>> From theCUBE studios in Palo Alto in Boston bringing you data driven insights from theCUBE and ETR. This is breaking analysis with Dave Vellante. >> Despite fears of inflation, supply chain issues skyrocketing energy and home prices and global instability caused by the Ukraine crisis CIOs and IT buyers continue to expect overall spending to increase more than 6% in 2022. Now, while this is lower than our 8% prediction that we made earlier this year in January, it remains in line with last year's roughly six to 7% growth and is holding firm with the expectations reported by tech executives on the ETR surveys last quarter. Hello and welcome to this week's wiki bond cube insights powered by ETR in this breaking analysis, we'll update you on our latest look at tech spending with a preliminary take from ETR's latest macro drill down survey. We'll share some insights to which vendors have shown the biggest change in spending trajectory. And we'll tap our technical analysts to get a read on what they think it means for technology stocks going forward. The IT spending sentiment among IT buyers remains pretty solid. >> In the past two months, we've had conversations with dozens of CIOs, chief digital officers data executives, IT managers, and application developers, and across the board, they've indicated that for now at least their spending levels remain largely unchanged. The latest ETR drill down data which will share shortly, confirms these anecdotal checks. However, the interpretation of this data it's somewhat nuanced. Part of the reason for the spending levels being you know reasonably strong and holding up is inflation. Stuff costs more so spending levels are higher forcing IT managers to prioritize. Now security remains the number one priority and is less susceptible to cuts, cloud migration, productivity initiatives and other data projects remain top priorities. >> So where are CIO's robbing from Peter to pay Paul to focus on these priorities? Well, we've seen a slight uptick in certain speculative. IT projects being put on hold or frozen for a period of time. And according to ETR survey data we've seen some hiring freezes reported and this is especially notable in the healthcare sector. ETR also surveyed its buyer base to find out where they were adjusting their budgets and the strategies and tactics they were using to do so. Consolidating IT vendors was by far the most cited tactic. Now this makes sense as companies in an effort to negotiate better deals will often forego investments in newer so-called best of breed products and services, and negotiate bundles from larger suppliers. You know, even though they might not be as functional, the buyers >> can get a better deal if they bundle together from one of their larger suppliers. Think Microsoft or a Dell or other, you know, large companies. ETR survey respondents also cited cutting the cloud bill where discretionary spending was in play was another strategy or tactic that they were using. We certainly saw this with some of the largest snowflake customers this past quarter. Where even though they were still growing consumption rapidly certain snowflake customers dialed down their consumption and pushed spending off to future quarters. Now remember in the case of snowflake, anyway, customers negotiate consumption rates and their pricing based on a total commitment over a period of time. So while they may consume less in one quarter, over the lifetime of the contract, snowflake, as do many other cloud companies, have good visibility on the lifetime value of a deal. Now this next chart shows the latest ETR spending expectations among more than 900 respondents. The bars represent spending growth expectations from the periods of December, 2021 that's the gray bars, March of 2022 survey in the blue, and the most recent June data, That's the yellow bar. So you can see spending expectations for the quarter is down slightly in the mid 5% range. But overall for the year expectations remain in the mid 6% range. Now it's down from 8%, 8.3% in December where it looked like 2022 was going to really be a breakout year and have more momentum than even last year. Now, remember this was before Russia invaded Ukraine which occurred in mid-February of this year. So expectations were a little higher. So look, generally speaking CIOs have told us that their CFOs and CEOs have lowered their earnings outlooks and communicated that to Wall Street. They've told us that unless and until these revised forecasts appear at risk, they continue to expect their budget levels to remain pretty constant. Now there's still plenty of momentum and spending velocity on specific vendor platforms. Let's take a look at that. >> This chart shows the companies with the greatest spending momentum as measured by ETRs proprietary net score methodology. Net score essentially measures the net percent of customers spending more on a particular platform. That measurement is shown on the Y axis. The red line there that's inserted that red dotted line at 40%, we consider to be a highly elevated mark. And the green dots are companies in the ETR survey that are near or above that line. The X axis measures the presence in the data set, how much, you know sort of pervasiveness, if you will, is in the data. It's kind of a proxy for market presence. Now, of course we all know Kubernetes is not a company, but it remains an area where organizations are spending lots of resources and time particularly to modernize and mobilize applications. Snowflake remains the company which leads all firms in spending velocity, but as you'll see momentarily, despite its highest position relative to everybody else in the survey, it's still down from its previous levels in the high seventies and low 80% range. AWS is incredibly impressive because it has an elevated level but also a big presence in the data set in the survey. Same with Microsoft, same with ServiceNow which also stands out. And you can see the other smaller vendors like HashiCorp which is increasingly being seen as a strategic cross cloud enabler. They're showing, spending momentum. The RPA vendors you see in there automation anywhere and UI path are in the mix with numerous security companies, CrowdStrike, CyberArk, Netskope, Cloudflare, Tenable Okta, Zscaler Palo Alto networks, Sale Point Fortunate. A big number of cybersecurity firms hovering at or above that 40% mark you can see pure storage remains elevated as do PagerDuty and Coupa. So plenty of good news here, despite the recent tech crash. So that was the good, here's the not so good. So >> there is no 40% line on this chart because all these companies are well below that line. Now this doesn't mean these companies are bad companies. They just don't have the spending velocity of the ones we showed earlier. A good example here is Oracle. Look how they stand out on the X axis with a huge market presence. And Oracle remains an incredibly successful company selling to high end customers and really owning that mission critical data and application space. And remember ETR measures spending activity, but not actual spending dollars. So Oracle is skewed as a result because Oracle customers spend big bucks. But the fact is that Oracle has a large legacy install base that pulls down their growth rates. And that does show up in the ETR survey data. Broadcom is another example. They're one of the most successful companies in the industry, and they're not going after growth at all costs at all. They're going after EBITDA and of course ETR doesn't measure EBIT. So just keep that in mind, as you look at this data. Now another way to look at the data and the survey, is exploring the net score movement over the last period amongst companies. So how are they moving? What's happening to the net score over time. And this chart shows the year over year >> net score change for vendors that participate in at least three sectors within the ETR taxonomy. Remember ETR taxonomy has 12, 15 different segments. So the names above or below the gray dotted line are those companies where the net score has increased or decreased meaningfully. So to the earlier chart, it's all relative, right? Look at Oracle. While having lower net scores has also shown a more meaningful improvement in net score than some of the others, as have SAP and Teradata. Now what's impressive to me here is how AWS, Microsoft, and Google are actually holding that dotted line that gray line pretty well despite their size and the other ironically interesting two data points here are Broadcom and Nutanix. Now Broadcom, of course, as we've reported and dug into, is buying VMware and, and of, of course most customers are concerned about getting hit with higher prices. Once Broadcom takes over. Well Nutanix despite its change in net scores, in a good position potentially to capture some of that VMware business. Just yesterday, I talked to a customer who told me he migrated his entire portfolio off VMware using Nutanix AHV, the Acropolis hypervisor. And that was in an effort to avoid the VTEX specifically. Now this was a smaller customer granted and it's not representative of what I feel is Broadcom's ICP the ideal customer profile, but look, Nutanix should benefit from the Broadcom acquisition. If it can position itself to pick up the business that Broadcom really doesn't want. That kind of bottom of the pyramid. One person's trash is another's treasure as they say, okay. And here's that same chart for companies >> that participate in less than three segments. So, two or one of the segments in the ETR taxonomy. Only three names are seeing positive movement year over year in net score. SUSE under the leadership of amazing CEO, Melissa Di Donato. She's making moves. The company went public last year and acquired rancher labs in 2020. Look, we know that red hat is the big dog in Kubernetes but since the IBM acquisition people have looked to SUSE as a possible alternative and it's showing up in the numbers. It's a nice business. It's going to do more than 600 million this year in revenue, SUSE that is. It's got solid double digit growth in kind of the low teens. It's profitability is under pressure but they're definitely a player that is found a niche and is worth watching. The SolarWinds, What can I say there? I mean, maybe it's a dead cat bounce coming off the major breach that we saw a couple years ago. Some of its customers maybe just can't move off the platform. Constant contact we really don't follow and don't really, you know, focus on them. So, not much to say there. Now look at all the high priced earning stocks or infinite PE stocks that have no E and divide by zero or a negative number and boom, you have infinite PE and look at how their net scores have dropped. We've reported extensively on snowflake. They're still number one as we showed you earlier, net score, but big moves off their highs. Okta, Datadog, Zscaler, SentinelOne Dynatrace, big downward moves, and you can see the rest. So this chart really speaks to the change in expectations from the COVID bubble. Despite the fact that many of these companies CFOs would tell you that the pandemic wasn't necessarily a tailwind for them, but it certainly seemed to be the case when you look back in some of the ETR data. But a big question in the community is what's going to happen to these tech stocks, these tech companies in the market? We reached out to both Eric Bradley of ETR who used to be a technical analyst on Wall Street, and the long time trader and breaking analysis contributor, Chip Symington to get a read on what they thought. First, you know the market >> first point of the market has been off 11 out of the past 12 weeks. And bare market rallies like what we're seeing today and yesterday, they happen from time to time and it was kind of expected. Chair Powell's testimony was broadly viewed as a positive by the street because higher interest rates appear to be pushing commodity prices down. And a weaker consumer sentiment may point to a less onerous inflation outlook. That's good for the market. Chip Symington pointed out to breaking analysis a while ago that the NASDAQ has been on a trend line for the past six months where its highs are lower and the lows are lower and that's a bad sign. And we're bumping up against that trend line here. Meaning if it breaks through that trend it could be a buying signal. As he feels that tech stocks are oversold. He pointed to a recent bounce in semiconductors and cited the Qualcomm example. Here's a company trading at 12 times forward earnings with a sustained 14% growth rate over the next couple of years. And their cash flow is able to support their 2.4, 2% annual dividend. So overall Symington feels this rally was absolutely expected. He's cautious because we're still in a bear market but he's beginning to, to turn bullish. And Eric Bradley added that He feels the market is building a base here and he doesn't expect a 1970s or early 1980s year long sideways move because of all the money that's still in the system. You know, but it could bounce around for several months And remember with higher interest rates there are going to be more options other than equities which for many years has not been the case. Obviously inflation and recession. They are like two looming towers that we're all watching closely and will ultimately determine if, when, and how this market turns around. Okay, that's it for today. Thanks to my colleagues, Stephanie Chan, who helps research breaking analysis topics sometimes, and Alex Myerson who is on production in the podcast. Kristin Martin and Cheryl Knight they help get the word out and do all of our newsletters. And Rob Hof is our Editor in Chief over at siliconangle.com and does some wonderful editing for breaking analysis. Thank you. Remember, all these episodes are available as podcasts wherever you listen. All you got to do is search breaking analysis podcasts. I publish each week on wikibon.com and Siliconangle.com. And of course you can reach me by email at david.vellante@siliconangle.com or DM me at DVellante comment on my LinkedIn post and please do check out etr.ai for the best survey data in the enterprise tech business. This is Dave Vellante for the CUBE insights powered by ETR. Stay safe, be well. And we'll see you next time. (soft music)

>> From around the globe. It's theCUBE. With digital coverage of IBM Think 2021. Brought to you by IBM. >> Welcome back to theCUBE's ongoing coverage of IBM Think 2021. The virtual cube. You know, the pandemic has caused us to really rethink this whole concept of operational resilience. So we're going to dig into that and talk about the importance of constructing a holistic resilience plan and get the perspective of some really great domain experts. Allen Downs is the Vice President in Global Cloud Security and Resiliency Services at IBM. And he's joined by Ms. Michelle Weston who is the Director of Cloud Security and Resiliency Offerings at IBM. Folks, welcome to theCUBE. Thanks for coming on. >> Thank you. >> Thank you. >> Now, before we get into it, I said, IBM, but I want to ask you Allen, about an announcement you made last month about Kyndryl, new spinout from IBM. What can you tell us? >> Very excited about the name. I think there's a lot of meaning in the name censored around new growth and censored around partnership and relationship. So if you look at the name that was announced, I think it really does typify what we set out to be as a trusted partner in the industry. All born around new growth, censored around strong partnership and relationship. So very pleased and excited. I look forward to the opportunity we have going forward. >> Yeah. Congratulations on that. Add some clarity, Martin Schroeder, new CEO, Cube alum, great exec. Love it. So good luck. Allen, let me stay with you for a second. I mean, operational resilience it means different things to different people. And we know from speaking with CIOs in our community during the pandemic, it doesn't just mean Disaster Recovery. In fact, a lot of CIO said that their business continuing strategy were too focused on DR. Allen, what does operational resilience mean from your perspective? >> So I'll answer it this way. Operational resiliency risk is defined as the quantifiable steps is defined as the quantifiable steps that any client needs to take in order to respond, recover from an unplanned outage. It sits squarely within operational risk and if you think about it operational risk is the kind of non-financial element of risk and defined within that category, operational resiliency risk is trying to identify those steps, trying to identify those steps, both preactive and reactive both preactive and reactive that a client needs to consider that they would have to take in the event of an unplanned disruption or an unplanned outage that would impact their ability to serve their clients or to serve their organization. That's how I define operational resiliency risk. >> Great. And I wonder Michelle if you can add to that, but I think, you know, I sometimes say that the pandemic was like a forced march to digital and part of that was business resilience but you know, where do we go from here? You know, we had 14 months shoved into our face and now we have some time to think about. So how should clients think about evolving their strategies in this regard? >> Yeah, well certainly with respect to what was called NewCo now, Kyndryl, our approach has been advisory-led. We will help clients along this journey. One thing that I'd like to point out and one of the journeys that we've been taking over the last couple of years is it really is about security and resiliency together. If you think of that planning and how to mitigate your operational risk, if the security and resiliency go hand in hand, they're the same people within the organization that are planning for that and worried about it. And so we had already started about three years ago to pull the two together and to have a unified value proposition for clients around security and resiliency both being advisory-led doing everything for a client from project-based to the digital consumption world, which we know clients live in today to a fully managed service all around security and resiliency together. >> Yeah. So, I mean, it's a really important topic. I mean, you heard Chair Powell last month. He was, he was on 60 Minutes saying, well, yeah, yeah. We're worried about inflation but we're way more worried about the security. So, so Allen, where, let's say you're in the virtual conference room with the board of directors, what's that conversation like? Where does it start? >> I think there is a huge concern right now with regards to security and obviously resiliency as well. But if you just think about what we've all been through and what's transpired in the last 12 months, the, what we call the threat landscape has broadened significantly. And therefore clients have had to go through a rapid transformation not just by moving employees to home base, but also their clients having a much higher expectation in terms of access to systems, access to transactions, which are all digital. So you referred to it earlier but the transformation our clients have had to go on driving a higher dependence on those systems that enable them to serve their clients digitally and enable them to and allow the employees to work remotely in this period has increased the dependencies that they have across the environment that are running many of the critical business processes. So the discussion of the boardroom is very much, are we secure? Are we safe? How do we know? How safe and secure and resilient should we be? And based on that facts about how fit, safe and secure should we be, where are we today as an organization? And I think these are the questions that are at the boardroom. It's basically from a resiliency, security perspective where should we be that supports our strategy, vision and our client expectation? And then the second question is very much, where are we today? How do we know that we are secure? How do we know that we can recover from any unplanned or unforeseen disruption to our environments? >> So Michelle, I mean Allen just mentioned the threat surface is expanding and we're just getting started. Everybody's like crazy about 5G, leaning in the Edge, IoT and that's just going to be orders of magnitude by the end of the decade compared to where it is today. So how do you think about the key steps that organizations should take to ensure operational resilience? You know, not only today, but also putting in a roadmap. >> Yeah. Yeah. And one thing that we do know from our clients is those that have actually planned for resiliency and security at the forefront. They tend to do that more effectively and more efficiently. It's much better to do that than to try to do that after an outage. You'll certainly learn a lot but that's not the experience that you want to go through. You want to have that planning and strategy in the forefront as Allen said. In terms of the threat vector, the pandemic brought that on as well. We saw a surgent of cyber attacks, opportunistic attacks. You know, we saw the best of people in the pandemic as well as the worst in people. Some of those attacks were on agencies that were trying to recover or trying to treat the public with respect to the COVID-19 pandemic. So none of us can let our guard down here. I think we can anticipate that that's only going to increase. And with the emergence of these new technologies like Cloud, we know that there's been such a massive benefit to clients. In fact those that were Cloud-enabled sustained their businesses during the pandemic. Full stop. But with that comes a lot more complexity. Those threat vectors increased, 5G, I expect to be the same. So again, resiliency and security have never been more relevant, more important. We see a lot of our clients putting budget there and those that plan for it with a strategic mindset and understand that whatever they have today may be good enough, but in the future they're going to have to invest and continue to evolve that strategy, are those that have done the best. >> Yeah. The bolt-on strategy doesn't really work that well. But, and I, and I wonder if you think about when when we talk to CSOs for example, and you ask them, what's your biggest challenge? They'll say things like lack of talent. We got too many tools. It's just as we're under the hamsters on wheels. So I would think that's, you know, unfortunately for some, but it's good for your, your business. That's a dynamic that you can help with. I mean, you're a services organization. You've got deep expertise in this. So I wonder if you could talk a little bit about that, that lack of talent that skills gap and how you guys address that. >> I think this is really the fit for managed services providers like Kyndryl. Certainly with some of our largest clients, if we look at Pettus as an example, that notion of phone a friend is really important. When it starts to go down, and you're not sure, you know, what you're going to do next, you want the expertise. You want to be able to phone someone and you want to be able to rely on them to help you recover your most critical data. One of the things clients have also been asking us for is a vaulted capability. Almost like the safe deposit box for your data and your critical applications being able to put them somewhere and then in the event of needing to recover, you certainly could call someone to help you do exactly that. >> Allen, I wonder if you could address this. I mean, I like IBM. I was, I'm a customer. I, I trust IBM, what's your relationship? Are you still going to, you know, be able to allow me to tap the pieces that I like and maybe you guys can be more agile in some respects? Maybe you could talk about that a little bit. >> Yeah, sure Dave. And many of our clients we have a long history with and a very positive experience of delivering, you know, market-leading and high, high quality of services and product. The relationship continues. So we will remain very close to IBM and we will continue to work with many of IBM's customers as well, IBM work with our customers going forward. So the relationship I believe whilst the different dynamic, will continue and I believe engenders an opportunity for growth. And, you know, we mentioned it earlier the very name signifies the fact that it's new growth. And I do think that partnership will continue and will continue together to deliver the type of service, the quality of products and services that our clients have you know, enjoyed from IBM over the last number of years. >> Michelle, I might take one of my takeaways from your earlier comments that you guys are hands on, consultative in nature. And I think about the comment I made about a lot of CIOs said we were way too, DR-focused, but when I think about DR, a lot of times it was a checkbox to the board. Hey, we got it. But when was the last time you tested it? Well, we don't test it because it's too risky to test. We do, we do fail over but we don't want to fail back because it's just too risky. Can I stress test? You know, my environment. Are we at the point now where technology and expertise will allow us to do that is that part of what you bring to the table? >> It is exactly what we bring to the table. So from a first of all, from a compliance and regulatory perspective, you no longer have that option. A lot of the auditors are asking you to demonstrate your DR plan. We have technology and I think we've talked about this before. About the automation that we have in our portfolio with resiliency orchestration that allows you to see the risk in your environment on a day-to-day basis, proactively manage it. I tried to recover this. There's a, there's a failure and then you're able to proactively address it. I also give the example from a resiliency work restoration perspective in this very powerful software automation that we have for DR. We've had clients that have come in scheduled a DR Test. It was to be all day they've ordered in lunch. And the DR Test fail over, fail back, took 22 minutes and lunch was canceled. (Dave laughs) >> I love it. >> So that is very powerful and very powerful with an auditor. >> That's awesome. Okay, guys, we got to leave it there. Really great to get the update. Best of luck to you. And congratulations. Thanks for coming on. >> Thank you. >> Thank you so much. >> All right. And thank you for watching. This is Dave Vellante for theCUBE's continuous coverage of IBM Think 2021. Be right back. (calm music)

>>from >>Around the globe. It's the cube with digital coverage of IBM think 2021 brought to you by IBM. >>Welcome back to the cubes ongoing coverage of IBM Think 2021 virtual cube, you know, the pandemic has caused us to really rethink this this whole concept of operational resilience and we're gonna dig into that and talk about the importance of constructing a holistic resilience plan and get the perspective of some really great domain experts. Alan Downs is the vice president, global Cloud security and resiliency services at IBM and he's joined by MS Michelle what? Weston who is the director of cloud security and resiliency offerings at IBM folks. Welcome to the cube. Thanks for coming on. >>Thank you. >>Now before we get into it, I said IBM but I want to ask you, alan about an announcement you made last month about Kendrell new spin out from IBM. What can you tell us? >>Very excited about the name? I think there's a lot of meaning in the name centered around new growth and censored around partnership and relationship. So if you look at the name that was announced I think it really does typify what we set out to be as a trusted partner in the industry. All born around new growth centered around strong partnership and relationship. So very pleased and excited and look forward to the opportunity we have going forward. >>Yeah congratulations on that. Had some clarity martin schroder. New ceo Cubillan. Great executive love it. So good luck. Um Alan let me stay with you for a second. I mean operational resilience it means different things to different people and we know from speaking with C. IOS in our community during the pandemic. It doesn't just mean disaster recovery. In fact a lot of C. I. O. Said that their business continuing strategy were too focused on on D. R. Ellen. What does operational resilience mean from your perspective? >>So I'll answer it this way. Operational resiliency risk is defined as the quantifiable steps that any client needs to take in order to respond, recover from an unplanned outage. It sits squarely within operational risk. And if you think about it, operational risk is the kind of non financial element of risk. And defined within that category, operational resiliency risk is trying to identify those steps both pre active and reactive that a client needs to consider that they would have to take in the event of an unplanned disruption or an unplanned outage that would impact their ability to serve their clients or to serve their organization. That's how I define operational resiliency risk. >>Great and I wonder Michelle if you can add to that but I think you know I sometimes say that the pandemic was like a forced march to digital and part of that was business resilience. But You know, where do we go from here? You know, we had 14 months shoved into our face and now we have some time to think about. So how should clients think about evolving their strategies in this regard? >>Yeah, Well, certainly with respect to what was called Newco now, Kendrell, um our approach has been advisory led. Uh we will help clients along this journey. Uh, one thing that I'd like to point out in one of the journeys that we've been taking over the last couple of years is it really is about security and resiliency together. If you think of that planning and how to mitigate your operational risk, the security and resiliency go hand in hand through the same people within the organization that are planning for that and worried about it. And so we had already started about three years ago to pull the two together and to have a unified value proposition for clients around security and resiliency, both being advisory lead, doing everything for a client from project based to the digital consumption world which we know clients live in today to a fully managed service all around security and resiliency together. >>Yeah, so I mean it's really important topic. I mean you heard Chair Powell last month. He was he was on 60 minutes saying well yeah worried about inflation, were way more worried about security. So so alan you know, were let's say you're in the virtual, you know, conference room with the board of directors. What's that conversation like? Uh where does it start? >>I think there is a huge concern right now with regard to security and obviously resiliency as well. But if you just think about what we've all been through and what's transpired in the last 12 months, the what we call the threat landscape has broadened significantly and therefore clients have had to go through a rapid transformation not just by moving employees to home base, but also their clients having a much higher expectation in terms of access to systems, access to transactions which are all digital. So you referred to it earlier. But the transformation, our clients have had to go on driving a higher dependence on those systems that enable them to serve their clients digitally and enable them to allow the employees to work remotely in this period has increased the dependencies that they have across the environment that are running many of the critical business processes. So the discussion in the boardroom is very much are we secure? Are we safe? How do we know how safe and secure and resilient should we be? And based on that fact about how safe and secure should we be? Where are we today as an organization? And I think these are the questions that are at the boardroom is basically from a resiliency security perspective, where should we be that supports our strategy vision and our client expectation? And then the second question is very much where are we today? How do we know that we are secure? How do we know that we can recover from any unplanned or unforeseen disruption to our environments? >>So Michelle, I mean I just mentioned the threat surface is expanding and we're just getting started, everybody's like crazy about five G leaning in the edge Iot and that's just uh this could be orders of magnitude by the end of the decade compared to where it is today. So how do you think about the key steps that organizations should should take to ensure operational resilience, you know, not only today, but also putting in a road map. >>Yeah, yeah. And and one thing that we do know from our clients is those that have actually planned for resiliency and security at the forefront. They tend to do that more effectively and more efficiently. Um It's much better to do that than to try to do that after an outage. You certainly learn a lot. Um but that's not the experience that you want to go through. You want to have that planning and strategy in the forefront. As Alan said in terms of the threat vector, the pandemic brought that on as well. We saw surgeons Of cyberattacks, opportunistic attacks. Um you know, we saw the best of people in the pandemic as well as the worst in people. Some of those attacks were on agencies that we're trying to recover. We're trying to treat the public with respect to the COVID-19 pandemic. So none of us can let our guard down here. I think we can anticipate that that's only going to increase. And with the emergence of these new technologies like cloud, we know that there's been such a massive benefit to clients. In fact those that were cloud enabled to sustain their businesses during the pandemic full stop. But with that comes a lot more complexity. Those threat vectors increase five G. I expect to be the same. So again, resilience and security have never been more relevant. More important, we see a lot of our clients putting budget there and those that plan for it with a strategic mindset and understand that whatever they have today may be good enough, but in the future they're going to have to invest and continue to evolve that strategy. Are those that have done the best. >>Yeah, the bolt on strategy doesn't doesn't really work that well, but and I wonder if you think about when we talk to CSOS for example, and you ask them what's your biggest challenge? They'll say things like lack of talent. We got too many tools. It's just as we're on the hamsters on wheels. So I would think that's, you know, unfortunately for some, but it's good for your, your business. That's that's a dynamic that you can help with. I mean you're a services organization, you got deep expertise in this. So I wonder if you could, could talk a little bit about that, that lack of talent, that skills gap and how you guys address that. >>I think this is really the fit for managed services providers like Kendrell, um, certainly with some of our largest clients, if we look at Peta as an example, that notion of phone a friend is really important when it starts to go down and you're not sure what you're gonna do next. You want the expertise, you want to be able to phone someone and you want to be able to rely on them to help you recover your most critical data. One of the things clients have also been asking us for is a vaulted capability, almost like the safe deposit box for your data and your critical applications. Being able to put them somewhere and then in the event of needing to recover, um, you certainly could call someone to help you do exactly that >>Ellen. I wonder if you can address this. I mean, I like IBM I was I'm a customer. I trust IBM. What's your relationship? Are you still gonna, you know, be able to allow me to tap the pieces that that I like and maybe you guys can be more agile in some respects, maybe you can talk about that a little bit. >>She has Sure, Dave and many of our clients, we have a long history with a very positive experience of delivering, you know, market leading and high high quality of services and product the relationship continue. So we will remain very close to IBM and we will continue to work with many of IBM's customers as will IBM work with our customers going forward. So the relationship, I believe whilst a different dynamic will continue and I believe engenders an opportunity for growth and you know, we mentioned earlier the very name signifies the fact that it's new growth and I do think that that partnership will continue and we'll continue together to deliver the type of service, the quality of products and services that our clients have, you know, enjoyed from IBM over the last number of years, >>Michelle my, one of my takeaway from your earlier comments as you guys are hands on consultative in nature. Um, and I think about the comment I made about a lot of Ceo said we were way too d our focus. But when I think about d are a lot of times it was a checkbox to the board. Hey, we got it. But it was last time you tested it. Well, we don't test it because it's too risky to test. You know, we, we do fail over, but we don't fail back because it's just too risky. Can I stress test, you know, my environment, we, at the point now where technology and expertise will allow us to do that is that part of what you bring to the table? >>It is exactly exactly what we bring to the table. So from a first of all, from a compliance and regulatory perspective, you no longer have that option. A lot of the auditors are asking you to demonstrate your d our plan. We have technology and I think we've talked about this before about the automation that we have in our portfolio with resiliency orchestration that allows you to see the risk in your environment on a day to day basis. Proactively manage it. I tried to recover this, there's a there's a failure and then you're able to proactively address it. I also give the example from a resiliency orchestration perspective in this very powerful software automation that we have for D. R. We've had clients that have come in scheduled A. D. R. Test, it was to be all day they've ordered in lunch And the D. R. test fail over failed back took 22 minutes and lunch was canceled. >>I love >>it. Very powerful and very powerful with an auditor. >>That's awesome. Okay guys, we've got to leave it there. Really great to get the update. Best of luck to you and congratulations. Thanks for coming on. >>Thank you so much >>and thank you for watching. This is Dave Volonte for the cubes continuous coverage of IBM think 2021 right back. >>Mhm.