>> Live from San Francisco, it's theCUBE covering IBM Think 2019. Brought to you by IBM. >> Welcome back, we're here at Moscone North. You're watching theCUBE, the leader in live tech coverage. This is day four of our wall to wall coverage of IBM the Think. The second annual IBM Think, first year at Moscone. Dave Vellante here with Stu Miniman. Eric Herzog is here, he's the CMO of IBM Storage and Sam Werner is the VP of Offering Management for Storage Software at IBM. Guys welcome back to theCUBE. Always good to see ya both. >> Thanks >> Thank you. >> So we were joking yesterday and today, of course multi cloud, the clouds opened, it's been raining, it's been sunny today, so multi cloud is all the rage. Evidently you guys have done some work in multi cloud. Some research that you can share with us. >> Yeah, so couple things. First of all, the storage vision in multi cloud at IBM for years. We work with all the cloud providers including IBM cloud, but we work with Amazon and we work with Azure, we work with Google cloud and in fact our Spectrum Protect, modern data protection product, has about 350 small and medium cloud providers across the world that use it for the engine for their back up as a service. So we've been doing that for a long time, but I think what you're getting is, what we found in a survey multi cloud and I actually had had a panel yesterday and all three of my panelists, including Aetna, use a minimum of five different public cloud providers. So what we're seeing is hybrid is a subset of that, right? On and off, but even if someone is saying, I'm using cloud providers, they're using between five and 10, not counting software as a service because many of the people in the survey didn't realize software as a service is theoretically a type of cloud deployment, right? >> So that's obviously not just the big three or the big five, we're talking about a lot of small guys. Some of the guys maybe you could have used in your Spectrum Protect for back up, local cloud providers, right? And then add sas to that, you could probably double or triple it, right? >> Right, well we've have been very successful with sas providers so for example, one of people on the panel, a company called Follett, they're a privately held, in the mid close to a billion dollars, they provide services to universities and school districts and they have a software package for universities for the bookstores to manage the textbooks and another software as a service for school districts across the United States. They have 1,500 and it's all software service. No on prem licensing and that's an example. That's in my mind, that's a cloud deployment, right? >> Ginni talked Tuesday about chapter two how chapter one was kind of, I call it commodity cloud, but you know, apps that are customer facing, chapter two, a lot of chapter two anyways, is going to be about hybrid and multi cloud. I feel like to date it's largely been, not necessarily a purposeful strategy to go multi cloud, it's just we're multi vendor. Do you see customers actually starting to think about a multi cloud strategy? If so, what's behind that and then more specifically, what are you guys doing from a software stand point to support that? >> Yeah, so in the storage space where we are, we find customers are now trying to come up with a data management strategy in a multi cloud model, especially as they want to bring all their data together to come up with insights. So as they start wanting to build an AI strategy and extend what they're doing with analytics and try to figure out how to get value out of the data they're building a model that's able to consolidate the data, allow them to ingest it and then actually build out AI models that can gain insights from it. So for our software portfolio, we're working with the different types of service providers. We're working closely with all the big cloud providers and getting our software out there and giving our customers flexible ways to move and manage their data between the clouds and also have clear visibility into all the data so they can bring it together. >> You know, I wonder sort of what the catalyst is there? I wrote an article that's going up on SiliconANGLE later and I talked about how the first phase was kind of tire kicking of cloud and then when the down turn hit, people went from capex to opex. It was sort of a CFO mandate and then coming out of the down turn, the lines of business were like, whoa agility, I love this. So shadow IT and then IT sort of bought in and said, "we got to clean up this mess." and that seems to be why, at least one catalyst, for companies saying, "hey, we want a single data management strategy." Are you seeing that or is there more to it? >> Well I think first of all, we're absolutely seeing it and there's a lot of drivers behind it There's absolutely IT realizing they need to get control over this again. >> Governance, compliance, security, edix >> And think about all the new regulations. GDPR's had a huge impact. All a sudden, these IT organizations need to really track the data and be able to take action on it and now you have all these new roles in organizations, like data scientists who want to get their hands on data. How do you make sure that you have governance models around that data to ensure you're not handing them things like pi? So they realized very quickly that they need to have much better control. The other thing you've seen is, the rise of the vulnerabilities. You see much more public attacks on data. You've seen C level executives lose their jobs over this. So there's a lot more stress about how we're keeping all this data safe. >> You're right. Boards are gettin' flipped and it's a big, big risk these days >> Well the other thing you're seeing is legal issues. Canada, the data has to stay in Canada. So if you're multi national and you're a Japanese company, all your Canadian offices, the data has to be some cloud of ours got an office in Canada. So if you're a Japanese headquarter company, using NTT cloud, then you got to use IBM or Amazon or Azure, 'cause you have to have a data center inside the country just to have the cloud data. You also have shier maturity in the market. I would argue, the cloud used to be called the web and before it was the web, it was called the internet and so now that you're doing that, what happens in the bigger companies, procurement is involved, just the way they've been involved in storage servers and networking for a long time. Great you're using CISCO for the network. You did get a quote from HP or using IBM storage, but make sure you get at least one other quote so as that influences aside from definitely getting the control is when procurement get involved, everything goes out for RFP or RFQ or at ten dure, as they say in Europe and you have to have multiple vendors and you sometimes may end up for purely, we need the way to club 'em on price so we need IBM cloud and Microsoft so we can keep 'em honest. So when everyone rushed the cloud, they didn't necessarily do that, but now that it's maturing >> Yeah, it's a sign of maturity. >> It's a sign of maturity that people want to control pricing. >> Alright, so one of the other big themes we've been talking a lot about this week is AI. So Eric talks about, when we roll back the clock, I think back to the storage world, we've been talking about intelligence in storage for longer than my career. So Sam, maybe you can tell us what's different about AI in storage than the intelligence we've been talking and what's the latest about how AI fits into the portfolio? >> Yeah, that's a great question and actually a lot of times we talk about AI and how storage is really important to make the data available for AI, but we're also embedding AI in our storage products. If you think about it, if you have a problem with your storage product, you don't just take down one application. You can take down an entire company, so you've got to make sure your storage is really resilient. So we're building AI in that can actually predict failures before they happen so that our storage never takes any outages or has any down time. We can also predict by looking at behavior out in the network, we can predict or identify issues that a host might be causing on the network and proactively tell a customer before they get the call that the applications are slowing down and we can point out exactly which host is causing the problem. So we're actually proactively finding problems out on the storage network before they become an issue. >> Yeah and Eric, what is it about the storage portfolio that IBM has that makes it a good solution for customers that are deploying AI as an application in use cases? >> Yeah so we look at all, so one is AI, in the box if you will, in the array and we've done a ton of work there, but the other is as the underlying foundation for AI workloads and applications so a couple things. Clearly, AI often is performance dependent and we're focused on all flash. Second thing as Sam already put it out, resilience and availability. If you're going to use AI in an automotive factory to control the supply chain and to control the actual factory floor, you can't have it go down because they could be out tens of millions, hundreds of millions of year just for that day of building Mercedes or Toyotas or whatever they're building if you have an automated factory. The other areas we've created what we call, the data pipeline and it involves three, four members of our storage software family. Our Spectrum Scale, a highly parallel file system that allows incredible performance for AI. Our Spectrum Discover which allows you to use meta data which is information about the data to more accurately plan and the AI software from any vendor can use an API and go in and see this meta data information to make the AI software more efficient that they would use. Our IBM Cloud Object Storage and our Spectrum Archive, you have to archive the data, but easily bring it back because AI is like a human. We are, smart humans are learning non-stop, whether you're five, whether you're 25, or whether you're 75, you're always learning. You read the newspaper, you see of course theCUBE and you learn new things, but you're always comparing that to what you used to know. Are the Russians our friends or our enemies? It depends on your point in time. Do we love what's going on in Germany? It depends on your point in time. In 1944, I'd say probably not. Today you'd say, what a great Democratic country, but you have to learn and so this data pipeline, this loop, our software is on our storage arrays and allows it to be used. We'll even sell the software without our storage arrays for use on any AI server platform, so that softwares really the huge differentiator for us. >> So can you, as a follow up to that, can you address the programmability of your portfolio? Whether it's through software or maybe the infrastructure as well. Infrastructure, I'm thinking infrastructure's code. You mentioned you know API's. You mentioned the ability to go into like Spectrum Discover for example, access meta data. How programmable is your infrastructure and how are you enabling that? >> I mean across our entire portfolio, we build restful API's to make our infrastructure completely extensible. We find that more and more enterprises are looking to automate the deployment of the infrastructure and so we provide API's for programming and deploying that. We're also moving towards containerizing most of our storage products so that as enterprises move towards cubernetes type clusters, we work with both Red Hat and with our own ICP and as customers move towards those deployment models and automate the deployment of their clusters, we're making all of our storage's available to be deployed within those environments. >> So do you see an evolution of the role of a storage admin, from one that's sort of provisioning luns to one that's actually becoming a coder, maybe learning Python, learning how to interact through API's, maybe even at some point developing applications for automation? Is that happening? >> I think there's absolutely a shift in the skills. I think you've got skills going in two directions. One, in the way of somebody else to administer hardware and replace parts as they fail. So you have lower skilled jobs on that side and then I believe that yes, people who are managing the infrastructure have to move up and move towards coding and automating the infrastructure. As the amount of data grows, it becomes too difficult to manage it in the old manual ways of doing it. You need automation and intelligence in the storage infrastructure that can identify problems and readjust. For example, in our storage infrastructure, we have automated data placement that puts it on the correct tier. That use to be something a storage administrator had to do manually and figure out how to place data. Now the storage can do it themselves, so now they need to move up into the automation stack. >> Yeah, so we've been talking about automation and storage also for a lot of years. Eric, how are enterprises getting over that fear that either I'm going to lose my job or you know, this is my business we're talking about here. How do I let go and trust? I love, I saw downstairs, there was a in the automation booth for IBM, it was free the humans, so we understand that we need to go there. We can't not put automation with the scale and how things are moving, but what's the reality out in the field? >> So I think that the big difference is and this is going to sound funny, but the economic down turn of seven, eight and nine, when downturn hit and certainly was all over the IT press, layoff, layoff, layoff, layoff, layoffs, so we also know that storage is growing exponentially, so for example, if I'm Fortune 500 company x and I had 100 people doing storage across the planet. If I laid off 50 of them and now I'm recovered. I'm making tons of money, my IT budget is back up. I didn't go to the CIO and say, you can hire the 50 storage people back. You can hire 50 people back, but no more than five or six can be storage people. Everything else has to be dev ops or something else. So what that means is, they are managing an un-Godly amounts of more storage every year with essentially the same people they had in 2008 or maybe a tiny bit more. So what matters is, you don't manage a peta bite or in the old days, half a peta bite. Now, one storage admin or back up admin or anyone in that space, they want you to manage 20 peta bites and if you don't have automation, that will never happen. >> Stu and I were interviewing Steven Hill from KPMG yesterday and he was talking about the macro numbers show we're not (stutters) as globally and even in the US, we're not seeing productivity gains. I'm saying yeah, you're not looking at the storage business you know, right? Because if you look at anybody who's running storage, they're doing way more with much less, to your point. >> Which is why, so for example when Sam talked about our easy tier, we can tier, not only as AI base. So in the old days, when you guys weren't even born yet, when I was doing it. >> Well I don't know about that >> What was it? It was move the data after 90, so first it was manual movement, then it was set up something, a policy. Remember policy automation was the big deal 10 years ago? Automatically move the data when its 90, 60, or 30 days old. AI based, what we have an easy tier, automatically will determine what tier it should go on, whether when the data's hot or when the data's cold and on top of that, because we can tier over 440 arrays that are not IBM logo'd, multi vendor tiering, we can tier from our box to an EMC box. So if you have a flash array, you've got an old or all hard drive that you've moved into your back up in archive tier, we can automatically tier to that. We can tier from the EMC array out to the Cloud, but it's all done automatically. The admin doesn't do anything, it just says source and target and the AI does all the work. That's how you get the productivity that you're talking about, that you need in storage and back ups even worse because you got to keep everything now, which Sam mentioned GDPR, all these new regulations and the Federal Government its like keep the data forever. >> But in that case, the machine can determine whether or not it's okay to put it in the Cloud, if it's in Canada or Germany or wherever, the machine can adjudicate and make those decisions. >> And that's what the AI, so in that case you're using AI inside of the storage system versus what we talked about with our other software that makes our storage systems a great platform for other AI workloads that are not, if you will, AI for storage. AI for everything else, cars or hospitals or resume analysis. That's what the platform can, but we put all this AI inside of the system 'cause there aren't that big, giant, global, Fortune 500 has 55 storage admins and in 2007 or eight, they had 100, but they've quintupled the amount of storage easily if not 10x'd it, so who's going to manage that? Automation. >> Guys, good discussion. Not everyday, boring, old storage. It's talking about intelligence, real intelligence this time. Eric, Sam, thanks very much for coming to theCUBE. Great to see you guys again. >> Thank you. >> Thank you. >> You're welcome. Alright, keep it right there everybody. Stu and I will be back with our next guest shortly, right after this break. John Furrier is also here. IBM Think, Day four, you're watching theCUBE. Be right back. (tech music)

(electronic music) >> Announcer: Live from Las Vegas, it's theCUBE, covering Interconnect 2017. Brought to you by IBM. >> Welcome back to Interconnect 2017 everybody, this is theCUBE, the leader in live tech coverage. Russ Kennedy is here. He's the Vice President of Product Strategy and Customer Success at IBM. Russ, good to see you again. >> Good to see you, Dave. >> So Russ, of course, you and I have known each other for years. >> Yes. >> From the Cleversafe. You guys came in from the Cleversafe acquisition-- >> Right. >> A phenomenal move for you guys. Great exit, awesome move for IBM. >> Yep. >> So we're now well over a year in. >> Umm-hmm. >> So the integration, you've been long past Blue Washing (laughing) you're now in, and you're integrating with other services. >> Right. >> You're embedded in the cloud, still selling on prem-- >> Right. >> Hybrid messaging, so give us the update. What's happening at Interconnect? >> Sure, well, thanks for having me on. >> Dave: You're welcome! >> It's great to see you again. And you're absolutely right. Things have been moving very rapidly since the acquisition. It's about 15 months since we've been part of IBM now. And we still have a very robust on prem business that was our heritage in the Cleversafe days, but now that we're part of IBM we're well entrenched in the cloud. We've got cloud services, object storage services in the cloud, and a variety of different flavors there. We announced a couple of new things this week that I think are very exciting for clients. I'm sure we'll get into that as we go through this discussion. And we have a hybrid combination, so if clients want to have some of their data on prem, some of their data in the cloud, we offer that hybridity as well. And I think that's very exciting for enterprises that are looking to figure out where their workloads run best, and be able to have that flexibility to move things back and forth if they need to. >> We were talking off-camera, I remember I was saying to you, Cleversafe was one of Wicky-Bon's first clients-- >> Umm-hmm. >> Back when we were tiny-- >> Umm-hmm. >> And you guys were just getting started and-- >> Right. >> I remember we were working with you guys, and sort of talking about some positioning and things like that, and I remember saying, Look, it's going to cloud! >> Russ: Right, right, right. >> It's all going there. And at the time, it was like, you guys were saying, Yeah, we think so, too, but it's just not here yet (laughing). >> Right. >> (laughing) And we're a small startup you got-- >> Yeah. >> And so, you have the conviction of belief that it's going to happen, but at the same time you have to survive-- >> Sure, sure! >> And you got investors and it's... >> Yep. >> But the growth of unstructured data and then all of a sudden the combination of that, plus cloud happened. And then boom that was a huge tailwind. >> Right. >> Talk about that. >> Right, right, no, you're exactly right. In the early days it was very, very difficult to get people to understand the value of object storage and understand the value of cloud. And we were out there pioneering discussions around this concept, but we knew that the wave was going to happen. The growth of unstructured data was already obvious. You had music services, you had video services, everything going online. People wanting to distribute information and share information, and so you knew that the wave was coming. It took a little bit longer than I think everybody thought. I think certainly success in other public cloud services like Amazon and Microsoft kind of helped drove that as well. But we were certainly there with leading technology, and as soon as people started to realize the benefits of object storage for storing large, unstructured data objects, it just took off. >> Well, you know, too, the cloud progression was really interesting. >> Umm-hmm. >> You're right. Amazon sort of popularized it. >> Yep. >> And then the downturn in 2007, 2008, caused a lot of CFOs to say, Hey, let's try this cloud thing. >> Exactly. >> And then they came out of it-- >> Russ: Exactly, yep. >> And said, Hey, this cloud thing's actually really cool. >> Russ: Umm-hmm, umm-hmm. >> Now, let's operationalize it (laughing). >> Right. >> And go mainstream. And so, and now you've got this big discussion going on around data value, right. >> Russ: Of course. >> Everybody's talking about the value of data and what it means-- >> Russ: Sure, sure. >> And moving conversations up the stack away from sort of bit slicing and-- >> Right, right (laughing). >> Object stores-- >> Yeah, exactly. >> And ups the data value. >> You're exactly right. >> What are you seeing here? >> I think that's another new interesting area that we're getting into. It's the value of information, and I think what's driven that is the tools and the technologies that are now available to analyze data in variety of formats, right. The whole analysis and analytics capability that exist in the marketplace today is giving organizations a reason to take a look at their data, and to leverage their data, and to use their data, to drive business outcomes, to be more competitive, to be more agile, to be more flexible. So they're using the information. They have tools now that can give them insight into all kinds of things, their own data, external sources of data, new data that's being generated through applications and those kinds of things. All that can come together and analysis can go on top of it, to give people really quick insights into how to drive their business. And I think that's the really exciting part about being part of IBM's cloud because IBM has all those tools. >> We've been having conversations now for... It's well over several months and going into years-- >> Umm-hmm. >> Where the CIO's not so much thinking about storage, and certainly not worried about the media. >> Right. >> But definitely talking about what services can I tap to enhance the value of my data? >> Sure. >> How do I monetize, not necessarily data itself, but how does data contribute to the monetization of my company? >> Umm-hmm. >> And you guys fit into that. >> Sure. >> So maybe talk about that a little bit-- >> Sure, well, we talked to clients all the time about the value of the data, regardless of what industry you're in, financial services, healthcare, manufacturing, all of those types of organizations have information and it's information that can help them be more productive. It can help them be more agile. It can help them win in the marketplace. All they need to do is open it up and use it, leverage it, analyze it, look at it, look at it from a variety of different sources, and it can help them do a lot of things more efficiently, so we talked to clients all the time about the value of data. Storage is certainly something that makes that value realizable, and it's the interfaces between applications and tools that make the data usable. And we open that up to clients with our storage system very easily, whether it's on prem or it's in the cloud, and that's what they like. Now, we heard David Kenny on stage the other day-- >> Umm-hmm. >> He announced IBM Cloud Object Storage Flex-- >> Yes. >> And he said, We do have a marketing department, and yes, they did come up with that name. (laughing) A funny tongue-in-cheek moment. >> Yes, yes. >> But talk about Flex. What is it? And why is it relevant? >> So a lot of clients that we've engaged with recently have talked about... They love the cloud model. They certainly love the simplicity and the ease of growth and those kinds of things that cloud gives them. But they're a little confused about the pricing and they're worrying about whether they're paying too much for the workload that they have in the cloud. So we designed Flex as a way to look at storing data. First of all, it's a very low cost entry point for storing the data. And then it's designed for data where the workload may be unpredictable. It may be cold for some period of time, and then it may become very active for a period of time, and then go back to being cold again. What Flex does is it ensures that you don't overpay when you actually utilize that data, when it's very active, very hot, maybe you're running some sort of analytics against that data. Maybe it's some sort of cognitive recognition analytics process that you're running against the data. It makes it very usable, but yet, you're not paying too much to access that data. So Flex is designed for those kinds of uneven, varied workloads, or workloads where it's very cold for some period of time and very hot. Traditional tiers are designed for hot workloads, mid-level workloads, and very cold workloads. Flex actually covers the whole gamut, and it ensures that you're not paying too much for storing and using your data. >> So that's a problem that people have because-- >> Umm-hmm. >> They don't really understand how to optimize cost-- >> Right, right. >> If they don't understand their workloads. >> Right. >> They get the cloud bill at the end of the month. They go, Whoa-- >> Yep, exactly. >> What just happened? >> Exactly. >> It's complicated for people, there's a lot of times it's different APIs for different services. >> Russ: Sure, sure. >> So talk a little bit more about how customers... How you see customers deploying that and what it's going to mean to... >> Sure. >> What's the business impact? >> Yeah, no it's a great question. So Flex, first of all, you only have to remember four numbers. There's a number to store the data, a cost to store the data, a cost to retrieve the data, a cost for what we call Class A Operations, which are write operations and then Class B, which are read operations. Four numbers you have to remember. You know that you're not going to pay over a certain amount, regardless of how often you use the data, so it's very simple for people to understand. It's one set of numbers. It doesn't matter what the workload is. You know you're not going to be overcharged for that workload. >> You set a threshold. >> Exactly, you set a cap, you set a threshold. >> Yeah. >> And you're not going to pay over that amount, so it's very simple for them to utilize. Then, so they start to use it, and let's say that over a six-month period of time they start to understand their workload, and they know it's a very active workload. They can then change that data into maybe our standard tier, and actually even save more money because it's consistent, it's predictable when it's active, they'll actually lower their cost. And we're very open with clients about that because we want to take away that complexity of using the storage, and certainly the complexity of billing, like you talked about. And give clients a very easy transition into the cloud, and make sure that they can use it and leverage it the way they need to be more productive. >> So the key to that is transparency. >> Russ: Yes, absolutely. >> And control. And that's an elastic sort of dial-up, dial-down-- >> Absolutely. >> As you need it. >> Russ: Very, very much so. Yes, definitely. >> I wanted to ask you, so we've been obviously watching... IBM made the SoftLayer acquisition, it was like, Okay, we're going to buy this bare metal hosting company. >> Umm-hmm. >> And then they bring in Bluemix, and then they start bringing in applications. >> Yes, yes. >> And then all of a sudden it's like, IBM does what IBM does (laughing), and boom! Now, you've got this machine going. >> Yes. >> And so, several acquisitions that are relevant here, Aspera. >> Yes. >> Clearleap. >> Yes. >> UStream fits there because we know Ustream because we broadcast on UStream-- >> Russ: Yes, yes, uh-huh. >> And, of course, Cleversafe. >> Umm-hmm. >> Are you beginning to leverage those acquisitions and potentially others through Bluemix-- >> Yes. >> To create services and new value for clients? >> Yeah, so we're fully integrated with all those technologies, right, the object storage system through our APIs. Every single one of those technologies can leverage and utilize the storage system underneath. I'll give you an example, Aspera, as you mentioned, a very, prominent product in the marketplace. I think just about every company in media and entertainment and certainly any company that's dealing with unstructured data objects knows and uses Aspera. They have a service now in the cloud where you can actually move data very rapidly over their protocol, into the cloud, and then store it in the object storage system. That's easy, that's simple. That makes it easy to start to leverage cloud. UStream the same way, Clearleap the same way. All of this comes together in Bluemix. Bluemix is the glue, so to speak, so if you're developing new applications you have all of the Bluemix tools that you can use, and then you got all these technologies that are integrated, including the object storage system, which is the foundation, everything's going to... All the data's going to reside in an object storage system. That makes it all usable for clients, very simple, very easy. They have a whole portfolio of things that they can do. And it's all tied together through APIs. It's very, very nice-- >> And has that opened up when you're small startup... (laughing) You don't have all these resources-- >> Right. >> How has it opened up new opportunities for you guys? >> So we see a lot of new startups coming on board, and taking advantage of the storage system-- >> Right. >> And all the different services that sit on top. Many companies today are born on the cloud, or they're new applications that are being born on the cloud, and so, they have access to, not only infrastructure, like you said within Bluemix, they also have access to other services, video services, high-speed data transfer services, object storage services. So they're able to take advantage of all those different services, build applications very quickly. Another thing that's interesting about IBM, they have this concept, you may have heard of it, this Bluemix Garage concept-- >> Dave: Yeah, I have. >> Which is a rapid deployment, rapid application development, using design thinking and agile methodologies, to quickly develop a minimum viable product that now uses object storage as part of the services, right. So as a new client, you can come in, sit in the Bluemix Garage, work on the application, and have some really rapid prototyping going on, and leverage the storage system underneath. And that gets you started, gets you going. I can see a lot of new applications coming to market through that same-- >> So they're like seven garages, is that right around the world? >> Russ: Yes, yes. Yeah, they're around the world. And so, I didn't realize... So Cleversafe's a fundamental part of that, in the object storage. >> It is now. And we just announced it this week at Interconnect, but it is now. >> So what does that mean? So I go in and I can... It's basically a set of... Sets of best practices-- >> Correct, correct. >> And accelerance and-- >> Right. And obviously in the cloud world, you need a place to place your data, right. So the integration with Cloud Object Storage, Cleversafe now called Cloud Object Storage is now all part of that, so it's integrated into the app dev that's going on in those garages. And we're excited about that because I think we'll see a lot of new technologies coming through that methodology, and certainly ones that leverage our storage technology, for sure. >> What's it been like to go from relatively small Illinois-based startup. (laughing) And now you're in IBM. >> Right. >> What was the integration like (laughing)? Are you on the rocket ship now? You were kind of on it before, but now it's like, steep part of the S-curve-- >> Sure. >> With all these global resources. Describe that. >> Well, I think the biggest part that's happened to us as an organization is exposure to a number of different accounts that we as a small company may not have had access to, certainly in certain industries, IBM's in every part of the world, in every industry, and that exposure from IBM's go to market has been very, very exciting for us. And certainly, global now, right. As Cleversafe, we were only in North America and Europe, for example, and now we're all over the world, or had the chance to be all over the world, so that's been really exciting. And then on top of that the whole integration into the cloud, right, because IBM's cloud business unity is the one that drove the acquisition of Cleversafe because they wanted the technology in the cloud. And now that we're there, we can offer storage services, object storage services as a foundation to anyone all over the world. And I think that's really exciting, and it's the exposure to all kinds of different businesses that's been exciting since we've been part of-- >> Yeah, and the speed at which you can get to that object store as a service as opposed to-- >> Absolutely. >> As opposed to saying, Okay, knocking on-- >> Yes. >> All the cloud doors, (laughing) And, hey, do you want to buy my cloud? And like, Well, you know we got our own, or whatever it is. >> Right, right. >> And now it's just boom global-- >> It's shortened that sale cycle tremendously, right. People are up and running in a few days now, or even a few hours, whereas before it may take months or, even quarters, to get started. You can get started now just by going to the portal, signing up for object storage services, starting to write data into the cloud, starting to leverage these other services that we walked about. It's very simple-- >> And the commentorial effects of what we were talking about before with, like Aspera and UStream, and so fourth-- >> Russ: Umm-hmm, umm-hmm. >> Give you the ability to add even new services. IBM 's always been very good at-- >> Yes. >> Acquisitions. >> Yes. >> We forget that sometimes IBM... (laughing) >> Acquisitions are always hard-- >> Yeah. >> But we've been fortunate we've had a lot of support and a lot help in getting integrated into the various businesses, And I think it's been a good journey. >> So what should we look for? What kind of milestones? Can you show a little leg on futures (laughing)? What should we be paying attention to? >> Well, we're going to continue to do what clients are asking us to do. We're going to develop features and functions, both on prem and in the cloud. We're going to integrate with a lot of different technologies, both IBM technologies and other company technologies. You may have seen our announcements with NetApp and VERITAS this week. >> Yeah. >> So we're going to continue to expand our integration with other technologies that exist in the marketplace because that's what clients want. They want solutions. They want end-to-end solutions, both on on prem and in the cloud. So we're focused on that. We're going to continue to do that. We'll certainly integrate with other IBM services as they come to market in the cloud. That's a really exciting thing, so we're going to continue to focus on driving success for our clients. And that's exciting. >> Oh! Russ, belated congratulations on the acquisition, and going through the integration. I'm really happy for you guys, and excited for your future. Thanks for coming on theCUBE. >> Thank you. >> You're welcome. >> Thank you, Dave. >> Alright, keep right there everybody. We'll be back with our next guest. This is theCUBE, we're live from Interconnect 2017. Be right back! (electronic music)

>> Commentator: Live from Las Vegas. It's theCUBE. Covering InterConnect 2017. Brought to you by IBM. >> Hello everyone. Welcome to theCUBE special broadcast here at the Mandalay Bay in Las Vegas for IBM InterConnect 2017. This is IBM's big Cloud show. I'm John Furrier. My co-host, David Vellante for the next three days will be wall-to-wall coverage of IBM's Cloud Watson. All the goodness from IBM. The keynote server finishing up now but this morning was the kickoff of what seems to be IBM's Cloud strategy here with Dave Vellante. Dave, you're listed in the keynote, we are hearing the presentation. We had the General Manager/Vice President of Data from Twitter on there, Chris Moody, talkin' about everything from the Trump presidential election being the avid tweeter that he is and got a lot of laughs on that. To the SVP of Cloud talking about DevOps and this is really IBM is investing 10 million dollars plus into more developer stuff in the field. This is IBM just continuing to pound the ball down the field on cloud. Your take? >> Well IBM's fundamental business premise is that cognitive, which includes analytics, John plus cloud plus specific industry solutions are the best way to solve business problems and IBM's trying to differentiate from the other cloud guys who David Kenny was on stage today saying, you know, they started with a retail business or the other guys started with search, we started with business problems, we started with data. And that's fundamental to what IBM is doing. The other point, I think is-- the other premise that IBM is putting forth is that the AI debate is over. The Artificial Intelligence, you know, wave of excitement in the 70s and 80s and then, you know, nothing is now back in full swing. An AI on the Cloud is a key differentiator from IBM. In typical IBM fashion for the last several Big Shows, IBM brought out not an IBMer but a customer or and or a partner. And today it brought out Chris Moody from Twitter talking about their relationship with IBM but more specifically the fact that Twitter's 11 years old. Some of the things you're doing with Twitter obviously connected into March Madness and then Arvind Krishna who has taken over for Robert LeBlanc as the head of the Cloud group, talked about IBM, AI, IBM's Cloud, blocked chain, trusted transactions, IoT, DevOPs, all the buzz words merged into IBM's Cloud Strategy. And of course, we reported several years ago at this event about Bluemix as the underpinning of IBM's developer strategy. And as well it showcased several partners. Indiegogo was a crowdfunding site and others. Some of those guys are going to be in theCUBE. So. You know as they say, this AI debate is over. It's real and IBM's intent is to the platform for business. >> Dave, the thing I want to get your thoughts on is IBM's on a 19 consecutive quarters of revenue problems with the business on general but they've been on a steady course and they kind of haven't wavered. So it's as if they know they got to shrink to grow approach but we just came off the heels of Google Next which is their Cloud Show. How the Amazon is on re-invent as the large public cloud but the number one question on the table that's going to power IoT, that's going to power AI, is the collision between cloud computing and IoT, cloud computing in big data I should say is colliding with IoT at the center which is going to fuel AI and so, it brings up the question of enterprise readiness. Okay? So this is the number one conversation in the hallways here at Las Vegas and every single Cloud Show in the enterprise is, can I move to the cloud? Obviously it's a hybrid world, multi-cloud world. IBM's cloud play. They had a Cloud. They're in the top four as we put them in there. Has to be enterprise ready but yet it as to spawn the development side. So again, your take on enterprise readiness and then really fueling the IoT because IoT is a real conversation at an architectural level that is shifting the-- tipping the scales if you will for where the action will be. >> Well John, you and I have talked in theCUBE for years now. Going on probably five years that IBM had to shrink to grow. They've got the shrink part down. They've divested some of its business like the x86 business and the microelectronics business. They have not solved the grow problem. Let's just say 19 straight quarters of declining revenue. But here's the question. Is IBM stronger today than it was a year ago? And I would argue yes and why is that? One is its focus. Its got a much clearer focus on its strategy around cognitive, around data and marrying that to Cloud. I think the other is as an 80 billion dollar company even though it's shrinking, its free cash flow is still 11.6 billion. So it's throwing off a lot of cash. Now of course, IBM made those numbers, made its earnings numbers by with through expense control, its got lower tax right. Some of the new ones of the financial engineering. Its got some good IP revenue. But nonetheless, I would still argue that IBM is stronger this year than it was a year ago. Having said that, IBM's service as business is still 60% of the company. The software business is still only about 30% into it but 10% is hardware. So IBM-- people say IBM has exited the hardware business. It hasn't exited completely the hardware business but it's only focusing on those high value areas like mainframe and they're trying to sort of retool power. Its got a new leader with Bob Picciano but it's still 60% of the company's business is still services and it's shifting to a (mumbles) model. An (mumbles) model. And that is sometimes painful financially. But again John, I would argue that it is stronger. It is better positioned. And now its got some growth potential in place with AI and with, as you say, IoT. We're going to have Harriet Green on. We're going to have Deon Newman on. Focusing on the IoT opportunity. The weather company acquisition as a foundation for IoT. So the key for IBM is that it's strategic imperatives are now over 40% of its business. IBM promised that it would be a 40 billion dollar business by 2018 and it's on track to do that. I think the question John is, is that business as profitable as its old business? And can it begin growing to offset the decline in things like storage, which has been seeing double digit declines and its traditional hardware business. >> So Dave, this is to my take on IBM. IBM has been retooling for multiple years. At least a five year journey that they have to do because let's just go down the enterprise cloud readiness matrix that I'm putting together and let's just go through the components and then think about what was old IBM and what's new. Global infrastructure. Compute networking, storage and content delivery, databases, developer tools, security and identity, management tools, analytics, artificial intelligence, Internet of Things, mobile services, enterprise applications, support, hybrid integration, migration, governance and security. Not necessarily in that order. That is IBM, right? So this is a company that has essentially (mumbles) together core competencies across the company and to me, this is the story that no one's talking about at IBM is that it's really hard to take those components and decouple them in a fashion that's cloud enabled. This is where, I think, you're going to start to see the bloom on the rose come out of IBM and this is what I'm looking at because IBM had a little bit here, they had a little bit here, then a little stove pipe over here. Now bringing that together and make it scalable, it's elastic infrastructure. It's going to be really the key to success. >> Well, I think, if again if you breakdown those businesses into growth businesses, the analytics business is almost 20 billion. The cloud business is about 14 billion. Now what IBM does is that they talk about as a service runway of you know, 78 billion so they give you a little dimensions on you know, their financials but that cloud business is growing at 35% a year. The as a service component, let's call it true cloud, is growing over 60% a year. Mobile growing, 35%. Security, 14%. Social, surprisingly is down actually year on year. You would thought that would be a growth theory for them but nonetheless, this strategic initiatives, this goal of being 40 billion by 2018 is fundamental to IBM's future. >> Yeah and the thing too about the enterprise rate is in the numbers, it speaks to them where the action is. So right now the hottest conversations in IT are SLA's. I need SLA's. I have a database strategy that has to be multi-database. So (mumbles) too. Database is a service. This is going to be very very important. They're going to have to come in and support multiple databases and identity and role-based stuff has to happen because now apps, if you go DevOps and you go Watson Data Analytics, you're going to have native data within the stack. So to me, I think, one of the things that IBM can bring to the table is around the enterprise knowledge. The SLA's are actually more important than price and we heard that at Google Next where Google tried it out on their technologies and so, look at all the technology, buy us 'cause we're Google. Not really. It's not so much the price. It's the SLA and where Google is lacking as an example is their SLA's. Amazon has really been suring up the SLA's on the enterprise side but IBM's been here. This is their business. So to me, I think that's going to be something I'm going to look for. As well as the customer testimonials, looking at who's got the hybrid and where the developer actually is. 'Cause I think IoT is the tell sign in the cloud game and I think a lot of people are talking about infrastructures of service but the actual B-platform as a service and the developer action. And to me, that's where I'm looking. >> Well comparing and contrasting, you know, those two companies. Google and Amazon with IBM, I think completely different animals. As you say, you know, Google kind of geeky doesn't really have the enterprise readiness yet although they're trying to talk that game. Diane Green hiring a lot of new people. AWS arguebly has, you know, a bigger lead on the enterprise readiness. Not necessarily relative to IBM but relative to where they were five years ago. But AWS doesn't have the software business that IBM has yet. We'll see. Okay so that's IBM's ace in the hole is the software business. Now having said that, David Kenny got on stage today. So he came out and he's doing his best Jeremy Burton impression. Came out in sort of a James Bond, you know, motif and guys with sunglasses and he announced the IBM Cloud Object Storage Flex. And he said, yes we have a marketing department and they came up with that name. You know, this to me is their clever safe objects tour to compete with S3, you know several years late. After Amazon has announced S3. So they're still showing up some of that core infrastructure but IBM's-- the (mumbles) of IBM strategy is the ability to layer cognitive and their SAS Portfolio on top of Cloud and superglue those things together. Along, of course, with its analytics packages. That's where IBM gets the margin. Not in volume infrastructure as a service. >> I want to get your take on squinting through the marketing messages of IBM and get down to the meat and the bone which is where is the hybrid cloud? Because if you look at what's going on in the cloud, we hear the new terms, lift and shift. Which to me is rip and replace. That's one strategy that Google has to take is if you run (mumbles) and Google, you're kind of cloud native. But IBM is dealing a lot at pre-existing enterprise legacy stuff. Data center and whatnot so the lift and shift is an interesting strategy so the question is, for you is, what does it take for them to be successful? With the data platform, with Watson, with IoT, as enterprise extend from the data center with hybrid. >> Well I think that, you know, again IBM's (mumbles) is the data and the cognitive platform. And what IBM is messaging to your question is that you own your data. We are not going to basically take your data and form our models and then resell your IP. That's what IBM's telling people. Now why don't we dig into that a little bit? 'Cause I don't understand sort of how you separate the data from the models but David Kenny on stage today was explicit. That the other guys, he didn't mention Google and Amazon, but that's who he was talkin' about, are essentially going to be taking your data into their cloud and then informing their models and then essentially training those models and seeping your IP out to your competitors. Now he didn't say that as explicitly as I just did but that's something as a customer that you have to be really careful of. Yes, it's your data. But if data trains the models, who owns the model? You own the data but who owns the model? And how do you protect your IP and keep it out of the hands of the competitors? And IBM is messaging that they are going to help you with the compliance and the governance and the (mumbles) of your organization to protect your IP. That's a big differentiator if in fact there's meat in the bone there. >> Well you mentioned data, that's a key thing. I think whether doing it really quickly is getting the hybrid equation nailed so I think that's going to like just pedal as fast as you can. Get that going. But data first enterprise is really speaks to the IoT opportunity and also the new application developers. So to me, I think, for IBM to be successful, they have to continue to nail this data as value concept. If they can do that, they're going to drive (mumbles) and I think that's their differentiation. You look at, you know, Oracle, Azure, Microsoft Azure and IBM, they're all playing their cards to highlight their differentiation. So. Table stakes infrastructures of service, get some platform as a service, cloud native, open source, all the goodness involved in all the microservices, the containers, Cooper Netties, You're seeing that marker just develop as it's developing. But for IBM to get out front, they have to have a data layer, they have to have a data first strategy and if they do that well, that's going to be consistent with what I think (mumbles). And so, you know, to me I'm going to be poking at that. I'm going to be asking all the guests. What do you think of the data strategy? That's going to be powering the AI, you're seeing artificial intelligence, and things like autonomous vehicles. You're seeing sensors, wearables. Edge of the network is being redefined so I'm going to ask the quests really kind of how that plays out in hybrid? What's your analysis going to be for the guests this week? >> Well, I think the other thing too is the degree to-- to me, a key for IBM success and their ability to grow and dominate in this new world is the degree to which they can take their deep industry expertise in health care, in financial services and certain government sectors and utilities, et cetera. Which comes from their business process, you know, the BPO organization and they're consulting and the PWC acquisition years ago. The extent to which they can take that codifier, put it in the software, marry it with their data analytics and cognitive platforms and then grow that at scale. That would be a huge differentiator for IBM and give them a really massive advantage from a business model standpoint but as I said, 60% of the IBM's business remains services so we got a ways to go. >> Alright. We're going to be drilling into it again. There's a collision between cloud and big data markets coming together that's forming the IoT. You can see machine learning. You can see artificial intelligence. And I'm really a forcing function in cloud acceleration with data analytics being the key thing. This is theCUBE. We'll be getting the data for you for the next three days. I'm John Furrier. With Dave Vellante. We'll be back with more coverage. Kicking off day one of IBM InterConnect 2017 after the short break.