>> Announcer: Live from Las Vegas, it's theCUBE. Covering VMworld 2017, brought to you by VMware and its ecosystem partners. (upbeat techno music) >> Welcome back to theCUBE's continuing coverage of VMworld 2017. Nearing the end of day two. Lots of topics going on, my goodness. I'm Lisa Martin with my co-host, Dave Vellante. And we're excited to have Ed Walsh, General Manager of IBM Storage, back on theCUBE. Welcome back. >> Thank you very much, it's nice to be back. >> Yeah, so two really strong quarters of IBM Storage revenue growth. >> Ed: Shh, don't let that get out. (laughs) It'd make my job too easy. But thank you for noticing. >> You didn't bring your crystal ball for the third quarter? >> But I do appreciate it. We do like to quietly just do it. But thank you. >> All right. So, what are some of the big trends? What's coming down the pike for you at IBM? >> I think if you look at, one the reason we're doing so well is, I think, the innovation we're driving the market now which will take you into the future. But also, just how we're approaching clients is kind of resonating. And it does play into future trends. And we can talk about especially on the show floor. But I think clients are just challenged right now with all the complexity innovation. We could talk about it until the nth degree or bring in dev ops environment. But it's the complexity of IT, and all the change they're dealing with. In fact, if anything, because all the competition like the Uber my Business coming into my industry and disrupting me. But we find all of our customers are on the heels a little bit in technology. Instead they need to kind of lean in. And so the trend that we're seeing is people trying to simultaneously modernize their traditional application environment, which is how do you free up your people and time through automation and agility so that you can move those people and resource and start transforming the business on higher value type of thing? So we see that consistently. So you see a lot of API type of automation tools. That just frees up the current team to do other things. You'll see that in our portfolio. One of our big themes is to modernize the traditional application environment. It's what we do on true private cloud, allow you to have all the capabilities of public cloud in a hybrid cloud environment. So, bring everything you do in the public cloud on prem. It's the same automation capabilities, same dev ops tools, and use it on prem. And then go to the cloud when you need to in hybrid cloud. That's all about automation, API temp automation, it's all about freeing up your team. So, what kills the team as far as the automation around dev ops or test dev? Also, things just like backup protection. So, how do you backup your environment? It can be just a complete manual task that really doesn't add a lot of value. Or if you use a new technology and innovate, you can actually use it to drive newer innovations, and drive new use case for that secondary storage. So, we see those trends happening. That's where I would say our clients kind of responding to the innovation we're bringing to market. And that's where you see us growing above market. >> Dave: You know I want to pick up on the growth and talk about you're clearly gaining share. The numbers were high single digits, right? >> Ed: Yeah, 7% in key one, 8% with growing margins. So, expanding margins. That's dramatically over market. And the market's growing at low to mid-single digits? >> 1%. >> Dave: Yeah, okay. Basically, flat. >> Ed: Yep. >> So, that's significant gains. But one could say, okay, if IBM has been losing share and sort of hitting off the bottom and now it's gaining share, we'll see if you can sustain that. But I'm more interested in the attributes of a leader in the storage business. I'm just listing them here. Certainly, you've got to be relevant. I want to come back to that. You got to have a complete portfolio. You got to have strong product cycles. You got to have a great go-to-market, strong leadership, and maybe a little bit of luck. I don't know. I'm probably missing some things there. Not a bad list. >> Ed: Yeah. So, relevance. I want to go back, I said to Eric when he was on, that interview that you did with Peter Burris at our studio. And you were talking about digital transformation and data and storage being an active element. It seemed like a very relevant conversation for the C-suite. >> Ed: Sure. >> And as Eric was pointing out, C-level executives don't like to talk about storage cause it's just a cost. >> Ed: Right, right. >> So, you've got the relevance piece going for you cause you're IBM. >> Ed: Sure. >> Talk about some of those other ones. Complete portfolio, end of product cycles have been very important in the past. And IBM hasn't had that as an advantage but it seems like you brought that to IBM and others. So, talk about that a little bit, that cadence. >> So I've talked about coming here 12 months ago, it was to really bring innovation and drive growth for division. I had the hypothesis, and we talked about this, so, I think clients are challenged. They're looking for a partner to help them out. And I think where IBM's unique, which gets to your question, one, we have the right vision. How do you talk cloud and cognitive? How do you leverage your data? Whatever metaphor you use to get more out of your data, leverage it for decisions, that's what we do both in hybrid cloud and public clouds. But we also help people through these multiple eras, and IBM's very unique. Very few of our competitors actually say they can go through multiple eras. IBM's been through every era in compute, and we calmly go through it. And clients give us credit for that. You mentioned the broad portfolio. When I first started here, people said, "You're portfolio's board." And I kind of say, if you really want to be meaningful, and help people modernize, get from where they are to where they need to get to, you need a broad portfolio to do exactly that. And IBM has the broadest portfolio in the industry for storage. And then, last but not least, which is innovation, I actually think my secret weapon is, not because I'm the storage company, but if I could ever get the rest of IBM, all the innovation, all the capabilities from Watson or analytics and cloud into my portfolio, all of a sudden now I kind of distanced myself from other storage. In fact, I would say it's a big boy or big girl environment where you need to actually, it's not about the next array, which I'll provide, it's actually how do you actually help people get from here to there. And a single product company just can't do that. Although, it's easier to market, it's the complexity. I think it is the innovation. In each segment we're in, we're either number one or number two in all the segments. So, number two in overall storage, number one in software, number one in software-defined, number two in data protection, number one in analytics. Each one of those is highly competitive and you need to drive innovation. And what we do is, we leverage not only our development expense or developers, but we have probably the only company in storage left that has primary research. So, we have our classic IBM research doing fundamental what's going to be next, and that's what we're bringing to market. >> So, what have you learned, second time around at IBM, what have you learned about your ability to leverage those other pieces of IBM? Cause every general manager talks about all the great things at IBM, but few have been able to bring that in. I remember when IBM bought Storwize, I was so frustrated. It was like two years before you took this secret weapon. You know, put it in! Do it! Ship it! And it took too long. What have you learned about how to leverage those innovations? >> So, I think the power of IBM is you do have, I've said a couple times, I'm honored to be the one they chose to help drive this transformation of storage. But also, I'm kind of blown away by the team. So, in very short order, we relaunched an entire new portfolio. We refreshed the entire portfolio, hardware and software, late last year. That's where you're seeing the growth. We're also launching new product that are really hitting this innovation. We're also, as you said how do we leverage research, is think about what we're just doing on flash. So, everyone's talking about NVMe. Well, because we're already doing primary research we already have NVMe capabilities. So NVMe is a way to do an IO, and you're cutting through the IO path. And your latencies go down in order of magnitude. So everything's faster. >> Dave: Eliminating all that over head of the scuzzy stack of just the simplify the-- >> So, we already have that in all our storage products. And also we've just did it in the mainframe. So, we have the ability to do mainframe storage. It does 12 microseconds access time. Which if you think about it that's NVMe performance. But that's exactly what we're bringing from research into our product line. You'll see more, so we'll bring in Watson. So the one thing my predecessors, how do you bring Watson in everything you do? Cognition or AI should be in your product's hardware/software on prem, in the cloud as a service. How about how you do services support? You call, chatbot should be able to help you out. Do an analytics on the different data patterns. So, that's exactly what we're doing. And all that's really from either research or from IBM Greater. I'll give you one just a tactical thing. People are trying to back up to the cloud. It's just hard. How do you get all that data through a little straw. Well, I can either re-architect Spectrum Protect, which we did a lot of re-architect. We just announced a big part here today. But instead, I just leveraged a product called Aspera. IBM had this company they acquired called Aspera that does a lot of, basically, file transfer to the cloud. By doing an API integration in 30 days, my Spectrum Protect clients now do 10 times faster back up to the cloud. That's a good example of just leveraging the Greater IBM. And it was just literally asset sitting there. But how do I bring it to bear for the benefits of my clients? >> So, how did that happen? That was really, if I recall, a cloud acquisition to be more competitive with AWS. And same thing with the Cleversafe acquisition, really fit into that portfolio, round out the Bluemix Cloud. How did you go about leveraging that? Was it just knocking on a colleague's door or was it as simple as picking up a phone call? Or did you have to get people in a headlock and give them a noogie? >> So, I think it's more collaborative than that. I think the the past there were maybe sharp elbows. But I think this is more collaborative. The cloud and the AI team inside IBM is wildly collaborative with me because I bring capabilities that I can bring to them as far as what we can do around storage. So, I think that collaboration's working. It's probably me more helping them out initially to make sure I'm building that bridge, but then it's reciprocated. It's very easy. And the key thing is also being able to understand all that capability from research, and actually try to bring it into offering management team. So getting my offering management team to be more open. to be outside-in. Outside-in from the industry but also from outside-in from the rest of IBM in. And if I leverage these pieces, all of a sudden my portfolio and all of my development expense just gets multiplied. It's a force multiplier that I'm bringing in. And that's where the clients are really responding to it. >> Dave: That's great. >> Lisa: Eric Kurzog >> talked about that, the outside-in, as did Steve. So, it sounds like quite a cultural shift has happened. shift probably isn't a strong enough word, within IBM. You talk about, and everyone has talked about, this message of clients want simplicity. So, as a GM how are you simplifying this cross-function collaboration? What are like the top three things you'd recommend to other GM's to bring the simplicity that clients want internal to be able to get to market faster and iterate. >> So one, you have to look for what's in the industry. The other thing is really listen to clients. The clients will talk about simplicity but then it's the nuances, so really the details of what they mean by that. We use NPS, Net Promoter Score. But we actually get feedback on every service call or inside our own offerings. So you actually get the feedback but more importantly you actually get detailed feedback of what they want to change. So one, you can listen to that. You bring the outside in. That's directly from the clients. We use the term feedback's a gift. Sometimes it's not... But we respond within 24 hours to each and every one of those customers, and that gets you into a nice circle of feedback. The other thing is bring in the right team. So, on my team of about 50% of them has changed. So I brought in basically professional storage team from the inside and outside of IBM so that we can actually have our own outside-in inside. And then really, you need to align your organization to be what the clients need to see. For instance I did a reorganization as far as how I did offering management and go to market that they were aligned. So, instead of being product line driven, what people are purchasing. So people are doing distributed storage. That should be one offering management line, one owner instead of maybe three or four. Cause I have three different, four product lines. And that allows you to simplify what happens in the market. So if you can align your organization to what you actually need to leverage that's pretty easy. >> Lisa: Fantastic. >> Dave: So, I got to ask you. >> So, you're a unique executive. I call you a five tool player. >> Okay. >> You've technical chops. >> A lot of people don't know that about you. I do. You can go toe to toe, which probably scares the crap out of a lot of guys that work for you. You've got financial acumen. >> Ed: Sure. >> You've got a really strong network. You're a visionary and you can inspire people both with that vision but you can also push them. >> Ed: Oh, thanks. >> Hard. >> You know, I've seen that. And that's kind of your reputation, and people have a great deal of respect. So, you've got that sort of perspective. I want to get your perspective on what's happening in the world of VMware, generally in data protection specifically. >> Ed: Okay, sure. >> You've had a lot of experience in that area. You were the CEO of Avamar. You sold that company. Spectrum Protect is a big focus of your business today. What's your sense as to what's happening here? Why is data protection exploding so much? I've been asking this question all week. And I'm still not sure I understand why. Maybe this is a cloud effect. But what's your take on it? >> So, you mentioned simplicity. It fits into the modernizing, how do you free up your people from all these manual tasks? I would say backup is one of those crazy manual tasks that's more of an insurance policy. And then recovery was always a very big challenge. So, what you're seeing is new technologies come out that not only solve all the manual processes. So, what we did in Spectrum Protect is really dramatically simplify what you do, you set up an SLA and it literally self-monitors and keeps track and literally backs up to SLA, and recoveries are instantaneous. That used to be hours of work, every single day by someone. And recoveries would take days or hours days. Could be a long time. And now you're easily be able to come up and running. But also now you have the secondary storage which is a cost. What else can I do with that which has always been the dream. Now what you have is scale architecture's maybe all flash. And what you're doing on prem in the cloud, you have an image copy of everything in your environment for recovery purposes, availability. What else would you do with it? One, you want to make it easy, so the ease thing. SLA management for recovery. So you can do instant availability for if there is an outage. But all of a sudden what else would you do with it? Now what you're able to do, with orchestration, you're able to take that secondary copy, it's instantaneously mountable or bootable copies. All of a sudden you can take a snapshot of that. You can do data masking of that. Now you have this gold copy you can use for test dev or dev ops. It could also be the way that you gather on premises and you get a data copy into the cloud. And backup is a very good way to keep a history of data on a day to day basis or a couple times a day. So now you actually have an index of how your environment is changing over time, that you can use for analytics for other things. So, what's really happening is, it's going from a cost center that used to be a manual headache to everyone. And you're taking the exact same requirement. You have to do that anyway. And know you're making an asset and also you're freeing up your team for doing it. So I think you're going to see a huge investment. In fact, I would say probably the number one area people are investing. But it's past dedupe. So Avamar was the last, well dedupe was the last thing that really changed backup recovery because it was just you can't be moving all that data. Just change the amount of data you're moving so you can do it faster easier. You know, check. But now it's more about the agility. In a secret way, your backup's now the best way to feed test dev. Or the best way to feed dev ops. It's the best way to feed a cloud, if done correctly. So that's what we now suspect in Protect Plus. Literally, just do a backup and we can give you all these other use cases by leveraging the same investment. If you're trying to modernize, and free up your team, and get more for what you already have to do, it's probably the biggest low hanging fruit for clients. >> Yeah, so I mean I think that's the answer. Backup has been historically been crappy insurance that's not cloud-like. The industry's demanding, the customers are demanding a change. >> And then also, how do you do dev ops and test dev, and use production data in a data mass format. You don't want to do that in your primary. You want to take a copy. Backup does that. And you want to use that data. So, it actually solves another area of agility for the same dollars. >> Wow, fantastic. Thank you so much for joining us and sharing your insight. And we'll look for those next quarter results. And hope that trend >> We'll be back. keeps going-- >> We like them. >> Outstanding. Well, for Ed Walsh and my co-host Dave Vellante, I'm Lisa Martin. You've been watching the CUBE's continuing coverage of day two from VMworld 2017. Stick around, we'll be right back with the show wrap. (upbeat techno music)