the Open Foundation last week as well. So we're really big on making sure that what we do ourselves is Ethel now We try to make sure that what happens in the hands of people who buy our technology, which we can always track, is also done ethically. And we go out of our way to join the right industry. Associations work with governments, work with whatever we need to do to help make sure that technology could really be iRobot. Anyone who thinks that's not true. If you talk to your grandparent's goto, go to the moon. What are you talking about? >> What Star Trek. It's always >> come to me. Oh, yeah, >> I mean, if you're your iPhone is basically the old community. Transport is the only thing I wish I could have the transfer. Aziz. You know, >> David has the same frame us up. I'm afraid of flying, and I I felt like two million miles on United and David. He's laughs about flowers, so I'm waiting for the transport. I know that's why anymore there's a cone over here. Go stand. Or maybe maybe with a little bit of like, I'm selling my Bitcoin. No, hang on, just hold on. There's always a comeback. Not always. There could be a comeback because Derek always enjoy it as always. Thanks for the good seeing you. All right, Back with more Veum. World 2019 The Cube live in San Francisco.