>> Narrator: Live from Las Vegas It's theCUBE covering Edge 2016. Brought to you by IBM. Now, here are your hosts Dave Vellante and Stu Miniman. >> Welcome back to Las Vegas, everybody. This is theCUBE the world-wide leader in live tech coverage. Leanne Kemp is here. She's the founder and CEO of Everledger. Leanne, good to see you. >> Hello, hello. What a great place to be. >> Good joke, Las Vegas again. Stu and I spend a lot of time here. Why did you start Everledger? >> Well, you know, some might say it's my mid-life crisis but the reality is I've been in emerging technology for 25 years. In the mid 90s, now I'm giving away my age I was in radio frequency identification so at the chip and inlay level supply chain tracking. A bit boring, really. >> Stu: No, RFID is cool. >> But in the last 10 years I've worked in jewelry and insurance. And that's given me an appreciation of the size of the problems that exist in the market. And couple that with a whole lot of nerd we have the ability to solve the problems that we're solving today. >> And describe that problem. It's a problem of provenance and transparency is that right? >> Provenance, fraud, document tampering. And when you mix all of those together you have a pretty potent formula for black market trade. And sadly, some of that trade is really running into terrorist-funded activities. So, it's a pretty big problem but I think now is a very real issue that's washing the front pages of every paper on a daily event. Diamonds, of course, is one of the vehicles for anti-money laundering. And if we can go and serve to reduce some of those problems then it's worthwhile getting out of bed for. >> Okay, so you're attacking the diamond value chain. Why that? 'Cuz you have a background in jewelry? Okay, how are you solving that problem though? Describe that in a little bit more detail. >> So, attacking's pretty aggressive. I think we're enhancing. So, we're bringing transparency in a once-opaque market. You know, we're enabling, with the use of technology to bring transparency into the market so that we can start to reduce some of the problems around fraud. When you really think about I mean most people look at us as a blockchain company. I liken us to an emerging technology company. We're using the very best of blockchain and smart contracts and machine vision as an enabler to be able to identify fraudulent-related activities and reduce them in marketplaces. And we're just starting with diamonds but it's really anything that is appreciable of value that criminals like to maybe get their grubby mitts on. >> When did you get this idea, like what timeframe? 2010, 2011, 2015? >> To be honest with you I think this has been a cocktail of experience that really has brought it together at the right time. So, you know, as I said my background has been really unfolding like a patchwork quilt. But when you really see the heightened anxiety that's going on in market now particularly around synthetic diamonds that are of gem-quality standards there's no greater time to be able to bring confidence back into the diamond industry and the consumer networks. >> I guess my question is that at what point did you say okay blockchain can be addressed to enhance this problem? Did you look at Bitcoin and say hmm, that's interesting? Not a currency, it's a technology that I can apply to all the problems. >> Yeah, I mean, you know, I'm a technologist so I really am quite bored with Sudoku so I would rather sort of look at what's going on in the tech space. And so when I really saw the emergency of Bitcoin I understood where that application could lie. But because I wasn't from a banking background it was patently obvious to me that I could decouple the currency from the ledger and really use the currency as a vehicle or a tokenization of assets. And the assets is diamonds, a girl's best friend. So why wouldn't you want to protect your assets? (chuckles) >> Fascinating 'cuz I think the first time I heard of, you know, blockchain and Bitcoin it was about being anonymous and therefore there were concerns that some of those unscrupulous people that are trying to benefit off of like diamonds would use, you know, this crypto currency. They don't have to talk to banks. They don't have to talk to governments. So you've almost flipped the usage of the technology to something to help the world a little bit more. >> That's right. I guess when you really think about it, you know the Bitcoin has often been assimilated with the anarchic world. And we're really bringing it to clean and transparency. So, I guess there is a juxtaposition there. But everything's upside down for me. I'm from Australia so it's perfectly normal. >> Go ahead, Stu. >> Yeah, just when you look at Blockchain and kind of the core technology you think we're really in the early days? What kind of usage do you see out beyond the ledgers? Are there other applications be it beyond the diamonds that you guys are looking at? >> Yeah, you know, so it's interesting. In the early 2000s I worked in WAP, you know? And I was so excited. I thought wow, this tech is really going to do something. So, you know, I'm part of Team Asserti in Australia and wrote out an application. And I felt like nearly six months came into the tech. And all of a sudden, I woke up and I went where the bloody hell did WAP go? It just disappeared. There was a very real danger that this technology was likely to face the same ill fate. And we often see in any emerging technology where there are heightened promises. They often end in disappointment. So, actually most of the decisions I've made in a start-up, and we're only 18 months old have really been counterintuitive. You know, when it's the time to put the pedal straight down I've often held back to really wait to see where the maturity of the technology was going to lie. And in any emerging technology and if you're a CEO of a start-up you have to be completely articulate about where the problem is that you're solving. But not only that you need to take the time to really distill the technology to its purest essence and then enable that to be the potent shot that goes out first and foremost. And so this is a nascent technology. And maybe, you know, it has the parentage of a multilingual PhD scientist but the reality is it's only just been born. We're not even nappy feddy. We're not even out of out of our nappies right now. So we need to give it the time to really grow. And we've chosen a niche market. It just so happens that it's a bloody big niche. >> So what took longer to figure out the problem or the solution? >> You know, I think you know, I don't know. That's a really good question, actually. I think the problem for me I understood quite early but I just didn't appreciate the size of the problem globally and the extension of that problem into other areas. And really I think it's taken some time for the technology to be understood. We've taken a view that we'd like to see ourselves as the custodian of the technology. We don't want to go to market too early. We want to be sure that whenever the message is delivered to market that it's something we've already delivered that we have built that the engineering effort has already been afforded. You know, small acorns grow into mighty oaks. And so for us, it's about ensuring that we take the time to really give the right fertilizer to the growth. >> And that's a 50 billion dollar problem you said this morning is that right? Is that there- >> Just in insurance. But we have banks as our clients too so, you know, we're shooting hoops. >> So you're saying it's a multiplier of that 50 billion? >> Leanne: Of course. >> Yeah, big multiplier. >> I mean counterfeit good if you extend it into luxury goods it's 1.7 trillion dollars. >> And you talked about the sort of value chain of rough cut, 15 billion and you maybe triple that when it gets polished almost 50 billion and then another one and a half X at retail. Where are the holes in that value chain, everywhere? I mean are you seeing fraud occur throughout that value chain or- >> Effectively. You know, we don't have you know, visibility of complete provenance through the supply chain. And in fact, it's not just limited to the diamond industry. I mean I guess the diamond industry there's the allure of luxury. You know, there's the backdrop of affluence. And then, of course, there's the atrocity of what goes on in terms of or what used to go on so prolifically in blood diamonds. You know, effectively the industry isn't as burdened with technology as say financial services. It doesn't have the legacy of 50 years of technology that it needs to unwind. So, when you really consider what's going on in the market today to bring emerging technology into this space not limited to blockchain even enabling new technologies like high-definition photographs and machine vision our marketplace has the ability to consume that technology quite rapidly. And when you think about the problems in our market or the restrictions in our market it's really a lightning rod moment for us where we've just been fortunate enough to be able to build out a solid engineering rod to be able to capture that lightning bolt of problem. >> Dave: Mm-hmm. >> We've had a lot of discussions with IBM executives this week and they feel security is one of the things that IBM does really well. Talk a little bit about your relationship with IBM what IBM does well what they're good at partnering with. How is it to work with IBM? >> Dave: What they could do better. >> Yeah. >> Absolutely (chuckles). We, in the very first 12 months of Everledger we managed to onboard, you know, a million diamonds. And most people were applauding the efforts of our engineering team. And we certainly applauded ourselves. But Christmas was a very lonely path for me because I started to become shivered by the thought of what would this mean if I went from a million to 10 million to 15 million and then into rough being able to track 320 million carats of rough diamonds across 80 countries around the world. So, when you're a start-up and you're faced with some of the largest organizations and governments around the world let's face it, the industry's 130 years old. You want to be able to look towards a technology innovator like IBM that has been around and reinvented itself over a trusted 100 years. And that transactional trust is at the very core of this fabric. So, some of the things that you look at in terms of a start-up may be actually too isolated. A lot of technology companies that are in the blockchain space are just looking at the blockchain fabric. But for me, it was patently obvious we needed to stretch further. We needed to realize that we have to deliver this into a cloud solution. We have to deliver this technology in such a form that has to be secured. And the security needs to really be from the ground up at the root source right the way through to the front end. And there's no other partner that's actually doing that. There are other service providers in this space that shall not be mentioned. But they're, of course, taking whatever nascent technology is being built and putting it into the cloud. IBM has really taken the time to sew together the right security fabric. >> And that's about scale for you, right? I mean you wouldn't be able to scale without it. >> I sleep at night knowing that we have IBM. Like as a CEO, I sleep at night. >> My understanding, there's container technology that you're using in here. Most people think of containers as security's one of the holes there so, you know, how do you feel with the security of containers today? And maybe you can share a little bit about you know, what IBM's doing specifically for that. >> Yeah, I mean the container services team that we've been working with and today I had the absolute privilege it was a diary note moment for me to present on stage with Donna. You know, her background in security has afforded us the ability to really deliver this quite quickly. The work that they have been doing is recognized not only and I touched on the surface of the three markets that of real concern or focus for us is fraud and theft and cyber. And when you consider the container services and the security team that's wrapped this around I really think that actually one of the silent winners in this is the reduction in cyber crime. And maybe that hasn't been focused on too largely. And the 50 billion dollars that I was talking about was really around document tampering and, you know, the over-inflation of insurance claims. When you really think about it it's actually cyber crime that I think we could actually truly solve as part of the solution itself. >> So explain again, Leanne, how does it work? So each diamond has a unique identifies it's got a fingerprint on there. How does it get on there? >> So there are existing processes in industry. There are two parts to the market first is rough diamonds and the second is polished diamonds. And as diamonds are crossing borders as a part of international trade they're often inspected by gemologists. Those that, of course, have received licenses in the skill of identifying diamonds. But that's all- >> Dave: But that's a spot inspection, is that right or- >> Correct. >> Dave: Yeah. >> But there's also actual machinery. So there are certain types of science that have been applied and have been applied for a number of years. And one of the challenges that we faced with ourselves is to IoT-enable the diamond pipeline. So, some of these machines have been in existence. They're highly calibrated and they have precision but that data is often blackboxed. It's not, indeed, ledgered or stored for public view or even inter-office view. And so one of the tricks that we've enabled is the ability to take all of those data points 40 meta data points as well as the reputation or the expert opinion and lay that data into the blockchain. So we're layering really a reputation score not only of the person, the machine but also the diamond and the validity of that diamond. And that can only come over time with large aggregated data sets. >> Okay, and that is your providence. You said the world's provenance is locked in paper. So now you're locking it into- >> Leanne: You're listening >> The blockchain. Of course (chuckles). I knew we had to talk to you. We better listen. Okay, so all right. And then can you explain the banking crisis the liquidity crisis in the diamond business? >> Leanne: Yeah, absolutely. >> What's that stem from? I didn't quite understand. >> It's really affecting the middle part of the pipeline. We have very large mining companies and of course quite substantial retailers but it's the middle part of the pipeline that's really being caused in terms of a squeeze. And so they are the diamond cutters and polishers really generational businesses that have perfected the art and the skill of cutting diamonds. It's the middle part of the pipeline that's really being affected at the moment. And as I mentioned there are two brave Western banks that remain supporting industry. The largest, which has been really in industry for quite some time is ABN AMRO. And proudly, they still remain. And Barclay's Bank. But we've seen an announcement more recently with Standard pulling back out of the industry for a lack of transparency and a burden on their balance sheet. This, of course, has come from Basel III and some of the regulations that's been pushed down from them. And if we're able to take certification and extend transparency but also bring certification to the next level to enable a collateral management system to be built so banks can take the security on the underlying asset rather than just take a balance sheet position it will lift the burden on their balance sheet. It will give them security of the diamond. And let's face it, diamonds are worth something. And as I said when you start to understand the true effect of rough to polished to track the diamond through its lifecycle and give security is something that banks are open-minded about. >> Yes, okay. So it's not a chicken and egg problem it's a transparency begets liquidity is that right? That's the premise anyway >> Yeah >> Dave: That you're testing basically making that bet with your company. We don't have much time but I just wanted to ask you about your company. You're an entrepreneur. You started the company, you said 18 months ago. Funding, VC, you know, give us the lowdown. >> Sure, sure, sure. I mean I came into London in October of 2014. And I was desperate to talk to insurers. And so one of the largest insurers in the London market is Aviva. And they had a hackathon at Google so I thought hey, this would be all right. I'm just going to Trojan Horse the event and see if I can have a talk to the CFO and COO. So I went there. They opened up some APIs. And because I, of course, had a technical background I thought those APIs are hopeless there's not much I can do with that. But if you want to solve some of the problems here this is what you can do. You can take diamonds, take certification and put it on the blockchain as a way to reduce fraud. And at that hackathon I was awarded the innovation prize. But the managing director of Barclay's Techstars was one of the judges and came to me and invited me to join them as part of their accelerator in London which began in March 2015. And, of course, I thought this is crazy. Why would I want to do that? Why would I want to be in London with a bank? It doesn't really make too much sense. And let's face it, I mean Australia is a much nicer country to spend your holidays in rather than London. But in any event, I returned and participated as part of the Barclay's accelerator and I've been supported through the process of the acceleration. But Barclay's is both a bank and an insurance company in Africa so the penny dropped and we put our head down. We wore some letters off the keyboard and Everledger was born. And away we go. >> And so Barclay's funded, in part the company or- >> Barclay's and the Techstars accelerator program have a seed funding event which is a part of the acceleration program for start-ups if you're chosen. And we were fortunate enough to be chosen. And since that time we've been we haven't disclosed who one of our backers are. >> Dave: Okay. >> But we will, in time. And so we've been funded by a selected name in industry. And we're actually just about to go into our Series A so we're looking towards that in the next number of months. >> Dave: You're not even in Series A yet? So you've gotten this far without even getting to your Series A? >> Leanne: Yeah. >> 980 thousand? >> Well, we have revenue, so- >> Dave: Yeah. >> This is my last start-up. I had to go through an intervention with my family to enable me to be here. >> Dave: This is my last So this is it. >> Dave: We've heard that before. >> I promise. I know, it's true, it's true. >> Opportunities beyond diamonds or is that getting too ahead of our speech here? >> Diamonds, watches, art, fine wine you know, and I'm completely empowered by how do we bring what the diamond industry did so well in the reduction of blood diamonds and bring ethical trade really to the forefront of the mind of the consumer and also the mind of the financial services market. So, you know, for me it's really around that part of the world. If that nexus point comes together then I'll keep getting out of bed for it. >> Awesome. Great story. Impressive entrepreneur. Thanks for coming on theCUBE. >> Leanne: Yes, thank you. >> London's not so bad (chuckles). Comment? >> London's probably watching. (Dave and Leanne laugh) >> All right, thanks again. Keep it right there, buddy. Stu and I will be back with our next guest. We're live from IBM Edge in Las Vegas. We'll be right back. (low tempo music)

>> Announcer: Live from Boston Massachusets it's The Cube covering Red Hat Summit 2017. Brought to you by Red Hat. >> Welcome back to The Cubes coverage of the Red Hat Summit, I'm your host Rebecca Knight, along with my cohost Stu Miniman. We are joined by Jim Wasko, he is the vice president of Open Systems at IBM. Thanks so much for joining us. >> Thanks for having me. >> So, before we get into the new ways in which IBM and Red Hat are working together, give us a little history on the IBM, Red Hat alliance and contextualize things for us. >> Oh sure, sure, so we started with Linux back in the very late '90's as a strategic initiative for IBM, and so Red Hat was one of the key players at that time. We worked with other Linux vendors who no longer exist. Linux Care was one of the companies we worked with, Mandrake, things along those lines. But Red Hat has been a constant through all of that. So we started in the very early days with Red Hat and we had an X86 line at the time, and then as well as Power NZ, and even in the very early days, we had ports of Red Hat running on IBM, all of IBM's hardware. >> And the alliance is going strong today? >> Yes it is, yes it is. So we have that long history and then as Red Hat transformed as a company into their enterprise software and REL in particular, that really matured, as far as our relationship was concerned, and I'm the engineering VP with Red Hat, and we just had a very strong collaborative relationship. We know how to work upstream, they obviously work very well upstream. We've worked in the Fedora Project, as a staging area for our platforms and so, yeah, we've known each other very well. I've been working on Linux at IBM since November of 2000. >> Jim, so IBM, long history with Open Source, I remember when it was the billion dollars invested in Linux. We covered on The Cube when Power became Open Power. Companies like Google endorsing Open Power. Bring us up to speed as to Open Power, how that fits with what you're doing with Red Hat and what you're talking about on the show here. >> Oh yeah, so Open Power was really about opening up hardware architecture as well as the operating system and firmware. And so, as that's progressed Red Hat has also joined in that Open Power initiative. If you look at when we started, just a small group of companies kicked it off, and today we're over 300 companies, including Red Hat as a part of Open Power foundation. They're also board members, so as a key partner in strategic partner of ours, they've recognized that it's an ecosystem that is worth participating in, because it's very disruptive, and they've been very quick to join us. >> That's good, we've talked to Jim Lighthurst about how they choose and they look for communities that are going to do good things for the industry, for the world, for the users, so, it's a nice endorsement to have Red Hat participate, I would think. >> Oh, it is, they don't enter into anything lightly. And so, their participation really is a signal, I think, in the marketplace, that this is a good strategic initiative for the industry. >> Where do you see as the biggest opportunities for growth, going forward. >> Opportunities for growth, there's quite a few. A lot of people don't realize that Linux is really the underlying engine for so many things that we do in the technology world. It's everything from embedded into the automotive industry, if you've got Onboard computer, which most new cars do, 80% of those are Linux. If you talked about web serving, websites, front ends, it's Linux, you know. I know with my mom, she's like "What do you work on?" and I say Linux you know, and she's like "Is that like Windows?" and I'm like "No." And then I tell her, you know Mom you've used it, probably a dozen times today, and then I give her examples. And so, all the new innovation tends to happen on Linux. If we look at HyperLedger, and Blockchain in particular, good example, that's one that takes a lot of collaboration, a lot of coordination if it's going to have a meaningful impact on the world. And so, it starts with Linux as foundation to it. So, any of those new technologies, if you look at what we're doing with quantum computing for example, it takes a traditional computer to feed it, and a tradition computer for the output, and we don't have time to go into details behind that but, Linux fed, as a part of it, because really that's where the innovation is taking place. >> Jim, could you expand a little bit more on the Hyperledger and Blockchain piece? A lot of people still, I think they understand BitCoin and digital currency there, but it's really some of the distributed and open source capabilities that these technologies deliver to the market, have some interest and use cases, what's the update on that? >> Oh that's a good question. So, a lot of people think of BitCoin and that says a very limited use case. As we look at Hyperledger, we notice that it could be applied in so many more ways than just a financial kind of way. Where we've done, it is logistics, and supply chain, we've implemented it at IBM for our supply chain and we've taken data from Weather.com, company that we've acquired, and we use that for our logistics for end of quarter for example. So that's something that was easier for us to implement, because it's all within our company. But then we are expanding that through partners. So that's an example where you could do supply chain logistics, you could do financials. But really, in order for that to work 'cause it's a distributed ledger, you need everybody in the ecosystem to participate. It can't be one company, can't be two companies. And so, that's why very early on we recognized we should jointly start up a project that the Linux Foundation, called Hyperledger, to look at what's the best and how could we all collaborate because we're all going to benefit from it, and it will be transformative. >> So what are you doing there, because as you said, these do present big challenges because there has to buy in from everyone? >> Yeah so if I look at the Hyperledger project specifically at the Linux Foundation, we've got customers of ours like JPMC for example, founding member and participant, we've got a distribution partners, we've got technology partners all there and so we contributed early code. Stuff we'd done in research, as kind of like a building block. And then we have members, both from research and product development side of the house, that are constantly working in that upstream community on the source code. >> And continually contributing, and okay... >> Yeah, well continually contributing, that's on the technology side. On the business side we're doing early proof of concepts, so we worked early with a company called Everledger that looks at the history of diamonds and tracks them beginning to end, and the ultimate goal of that is to eliminate blood diamonds from the marketplace and so if you know, it's also a very good market to begin because it's a limited set of players. So you can implement the technology, you can do the business processes behind it and then demonstrate the value. So that's an early project. Most of the financial institutions are doing stuff, whether it's stock trading or what have you. And so we're doing early proof of concept, so we're taking both technology and business, you marry 'em together as Jim Whitehurst said the other day you know, what's the minimal viable product, lets get that out there, lets try it out, lets learn. >> Release early release often. >> Yes, and then modify quickly, don't start with something you think is overly baked, and find that you have to shelf it in order to kind of back track and make corrections. >> And what is like to mesh those two cultures, the technology and the business? I mean, do you find that there is a clash? >> We have not. Now at IBM it was not a simple transition back in the late '90's. There were people that thought Open Source would be just a flash in the pan, and here we are so many years later, that's not true. And so early on, like I said, there were a lot of internal kind of debates, but that debate is long since settled, so we don't have that. And if you look across our different business divisions, even within our company, whether its Cloud, whether it's Cognitive, whether it's systems business, all use Open Source. Whether we contribute everything externally and we're using third party packaged, or we consume it ourselves. And we see that as happening across industry, even with out clients. Some that you might think are very traditional, they recognize that's where the innovation is taking place. And so, you always look at balancing is this viable, is that healthy? Or is still the commercially available stuff the better stuff? Just a quick story, I had a development team and we were doing Agile and we needed a tool to do to track our sprints and everything like that, and so, all of my developers were Open Source developers, and so that's their bias. If we're going to use software, it has to be Open Source, they went and evaluated a couple projects and they found Open Source software that had been abandoned, they were smart enough to recognize we also acquired a company called Rational, and Rational Team Concert does this, but it's proprietary. And so they initially resisted it, but then they looked at these Open Source project and saw, if we picked up that code, we maintain it forever, and we're alone. That is as worthless, as it can be, because there's no benefit. Doing Open Source, where you have multiple people contributing, you give an added benefit. So they went with our in house stuff, Rational Team Concert. Just showed the maturity of the team that even though they think Open Source is really the best thing in life, you've got to balance the business with it. >> Jim, so we look at the adoption of Open Source, it took many years to mature. Today, you talk about things like Cognitive, it's racing so fast, give us a little bit of look forward, you know, what's changing your space? What are you looking forward to? What would we expect to see from you by the time we come back next year? >> Sure, so a lot of what you've heard here at the conference so a lot of things that we're doing, are often offered in a Cloud platform, or as a hosted service, or as a service. So, for example, we do have Blockchain as a service available today. And it's running the back end is on mainframe cloud, for example, running Linux. Other examples of that, looking at new applications for quantum computing. Well that requires severengic freezing in order to keep those cubits alive. And so that's a hosted thing, and we actually have that available online, people can use that today. So I think that you're going to see a lot of early access, even for commercial applications. Early access so people can try it, and then based on their business model, like we've heard from clients this week, sometimes they'll need it on prem, and for various business reasons, and other times they can do it on the cloud and we'll be able to provide that. But we give them early access via cloud and as a service. And I think that's what you're going to see a lot in the industry. >> And it's this hybrid mix, as you said, some on prem, some off prem, okay. >> Jim: Yes. >> Well Jim, thanks so much for joining us, we really appreciate you sitting down with us. >> You're welcome, and thanks for your time. >> I'm Rebecca Knight, for Stu Miniman, we'll have more from the Red Hat Summit after this. (upbeat electronic music)

>> Announcer: Live, from Las Vegas, it's the Cube. Covering InterConnect 2017. Brought to you by, IBM. >> Okay welcome back everyone, we're here live in Las Vegas for IBM InterConnect 2017, this is the Cube coverage here, in Las Vegas for IBM's cloud and data shows. It turns out, I'm John Furrier, with my cohost Dave Vellante, next guess is Jamie Thomas, general manager of systems development and strategy at IBM, Cube Alum. Great to see you, welcome back. >> Thank you, great to see you guys as usual. >> So, huge crowds here. This is I think, the biggest show I've been to for IBM. It's got lines around the corner, just a ton of traffic online, great event. But it's the cloud show, but it's a little bit different. What's the twist here today at InterConnect? >> Well, if you saw the Keynote, I think we've definitely demonstrated that while we're focused on differentiating experience on the cloud through cloud native services, we're also interesting in bridging existing clients IT investments into that environment. So, supporting hybrid cloud scenarios, understanding how we can provide connective fabric solutions, if you will, to enable clients to run mobile applications on the cloud and take advantage of the investments they've made and their existing transactional infrastructure over a period of time. And so the Keynote really featured that combination of capabilities and what we're doing to bring those solution areas to clients and allow them to be productive. >> And the hybrid cloud is front and center, obviously. IOT on the data side, you've seen a lot of traction there. AI and machine learning, kind of powering and lifting this up, it's a systems world now, I mean this is the area that you're in. Cause you have the component pieces, the composibility of that. How are you guys facilitating the hybrid cloud journey for customers? Because now, it's not just all here it is, I might have a little bit of this and a little bit of that, so you have this component-isationer composobility that app developers are consistent with, yet the enterprises want that work load flexibility. What do you guys do to facilitate that? >> Well we absolutely believe that infrastructure innovation is critical on this hybrid cloud journey. And we're really focused on three main areas when we think about that innovation. So, integration, security, and supportive cognitive workloads. When we look at things like integration, we're focused on developers as key stake holders. We have to support the open communities and frameworks that they're leveraging, we have to support API's and allow them to tap into our infrastructure and those investments once again, and we also have to ensure that data and workload can be flexibly moved around in the future because these will allow better characteristics for developers in terms of how they're designing their applications as they move forward with this journey. >> And the insider threat, though, is a big thing too. >> Yes. >> I mean security is not only table stakes, it's a highly sensitive area. >> It's a given. And as you said, it's not just about protecting from the outside threats, it's about protecting from internal threats, even from those who may have privileged access to the systems, so that's why, with our systems infrastructure, we have protected from the chip, all the way through the levels of hardware into the software layer. You heard us talk about some of that today with the shipment of secure service containers that allow us to support the system both at install time and run time, and support the applications and the data appropriately. These systems that run Blockchain, our high security Blockchain services, LinuxONE, we have the highest certification in the industry, EAL five plus, and we're supporting FIPS 120-two, level four cryptology. So it's about protecting at all layers of the system, because our perspective is, there's not a traditional barrier, data is the new perimeter of security. So you've got to protect the data, at rest, in motion, and across the life cycle of the data. >> Let's go back to integration for a second. Give us an example of some of the integrations that you're doing that are high profile. >> Well one of the key integrations is that a lot of clients are creating new mobile applications. They're tapping back into the transactions that reside in the mainframe environment, so we've invested in ZOS Connect and this API set of capabilities to allow clients to do that. It's very prevalent in many different industries, whether it's retail banking, the retail sector, we have a lot of examples of that. It's allowing them to create new services as well. So it's not just about extending the system, but being able to create entirely new solutions. And the areas of credit card services is a good example. Some of the organizations are doing that. And it allows for developer productivity. >> And then, on the security side, where does encryption fit? You mentioned you're doing some stuff at the chip level, end to end encryption. >> Yeah it really, it's at all levels, right? From the chip level, through the firmware levels. Also, we've added encryption capability to ensure that data is encrypted at rest, as well as in motion, and we've done that in a way that encrypts these data sets that are heavily used in the main frame environment as an example, without impending on developer productivity. So that's another key aspect of how we look at this. How can we provide this data protection? But once again, not slow down the velocity of the developers. Cause if we slow down the velocity of the developers, they will be an inhibitor to achieving the end goal. >> How important is the ecosystem on that point? Because you have security, again, end to end, you guys have that fully, you're protecting the data as it moves around, so it's not just in storage, it's everywhere, moving around, in flight, as they say. But now you got ecosystem parties, cause you got API economy, you're dealing with no perimeter, but now also you have relationships as technology partners. >> Yes, well the ecosystem is really important. So if we think about it from a developer perspective, obviously supporting these open frameworks is critical. So supporting Linux and Docker and Spark and all of those things. But also, to be able to innovate at the rate and pace we need, particularly for things like cognitive workloads, that's why we created the Open Power Foundation. So we have more than 300 partners that we're able to innovate with, that allow us to create the solutions that we think we'll need for these cognitive workloads. >> What is a cognitive workload? >> So a cognitive workload is what I would call an extremely data hungry workload, the example that we can all think of is we're expecting, when we experience the world around us, we're expecting services to be brought to us, right, the digital economy understands our desires and wants and reacts immediately. So all of that is driving, that expectation is driving this growth and artificial intelligence, machine learning, deep learning type algorithms. Depending on what industry you're in, they take on a different persona, but there's so many different problems that can be solved by this, whether it's I need to have more insight into the retail offers I provide to an in consumer, to I need to be able to do fraud analytics because I'm in the financial services industry, there's so many examples of these cognitive applications. The key factors are just, tremendous amount of data, and a constrained amount of time to get business insight back to someone. >> When you do these integrations and you talk about the security investments that you're making, how do you balance the resource allocation between say, IBM platforms, mainframe, power, and the OS's, the power in those, and Linux, for example, which is such a mainstay of what you guys are doing. Are you doing those integrations on the open side as well in Linux and going deep into the core, or is it mostly focused on, sort of, IBM owned technology? >> So it really depends on what problem we're trying to solve. So, for instance, if we're trying to solve a problem where we're marrying data insight with a transaction, we're going to implement a lot of that capability on ZOS, cause we want to make sure that we're reducing data latency and how we execute the processing, if you will. If we're looking at things like new work loads and evolution of new work loads, and new things are being created, that's more naturally fit for purpose from a Linux perspective. So we have to use judgment, a lot of the new programming, the new applications, are naturally going to be done on a Linux platform, cause once again that's a platform of choice for the developer community. So, we have to think about whether we're trying to leverage existing transactions with speed, or whether we're allowing developers to create new assets, and that's a key factor in what we look at. >> Jamie, your role, is somewhat unique inside of IBM, the title of GM system's development and strategy. So what's your scope, specifically? >> So, I'm responsible for the systems development involved in our processor's mainframes, power systems, and storage. And of course, as a strategy person for a unit like that, I have responsibility for thinking about these hybrid scenarios and what do we need to do to make our clients successful on this journey? How do we take advantage of their tremendous investments they made with us over years. We have strong responsibility for those investments and making sure the clients get value. And also understanding where they need to go in the future and evolving our architecture and our strategic decisions, along those lines. >> So you influence development? >> Jamie: Yes. >> In a big way, obviously. It's a lot of roadmap work. >> Jamie: Yes. >> A lot of working with clients to figure out requirements? >> Well I have client support too, so I have to make sure things run. >> What about quantum computing? This has been a big topic, what's the road map look like? What's the evolution of that look like? Talk about that initiative. >> Well if I gave you the full road map they'd take me out of here with a hook out of this chair. >> You're too good for that, damn, almost got it from you. >> But we did announce the industries first commercial universal quantum computing project. A few weeks ago. It's called IBM Q, so we had some clever branding help, because Q makes me think of the personality in the James Bond movie who was always involved in the latest R&D research activity. And it really is the culmination of decades of research between IBM researchers and researchers around the world, to create this system that hopefully can solve problems to date, that are unsolvable today with classical computers. So, problems in areas like material science and chemistry. Last year we had announced quantum experience, which is an online access to a quantum capabilities in our Yorktown research laboratory. And over the last year, we've had more than 40,000 users access this capability. And they've actually executed a tremendous number of experiments. So we've learned from that, and now we're on this next leg of the journey. And we see a world where IBM Q could work together with our classical computers to solve really really tough problems. >> And that computing is driving a lot of the IOT, whether that's health care, to industrial, and everything in between. >> Well we're in the early stages of quantum, to be fair, but there's a lot of unique problems that we believe that it will solve. We do not believe that everything, of course, will move from classical to quantum. It will be a combination, an evolution, of the capabilities working together. But it's a very different system and it will have unique properties that allow us to do things differently. >> So, what are the basics? Why quantum computing? I presume it's performance, scale, cost, but it's not traditional, binary, computing, is that right? >> Yes. It's very, very different. In fact, if. >> Oh we just got the two minute sign. >> It's a very different computing model. It's a very different physical, computing model, right? It's built on this unit called a Q bit, and the interesting thing about a Q bit is it could be both a zero and a one at the same time. So it kind of twists our minds a little bit. But because of that, and those properties, it can solve very unique problems. But we're at the early part of the journey. So this year, our goal is to work with some organizations, learn from the commercialization of some of the first systems, which will be run in a cloud hosted model. And then we'll go from there. But, it's very promising. >> In the timeframe for commercial systems, have you guys released that? >> Well, this year, we'll start the commercial journey, but within the next few years we do plan to have a quantum computer that would then, basically, out strip the power of the largest super computers that we have today in the industry. But that's, you know, over the next few years we'll be evolving to that level. Because eventually, that's the goal, right? Is to solve the problems that we can't solve with today's classical computers. >> Talk about real quickly, in the last couple minutes, Blockchain, and where that's going, because you have a lot of banks and financial institutions looking at this as part of the messaging and the announcements here. >> Well, Blockchain is one of those workloads of course that we're optimizing with a lot that security work that I talked about earlier so. The target of our high security Blockchain services is LinuxONE, is driving a lot of encryption strategy. This week, in fact, we've seen a number of examples of Blockchain. One was talked about this morning, which was around diamond provenance, from the Everledger organization. Very clever implementation of Blockchain. We've had a number of financial institutions that are using Blockchain. And I also showed an interesting example today. Plastic Bank, which is an organization that's using Blockchain to allow ecosystem improvement, or improving our planet, if you will, by allowing communities to exchange plastic, recyclable plastic for currency. So it's really about enabling plastic to be turned into currency through the use of Blockchain. So a very novel example of a foundational research organization improving the environment and allowing communities to take advantage of that. >> Jamie thanks for stopping by the Cube, really appreciate giving the update and insight into the quantum, the Q project, and all the greatness around, all the hard work going to into the hybrid cloud, the security-osity is super important, thanks for sharing. >> It's good to see you. >> Okay we're live here, in Mandalay Bay, for IBM InterConnect 2017, stay with us for more live coverage, after this short break.