>> From Washington D.C. it's theCUBE covering ScienceLogic Symposium 2019. Brought to you by ScienceLogic. >> Hi, I'm Stu Miniman and this is theCUBE's coverage of ScienceLogic Symposium 2019 here at The Ritz-Carlton in Washington D.C. About 460 people here, the events' grown about 50%, been digging in with a lot of the practitioners, the technical people as well as some of the partners. And for this session I'm happy to welcome to the program for the first time guest, Surendra who is the vice president and CTO for automation in IBM's global technology services. And joining us also is Dave Link who is the co-founder and CEO of ScienceLogic. Gentlemen, thank you so much for joining us. >> Thank you for having us. >> Thanks for having us. >> Alright, so Surendra let's start with you. Anybody that knows IBM services at the core of your business, primary driver, large number of the presented to the employees at IBM are there. You've got automation in your title so, let's flush out a little bit for us, your part of the organization and your role there. >> Alright, so as you pointed out, IBM, a big part of IBM is services; it's a large component. And that two major parts of that and though we come together as one in terms of IBM services, one is much more focused on infrastructure services and the other one on business services. So, the automation I'm dealing with primarily is in the infrastructure services area which means all the way from resources you have in a persons data center going into now much more of course in a hybrid environment, hybrid multi-cloud, with different clouds out there including our own and providing the automation around that. And when we mean automation we mean the things that we have to do to keep our clients' environments healthy from a availability and performance standpoint; making sure that our environment then we respond to the changes that they need to the environment because it obviously evolves over time, we do that effectively and correctly and certainly another very important part is to make sure that they're secure and compliant. So, if you think of Maslow's hierarchy of the things that IT operations has to do that in a nutshell sums it up. That's what we do for our clients. >> Yeah, so Dave luckily we've got a one on one with you today to dig out lots of nuggets from the kino and talk a bit about the company but, you talk about IT operations and one of the pieces I've got infrastructure, I've got applications, ScienceLogic sits at an interesting place in this heterogeneous ever-changing world that we live in today. >> It does and the world's changing quickly because the clouds transforming the way people build applications. And that is causing a lot of applications to be refactored to take advantage of some of these technologies. The especially focused global scale we've seen them, we've used them, applications that we use on our phone. They require a different footprint and that requires then a different set of tools to manage an application that lives in the cloud and it also might live in a multi-cloud environment with some data coming from private clouds that populate information on public clouds. What we found is the tools industry is at a bit of a crossroads because the applications now need to be infrastructure aware, but the infrastructure could be served from a lot of different places, meaning they've got lots of data sources to sort together and contextualize to understand how they relate to one another real time. And that's the challenge that we've been focused on solving for our customers. >> Alright, Surendra I want to know if we can get a little bit more to automation and we talk automation, >> There's also IBM use for a number of years, the cognitive and there was the analyst that spoke in the kino this morning. He put cognitive as this overarching umbrella and underneath that you had the AI and underneath that you had that machine learning and deep learning pieces there. Can you help tease out a little bit for IBM global services in your customers? How do they think of the relationship between the MLAI cognitive piece in automation? >> So I think the way you laid it out, the way it was talked about this morning absolutely makes sense, so cognitive is a broad definition and then within that of course AI and the different techniques within AI, machine learning being one, natural language processing, national languages understanding which not as much statistically driven as being another type of AI. And we use all of these techniques to make our automation smarter. So, often times when we're trying to automate something, there can be very prescriptive type of automation, say a particular event comes in and then you take a response to it. But then often times you have situations where you have events especially what Dave was talking about; when an application is distributed not just a classic of distributed application, but now distributed of infrastructure you may have. Some of it may be running on the main frame, some of it actually running in different clouds. And all of this comes together, you have events and signals coming from all of this and trying to reason over where a problem may be originating from because now you have a slow performance. What's the reason for the slow performance? Trying to do some degree of root cause determination, problem determination; that's where some of the smarts comes in in terms of how we actually want to be able to diagnose a problem and then actually kick off maybe more diagnostics and eventually kick off actions to automatically fix that or give the practitioner the ability to fix that in a effective fashion. So that's one place. The other areas that one type of machine learning I shouldn't say one type, but deadly machine learning techniques lend themselves to that. There's another arena of causes a lot of knowledge and information buried in tickets and knowledge documents and things like that. And to be able to extract from that, the things that are most meaningful and that's where the natural language understanding comes in and now you marry that with the information that's coming from machines, which is far more contextualized. And to be able to reason over these two together and be able to make decisions, so that's where the automation. >> Wonder if we can actually, let's some of those terms I want to up level a little bit. I hear knowledge I hear information; the core of everything that people are doing these today, it's data. And what I heard, and was really illuminated to me listening to what I've seen of ScienceLogic is that data collection and leveraging and unlocking value of data is such an important piece of what they're doing. From an IBM standpoint and your customers, where does data fit into that whole discussion? How do things like ScienceLogic fit in the overall portfolio of solutions that you're helping customers through either manager, deploying and services? >> So definitely in the IT Ops arena, a big part of IT Ops, at the heart of it really is monitoring and keeping track of systems. So, all sets of systems throw off a lot of data whether it's log data, real time performance data, events that are happening, monitoring of the performance of the application and that's tons and tons of data. And that's where a platform like ScienceLogic comes in, as a monitoring system with capabilities to do what we call also event management. And in the old days, actually probably would have thought about monitoring event management and logs as somewhat different things; these worlds are collapsing together a bit more. And so this is where ScienceLogic has a platform that lends itself to a marriage of these faces in that sense. And then that would feed a downstream automation system of informing it what actions to take. Dave, thoughts on that? >> Dave, if you want to comment on that I've got some follow ups too, but. >> Yeah, there's many areas of automation. There's layers of automation and I think Surendra's worked with customers over a story career to help them through the different layered cakes of automation. You have automation related to provisioning systems, the provision and in some case provision based on capacity analytics. There's automation based on analysis of a root cause and then once you know it, conducting other layers of automation to augment the root cause with other insights so that when you send up a case or a ticket, it's not just the event but other information that somebody would have to go and do, after they get the event to figure out what's going on. So you do that at time of event that's another automation layer and then the final automation layer, is if you know predictively about how to solve the problem just going ahead if you have 99% confidence that you can solve it based on these use case conditions just solve it. So when you look at the different layers of automation, ScienceLogic is in some cases a data engine, to get accurate clean data to make the right decisions. In other cases, we'll kick off automations in other tools. In some cases we'll automate into ecosystem platforms whether it's a ticketing system, a service desk system, a notifications systems, that augment our platform. So, all those layers really have to work together real time to create service assurance that IBM's customers expect. They expect perfection they expect that excellence the brand that IBM presents means it just works. And so you got to have the right tooling in place and the right automation layers to deliver that kind of service quality. >> Yeah, Dave I actually been, one of the things that really impressed me is that the balance between on the one hand, we've talked to customers that take many many tools and replace it with ScienceLogic. But, we understand that there is no one single pane of glass or one tool to rule them all, the theme of the shows; you get the superheros together because it takes a team. You give a little bit of a history lesson which resonated me. I remember SNMP was going to solve everything for us, right? But, the lot of focus on all the integrations that works, so if you've got your APM tools, your ITSM tools or things you're doing in the cloud. It's the API economy today, so balancing that you want to provide the solutions for your customers, but you're going to work with many of the things that they have; it's been an interesting balance to watch. >> Yeah, I think that's the one thing we've realized over the years; you can't rip and replace years and years of work that's been done for good reason. I did hear today that one of our new customers is replacing a record 51 tools with our product. But a lot of these might be shadow IT tools that they've built on top of special instrumentation they might have for a specific use cases or applications or a reason that a subject matter expert would apply another tool, another automation. So, the thing that we've realized is that you've got to pull data from so many sources today to get machine learning, artificial intelligence is only as good as the data that it's making those decisions upon. >> Absolutely. >> So you've got to pull data from many different sources, understand how they relate to one another and then make the right recommendations so that you get that smooth service assurance that everybody's shooting for. And in a time where systems are ephemeral where they're coming and going and moving around a lot, that's compounding the challenge that operations has not just in all the different technologies that make up the service; where those technologies are being delivered from, but the data sources that need to be mashed together in a common format to make intelligent decisions and that's really the problem we've been tackling. >> Alright, Surendra I wonder if you can bring us inside your, you talked to a lot of enterprise customers and it helped share their voices to in this space, not sure if they're probably not calling it AI ops there, but some of the big challenges that they're facing where you're helping them to meet those challenges and where ScienceLogic fits in. >> So certainly the, yes, they probably don't want to talk about it that. They want to make sure that their applications are always up and performing the way they expect them to be and at the same time, being responsive to changes because they need to respond to their business demands where the applications and what they have out there continually has to evolve, but at the same time be very available. So, all the way from even if you think about something that is traditional and is batch jobs which they have large processing of batch jobs; sometimes those things slow down and because now they're running through multiple systems and trying to understand the precedence and actions you take when a batch job is not running properly; as just one example, right? Then what actions we want, first diagnosing why it's not working well. Is it because some upstream system is not providing it the data it needs? Is it clogged up because it's waiting on instructions from some downstream system? And then how do you recover from this? Do you stop the thing? Just kill it or do you have to then understand what downstream further subsequent batch jobs needs to or other jobs will be impacted because you killed this one? And all of that planning needs to be done in some fashion and the actions taken such that if we have to take an action because something has failed, we take the right kind of action. So that's one type of thing where it matters for clients. Certainly, performance is one that matters a lot and even on the most modern of applications because it may be an application that's entirely sitting on the cloud, but it's using five or 10 different SAS providers. Understanding which of those interactions may be causing a performance issue is a challenge because you need to be able to diagnose that and take some actions against that. Maybe it's a log in or the IDN management service that you getting from somewhere else and understanding if they have any issues and whether that provider is providing the right kind of monitoring or information about their system such that you can reason over it and understand; okay my service which is dependent on this other service is actually being impacted. And all these kind of things, it's a lot of data and these need to come together. That's where the platform something like ScienceLogic would come into play. And then taking actions on top of that is now where a platform also starts to matter because you start to develop different types of what we call content. So we distinguish the space between an automation platform or a framework plus and the content you need to have that. And ScienceLogic they talk about power packs and these things you need to have that essentially call out the work flows of the kind of actions you need to take when you have the falling signature of a certain bundle of events that have come together. Can you reason over it to say okay, this is what I need to do? And that's where a lot of our focus is to make sure that we have the right content to make sure that our clients applications stay healthy. Did that get to, I think build on what you were talking about a bit? >> Absolutely. Yes, you've got, it's this confluence of a know how an intelligence from working with customers, solving problems for them and being proactive against the applications that really run their business; and that means you're constantly adjusting. These networks I think Surendra's said it before, they're like living organisms. Based on load, based on so many factors; they're not stagnant, they're changing all the time, unless you need the right tools to understand not just anomaly's what's different, but the new technologies that come in to augmenting solutions and enhancing them and how that effects the whole service delivery cadence. >> Mr. Surendra, I want to give you the final word. One of the things I found heartening when I look at this big wave of AI that's been coming is, there's been good focus on what kind of business outcomes customers are having. >> Okay. >> Because back in the big data wave I remember we did the survey's and it was like what was the most common use case? And it was custom. And what you don't want to have is a science project, right? >> Right. >> Yes. >> You actually want to get things done. So any kinds you can give as to, I know you understand we're still early in a lot of these deployments and rollouts but what do you seeing out there? What are some of the lighthouse use cases? >> So, certainly for us, right? We've been at using data for a while now to improve the service assurance for our clients and I'll be talking about this tomorrow, but one of the things we have done is we found that now in terms of the events and incidents that we deal with, we can automatically respond with essentially no human interference or involvement I should say about 55% of them. And a lot of this is because we have an engine behind it where we get data from multiple different sources. So, monitoring event data, configuration data of the systems that matter, tickets; not just incident tickets but change tickets and all of these things and a lot of that's unstructured information and you essentially make decisions over this and say okay, I know I have seen this kind of event before in these other situations and I can identify an automation whether it's a power pack, an automotor, an Ansible module, playbook. that has worked in the situation before in another client and these two situations are similar enough such that I can now say with these kind of events coming in, or group events I can respond to it in this particular fashion; that's how we keep pushing the envelope in terms of driving more and more automation and automated response such that the I would say certainly the easy or the trivial kinds of I shouldn't say trivial, but the easy kinds of events and monitoring things we see in monitoring are being taken care of even the more somewhat moderate ones where file systems are filling out for some unknown reasons we know how to act on them. Some services are going down in some strange ways we know how to act on them to getting to even more complex things like the batch job type of thing. Example I gave you because those can be some really pernicious things can be happening in a broad network and we have to be able to diagnose that problem, hopefully with smarts to be able to fix that. And into this we bring in lots of different techniques. When you have the incident tickets, change tickets and all of that, that's unstructured information; we need to reason over that using natural language understanding to pick out the right I'm getting a bit technical here, verp no pas that matter that say okay this probably led to these kind of incidents downstream from typical changes. In another client in a similar environment. Can we see that? And can we then do something proactively in this case. So those are all the different places that we're bringing in AI, call it whatever you want, AIML into a very practical environment of improving certainly how we respond to the incidents that we have in our clients environments. Understanding when I talked about the next level changes when people are making changes to systems, understanding the risks associated with that change; based on all the learning that we have because we are very large service provider with essentially, approximately 1,000 clients. We get learning over a very diverse and heterogeneous experience and we reason over that to understand okay, how risky is this change? And all the way into the compliance arena, understanding how much risk there is in the environment that our clients facing because they're not keeping up with patches or configurations for security parameters that are not as optimal as they could be. >> Alright, well Surendra we really appreciate you sharing a glimpse into some of your customers and the opportunities that they're facing. >> Thank you. >> Thanks so much for joining us. Alright and Dave, we'll be talking to you a little bit more later. >> Great, thanks for having me. >> All right. >> Thank you. >> And thank you as always for watching. I'm Stu Miniman and thanks for watching theCUBE. >> Thank you Dave. >> Thank you. (upbeat techno music)

>> Narrator: From around the globe, it's theCUBE. With digital coverage of IBM Think 2021. Brought to you by IBM. >> Welcome back to IBM Think 2021. This is theCUBE's continuous virtual in-depth coverage of the people, processes, and technologies that are changing our world. Right now we're going to talk about modernization and the Synergy with Cloud. And we're pleased to welcome Doug Armbrust, who's the VP GTS Cloud Synergy. Hey Doug, how you doing? >> Great, Dave. I'm excited to be on theCUBE, thanks for having me. >> It's our pleasure. Hey, let's talk a little bit of tech. What are some of the technologies that your clients are applying on their path to modernization? >> Sure. I'll give you three examples and three that we're seeing a lot of interest in from a services standpoint. One is automation. Automation is an area that's been a focus for Several decades but We're seeing a renewed excitement around the opportunity for automated operations. Really, I'll talk about two other technologies but the extension of automation and to some of the newer cloud technologies. So that's one. Two is cloud. Cloud has been a terminal industry for a while now and folks have been at various points of a journey to cloud-centric models and technologies. We're seeing an even accelerated transition to not just public cloud but also private cloud technologies, and in particular, need to interconnect those with one another and with a traditional environments. The last one, I think there's been a bit of a referendum on the technology over the last year is around containers, specifically Kubernetes, as a standard for that space. A cementing of direction around containers. Clearly, people are different stages of implementation and experimentation with the technology but I do see a referendum on this being a fundamental part of future technology and direction. >> So, okay. So automation, cloud, and containers. I'm going to ask you a follow up on containers because it's clear that when you look at all the data, it's off the charts in terms of adoption and ultimately our scenario is okay, it gets subsumed into the stack. But where Where the customers ultimately want to go? Obviously, they're upskilling but what's the outcome that they're trying to achieve? >> Yeah, it's a good question. General question of the ask a modernization. I like modern things. We'd like to live in a modern house, my wife likes a farmhouse so guess where we live. (laughs loudly) We live in a farm house with Modernized appliances and infrastructure. >> New cost to live with. (laughs loudly) >> Ultimately, enterprises, they're working back from an objective, and that objective, had this term digital transformation for about a decade. Underneath that umbrella, it's about being able to move and respond quickly. It's about being able to create innovation and accelerate innovation. I think probably most important is deliver on a customer experience and end customer experience. 10 years ago, what I expected when I went to a restaurant was a If I could look them up on the internet and find their location, use my GPS, get there, I was good to go. A year ago, I'm looking for Use an app, them to remember my favorite place to sit. Very different expectations and that pressure on enterprise, to meet those end expectations is really at the heart of The modernization and part of that's Infrastructure modernization containers is interesting because it brings together, not just infrastructure, brings together how application development cycles are being implemented. It has implications for security that Can be positive if done right. We do see that as A key area to meet the end and business objectives. It's going to take some time. IDC, I think is the most bullish. They took like 80% of workloads. By 2023, we'll shift to containers. I believe that for newly created workloads. I think developers have got this in their hands and they understand the efficiencies for their own work as well as when this moves to production. This sort of DevSecOps model, kind of comes with containers if done right. There's a legacy that's going to be around a long time, helping customers understand those operating models and how to live with them both is going to be important over the next five to 10 years. >> You're talking about those drivers responsiveness, the innovation, et cetera. I live in an old house too and there's another component here which is that 80%, reasonable people could discuss that, because there's a risk component, right? I can modernize my house but I could jack up one into the house but it might mess up something that I just did. And so, CIO is obviously a risk-averse, they want to modernize but at the same time, they want to get from point a to point b with minimum disruption. To that end, I wonder if you could talk about what you saw during the pandemic. We're still in the pandemic but you had a reduction in budgets, virtually across the board, minus four, minus 5% in spending, had a shift toward work from home, whatever, VDI, laptops, rushed endpoint security, that whole thing. A lot of organizations try to do both. They said, "Hey, we're actually going to double down on digital transformation." We see this as a lean and opportunity. We got liquidity. How did COVID influence modernization initiatives in your client base? >> It impacted different clients in different ways. Some, as you mentioned, I almost view it as very Darwinian in the sense that those who had modernized and had capabilities, more deeply automated were ready for the transition that they had to go through so they were able to quickly shift to work from home. They were able to deliver on new client experiences, the analogy before in digital transformation, those pressures never went away, but COVID just brought new ones, and they expected all of those things but now they expected the restaurant They expect the restaurant to bring that food to my door and do it in a safe manner. The challenges it brought on organizations were In many cases, new. Some who were in a good position could accelerate work in place and leverage that. Others had a harder time, right? Those who couldn't translate technology to immediate returns, to kind of fuel that ongoing progress, had to make some hard decisions. I would say that's probably the single trend, projects are very carefully reviewed. There's that view of "Will this help me now and into the future?" That's always present but it's present in a stronger manner than we would've have seen it for some time. In that envelope, can I come back to within those three technologies? Automation has certainly We've seen a jump because of its nature. What we see in automation projects is A faster time to implement and achieve some of the agility and flexibility that cloud provides but can take a longer timeframe if you haven't gotten far along in your cloud journey. Containers, even longer timeframe. So a lot of folks are looking at automation projects, particularly those that weren't as well positioned for sort of a quick turn and then taking that automation work and extending it into cloud and containers, as those initiatives progress. >> There are definitely some historical parallels and I could even go back to Y2K and look at all the application rationalization exercises that were going on back then. The technologies were different. You didn't have the modern cloud, containers have been around forever but not in the form of Kubernetes. The automation was scary back then but nonetheless, people were trying to use scripts or whatever they could do. But now, it's almost like an automation mandate, if you were in a digital business, you were out of business. So what are the What are some of the learnings that you've seen from these modernization journeys that you're taking customers on that you might be able to share. >> Let me comment on automation first, I'll say it more generally. I think automation, you're right, we're not finding enterprises that are doing things manually. Everybody's gotten at least to kind of that scripting point. And then we see That has its own journey. Then there's centralization and folks trusting the automation to enable self-service. That's sort of a Kind of a tipping point to who is ready for COVID and who wasn't. Those who had hardened their automation to enable self-service generally could then call on that self service to meet the new demands that they were facing. The next stage and we see less folks there, we get into this sort of Infrastructure as code. We talk about areas of intelligence in your automation. You talk about trust, not as many have progressed to where they trust their automation to Proactively, maybe sometimes reactively respond to a situation or set of You have to be very integrated at that point and you have to really believe in your automation. You then talk about integrating AI to sense, respond, make decisions and bring those back into your automation technologies. I'd say, that's still very future but folks are very intrigued by that. Your more general question, what's sort of some of the learnings. Really goes back to Modernization needs to have a business school. That's become maybe more clear than it was a year and a half ago. In the absence of that, IT projects have always had some degree of failure. It's just the evidence of that failures, probably a little bit more poignant. Related to that, is there needs to be a strategic plan and in particular with modernization, it's easy to get caught up with the modern side. And Dave, you were kind of alluded to this before. If you're not thinking about the old, the connection to the legacy, that's a very common kind of failure signature. It's a marching ahead with the modernization, without a strategic plan and connect those things and an ability to kind of tackle a piece at a time. Sometimes budgets go away and that's a problem. Each step in the journey is really the third lesson. Needs to have incremental value. It needs to kind of pay back something to help fund the next stage of modernization. I'd say the last one and it's self-serving for us as a services company. It's helpful to have a partner on these journeys. In my particular area of focus, in a year and a half, we've had 1,600 engagements. A lot of those engagements are people coming to us after making what they now view as mistakes. Some of the three areas I just mentioned. And being able to bring somebody in with experience with maybe some complimentary skills that can partner within an enterprise can be very helpful to avoid some of the pitfalls. >> I think, your point is right on. I've seen horror stories where people Literally, we're going to go off the mainframe. They got decades old COBOL code that's working just fine and they literally risked their business trying to brute force migrate off and they never could We're not going to freeze the code. It's just horror stories. But today's different, you can actually build an abstraction layer, leverage cloud services, and Kubernetes, and the like, use microservices to actually connect the old to the new. And that's the hardest part, again, old house analogies. I've done a lot of connecting the old to the new, that's the hardest part. You got to be really careful but today the technologies are enabling to do that and one of them is Obviously, things like OpenShift. The definition of open, again, a little history here, it used to be Unix was open and then Windows and then Linux, the LAMP stack. But really That piece of your portfolio is a critical part to enable these types of moves. >> Absolutely. It's exciting that technologies are there and there's a path forward. And it's great to Great to work with a partner, who's maybe, done that 10 or 15 times, or more and have them help guide you on that path. But the good news is there is Enabling technologies to transform in a number of ways, depending on what the business objectives are for an enterprise. >> Cool. All right, Doug, we've got to go. Thanks so much for coming on theCUBE. It's great to see you. >> Okay, same Dave. >> All right. >> Appreciate it. >> Keep it right there everybody. This is Dave Vellante. You're watching IBM Think 2021. The virtual edition covered on theCUBE. (bouncy music)

(soothing music) >> Narrator: From around the globe, it's theCUBE. With digital coverage of IBM Think 2021. Brought to you by IBM. >> Welcome back to IBM Think 2021. This is theCUBE's continuous virtual in-depth coverage of the people, processes, and technologies that are changing our world. Right now we're going to talk about modernization and the Synergy with Cloud. And we're pleased to welcome Doug Armbrust, who's the VP GTS Cloud Synergy. Hey Doug, how you doing? >> Great, Dave. I'm excited to be on theCUBE, thanks for having me. >> It's our pleasure. Hey, let's talk a little bit of tech. What are some of the technologies that your clients are applying on their path to modernization? >> Sure. I'll give you three examples and three that we're seeing a lot of interest in from a services standpoint. One is automation. Automation is an area that's been a focus for... Several decades but... We're seeing a renewed excitement around the opportunity for automated operations. Really, I'll talk about two other technologies but the extension of automation and to some of the newer cloud technologies. So that's one. Two is cloud. Cloud has been a terminal industry for a while now and folks have been at various points of a journey to cloud-centric models and technologies. We're seeing an even accelerated transition to not just public cloud but also private cloud technologies, and in particular, need to interconnect those with one another and with a traditional environments. The last one, I think there's been a bit of a referendum on the technology over the last year is around containers, specifically Kubernetes, as a standard for that space. A cementing of direction around containers. Clearly, people are different stages of implementation and experimentation with the technology but I do see a referendum on this being a fundamental part of future technology and direction. >> So, okay. So automation, cloud, and containers. I'm going to ask you a follow up on containers because it's clear that when you look at all the data, it's off the charts in terms of adoption and ultimately our scenario is okay, it gets subsumed into the stack. But where... Where the customers ultimately want to go? Obviously, they're upskilling but what's the outcome that they're trying to achieve? >> Yeah, it's a good question. General question of the ask a modernization. I like modern things. We'd like to live in a modern house, my wife likes a farmhouse so guess where we live. (laughs loudly) We live in a farm house with... Modernized appliances and infrastructure. >> New cost to live with. (laughs loudly) >> Ultimately, enterprises, they're working back from an objective, and that objective, had this term digital transformation for about a decade. Underneath that umbrella, it's about being able to move and respond quickly. It's about being able to create innovation and accelerate innovation. I think probably most important is deliver on a customer experience and end customer experience. 10 years ago, what I expected when I went to a restaurant was a... If I could look them up on the internet and find their location, use my GPS, get there, I was good to go. I'm looking for... Use an app, them to remember my favorite place to sit. Very different expectations and that pressure on enterprise, to meet those annex and expectations is really at the heart of... The modernization and part of that's... Infrastructure modernization containers is interesting because it brings together, not just infrastructure, brings together how application development cycles are being implemented. It has implications for security that... Can be positive if done right. We do see that as... A key area to meet the end and business objectives. It's going to take some time. IDC, I think is the most bullish. They took like 80% of workloads. By 2023, we'll shift to containers. I believe that for newly created workloads. I think developers have got this in their hands and they understand the efficiencies for their own work as well as when this moves to production. This sort of DevSecOps model, kind of comes with containers if done right. There's a legacy that's going to be around a long time, helping customers understand those operating models and how to live with them both is going to be important over the next five to 10 years. >> You're talking about those drivers responsiveness, the innovation, et cetera. I live in an old house too and there's another component here which is that 80%, reasonable people could discuss that, because there's a risk component, right? I can modernize my house but I could jack up one into the house but it might mess up something that I just did. And so, CIO is obviously a risk-averse, they want to modernize but at the same time, they want to get from point a to point b with minimum disruption. To that end, I wonder if you could talk about what you saw during the pandemic. We're still in the pandemic but you had a reduction in budgets, virtually across the board, minus four, minus 5% in spending, had a shift toward work from home, whatever, VDI, laptops, rushed endpoint security, that whole thing. A lot of organizations try to do both. They said, "Hey, we're actually going to double down on digital transformation." We see this as a lean and opportunity. We got liquidity. How did COVID influence modernization initiatives in your client base? >> It impacted different clients in different ways. Some, as you mentioned, I almost view it as very Darwinian in the sense that those who had modernized and had capabilities, more deeply automated were ready for the transition that they had to go through so they were able to quickly shift to work from home. They were able to deliver on new client experiences, the analogy before in digital transformation, those pressures never went away, but COVID just brought new ones, and they expected all of those things but now they expected the restaurant... They expect the restaurant to bring that food to my door and do it in a safe manner. The challenges it brought on organizations were... In many cases, new. Some who were in a good position could accelerate work in place and leverage that. Others had a harder time, right? Those who couldn't translate technology to immediate returns, to kind of fuel that ongoing progress, had to make some hard decisions. I would say that's probably the single trend, projects are very carefully reviewed. There's that view of... "Will this help me now and into the future?" That's always present but it's present in a stronger manner than we would've have seen it for some time. In that envelope, can I come back to within those three technologies? Automation has certainly... We've seen a jump because of its nature. What we see in automation projects is... A faster time to implement and achieve some of the agility and flexibility that cloud provides but can take a longer timeframe if you haven't gotten far along in your cloud journey. Containers, even longer timeframe. So a lot of folks are looking at automation projects, particularly those that weren't as well positioned for sort of a quick turn and then taking that automation work and extending it into cloud and containers, as those initiatives progress. >> There are definitely some historical parallels and I could even go back to Y2K and look at all the application rationalization exercises that were going on back then. The technologies were different. You didn't have the modern cloud, containers have been around forever but not in the form of Kubernetes. The automation was scary back then but nonetheless, people were trying to use scripts or whatever they could do. But now, it's almost like an automation mandate, if you were in a digital business, you were out of business. So what are the... What are some of the learnings that you've seen from these modernization journeys that you're taking customers on that you might be able to share. >> Let me comment on automation first, I'll say it more generally. I think automation, you're right, we're not finding enterprises that are doing things manually. Everybody's gotten at least to kind of that scripting point. And then we see... That has its own journey. Then there's centralization and folks trusting the automation to enable self-service. That's sort of a... Kind of a tipping point to who is ready for COVID and who wasn't. Those who had hardened their automation to enable self-service generally could then call on that self service to meet the new demands that they were facing. The next stage and we see less folks there, we get into this sort of... Infrastructure as code. We talk about areas of intelligence in your automation. You talk about trust, not as many have progressed to where they trust their automation to... Proactively, maybe sometimes reactively respond to a situation or set of... You have to be very integrated at that point and you have to really believe in your automation. You then talk about integrating AI to sense, respond, make decisions and bring those back into your automation technologies. I'd say, that's still very future but folks are very intrigued by that. Your more general question, what's sort of some of the learnings. Really goes back to... Modernization needs to have a business school. That's become maybe more clear than it was a year and a half ago. In the absence of that, IT projects have always had some degree of failure. It's just the evidence of that failures, probably a little bit more poignant. Related to that, is there needs to be a strategic plan and in particular with modernization, it's easy to get caught up with the modern side. And Dave, you were kind of alluded to this before. If you're not thinking about the old, the connection to the legacy, that's a very common kind of failure signature. It's a marching ahead with the modernization, without a strategic plan and connect those things and an ability to kind of tackle a piece at a time. Sometimes budgets go away and that's a problem. Each step in the journey is really the third lesson. Needs to have incremental value. It needs to kind of pay back something to help fund the next stage of modernization. I'd say the last one and it's self-serving for us as a services company. It's helpful to have a partner on these journeys. In my particular area of focus, in a year and a half, we've had... 1,600 engagements. A lot of those engagements are people coming to us after making what they now view as mistakes. Some of the three areas I just mentioned. And being able to bring somebody in with experience with maybe some complimentary skills that can partner within an enterprise can be very helpful to avoid some of the pitfalls. >> I think, your point is right on. I've seen horror stories where people... Literally, we're going to go off the mainframe. They got decades old COBOL code that's working just fine and they literally risked their business trying to brute force migrate off and they never could... We're not going to freeze the code. It's just horror stories. But today's different, you can actually build an abstraction layer, leverage cloud services, and Kubernetes, and the like, use microservices to actually connect the old to the new. And that's the hardest part, again, old house analogies. I've done a lot of connecting the old to the new, that's the hardest part. You got to be really careful but today the technologies are enabling to do that and one of them is... Obviously, things like OpenShift. The definition of open, again, a little history here, it used to be... Unix was open and then Windows and then Linux, the LAMP stack. But really... That piece of your portfolio is a critical part to enable these types of moves. >> Absolutely. It's exciting that technologies are there and there's a path forward. And it's great to... Great to work with a partner, who's maybe, done that 10 or 15 times, or more and have them help guide you on that path. But the good news is there is... Enabling technologies to transform in a number of ways, depending on what the business objectives are for an enterprise. >> Cool. All right, Doug, we've got to go. Thanks so much for coming on theCUBE. It's great to see you. >> Okay, same Dave. >> All right. >> Appreciate it. >> Keep it right there everybody. This is Dave Vellante. You're watching IBM Think 2021. The virtual edition covered on theCUBE. (bouncy music)

>> From the KIPP studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is a CUBE conversation. >> IBM's new CEO has an opportunity to reset the direction of the company. Outgoing CEO Ginni Rometty, inherited a strategy that was put in place over two decades. It became fossilized in a lower-margin services-led model that she helped architect. Ginni spent a large portion of her tenure, shrinking the company so it could grow. But unfortunately, she ran out of time. For decades, IBM has missed opportunities to aggressively invest in the key waves that are now powering the tech economy. Instead, IBM really tried to balance investing innovation with placating Wall Street. We believe IBM has an opportunity to return to the Big Blue status that set the standard for the tech industry. But several things have to change, some quite dramatically. So we're going to talk about what it's going to take for IBM to succeed in this endeavor. Welcome to this special Wikibon CUBE Insights powered by ETR. In this breaking analysis, we're going to address our view of the future of IBM and try to accomplish three things. First, I want to review IBM's most recent earnings, the very first one under new CEO Arvind Krishna, and we'll discuss IBM's near-term prospects. Next, we'll look at how IBM got to where we are today. We want to review some of the epic decisions that it has made over the past several years and even decades. Finally, we'll look at some of the opportunities that we see for IBM to essentially remake itself and return to that tech titan that was revered by customers and feared by competitors. First, I want to look at the comments from new CEO Arvind Krishna. And let's try to decode them a bit. Arvind in the first earnings call that he held, and in interviews as well, and also internal memos, he's given some clues as to how he's thinking. This slide addresses a few of the key points. Arvind has clearly stated that he's committed to growing the IBM company, and of course, increasing its value. This is no surprise, as you know, every IBM CEO has been under pressure to do the same. And we'll look at that further a little later on in the segment. Arvind, also stated that he wants the company, he said it this way, "To lead with a technical approach." Now as we reported in January when Krishna was appointed to CEO. We're actually very encouraged that the IBM board chose a technical visionary to lead the company. Arvind's predecessors did not have the technical vision needed to make the bold decisions that we believe are now needed to power the company's future. As a technologist, we believe his decisions will be more focused on bigger tactical bets that can pay bigger returns, potentially with more risk. Now, as a point of just tactical commentary, I want to point out that IBM noted that it was doing well coming into the March month, but software deals especially came to a halt as customers focused on managing the pandemic and other parts of the business were okay. Now, this chart pulls some of the data from IBM's quarter. And let me make a few comments here. Now, what was weird here, IBM cited modest revenue growth on this chart, this was pulled from their slides. But revenue was down 2% for the quarter relative to last year. So I guess that's modest growth. Cloud revenue for the past 12 months, the trailing 12 months, was 22 billion and grew 23%. We're going to unpack that in a minute. Red Hat showed good growth, Stu Miniman and I talked about this last week. And IBM continues to generate a solid free cash flow. Now IBM, like many companies, they prudently suspended forward guidance. Some investors bristled at that, but I really have no problem with it. I mean, just way too much uncertainty right now. So I think that was a smart move by IBM. And basically, everybody's doing it. Now, let's take a look at IBM's business segments and break those down and make a few comments there. As you can see, in this graph, IBM's 17 plus billion dollar quarter comprises their four reporting segments. Cloud and cognitive software, which is, of course, its highest margin and highest growth business at 7%. You can see its gross margin is really, really nice. But it only comprises 30% of the pie. Services, the Global Business Services and GTS global technology services are low-growth or no growth businesses that are relatively low margin operations. But together they comprise more than 60% of IBM's revenue in the quarter and consistently throughout the last several years. Systems, by the way, grew nicely on the strength of the Z15 product cycles, it was up by 60% and dragged storage with it. But unfortunately power had a terrible quarter and hence the 4% growth. But decent margins compared to services of 50%. IBM's balance sheet looks pretty good. It took an advantage of some low rates recently and took out another $4 billion in corporate debt. So it's okay, I'm not too concerned about its debt related to the Red Hat acquisition. Now, welcome back to cloud at 22 billion for the past 12 months and growing at 23%. What, you say? That sounds very large, I don't understand. It's understandable that you don't understand. But let me explain with this next graphic. What this shows is the breakdown of IBM's cloud revenue by segment from fiscal year 19. As you can see, the cloud and cognitive segments, or segment which includes Red Hat comprises only 20% of IBM's cloud business. I know, kind of strange. Professional services accounts for 2/3 of IBM's Cloud revenue with systems at 14%. So look, IBM is defining cloud differently than most people. I mean, actually, that's 1% of the cloud business of AWS, Azure and Google Cloud come from professional services and on-prem hardware. This just doesn't have real meaning. And I think frankly, it hurts IBM's credibility as it hides the ball on cloud. Nobody really believes this number. So, I mean, it's really not much else I can say there. But look, why don't we bring in the customer angle, and let's look at some ETR data. So what this chart shows is the results of an ETR survey. That survey ran, we've been reporting on this, ran from mid March to early April. And more than 1200 respondents and almost 800 IBM customers are in there. If this chart shows the percentage of customers spending more on IBM products by various product segments that we chose with three survey samples April last year, January 2020, and the most recent April 2020 survey. So the good news here is the container platforms, OpenShift, Ansible, the Staples of Red Hat are showing strength, even though they're notably down from previous surveys. But that's the part of IBM's business that really is promising. AI and machine learning and cloud, they're right there in the mix, and even outsourcing and consulting and really across the board, you can see a pretty meaningful and respectable number or percent of customers are actually planning on spending more. So that's good, especially considering that the survey was taken right during the middle of the COVID-19 pandemic. But, if you look at the next chart, the net scores across IBM's portfolio, they're not so rosy. Remember, net score is a measure of spending momentum. It's derived by essentially subtracting the percent of customers that are spending less from those that are spending more. It's a nice simple metric. Kind of like NPS and ETR surveys, every quarter with the exact same methodology for consistency so we can do some comparisons over time series, it's quite nice. And you can see here that Red Hat remains the strongest part of IBM's portfolio. But generally in my experience as net scores starts to dip below 25% and kind of get into the red zone, that so called danger zone. And you can see many parts of IBM's portfolio are showing softness as we measure in net score. And even though you see here, the outsourcing and consulting businesses are up relative to last year, if you slice the data by large companies, as we showed you with Sagar Kadakia last week, that services business is showing deceleration, same thing we saw for Accenture, EY, Deloitte, etc. So here's the takeaway. Red Hat, of course, is where all the action is, and that's where IBM is going to invest in our opinion, and we'll talk a little bit more about that and drill into that kind of investment scenario a bit later. But what I want to do now is I want to come back to Arvind Krishna. Because he has a chance to pull off a Satya Nadella like move. Maybe it's different, but there are definite similarities. I mean, you have an iconic brand, a great company, that's in many technology sectors, and yes, there are differences, IBM doesn't have the recurring software revenue that Microsoft had, it didn't have the monopoly and PCs. But let's move on. Arvind has cited four enduring platforms for IBM, mainframes, services, middleware, and the newest hybrid cloud. He says that IBM must win the architectural battle for hybrid cloud. Now, I'm going to really share later what we think that means. There's a lot in that statement, including the role of AI in the edge. Both of which we'll address later on in this breaking analysis. But before we get there, I want to understand from a historical perspective where we think Arvind is going to take IBM. And to do that, we want to look back over the modern history of IBM, modern meaning of the post mainframe dominance era, which really started in 1993 when Louis Gerstner took over. Look, it's been well documented how Louis Gerstner pivoted into services. He wrote his own narrative with the book, "Who Says Elephants Can't Dance". And you know, look, you can't argue with his results. The graphic here shows IBM's rank in the fortune 500, that's the green line over time. IBM was sixth under Gerstner, today it's number 38. The blue area chart on the Insert, it shows IBM's market cap. Now, look, Gerstner was a hero to Wall Street. And IBM's performance under his tenure was pretty stellar. But his decision to pivot to services set IBM on a path that to this day marks company's greatest strength, and in my view, its greatest vulnerability. Name a product under the mainframes in which IBM leads. Again, middleware, I guess WebSphere, okay. But you know, IBM used to be the leader in the all important database market, semiconductors, storage servers, even PCs back in the day. So, I don't want to beat on this too much, I can say it's been well documented. And I said earlier, Ginni essentially inherited a portfolio that she had to unwind, and hence the steep revenue declines as you see here, and it's 'cause she had to jettison the so called non-strategic businesses. But the real issue is R&D, and how IBM has used it's free cash. And this chart shows IBM's breakdown of cash use between 2007 and 2019. Blue is cash return to shareholders, orange is research and development, and gray is CapEx. Now I chose these years because I think we can all agree that this was the period of tech defined by cloud. And you can see, during those critical early formative years, IBM consistently returned well over 50%, and often 60% plus of its free cash flow to shareholders in the form of dividends and stock buybacks. Now, while the orange appears to grow, it's because of what you see in this chart. The point is the absolute R&D spend really didn't change too much. It pretty much hovered, if you look back around 5 1/2 to $6 billion annually, the percentage grew because IBM's revenue declined. Meanwhile, IBM's competitors were spending on R&D and CapEx, what were they doing? Well, they were building up the cloud. Now, let me give you some perspective on this. In 2007 IBM spent $6.2 billion on R&D, Microsoft spent 7 billion that same year, Intel 5.8 billion, Amazon spent 800 million, that's it. Google spent 2.1 billion that year. And that same year, IBM returned nearly $21 billion to shareholders. In 2012 IBM spent $6.3 billion on R&D, Microsoft that year 9.8 billion, Intel 10 billion, Amazon 4.6 billion, less than IBM, Google 6.1 billion, about the same as IBM. That year IBM returned almost $16 billion to shareholders. Today, IBM spends about the same 6 billion on R&D, about the same as Cisco and Oracle. Meanwhile, Microsoft and Amazon are spending nearly $17 billion each. Sorry, Amazon 23 billion, and IBM could only return $7 billion to shareholders last year. So while IBM was returning cash to its shareholders, its competitors were investing in the future and are now reaping the rewards. Now IBM suspended its stock buybacks after the Red Hat deal, which is good, in my opinion. Buybacks have been a poor use of cash for IBM, in my view. Recently, IBM raised its dividend by a penny. It did this so it could say that it has increased its dividend 25 years in a row. Okay, great, not expensive. So I'm glad that that investors were disappointed with that move. But since 2007, IBM has returned more than $175 billion to shareholders. And somehow Arvind has to figure out how to tell Wall Street to expect less while he invests in the future. So let's talk about that a little bit. Now, as I've reported before, here is the opportunity. This chart shows data from ETR. It plots cloud landscape and is a proxy for multi-cloud and hybrid cloud. It plots net score or spending momentum on the y-axis, and market share, which really isn't market share, as we've talked about, it's a measure of pervasiveness in the data set, that's plotted on the x-axis. So, the point is, IBM has presence, it's pervasive in the marketplace, Red Hat and OpenShift, they have relevance, they have momentum with higher net scores. Arvind's opportunity is to really plug OpenShift into IBM's, large install base, and increase Red Hat's pervasiveness, while at the same time lifting IBM momentum. This, in my view, as Stu Miniman and I reported last week at the Red Hat Summit, puts IBM in a leading position to go after multi and hybrid cloud and the edge. So let's break that down a little bit further. When Arvind talks about winning the architectural battle for hybrid cloud, what does he mean by that? Here's our interpretation. We think IBM can create the de facto standard for cloud and hybrid cloud. And this includes on-prem, public cloud, cross clouds, or multi cloud, and importantly, the edge. Here's the opportunity, is to have OpenShift run natively, natively everywhere, on-premises in the AWS cloud, in the Azure Cloud, GCP, Alibaba, and the IBM Cloud and the Oracle Cloud, everywhere natively, so we can take advantage of the respective services within all those clouds. Same thing for on-prem, same thing for edge opportunities. Now I'll talk a little bit more about that in a moment. But what we're talking about here is the entire IT stack running natively, if I haven't made that point on OpenShift. The control plane, the security plane, the transport, the data management plane, the network plane, the recovery plane, every plane, a Red Hat lead stack with a management of resources is 100% identical, everywhere the same cloud experience. That's how IBM is defining cloud. Okay, I'll give them a mulligan on that one. IBM can be the independent broker of this open source standard covering as many use cases and workloads as possible. Here's the rub, this is going to require an enormous amount of R&D. Just think about all the startups that are building cloud native services and imagine IBM building or buying to fill out that IT stack. Now I don't have enough time to go in too deep to all other areas, but I do want to address the edge, the opportunity there and weave in AI. Beyond what I said above, which I want to stress, the points I made above about hybrid, multi-cloud include edge, the edge is a huge opportunity. But IBM and in many other, if not most other traditional players, we think are kind of missing the boat on that. I'll talk about that in a minute. Here's the opportunity, AI inference is going to run at the edge in real-time. This is going to be incredibly challenging. We think about this, a car running inference AI generates a billion pixels per second today, in five years, it'll be 15 times that. The pressure for real-time analysis at the edge is going to be enormous, and will require a new architecture with new processing models that are likely going to be ARM-based in our opinion. IBM has the opportunity to build end-to-end solutions powered by Red Hat to automate the data pipeline from factory to data center to cloud and everywhere. Anywhere there's instruments, IBM has an opportunity to automate them. Now rather than toss traditional Intel-based IT hardware over the fence to the edge, which is what IBM and most people are doing right now, IBM can develop specialized systems and make new silicon investments that can power the edge with very low cost and efficient systems that process data in real-time. Hey look, I'm out of time, but some other things I want you to consider, IBM transitioning to a recurring revenue model. Interestingly, Back to the Future, right? IBM used to have a massive rental revenue stream before it converted that base to sales. But if Arvind can recreate a culture of innovation and win the day with developers via its Red Hat relationships, as I said recently, he will be CEO of the decade. But he has to transform the portfolio by investing more in R&D. He's got to convince the board to stop pouring money back to investors for a number of years, not just a couple of quarters and do Whatever they have to do to protect the company from corporate raiders. This is not easy, but with the right leader, IBM, a company that has shown resilience through the decades, I think it can be done. All right, well, thanks for watching this episode of the Wikibon CUBE Insights powered by ETR. This is Dave Vellante. And don't forget, these episodes are available as podcasts, wherever you listen, I publish weekly on siliconangle.com, where you'll find all the news, I publish on wikibon.com which is our research site. Please comment on my LinkedIn posts, check out etr.plus, that's where all the data lives. And thanks for watching everybody. This is Dave Vellante for Breaking Analysis, we'll see you next time. (soft music)

>> live from San Francisco, California It's the Q covering the IBM Chief Data Officer Summit brought to you by IBM. >> We're back. You're watching the Cube, the leader in life Tech coverage. My name is Dave Volant Day, and we're covering the IBM Chief Data officer event hashtag IBM CDO is the 10th year that IBM has been running This event on the New Cube has been covering this for the last I'd say four or five years. Beth rottenness here. She's the distinguished engineer and principal data scientist. Cognitive within GTS Large Service's organization within IBM. Bet thanks so much for coming on the Cube. >> Absolutely. Thank you for having me. >> So you're very welcome. So really interesting sort of title. I'm inferring a lot. Um, and you're sexually transforming lives through data and analytics. Talk about your role a little bit. >> So my role is to infuse workforce transformation with cognitive. I typically we go from I think you've heard the ladder to a I. But as we move up that ladder and we can actually >> apply artificial intelligence and NLP, which is a lot of what I'm doing, >> it is it's instrumental in being able to see human beings in a lot more dimensions. So when we classify humans by a particular job role skill set, we often don't know that they have a passion for things like coding or anything else. And so we're really doing a lot more where we're getting deeper and being able to match your supply and demand in house as well as know when we have a demand for someone. And this person almost meets that demand. Based on all the different dimensionality that weaken dio, >> we can >> put them into this specific training class and then allow them to go through that training class so that we can upgrade the entire upscale and reschedule the entire work force. >> So one of the challenges you're working on is trying to operationalize machine intelligence and obviously starts with that training and skill level so well, it's not easy company the size of of I B M E. You're starting the GTS group, which probably has an affinity, at least conceptually, for transformation. That's what you guys do for your clients. So how's that going? You know, where are you in that journey? >> I think that we're in the journey and we're doing really well. I think that a lot of our people and the people who are actually working on the ground, we're talking to our clients every single day. So people on the helped us, they're talking to clients and customers. They understand what that client is doing. They understand the means, the troops, the mores, the language of the customer, of the organization of the customer, in the client, giving those people skills to understand what they can do better. To help solve our client's problems is really what it's all about. So understanding how we can take all of the unstructured data, all of like the opportunity for understanding what skills those people have on the ground and then being able to match that to the problems that our clients and customers are having. So it's a great opportunity. I think, that I've been in GTS my entire career and being an I t. I think that you understand this is where you store or create or, you know, manage all of the data in an entire enterprise organization, being able to enable and empower the people to be ableto upscale and Reese kill themselves so that they can get access to that so that we can do better for our clients and customers. >> So when you think about operations, folks, you got decades of skills that have built up you. D. B A is, you got network engineers, you got storage administrators. You know the VM add men's, you know, Unix. Add men's, I mean and a lot of those jobs. Air transforming clearly people don't want to invest is much in heavy lifting and infrastructure deployment, right? They want to go up the stack, if you will. So my question is, as you identify opportunities for transformation, I presume it's a lot of the existing workforce that you're transforming. You're not like saying, Okay, guys, you're out. What is gonna go retrain or bring in new people? Gonna retrain existing folks? How's that going? What's their appetite for that? Are they eagerly kind of lining up for this? You could describe that dynamic. >> I think the bits on the ground, they're very hungry. Everyone is so, so, so hungry because they understand what's coming on. They listen to the messages, they're ready. We were also in flexing. I'm sure you've heard of the new collar program were influencing a lot of youth as early professional hires. I have 2 16 year olds in the 17 year old on my team as interns from a P Tech program in Boulder, and getting that mix in that diversity is really all what it's about. We need that diversity of thought. We need that understanding of how we can start to do these things and how people can start to reach for new ways to work. >> All right, so I love this top of the cube we've we've covered, you know, diversity, women in tech. But so let's talk about that a little bit. You just made a statement that you need that diversity. Why is it so important other than it's the right thing to do? What's the what's the business effect of bringing diversity to the table? >> I think that would. We're searching for information truth if you want. If you want to go there, you need a wide variance of thought, the white of your variance, the more standard you're me, and it's actually a mathematical theory. Um, so this is This is something that is part of our truth. We know that diversity of thoughts we've been working. I run and sponsor the LGBT Q Plus group. I do women's groups in the B A R G's and then we also are looking at neuro diversity and really understanding what we can bring in as far as like, a highly diverse workforce. Put them all together, give them the skills to succeed. Make sure that they understand that the client is absolutely the first person that they're looking at in the first person that they're using Those skills on enable them to automate, enable them to stop doing those repeatable tasks. And there's so much application of a I that we can now make accessible so that people understand how to do this at every single level. >> So it's a much wider scope of an observation space. You're sort of purposefully organizing. So you eliminate some of that sampling bias and then getting to the truth. As you say, >> I think that in order to come up with ethical and explainable, aye, aye, there's definitely a way to do this. We know how to do it. It's just hard, and I think that a lot of people want to reach for machine learning or neural nets that spit out the feature without really understanding the context of the data. But a piece of data is an artifact of a human behavior, so you have to trace it all the way back. What process? What person who put it there? Why did they put it there? What was that? When we when we look at really simple things and say, Why are all these tickets classified in this one way? It's because when you observe the human operator, they're choosing the very first thing human behaviors put data in places or human behaviors create machines to put data in places. All of this can be understood if we look at it in a little bit of a different way. >> I thought I had was. So IBM is Business is not about selling ads, so there's no one sent to future appropriate our data to sell advertising. However, if we think about IBM as an internal organism, there's certain incentive structures. There's there's budgets, there's resource is, and so there's always incentives to game the system. And so it sounds like you're trying to identify ways in which you can do the right thing right thing for the business right for people and try to take some of those nuances out of the equation. Is that >> so? From an automation perspectively build digital management system. So all the executives can go in a room and not argue about whose numbers are correct, and they can actually get down to the business of doing business. From the bottoms up perspective, we're enabling the workforce to understand how to do that automation and how to have not only the basic tenets of data management but incorporate that into a digital management system with tertiary and secondary and triangulation and correlations so that we have the evidence and we can show data providence for everything that we're doing. And we have this capability today we're enabling it and operational izing. It really involves a cultural transformation, which is where people like me come in. >> So in terms of culture, so incentives drive behavior, how have you thought through and what are you doing in terms of applying new types of incentives? And how's that working? >> So when we start to measure skills were not just looking at hard skills. We're looking at soft skills, people who are good collaborators, people who have grit, people who are good leaders, people who understand how to do things over and over and over again in a successful manner. So when you start measuring your successful people, you start incentivizing the behaviors that you want to see. And when you start measuring people who can collaborate globally in global economies that that is our business as IBM, that is who we want to see. And that's how we're incentivizing the behaviors that we want to. D'oh. >> So when I look at your background here, obviously you're you're a natural fit for this kind of transformation. So you were You have an anthropology background language. Your data scientist, you do modeling. >> I always say I'm a squishy human data scientist, but I got to work with a huge group of people to create the data science profession with an IBM and get that accredited through open group. And that's something we're very passionate about is to give people a career past so that they know where their next step is. And it's all about moving to growth and sustainable growth by making sure that the workforce knows how value they are by IBM and how valuable they are by our clients. What does >> success look like to you? >> I think success is closer than we think. I think that success is when we have everybody understanding everybody, understanding what it's like to pick up the phone and answer a customer service call from our client and customer and be able to empathize and sympathize and fix the problem. We have 350,000 human beings. We know somebody in some circle that can help fix a client's problem. I think success looks like being able to get that information to the right people at the right time and give people a path so that they know that they're on the boat together, all rowing together in order to make our clients successful. >> That's great. I love the story. Thanks so much for coming on the hearing. You're very welcome. Keep it right there, but we'll be back with our next guest is a day. Violante. We're live from Fisherman's. More for the IBM CDO Chief Data officer event. Right back sticker The cube dot net is where the

>> Live from Miami Beach, Florida, it's the CUBE, covering VeeamON2019. Brought to you by Veeam. >> Welcome back to Miami everybody. This is Dave Vellate with Peter Burris here. Day One of VeeamOn2019, at the Fontainebleau Hotel in Miami. Rat Pack used to hang out here Which is kind of the big theme of the reception last night. Dale Hoffman is here. He's the Director of Offering Management for VMWare Solutions at IBM. Dale, thanks for coming to the group. >> Thanks, David. It's a pleasure to be here and Peter, nice to meet you. >> Okay, yeah, pleasure to meet you as well. So lets unpack the sort of notion of Offering Management that sort of people generally refer to as Product Management. IBM calls it Offering Management. So you are focused on the public cloud, but specific to the VMWare swimlane. Is that right? >> Yeah, that is correct. So, if you think about it I own the VMWare Offering Solutions on our cloud. So, that is everything associated with the whole VMWare software defined data center stack, but also a lot of our partner solutions. Many solutions in the security space. Many solutions in the business resiliency space. And that's kind of where Veeam had came in on that aspect. >> So the first public cloud deal that VMWare did, correct me if I'm wrong, was with IBM, was it not? >> Yeah, so if you just go back a little bit in time, IBM itself is probably the largest, if not the largest, provider of VMWare workloads. And mainly that's due to a lot of our GTS services business. But back in 2016, this looked like a great opportunity to actually go on the public cloud and actually stand up a software defined data center stack from VMWare. So, we started on that in that partnership with VMware and started to just basically grow that business. That business has been growing at about a 75% CAGR, and then that was kind of like step one, get the stack, and then step two was how do you get those security services in, and some of those business resiliency services in. And that's where we started to go in and do a real deep partnership with Veeam and happy to say that we started that in 2017 and we have about 12,000 plus VMs, both bare metal and also on virtualized VMWare on our cloud. Its been about 170% year to year growth rate. So Veeam's killing it on our cloud. They really are. >> And your scope is anything in the IBM cloud that's VMWare related so it could be >> That is correct. >> Data base services, it could be >> Absolutely. >> Object stores, obviously data protection with Veeam. What do you think is driving the Veeam-IBM momentum? >> Well, I think what's driving it is if you think about a lot of these, you know, critical customers, first thing they're going to want to do is take advantage of a lot of things that you get with the cloud. Whether its moving from a capex to an opex model with being able to get that capacity expansion. And there's a whole bunch of different use cases that you've got, but one of the key things to them is this whole business continuity. The ability to make sure that I can back it up, I can recover as quickly as I possibly can, and maybe more importantly, we have about 60 data centers worldwide. And being able to, essentially, have that geographic span is a huge advantage. And also the, fact that, just take backup as a simple example. When I back up I may be moving data back and forth in a particular region. I'm looking for some latency. And not to be able to be charged for that is a powerful value proposition for the customer. So, we don't charge for any type of data movement inside our cloud. And also, when you go outside, maybe for high availability, outside into the geographic reach, the same thing happens. So I think those are some very key things. That it's the security, the very fast backup and recovery, and knowing that you're not getting charged for that private secure network. It brings a real good value proposition to our customers that are leveraging Veeam and other services. >> So we think that we're now entering into a third era of cloud where the first one was basically makers, companies that created SAS companies, gaming companies, and then people moved analytics into there for a variety of reasons. Now the enterprise seems to be getting in it in a big way. Certainly at the large size. But that's starting to move down into the mid-range as well. Your advantage, IBM's advantage, has always been your ability to engage and bind with your customer base. How are you, how is IBM helping to move these customers forward, and what is the backup restore conversation in that process? Is it an afterthought? Is it something that's becoming more central to their thinking? How is it working? >> Yeah, so that's a great question, Peter. So, the way I think we in IBM cloud have thought about this is we've kind of divided the journey to cloud into two pieces. The 20% that are there, they weren't the real I'll call them business critical type of workloads that are going on, but that next 80% that's where we really see a huge advantage to us. Its out enterprise relationships. Its what we do from a security aspect on the cloud, and how easily we could help them, what we call lift and shift and migrate things over. And then once you're there, how can I help give you that assurance that we're going to give you the best backup, the best recovery in the event of a disaster, something that can, if you do see a failure, being able to have a very fast recovery point, you know, objective, and get you knowing that everything is secure and backed up and has this wide geographic spread. And even think about in the areas of compliance these days. GDPR. I mean, you have to have these data centers worldwide and sometimes they have to be you know, fixed. So, we provide that whole value proposition, I think, to those clients, in that essence. And I think the business critical, and, eventually, what we call mission critical workloads that will eventually move over, its probably the best choice to be able to have that trusted place to put workloads. >> So, the other, related to that, is you've got customers who are now moving and we're going to see them moving at varieties of speeds, but increasingly, the enterprises are going to move faster to do this than they've done in almost anything previously. And you've got Veeam, a very hard charging vendor, that has a reputation for great quality stuff, but a lot of innovation, moving very quickly. How is, how are you ensuring that there's no impedance mismatch between you, IBM, IBM customers, and Veeam and the technology vectors that it's on. >> Yeah, well first of all, its a very, very deep partnership. I mean very, very6 close relationship with them. This is not a vendor supplier relationship. This is a very, very deep partnership. And the other thing is, from a technology standpoint, one of our big differentiators on the cloud is, we actually provide that access all the way down to the hypervisor level. So, you have full freedom of action to do whatever you want to be able to do. So, from a Veeam standpoint, since its really based on a hypervisor type of technology, that gives us a real big advantage, because let's say, David, you're using Veeam on-prem. I give it the exact same look and feel as if you're off-prem, and I essentially make that data center look like an extension, like it was just in the next building and such. >> It's just another group, it's just another pool of VMs. >> Absolutely. And that whole, control and management of that gives you extreme flexibility that you really can't get in any other type of cloud. I like to say that You can come in and custom build your infrastructure, your VMWare software defined data center stack, your services such as Veeam. You custom build it any way that you want. It's like leasing a car. After you custom built that car, we hand you the keys. It's client managed. You go out and do whatever you want with that. And if you don't like it you can turn those keys back in, because we just do things not on a long term commitment, but on monthly commitments and such. >> And I want to, I want to maybe drill down on that a little bit, Dale. >> Sure. >> And try to better understand some of the flexibility that I'm inferring from your statement. So, you're a mainframer. You remember the days of SMS, and one of the things about it was that I could set policy for data protection, for backup, based upon the workload. I could say back this up once a week or back this up every day or back this up every hour or what is was. I had a granular level of capability. It was mainframe so it was, you know, big stuff. A lot of the challenges within, certainly the mid-size and smaller businesses, it's like one size fits all. This has been a, you know, a problem for everybody for years. Danny Allen, this morning, in the analyst and media session was talking about... >> This is the products guy here at VM. >> Yeah, yeah, yeah. Talking about the ability to sort of set granular levels, the pressures of RPO and RTO. And I want to sort of test how challenging it is to do that by workload or by application, and how IBM and Veeam are supporting that. How complicated is it? Are your clients doing it or is it still kind of a one size fits all world. >> I wouldn't say its one size fits all, but what I would say is by giving the clients full control and having the freedom and flexibility to do things that they want, the tight integration of this Veeam technology into the V-Center console and such, it gives them the ability, I like to say, do it at your own pace. Do it when you want to. Even something as simple as, lets say, managing VMWare and patching it, instead of having somebody else do it for you at their pace, we essentially allow you to do it at your pace when you want to. And its the same thing with the backup. You do it when you want to, at your frequency, what regions you want to go, or your whole geographic spread. And we try to provide the maximum flexibility and control to our mutual clients to enable that. >> And on the automation scale, or you know, the 9-inning game of automation, where are we? How, how automated can I make that, but more importantly, how fast are customers adopting that sort of automation scenario. >> Yeah, so you're experience when you come into our, our cloud, and essentially you click on "I want to go to the cloud," you click on the VMWare offering, its a very simple menu. You pick your infrastructure, compu... network storage. I'll keep it simple for now. You pick your software defined data center stack and we even enable a BYOL. A lot of people have their own Vsphere licenses. We enable them to go in and insert their key which is a cost advantage to them. Then you pick your partner services and such. So you pick your Veeam, and then you go in there and say "Well, where do I want to put it? Do I want to put it into Vsan? Do I want to put it into a file based storage?" And I think what we're really excited about is, we just recently announced being able to put this into IBM's cloud object storage. And that's huge, because, if you think about it, we all live in this area of regulatory and compliance and you can't throw anything away and the data is just exploding all over the place. So, having that ability to put it into a lower cost storage and all automated and essentially Veeam can essentially point to any of those multiple storage tiers. It gives our customers a big advantage so that they could essentially, I'll call it right-tune what they want to do and where they want to do their backups. So, they want something there quick or they say "Nah, you know, that could be a cold vault. I can keep that out there for a while and when I need it I'll go back and get it." So a lot of flexibility on storage options, a lot of flexibility on the pricing. But Veeam essentially is that powerhouse behind it that's actually interfacing that VMWare world as well as on the bare metal side over to those various levels of storage. >> So David, to answer your question, where are we in that 9 innings. I would have said bottom of the 1st, 1 out, 2 men on, 1 of them is Manny Ramirez. [Laughter] Because you just don't know what's going to happen next, and that's what I want to bring up. Veeam talked about... >> Is he a Boston fan? >> No, I'm not. [Laughter] I'm not. But Veeam talked about the "with Veeam" and I'm wondering how IBM sees it bringing its, this massive innovation, you still are one of the leading generators of patents in certainly the tech industry, but globally. How do you see IBM bringing IBM intellectual property, IBM invention, to this "with Veeam" platform to increase the degree to which it can serve a broader range of customers of different sizes, different geographies, and different workload forms. How do you see IBM participating in that process? >> Yeah, let me give you a couple examples. So, let me just take a non-Veeam example, just to talk about some IBM innovation. So, about a month ago we actually introduced something called hyperprotect cryptoservices. That's a big word there. Basically, it is, it's the same technology that we have in system Z, that's used by our large enterprise customers that gives you that, that FIPS 140-2, level 4. We are the only cloud in the world that has that technology that's on there. Basically, once you put your keys in there nobody's going to get to them at all. And it's an innovation of taking something that was done in a different division within IBM and now making that as an endpoint service within our cloud. Now, let me give you an example of doing a little bit of innovation even with Veeam. So, one of the things that we're trying to do is, you know, we started out hey, let's lay down the software data center stack, let's lay down partner services. Now, let's focus on what's that solution layer on top of it. How do we add more value into our clients? So, just take SAP, for example. We just recently announced both on a bare metal and also on our VMWare side, to be able to have a, we're the only cloud that has a certified SAP server in the cloud. And what we've just recently done is, we've integrated and put Veeam as that backup choice for that. So, now what that really enables everyone to do is leverage a lot of innovative work that Veeam was doing to make sure that you can back up SAP correctly. We married that with our infrastructure and our bare metal/VMWare stack with Veeam as that backup. And just a little bit of foreshadowing in the future, we're going to look at ways to further automate a lot of that SAP landscape so that our clients see, you know, a much better automated solution so that they essentially, using your baseball analogy, are going to see that full range of automation and say "Wow. I think we're at the end of the game here. This thing truly is automated, easy to consume, and I'll have the confidence of the security and the business resiliency knowing that it's got the trusted IBM name behind it. >> You know, give us the summary of 2019. Maybe some of the first half highlights and maybe show a little leg for the second half. >> Sure, sure. Why not? >> What can we expect leading up to IBM thing. >> So, I mentioned a few things about what we did in the security space already. So, we've enabled, besides our, what we've done with high trust, with data and key protection. We've also enabled IBM's key protect services. We brought the System Z hyperprotect services into the mix. We've enabled things like cavionics to bring the risk foresight. So, now, we can monitor a lot of compliance and keep things in compliance and monitor that for you. We brought some app modernization to essentially help people on their journey modernize their apps, leveraging both a tight integration of VMWare and what we call ICP-hosted or IBM Cloud Private hosted to get that tight integration and such. But moving forward I see a couple big things, and I'll try to maybe put them in the Veeam perspective and such. You heard me mention before about this 80% of that real key workload coming over to the cloud that, you know, business critical or mission critical. We announced last year something called mission critical VMWare, and basically what it is, it's two, two active, active type of sites with a witness site and you essentially are moving things back and forth so if you have a failure within a region you instantly can go in and switch over. And the idea is to give you the highest availability into the cloud. And Veeam is a very much integral part of that solution in the sense that it'll be our backup. And then since you said do a little bit of foreshadowing, say what's coming in the future. We have a very very strong single tenant VMWare offering on the cloud. Like I was saying, you know, it's client managed, the hypervisor access. You've got that extreme flexibility and control. But what we like to do is kind of look into a little bit more of that multi-tenant type of space. And we think it opens up a whole new market segment for us in that emerging market and commercial market space. Guess who's going to be our partner in that to make the backup happen? That's going to be Veeam. >> Cool. Dale Hoffman, thanks so much for coming to the CUBE and sharing. >> Oh, thank you for having me. >> Some of the ways in which IBM is differentiating, not doing infrastructure service and just racing to zero, but really trying to pick your spots and I really appreciate your insights and thanks again. >> Okay, thank you. >> Alright, keep it right there everybody. This is Dave Vellante with Peter Burris. Day one at VeeamON2019, and from Miami you're watching the CUBE. We'll be right back.

>> live from Las Vegas. It's the queue covering Dell Technologies. World twenty nineteen. Brought to you by Dell Technologies and its ecosystem partners. >> The one Welcome to the Special Cube Live coverage here in Las Vegas with Dell Technologies World 2019. I'm John Furrier with Dave Vellante breaking down day one of three days of wall the wall Coverage - 2 Cube sets. Uh, big news today and dropping here. Dell Technology World's series of announcements Cloud ability, unified work spaces and then multi cloud with, uh, watershed announced with Microsoft support for VMware with Azure are guests here theCUBE alumni that Seo, senior leader of'Em Where Sanjay *** and such a great to see you, >> John and Dave always a pleasure to be on your show. >> So before we get into the hard core news around Microsoft because you and Satya have a relationship, you also know Andy Jassy very well. You've been following the Clouds game in a big way, but also as a senior leader in the industry and leading BM where, um, the evolution of the end user computing kind of genre,  that whole area is just completely transformed with mobility and cloud kind of coming together with data and all this new kinds of applications. The modern applications are different. It's changing the game on how end users, employees, normal people use computing because some announcement here on their What's your take on the ever changing role of cloud and user software? >> Yeah, John, I think that our vision , as  you know, it was the first job I came to do at VMware almost six years ago, to run and use a computing. And the vision we had at that time was that you should be able to work at the speed of life, right? You and I happen to be on a plane at the same time  yesterday coming here, we should be able to pick our amps up on our devices. You often have Internet now even up at thirty thousand feet. In the consumer world, you don't lug around your CDs, your music, your movies come to you. So the vision of any app on any device was what we articulated with the digital workspace We. had Apple and Google very well figured out. IOS later on Mac,  Android,  later on chrome . The Microsoft relationship in end use the computing was contentious because we overlapped. They had a product, PMS and in tune. But we always dreamed of a day. I tweeted out this morning that for five and a half years I competed with these guys. It was always my dream to partner with the With Microsoft. Um, you know, a wonderful person, whom I respect there, Brad Anderson. He's a friend, but we were like LeBron and Steph Curry. We were competing against each other. Today everything changed. We are now partners. Uh, Brad and I we're friends, we'll still be friends were actually partners  now why? Because we want to bring the best of the digital workspace solution VMware brings workspace one to the best of what Microsoft brings in Microsoft 365 , active directory, E3 capabilities around E. M. S and into it and combined those together to help customers get the best for any device. Apple, Google and Microsoft that's a game changer. >> Tell about the impact of the real issue of Microsoft on this one point, because is there overlap is their gaps, as Joe Tucci used to say, You can't have any. There's no there's no overlap if you have overlapped. That's not a >> better to have overlapped and seems right. A gaps. >> So where's the gaps? Where this words the overlapping cloud. Next, in the end user world, >> there is a little bit of overlap. But the much bigger picture is the complementarity. We are, for example, not trying to be a directory in the Cloud That's azure active directory, which is the sequel to Active Directory. So if we have an identity access solution that connect to active directory, we're gonna compliment that we've done that already. With Octo. Why not do that? Also inactive Directory Boom that's clear. Ignored. You overlap. Look at the much bigger picture. There's a little bit of overlap between in tune and air Watch capabilities, but that's not the big picture. The big picture is combining workspace one with E. M s. to allow Office 365 customers to get conditional access. That's a game, so I think in any partnership you have to look past, I call it sort of these Berlin Wall moments. If the U. S and Soviet Union will fighting over like East Germany, vs West Germany, you wouldn't have had that Berlin wall moment. You have to look past the overlaps. Look at the much bigger picture and I find the way by which the customer wins. When the customer wins, both sides are happy. >> Tearing down the access wall, letting you get seamless. Access the data. All right, Cloud computing housely Multi cloud announcement was azure something to tell on stage, which was a surprise no one knew was coming. No one was briefed on this. It was kind of the hush hush, the big news Michael Delll, Pat Girl singer and it's nothing to tell up there. Um, Safia did a great job and really shows the commitment of Microsoft with the M wear and Dell Technologies. What is this announcement? First, give us your take an analysis of what they announced. And what does it mean? Impact the customers? >> Yeah, listen, you know, for us, it's a further That's what, like the chess pieces lining up of'Em wars vision that we laid up many years for a hybrid cloud world where it's not all public cloud, it isn't all on premise. It's a mixture. We coined that Tom hybrid loud, and we're beginning to see that realize So we had four thousand cloud providers starting to build a stack on VM, where we announced IBM Cloud and eight of us. And they're very special relationships. But customers, some customers of azure, some of the retailers, for example, like Wal Mart was quoted in the press, released Kroger's and some others so they would ask us, Listen, we're gonna have a way by which we can host BMO Workloads in there. So, through a partnership now with Virtue Stream that's owned by Dell on DH er, we will be able to allow we, um, where were close to run in Virtue Stream. Microsoft will sell that solution as what's called Azure V M, where solutions and customers now get the benefit of GMO workloads being able to migrate there if they want to. Or my great back on the on premise. We want to be the best cloud infrastructure for that multi cloud world. >> So you've got IBM eight of us Google last month, you know, knock down now Azure Ali Baba and trying you. Last November, you announced Ali Baba, but not a solution. Right >> now, it's a very similar solutions of easy solution. There's similar what's announced with IBM and Nash >> So is it like your kids where you loved them all equally or what? You just mentioned it that Microsoft will sell the VM wear on Azure. You actually sell the eight of us, >> so there is a distinction. So let me make that clear because everything on the surface might look similar. We have built a solution that is first and preferred for us. Called were MacLeod on a W s. It's a V m er manage solution where the Cloud Foundation stack compute storage networking runs on a ws bare metal, and V. Ember manages that our reps sell that often lead with that. And that's a solution that's, you know, we announced you were three years ago. It's a very special relationship. We have now customer attraction. We announce some big deals in queue, for that's going great, and we want it even grow faster and listen. Eight of us is number one in the market, but there are the customers who have azure and for customers, one azure very similar. You should think of this A similar to the IBM ah cloud relationship where the V C P. V Partners host VM where, and they sell a solution and we get a subscription revenue result out of that, that's exactly what Microsoft is doing. Our reps will get compensated when they sell at a particular customer, but it's not a solution that's managed by BM. Where >> am I correct? You've announced that I think a twenty million dollars deal last quarter via MacLeod and A W. And that's that's an entire deal. Or is that the video >> was Oh, that was an entirely with a customer who was making a big shift to the cloud. When I talked to that customer about the types of workloads, they said that they're going to move hundreds off their APs okay on premise onto via MacLeod. And it appears, so that's, you know, that's the type of cloud transformation were doing. And now with this announcement, there will be other customers. We gave an example of few that Well, then you're seeing certain verticals that are picking as yours. We want those two also be happy. Our goal is to be the undisputed cloud infrastructure for any cloud, any cloud, any AP any device. >> I want to get your thoughts. I was just in the analysts presentation with Dell technology CFO and looking at the numbers, the performance numbers on the revenue side Don Gabin gap our earnings as well as market share. Dell. That scales because Michael Delll, when we interviewed many years ago when it was all going down, hinted that look at this benefits that scale and not everyone's seeing the obvious that we now know what the Amazon scale winds so scale is a huge advantage. Um, bm Where has scale Amazon's got scale as your Microsoft have scales scales Now the new table stakes just as an industry executive and leader as you look at the mark landscape, it's a having have not world you'd have scale. You don't If you don't have scale, you're either ecosystem partner. You're in a white space. How do companies compete in this market? Sanjay, what's your thoughts on I thinkit's >> Jonah's? You said there is a benefit to scale Dell, now at about ninety billion in revenue, has gone public on their stock prices. Done where Dellvin, since the ideal thing, the leader >> and sir, is that point >> leader in storage leader inclined computing peces with Vienna and many other assets like pivotal leaders and others. So that scale VM, Where about a ten billion dollar company, fifth largest software company doing verywell leader in the softer to find infrastructure leader, then use a computing leader and softer, defined networking. I think you need the combination of scale and speed, uh, just scale on its own. You could become a dinosaur, right? And what's the fear that every big company should have that you become ossified? And I think what we've been able to show the world is that V M wear and L can move with scale and speed. It's like having the combination of an elephant and a cheetah and won and that to me special. And for companies like us that do have scaled, we've to constantly ask ourselves, How do we disrupt ourselves? How do we move faster? How do we partner together? How do we look past these blind spots? How do we pardon with big companies, small companies and the winner is the customer. That's the way we think. And we could keep doing that, you'll say so. For example, five, six years ago, nobody thought of VMware--this is going before Dell or EMC--in the world of networking, quietly with ten thousand customers, a two million dollar run rate, NSX has become the undisputed leader and software-defined networking. So now we've got a combination of server, storage and a networking story and Dell VMware, where that's very strong And that's because we moved with speed and with scale. >> So of course, that came to an acquisition with Nice Sarah. Give us updates on the recent acquisitions. Hep C e o of Vela Cloud. What's happening there? >> Yeah, we've done three. That, I think very exciting to kind of walk through them in chronological order about eighteen months ago was Velo Cloud. We're really excited about that. It's sort of like the name, velocity and cloud fast. Simple Cloud based. It is the best solution. Ston. How do we come to deciding that we went to talk to our partners like t other service providers? They were telling us this is the best solution in town. It connects to the data center story to the cloud story and allows our virtual cloud network to be the best softer. To find out what you can, you have your existing Mpls you might have your land infrastructure but there's nobody who does softer to find when, like Philip, they're excited about that cloud health. We're very excited about that because that brings a multi cloud management like, sort of think of it like an e r P system on top of a w eso azure to allow you to manage your costs and resource What ASAP do it allows you to manage? Resource is for materials world manufacturing world. In this world, you've got resources that are sitting on a ws or azure. Uh, cloud held does it better than anybody else. Hefty. Oh, now takes a Cuban eighty story that we'd already begun with pivotal and with Google is you remember at at PM world two years ago. And that's that because the founders of Cuban eighties left Google and started FTO. So we're bringing that DNA we've become now one of the top two three contributors to communities, and we want to continue to become the de facto platform for containers. If you go to some of the airports in San Francisco, New York, I think Keilani and Heathrow to you'LL see these ads that are called container where okay, where do you think the Ware comes from Vienna, where, OK, and our goal is to make containers as container where you know, come to you from the company that made vmc possible of'Em where So if we popularized PM's, why not also popularised the best enterprise contain a platform? That's what helped you will help us do >> talk about Coburn at ease for a minute because you have an interesting bridge between end user computing and their cloud. The service is micro. Services that are coming on are going to be powering all these APS with either data and or these dynamic services. Cooper, Nettie sees me the heart of that. We've been covering it like a blanket. Um, I'm gonna get your take on how important that is. Because back Nelson, you're setting the keynote at the Emerald last year. Who burn it eases the dial tone. Is Cooper Netease at odds with having a virtual machine or they complimentary? How does that evolving? Is it a hedge? What's the thoughts there? >> Yeah, First off, Listen, I think the world has begun to realize it is a world of containers and V ems. If you looked at the company that's done the most with containers. Google. They run their containers in V EMS in their cloud platform, so it's not one or the other. It's vote. There may be a world where some parts of containers run a bare metal, but the bulk of containers today run and Beyonce And then I would say, Secondly, you know, five. Six years ago, people all thought that Doctor was going to obliterate VM where, But what happened was doctors become a very good container format, but the orchestration layer from that has not become daugher. In fact, Cuban Eddie's is kind of taking a little of the head and steam off Dr Swarm and Dr Enterprise, and it is Cooper Navy took the steam completely away. So Senses Way waited for the right time to embrace containers because the obvious choice initially would have been some part of the doctor stack. We waited as Borg became communities. You know, the story of how that came on Google. We've embraced that big time, and we've stated a very important ball hefty on All these moves are all part of our goal to become the undisputed enterprise container platform, and we think in a multi cloud world that's ours to lose. Who else can do multi cloud better than VM? Where may be the only company that could have done that was Red Hat. Not so much now, inside IBM, I think we have the best chance of doing that relative. Anybody else >> Sanjay was talking about on our intro this morning? Keynote analysis. Talking about the stock price of Dell Technologies, comparing the stock price of'Em where clearly the analysis shows that the end was a big part of the Dell technologies value. How would you summarize what v m where is today? Because on the Kino there was a Bank of America customers. She said she was the CTO ran, she says, Never mind. How we got here is how we go floors the end wars in a similar situation where you've got so much success, you always fighting for that edge. But as you go forward as a company, there's all these new opportunities you outlined some of them. What should people know about the VM? We're going forward. What is the vision in your words? What if what is VM where >> I think packed myself and all of the key people among the twenty five thousand employees of'Em are trying to create the best infrastructure company of all time for twenty one years. Young. OK, and I think we have an opportunity to create an incredible brand. We just have to his use point on the begins show create platforms. The V's fear was a platform. Innocent is a platform workspace. One is a platform V san, and the hyper convert stack of weeks right becomes a platform that we keep doing. That Carbonetti stuff will become a platform. Then you get platforms upon platforms. One platforms you create that foundation. Stone now is released. ADelle. I think it's a better together message. You take VX rail. We should be together. The best option relative to smaller companies like Nutanix If you take, you know Veum Where together with workspace one and laptops now put Microsoft in the next. There's nobody else. They're small companies like Citrix Mobile. I'm trying to do it. We should be better than them in a multi cloud world. They maybe got the companies like Red Hat. We should have bet on them. That said, the end. Where needs toe also have a focus when customers don't have Dale infrastructure. Some people may have HP servers and emcee storage or Dell Silvers and netapp storage or neither. Dellery emcee in that case, usually via where, And that's the way we roll. We want to be relevant to a multi cloud, multi server, multi storage, any hardware, any cloud. Any AP any device >> I got. I gotta go back to the red hat. Calm in a couple of go. I could see you like this side of IBM, right? So So it looks like a two horse race here. I mean, you guys going hard after multi cloud coming at it from infrastructure, IBM coming at it with red hat from a pass layer. I mean, if I were IBM, I had learned from VM where leave it alone, Let it blossom. I mean, we have >> a very good partisan baby. Let me first say that IBM Global Services GTS is one about top sai partners. We do a ton of really good work with them. Uh, I'm software re partner number different areas. Yeah, we do compete with red hat with the part of their portfolios. Relate to contain us. Not with Lennox. Eighty percent plus of their businesses. Lennox, They've got parts of J Boss and Open Stack that I kind of, you know, not doing so well. But we do compete with open ship. That's okay, but we don't know when we can walk and chew gum so we can compete with Red Hat. And yet partner with IBM. That's okay. Way just need to be the best at doing containing platform is better than open shifter. Anybody, anything that red hat has were still partner with IBM. We have to be able to look at a world that's not black and white. And this partnership with Microsoft is a good example. >> It's not a zero sum game, and it's a huge market in its early days. Talk >> about what's up for you now. What's next? What's your main focus? What's your priorities? >> Listen, we're getting ready for VM World now. You know in August we want to continue to build momentum on make many of these solutions platforms. So I tell our sales reps, take the number of customers you have and add a zero behind that. OK, so if you've got ten thousand customers of NSX, how do we get one hundred thousand customers of insects. You have nineteen thousand customers of Visa, which, by the way, significantly head of Nutanix. How do we have make one hundred ninety thousand customers? And we have that base? Because we have V sphere and we have the Delll base. We have other partners. We have, I think, eighty thousand customers off and use of computing tens of millions of devices. How do we make sure that we are workspace? One is on billion. Device is very much possible. That's the vision. >> I think that I think what's resonating for me when I hear you guys, when you hear you talk when we have conversations also in Pat on stage talks about it, the simplification message is a good one and the consistency of operating across multiple environments because it sounds great that if you can achieve that, that's a good thing. How you guys get into how you making it simple to run I T. And consistent operating environment. It's all about keeping the customer in the middle of this. And when we listen to customs, all of these announcements the partnership's when there was eight of us, Microsoft, anything that we've done, it's about keeping the customer first, and the customer is basically guiding up out there. And often when I sit down with customers, I had the privilege of talking hundreds of thousands of them. Many of these CEOs the S and P five hundred I've known for years from S athe of'Em were they'LL Call me or text me. They want us to be a trusted advisor to help them understand where and how they should move in their digital transformation and compared their journey to somebody else's. So when we can bring the best off, for example, of developer and operations infrastructure together, what's called DEV Ops customers are wrestling threw that in there cloud journey when we can bring a multi device world with additional workspace. Customers are wrestling that without journey there, trying to figure out how much they keep on premise how much they move in the cloud. They're thinking about vertical specific applications. All of these places where if there's one lesson I've learned in my last ten twenty years of it has become a trusted advisor to your customers. Lean on them and they will lean on you on when you do that. I mean the beautiful world of technology is there's always stuff to innovate. >> Well, they have to lean on you because they can't mess around with all this infrastructure. They'LL never get their digital transformation game and act together, right? Actually, >>= it's great to see you. We'Ll see you at PM, >> Rollo. Well, well, come on, we gotta talk hoops. All right, All right, All right, big. You're a big warriors fan, right? We're Celtics fan. Would be our dream, for both of you are also Manny's themselves have a privileged to go up against the great Warriors. But what's your prediction this year? I mean, I don't know, and I >> really listen. I love the warriors. It's ah, so in some senses, a little bit of a tougher one. Now the DeMarcus cousins is out for, I don't know, maybe all the playoffs, but I love stuff. I love Katie. I love Clay, you know, and many of those guys is gonna be a couple of guys going free agents, so I want to do >> it again. Joy. Well, last because I don't see anybody stopping a Celtics may be a good final. That would be fun if they don't make it through the rafters, though. That's right. Well, I Leonard, it's tough to make it all right. That sounds great. >> Come on. Sanjay Putin, CEO of BM Wear Inside the Cube, Breaking down his commentary of you on the landscape of the industry and the big news with Microsoft there. Other partner's bringing you all the action here Day one of three days of coverage here in the Cubicle two sets a canon of cube coverage out there. We're back with more after this short break.

>> Live from San Francisco. It's the cube covering IBM thing twenty nineteen brought to you by IBM. >> Welcome back. We're here in Moscow, named North for IBM. Think twenty nineteen. I'm stupid. I'm unhappy. Toe. Welcome back to the program. A cube alone. Dave Russell, who is the vice president of enterprise strategy with Team and IBM partner Dave. Thanks so much for joining us. >> Hey, thank you for having against two. >> All right, S o. You know, big thing we're talking about here of the show. It's hybrid cloud. It's multi cloud and IBM, you know, spent, you know, big money to make acquisitions in the space to be there. Multi club. Something I've been hearing from theme for a number of years. Talk to us about kind of the relevant. Why beams here at this show? And we'll get into it from there. >> Yeah, absolutely. You know, So I've been traveling the world. Really? You mentioned Barcelona just a moment ago. Been? You know, Barcelona, Vegas, a number of other cities really pitching beams, multi cloud capabilities and story. And the short version of it is we believe that all organizations are really multi cloud today. Whether they realize it or not, they're going to be more multi cloud in the future. And what I mean by that is if you think about availability, backup in recovery and replication, you know it's a Zurich zur stack. It's a ws. It's private cloud. It's obviously what you have on premise, and it's the stuff you haven't even thought about tomorrow. And you. If you want to make a little adjacent stretch, you can put software is a service. I think in there, too, So it's about really offering protection, but also portability. >> Yeah, absolutely. When you have that multi cloud world world, of course, data is one of the most important things and how to lie for you. No protect and secure my data and leverage that data is critically important. IBM has a lot of different pieces. Where's the intersection between vehement IBM? >> Yeah, it's actually pretty exhaustive. So I'm a former I B M for fifteen plus years still live in Tucson, where IBM storage has a big presence and, you know, so it's everything from tape. We still believe Tape has a role to play, by the way, actually just released some new tape capabilities. It's, of course, the servers that they offer, and as well as the GTS Global Services and IBM cloud, of course, were interact with but their storage raise their virtual ization solutions. All of that. We have hooks and integration into today. >> Yeah, IBM have a pretty broad and deep portfolio, so lots of places for for being too play Dave. If he had an announcement recently updated, you were just alluding to some of the function of what? Why do you walk us through what the latest is? >> Yeah, it's actually the largest in company's history, which is now eleven years shipping product as of today, which is three weeks ago today we released the product, but as of today, there's sixty four thousand downloads that's against the base of three hundred thirty thousand ish customers might be three hundred thirty two thousand, but sixty four thousand dollars in exactly three weeks. Couple of capabilities from a cloud perspective alone. We've got this kind of probability that we spoke about take any workload on premises or physical virtual that's running in your shop and to be able to move it somewhere else. Really, to click restores to be able to get Teo Zura zur Stak E. W s. From an IBM perspective, we can definitely support IBM cloud in that we've got beam availability suite for a W s, where we can take instances running in a Ws like Mongo to be Cassandra and bring that back. You may want to bring that back for safekeeping or even transformation on prime two of'em instance, we've got all kinds of interesting things to not least of which is called cloud Tear. It sounds like an archive solution. It's it's really not. We underneath the covers take what's on running on premises for you. Let's say you're a beam shop today, and we can take out those unused blocks, unbeknownst to you and stage als off objects storage. And we can optimize how we do that. Right? So we can make sure you avoid egress charges. We essentially short version of that is in active source side D duplication of optimizing the blocks in the cloud. And then we leave uninterrupted access to it on prime. You don't ever have to know what's in the cloud. Change your behaviour. Changed the application to update it. Those are just a couple of the many things that we introduced. >> Well, yeah, quite a few things there, Dave. You know, in a multi cloud world. Can you bring us inside the customers? You know, Who is it that teams working with there? You know, cloud architect. Seems like it would be different than kind of the traditional, you know, storage or system administrator there. You know, one of the things we worry about in a multi cloud worlds is I've got different skill sets I need for all of these and how their organizations manage that. And, you know, how is the organization shaping up? >> Well, today You're right. It can be dispersed people, you know, disparity, folks. You know, it could be the software as a service person. It could be someone that's used to thinking, say, a ws. And I know when we go as a company to ignite their conference when we go there because, Ah, company Ricard called and two ws that specializes in that the people that come up to that desk don't even know who I mean. So >> reinvent your saying for all it was on >> my bed yet. So, you know, they don't even know the on premise, right? They only know what their specific focuses. And so, you know, we interact with a multitude of different roles where they tend to unite is vice president of infrastructure. But it could be many different touch points. I think is an organization. If you're especially a C i. O, you're probably a little bit worried about how many different things are going on there. Can we have a common management plain? >> Yeah. One of the areas that's really interesting. We talk about the public clouds. IBM has a long tradition with kind of C. S, P. S and M s bees, the service providers ahs. You will where does seem interacted at that layer of the ecosystem. Yeah, >> well, we have really twenty one thousand different being cloud service providers today, some of which manage over one million different machine instances just themselves. So we did a number of actually updates for them as well. And that's actually one of the tape integration points we now offer tenant to tape ifyou're a cloud service provider to offer an additional capability. But we offered, you know, the engine, if you will, that people can build it back up as a service disaster, recovery as a service, a solution around. >> Okay. Excellent. And thiss new release. What was it called? Yeah. >> It's a long name. Its aversion nine dot five update for >> that That screams major release. Yeah, >> well, it's the importance of it belies the, you know, the Newman clincher. But, you know, the reality is it's the biggest in our history. >> Yeah. So, Dave, give us a little insight. You know, you're doing the presentation here at IBM. Think give us some of the the team present where we're going to be seeing the bright green throughout the show. >> Yeah. Yeah. So there's been a couple of different things taking place already. I'm really going to hit multi cloud. Very, very hard. Really? From a how you should think about. So I really intended to be so much a beam commercial we'll talk about, you know, unabashedly, what being capabilities are but really set up a thought process. You know, a framework I get to kind of play a little bit of my analyst role, but, well, how much you want, You know, approach this. >> Yeah. David, I'm glad you brought it up. I love when you get here. We put your analyst hat roll on. We can. You know, talk is analysts here when I look at multi cloud networking. Management and security have just been this challenge we've been looking at. We've made progress as a whole, but there's still a lot of concerns. And, you know, multi cod sure isn't simple for the enterprise today. Ah, where we doing well is an industry. I know there's some areas that Beam has specific expertise to help on DH solutions, but I won't give a critical eyes, too. You know, what we need to do is an industry as a whole to make things better for customers, You >> know, the number one thing I would say is have a design, have a plan, don't fall into this haphazard. And one of the reasons I assert that just about every organization is multi cloud is because no matter what size you are, somebody somewhere has deployed something in a cloud or two or more. And again, if you throw software is a service into that. Now, this's just geometrically expanded. But it hasn't been like a conscious design strategy. >> Yeah, in many ways that we used to talk about shadow it Teo and many thie old. It was we used to call it either silos or cylinders of excellent, depending on the organization that you lived into. The concern I have is we're kind of rebuilding these in the cloud. So how we've learned from the past, our customers, you know, the CEOs, the organization's getting a better handle around their environment today. Or are we failed to do what was done in the past? >> I think we're getting incrementally better. Obviously, some organizations are, you know, accelerating faster than others. I think initially, when people thought, well, I can lift and shift and life will be better. You know, I can just like I introduce server virtual ization. Now, everything's cheaper, and I'm going to spend a lot of money to do that, you know? Well, I'm going to go to the cloud. It's going to be cheaper. And I just doing the same exact capabilities, instances and deployment that I was doing before never really worked out. So I think if you're approaching us something fresh and new and trying to actually take advantage of those capabilities here in a better position. >> Yeah. So I had a really interesting discussion earlier today. Had had the heads of V M wears cloud a group in an IBM cloud on. Of course, one of them comes up is you know, are we just lifting and shifting or re transforming and how to developers fit into it? So I'd love to hear from a beam standpoint as that, you know, application, maturity and modernization happens. You know What? What does that mean to the VM portfolio? >> Well, I would be really exciting if we do see more of a development base because I think really then you can add on extensions to what? Today the team is a data capture retention engine. It's best known for backup in recovery, disaster, recovery. But it could be so much more than that. So just a quick commercial button integration. Answer your question of we can now stand up ad hoc, isolated instances of machines and you can run things on that like GDP are scrubbing. You know, you can also do what we call a secure restore you, Khun. Understand? Well or not, it has a virus associated with it before populated back into the environment. But as a application community, you may want to say tomorrow morning at ten AM I want thes ten servers stood up with fresh data so my team could go in there and now generate faster applications for the business. It's really a business transformation St That's why I think we need more developers. >> Yeah, I remember one of the demons I attended, the CTO of Microsoft came, and you handed out his book, which I read recently, and it was kind of that they called it. It's not like science fact. But, you know, you talked about about cyber security and the challenge we faced in, you know? Okay. The global terrorists are going to come, you know, wipe out, you know, the entire infrastructure, and it's a little bit close to home, you know, because you kind of understand the security threat. Where does seem fit into the security picture when it when it comes to multi cloud things like Ransomware and the like, >> Yeah, unfortunately, things are going to happen. And we know this because things are already happen to number of organizations. It doesn't, you know, really take too long to find somebody that's been affected by this already. And so when that happens, you need some first level step of remediation. You need to get back as fast as you can to known. Good copy of your data. You know, Certainly that's where beam comes in, but being ableto also have portability. What if we could go and take your Azzurri instance data? Do the bios conversion for you automatically and send that to Amazon or vice versa. So you can have another offline, baldheaded copy. Or, you know, in that ransom where notion I presented to you. You know what? If you have to go backto backups, put ransomware typically lies dormant before it actually deploys the payload. So you don't know exactly how far back you need to go. So with this capability, you could go back on ly so far as you need to me Because you could verify exactly when vulnerability was introduced. But do that in a way that's sandbox isolated off the network and not putting you at risk. All >> right, Dave gives little look forward. What would be it would be expecting to see from beam through twenty. Nineteen? >> Yeah, we're focused a lot on increasing scale way. Believe that were very easy to use. Solution. People say no. Simple, you know, flexible, reliable. We wantto keep enhancing that, but we're looking at additional work loads to protect all the time cloud capabilities to expand upon a new ways, though, to take what it has always been a data protection company and make it a data management company. Things we were just speaking about from a developer angle. You're going to see us go a lot harder on that. We have a significant amount of investment way Got the largest We believe storage software investment history of five hundred million ended last year with a rich cash reserves. So now, instead of busy trying to do stuff, we're also looking at busy. What else do we need to acquire? Potentially. All right, >> well, Dave, the Cube is really excited to be back here in the redone Mosconi. A little bit more glass, a little bit more light, a little bit more space. The theme is having its annual user conference at facility. We really like to the front of blue in Miami for people that are going or thinking about going to tell him what they should be expected if they attended. >> Yeah, well, you'll get to see live demonstrations of everything I've been speaking about and Mohr, you know, seeing is believing, right? It's one thing to have power point. It's another thing to actually see someone demo it. And some of our folks, they actually demo this live on stage mean they're not canned demos. They're actually going into real servers and doing things like having a virus infiltrate and then remediating from that. So you'll get to see that you get to Seymour of road map. You'll get to see more customers, success stories and our partner ecosystem. We have a huge number of partners, of course, IBM being one of them. But we'll have a whole legal system of people there as well that have built his business around. Wien. >> Alright, Dave, want to give you the final word takeaways as to the importance of what's happening here at IBM, think the partnership and beyond, Well, >> IBM like you mentioned. I mean, they're probably the last major portfolio vendor on the planet, right? And they do just about everything you can imagine. And so from a partnership perspective, there's there's no geography, There's no vertical. There's practically no cos. Size, and there's almost no technology that's untouched. So the opportunity to interact and partner is huge. We believe we can offer some advantages in terms of simplicity in terms of cloud mobility and exploitation of IBM infrastructure. And we're just happy to be here and view them as a very strong partner. >> All right, well, Dave Russell. Always a pleasure to catch up with you. Thanks so much for joining us. Thank you. All right. And we'll be back with more coverage here from IBM. Think twenty nineteen. Of course, the Cube will also be a giveem on May twentieth through twenty second at The Phantom. Blew in Miami, Florida on stew minimum. And thank you for watching the Cube.

(upbeat music) >> Live from Boston. It's theCUBE. Covering IBM Chief Data Officer's Summit. Brought to you by IBM. >> Welcome back to theCUBE's live coverage of IBM's CDO here in beautiful Boston, Massachusetts. I'm your host, Rebecca Knight, along with my co-host Paul Gillen. We're joined by Beth Rudden. She is distinguished engineer, analytics at IBM. Thanks so much for coming on theCUBE, Beth. >> Thank you. >> So your background, you have a master's in anthropology and in classics and Greek. You're a former archeologist. And now here you are, distinguished engineer. There's only 672 in all of IBM. How did you, what are you doing here? (laughs) >> I think that I love data. I love that data represents human behavior and I think that understanding that puzzle and being able to tell that story is something that we need to do more of. And we need to understand how all of the data fits together and how all of the information is created and all the wisdom is created. And that takes a lot of effort from a lot of people and it involves storytelling. I think that 75,000 years of human history, we are always understanding conflict and resolution through storytelling. And I think that if we can have evidence for that using our data, and looking at our data in the business world, as it reflects our strategy, instead of force-fitting our data into our strategy. So I think that that's part of the change that we need to look at it, and I think with the, I would say, second or third hype curve of AI and what we're doing with AI and cognitive today, it really is being able to bind philosophy and psychology and look at it from a computer science perspective. And that's new. >> That's interesting. And we were just speaking with Inderpal earlier about the background that he sees CDOs coming from, and he talked very little about technology. It was all about human so-called soft skills. Are you finding that the CDO role is evolving in a less technical direction over time? >> Absolutely. And I think that, you know, when you're starting to look for outcomes, and as outcomes as they relate to our business, and as they relate to our clients and our customers, we have to be able to have a very diverse and inclusive viewpoint. And we have to be incredibly transparent. I think that is something that we are continuing to do within IBM, where we are really looking at how do we differentiate ourselves based on our expertise and based on our human capital. >> So it's differentiating yourself as an employer of choice. >> Absolutely. >> And attracting, recruiting or training the talent. >> 100%, yes. >> But then also being the expert that your clients come to. So yeah, just... >> So IBM has, you know, we have career frameworks. We have career paths. I was part of a team that created the data science profession at IBM and one of the things that we're looking at, as a differentiating feature, is that we really want people to continuously learn, continuously adapt, develop themselves, develop their skills, because that is our differentiating feature. And I think that, you know, when our clients meet our people they love our people. And this is such an amazing company to be a part of. We have a long history. 107 year history of being one of the most diverse and inclusive companies. 1899, we hired the first black and female person, and in 1953 we had equal opportunity rights 10 years before the Civil Rights Act. So I think that all of these things, you know, lead up to a company that shows that we can adapt and transform. And being an acting CDO for the largest IT system in IBM right now, we are doing amazing things because we are really investing in our people. We are investing in giving them that guidance, that career track. And allowing people to be themselves. Their true selves. >> You're speaking of Global Technology Services Operation, which is currently undergoing a transformation. >> That's right. >> What does the outcome look like? How do you envision the end point? >> I think that I envision the end point, we are in the process of developing our IBM Services Academy and it is a continuous learning platform for Bands Two through general managers. And, you know, one of the stories I like to tell is my general manager who I'm working for on this. You know, she believes so strongly in making sure that everybody has access to all of the available education and everybody is using that type of education and we are looking at transforming how we are measuring what we are doing to incentivize the behaviors that we want to see. And the behaviors that we are looking for are people who are helping other people, and making sure that we are continually being the premier leader of the intellectual brainchild of what we are doing for keeping us in the AI game, in the cognitive game, and making sure that we are understanding every single aspect of that as it relates to our transformation. >> So you're actually tracking and measuring how colleagues collaborate with each other. >> 100%. >> How do you do that? >> You look for words like we and team and you look for people who are enabling other people. And that's something that we can see in the data. Data are artifacts of human behavior. We can see that in our data. We are looking at unstructured data, we are looking at structured data. We are taking this in and we're taking it to what I would call a new level, so that we can see what we are doing, who our people are, and we are able to look at how many of the people are enabling other people and empowering other people. And sometimes this is called the glue, or glue work. I think that there is even a baseball reference for like a glue man. I think that we need to champion people who are enabling and empowering everybody to succeed. >> And are those typically the unsung heroes, would you say? >> Yes. 100%. And I want to sing the hero's song for those unsung heroes. And I want to make sure that those people are noticed and recognized, but I also want to make sure that people know that IBM is this amazing company with a very long history of making sure that we are singing the unsung hero's song. >> But how do you measure the outcome of that? There's got to be a big business bottom line benefit. What does that look like? >> Absolutely. I think that it always starts with our clients. Everything that we do starts with our clients. And in GTS, we have people, we have five to seven year relationships with our clients and customers. These are deep relationships, and they interact with our humans every single day. And we are the men and women who, you know, design and create and run and manage the foundational systems of the world. And every single person, like you cannot book an airline, you cannot pay your bill, you cannot do that, anything, without touching somebody in IBM. We are investing in those people, because those are who is interfacing with our clients and customers, and that is the most important thing to us right now. >> One of the things we were talking about earlier is bringing more women and underrepresented minorities and men into IBM, and into other industries too. So how, we know the technology industry has a very bad reputation, deservedly so, for being a bro culture. How are you personally combating it, and then how do you do it from an institutional perspective? >> Yeah. We have so many programs that are really looking at how we can take and champion diversity. I was very honored to walk into the Best of IBM with my husband a couple years ago, and he looks around and he goes, this is like a UN convention. He's like, you guys are so global. You have so much diversity. And you know, that viewpoint is something that, it's why I work for IBM. It's why I love IBM. I have the ability to understand different cultures, I have the ability to travel around the world. We have, you can work day and night. (laughs) You know, you can talk to India in morning and Australia in the afternoon. It is just, to me, you know, IBM operates in 172 different countries. We have the global infrastructure to be able to handle the type of global teams that we are building. >> When you look at the skills that will be needed in the future as organizations, big data becomes infused into the organization, how will the skill needs change? >> To me, I think that the skill needs are always going to continuously transform. We're always going to get new technology. Most of my data scientists, you know, I really push Python, I really push R, but I think that it's the will more than the skill. I think that it is how people have the attitude and how people collaborate. And that is more important, I think, than some of the skills. And a lot of people, you know, when they are performing data science or performing data engineering, they need to believe that they are doing something that is going to succeed. And that is will. And that's what we, we have seen a huge surge in oral and written communications which is not a hard skill. It's a soft skill. But to me, there's nothing soft about those skills. It takes courage and we have built resiliency because we have had the courage to really enable and empower people to get those types of skills. And that's a lot of where our education is going. >> So that's really an interesting point here. So are you hiring a self-selected group of people, or are you bringing in super smart people who maybe are not as skilled in those areas and bringing them into the culture. I mean, what's coming first here? >> Yeah. I think that we are, our culture is strong. IBM's brand is strong. Our culture is strong. We are investing in the people that we have. And we are investing in, you know, our humans in order to make sure that the people who already have that culture have the skills that they need in order to learn. And that understanding of going from disequilibrium to equilibrium to disequilibrium to learn, that's what we want to teach, so that any of the new technology, any of the new skills, or any of the new platforms that we need to learn, it's something that's inherent with people being able to learn how to learn. >> Beth, thank you so much for coming on theCUBE. >> Yes. >> It was great to have you. >> Thank you. >> I'm Rebecca Knight, for Paul Gillen, we will have more of theCUBE's live coverage of IBM's CDO coming up in just a little bit. (light music)

>> Live from Orlando, Florida, it's theCUBE, covering Cisco Live 2018. Brought to you by Cisco, NetApp, and theCUBE's ecosystem partners. >> Hello, everyone. Welcome back to theCUBE's live coverage here in Orlando, Florida for Cisco Live 2018. I'm John Furrier with Stu Miniman. Our next guest, Eric Herzog, Chief Marketing Officer and Vice President Global Channel Sales for IBM Storage. CUBE alum, great to see you. Thanks for comin' by. >> Great, we always love comin' and talkin' to theCUBE. >> Love havin' you on. Get the insight, and you get down and dirty in the storage. But I gotta, before we get into the storage impact, the cloud, and all the great performance requirements, and software you guys are building, news is that the CEO of Cisco swung by your booth? >> Yes, Chuck did come by today and asked how-- Chuck Robbins came by today, asked how we're doin'. IBM has a very broad relationship with Cisco, beyond just the storage division. The storage division, the IOT division, the collaboration group. Security's doin' a lot of stuff with them. IBM is one of Cisco's largest resellers through the GTS and GBS teams. So, he came by to see how were doin', and gave him a little plug about the VersaStack, and how it's better than any other converge solutions, but talked about all of IBM, and the strong IBM Cisco relationship. >> I mean, it's not a new relationship. Expand on what you guys are doin'. How does that intersect with division that he put on stage yesterday with the keynote. He laid out, and said publicly, and put the stake in the ground, pretty firmly, "This is the old way." Put an architecture, a firewall, a classic enterprise network diagram. >> Right, right. >> And said, "That's the old way," and put in a big circle, with all these different kinda capabilities with the cloud. It's a software defined world. Clearly Cisco moving up the stack, while maintaining the networking shops. >> Right. >> Networking and storage, always the linchpin of cloud and enterprise computing. What's the connection? Share the touch points. >> Sure, well I think the key thing is everyone's gotta realize that whether you're in a private cloud, a hybrid cloud, or a public cloud configuration, storage is that rock solid foundation. If you don't have a good foundation, the building will fall right over, and it's great that you've got cloud with its flexibility, it's ability to transform, the ability to modernize, move data around, but if what's underneath doesn't work, the whole thing topples over, and storage is a cruel element to that. Now, what we've done at IBM is we have made all of our solutions on the storage side, VersaStack, our all-flash arrays, all of our software defined storage, our modern data protection, everything is what we'll say is cloudified. K, it's, I designed for multiple cloud scenarios, whether it be private, hybrid, or public, or, as you've probably seen, in some the enterprise accounts, they actually use multiple public cloud providers. Whether it be from a price issue, or a legal issues, because they're all over the world, and we're supporting that with all our solutions. And, our VersaStack, specifically, just had a CVD done with Cisco, Cisco Validated Design, with IBM Cloud Private on a VersaStack. >> Talk about the scale piece, because this becomes the key differentiator. We've talked about on theCUBE, many of the times with you around, some of the performance you guys have, and the numbers are pretty good. You might wanna do a quick review on that. I'm not lookin' for speech and feeds. Really, Eric, I'd like to get your reaction, and view, and vision, on how the scale piece is kicking, 'cause clients want scale optionality. They're gonna have a lot of stuff on premise. They have cloud goin' on, multi cloud on the horizon, but they gotta scale. The numbers are off the charts. You're seein' all these security threats. I mean, it's massive. How are you guys addressing the scale question with storage? >> So, we've got a couple things. So first of all, the storage itself is easily scalable. For example, on our A9000 all-flash array, you just put a new one, automatically grows, don't have to do anything, k? With our transparent cloud tiering, you can set it up, whether it be our Spectrum Scale software, whether it be our Spectrum Virtualize software, or whether it be on our all-flash arrays, that you could automatically just move data to whatever your cloud target may be. Whether that be something with an object store, whether that be a block store, and it's all automated. So, the key thing here on scalability is transparency, ease of use, and automation. They wanna automatically join new capacity, wanna automatically move data from cloud to cloud, automatically move data from on premise to cloud, automatically move data from on premise to on premise, and IBM's storage solutions, from a software perspective, are all designed with that data mobility in mind, and that transportability, both on premise, and out to any cloud infrastructure they have. >> What should Cisco customers know about IBM storage, if you get to talk to them directly? We're here at Cisco Live. We've talked many times about what you guys got goin' on with the software. Love the software systems approach. You know we dig that. But a Cisco deployment, they've been blocking and tackling in the enterprise for years, clouds there. What's the pitch? What's the value proposition to Cisco clients? >> So, I think they key thing for us talkin' to a Cisco client is the deep level of integration we have. And, in this case, not just the storage division, but other things. So, for example, a lot of their collaboration stuff uses under pitting software from IBM, and IBM also uses some software from Cisco inside our collaboration package. In our storage package, the fact that we put together the VersaStack with all these Cisco Validated Designs, means that the customer, whether it be a cloud product, for example, on the VersaStack, about 20 of our public references are all small and medium cloud providers that wheel in the VersaStack, connect 'em, and it automatically grows simply and easily. So, in that case, you're looking at a cloud provider customer of Cisco, right? When you're looking at a enterprise customer of Cisco, man, the key thing is the level of integration that we have, and how we work together across the board, and the fact that we have all these Cisco Validated Designs for object storage, for file storage, for block storage, for IBM Cloud Private. All these things mean they know that it's gonna work, right outta the box, and whether they deploy it themselves, whether they use one of our resellers, one of our channel partners, or whether they use IBM services or Cisco service. Bottom line, it works right out of the box, easy to go, and they're up and running quickly. >> So, Eric, you talked a bunch about VersaStack, and you've been involved with Cisco and their UCS since the early days when they came up, and helped drive, really, this wave of converged infrastructure. >> Right. >> One of the biggest changes I've seen in the last couple years, is when you talk to customers, this is really their private cloud platform that they're building. When it first got rolled out, it was virtualization. We kinda added a little bit of management there. What, give us your viewpoint as to kinda high-level, why's this still such an important space, what are the reasons that customers are rolling this out, and how that fits into their overall cloud story? >> Well, I think you hit it, Stu, right on the head. First of all, it's easy to put in and deploy, k? That is a big check box. You're done, ready to go. Second thing that's important is be able to move data around easily, k? In an automated fashion like I said earlier, whether that be to a public cloud if they're gonna tier out. If I'm a private cloud, I got multiple data centers. I'm moving data around all the time. So, the physical infrastructure and data center A is a replica, or a DR center, for data center B, and vice versa. So, you gotta be able to move all this stuff around quickly easy. Part of the reason you're seeing converge infrastructure is it's the wave of what's hit in the server world. Instead of racking and stacking individual servers, and individual pieces of storage, you've got a pre-packed VersaStack. You've got Cisco networking, Cisco server, VMware, all of our storage, our storage software, including the ability to go out to a cloud, or with our ICP IBM Private Cloud, to create a private cloud. And so, that's why you're seeing this move towards converge. Yes, there's some hyperconverged out there in the market, too, but I think the big issue, in certain workloads, hyperconverged is the right way to go. In other workloads, especially if you're creating a giant private cloud, or if you're a cloud provider, that's not the way to go because the real difference is with hyperconverged you cannot scale compute and storage independently, you scale them together, So, if you need more storage, you scale compute, even if you don't need it. With regular converge, you scale them independently, and if you need more storage, you get more storage. If you need more compute-- If you need both, you get both. And that's a big advantage. You wanna keep the capex and opex down as you create this infrastructure for cloud. 'Member, part of the whole idea of cloud are a couple things. A, it's supposed to be agile. B, it's supposed to be super flexible. C, of course, is the modern nomenclature, but D is reduce capex and opex. And you wanna make sure that you can do that simply and easily, and VersaStack, and our relationship with Cisco, even if you're not using a VersaStack config, allows us to do that for the end user. >> And somethin' we're seeing is it's really the first step for customers. I need to quote, as you said, modernize the platform, and then I can really start looking at modernizing my applications on top of that. >> Right. Well, I think, today, it's all about how do you create the new app? What are you doin' with containers? So, for example, all of our arrays, and all of our arrays that go into a VersaStack, have free persistent storage support for any containerize environ, for dockers and kubernetes, and we don't charge for that. You just get it for free. So, when you buy those solutions, you know that as you move to the container world, and I would argue virtualization is still here to stay, but that doesn't mean that containers aren't gonna overtake it. And if I was the CEO of a couple different virtualization companies, I'd be thinkin' about buyin' a container company 'cause that'll be the next wave of the future, and you'll say-- >> Don't fear kubernetes. >> Yeah, all of that. >> Yeah, Eric Herzog's flying over to Dockercon, make a big announcement, I think, so. (laughing) >> Evaluation gonna drop a little bit. I gotta ask you a question. I mean, obviously, we watch the trends that David Floy and our team, NVMe is big topic. What is the NVMe leadership plan for you, on the product side, for you? Can you take a minute to share your vision for what that is gonna be? >> Sure, well we've already publicly announced. We've been shipping an NVMe over fabric solution leveraging InfiniBand since February of this year, and we demoed it, actually, in December at the AI Conference in New York City. So, we've had a fabric solution for NVMe already since December, and then shipping in February. The other thing we're doing is we publicly announced that we'd be supporting the other NVMe over fabric protocols, both fabric channel and ethernet by the end of the year. We publicly already announced that. We also announced that we would have an end to end strategy. In this case, you would be talking about NVMe on the fabric side going out to the switching and the host infrastructure, but also NVMe in a storage sub-system, and we already publicly announced that we'd be doing that this year. >> And how's the progress on that plan? You feel good about it? >> We're getting there. I can't comment yet, but just stay tuned on July 1st, and see what happens. >> So, talk about the Spectrum NAS, and other announcements that you have. What's goin' on? What are the big news? What's happening? >> Well, I think that, yeah, the big thing for us has been all about software. As you know, for the analysts that track the numbers, we are, and ended up in 2017, as tied as the number one storage software company in the world, independent of our system's business. So, one of the key powers there is that our software works with everyone's gear, whether it be a white box through a distributor or reseller, whether it be our direct competitors. Spectrum Protect, which is a, one of the best enterprise backup packages. We backup everybody's gear, our gear, NetApp's gear, HP's gear, Pure's gear, Hitachi's gear, the old Dell stuff, it doesn't matter to us, we backup everything. So, one of the powers that IBM has, from a software perspective, is always being able to support not only our own gear, but supporting all of our competitors as well. And the whole white box market, with things that our partners may put together through the distributors. >> I know somethin' might be obvious to you, but just take me through the benefits to the customer. What's the impact to the customer? Obviously, supporting everything, it sounds like you guys have done that with software, so you're agnostic on hardware. >> Right. >> So, is it a single pane of glass? What's the benefit to the customer with that software capability? >> Yeah, I feel there's a couple things. So, first of all, the same software that we sell as standalone software, we also sell on our arrays. So if you're in a hybrid configuration, and you're using our Flashsystem V9000 in our Storwize family, that software also works with an EMC, or NetApp box. So, one license, one way to do everything, one set of training, which in a small shop is not that important, but in a big shop, you don't have to manage three licenses, right? You don't have to get trained up on three different ways to do things, and you don't have to, by the way, document, which all the big companies would do. So it dramatically simplifies their life from an opex perspective. Makes it easier for them to run their business. >> Eric, we'd love to get your opinion on just how's Cisco doin' out there? It's a big sprawling company. I looked at the opening keynote, the large infrastructure business doing very well in the data center, but they've got collaboration, they do video, they're moving out in the cloud. Wanna see your thoughts as to how are they doing, and still making sure they take care of core networking, while still expanding and going through their own transformation, that they're talkin' very public about. How do we measure Cisco as a software company? >> Well, we see some very good signs there. I mean, we partner with 'em all the time, as I mentioned, for example, in both the security group and our collaboration group, and I'm not talkin' storage now, just IBM in general, we leverage software from them, and they leverage software from us. We deliver joint solutions through our partners, or through each of the two service organizations, but we also have products where we incorporate their software into ours, and they incorporate software in us. So, from our perspective, we've already been doing it beyond their level, now, of expanding into a much greater software play. For us, it's been a strong play for us already because of the joint work we've been doing now for several years on software that they've been selling in the more traditional world, and now pushing out into the broader areas, like cloud, for example. >> Awesome work. Eric, thanks for coming on. I gotta ask you one final, personal, question. >> Sure. >> You got the white shirt on, you usually have a Hawaiian shirt on. >> Well, because Chuck Robbins came by the booth, as we talked about earlier today, felt that I shouldn't have my IBM Hawaiian shirt on, however, now that I've met Chuck, next time, at next Cisco Live, I'll have my IBM Hawaiian shirt on versus my IBM traditional shirt. >> Chuck's a cool guy. Thanks for comin' on. As always, great commentary. You know your stuff. >> Great, thank you. >> Great to have the slicing and dicing, the IBM storage situation, as well as the overall industry landscape. At Cisco Live, we're breakin' it down, here on theCUBE in Orlando. Second day of three days of coverage. I'm John Furrier, Stu Miniman, stay with us for more live coverage after this break.

>> Narrator: Live from Las Vegas, its theCUBE covering IBM Think 2018. Brought to you by IBM >> Welcome back to IBM Think 2018, you're watching theCUBE, the leader in live tech coverage. My name is Dave Vellante and I'm here with my co-host Peter Burris, this is day three of our coverage. Mohammad Farooq is here, he's the general manager of Brokerage Services GTS at IBM. Mohammad, great to see you again, thanks for coming back on theCUBE. >> Thank you very much, appreciate for having me here. >> You're very welcome. So, big show. All the clients come together in one big tent. >> Yes. >> What do you think? >> It's very exciting. I think we're doing some interesting things with our technology. We have learned a lot from our clients the last two years. We are working very closely with our partners because we believe not one company can do everything in this massive transformation that's underway. So, working with our partners, with our clients on new technologies to specifically accelerate enterprized option of the cloud model and that's exciting for us. >> Partnering, it seems to have new, energized momentum at IBM. I sense a change, is it palpable? I mean, how can you comment on that? >> I think partnering is critical for everybody's success because the industry itself is transforming, and one company cannot achieve all the requirements that clients are asking for, and we have our core competencies. Service Now, our VMWare, our Amazon, our Azure They have their core competencies. But IBM, as a company, is a company that enterprisers trust to move them to cloud and operate them in the cloud. So what we are doing is, to keep that goal in mind, we are saying okay, we are going to take a client from point A, which is non-cloud, to point B, which is cloud native, and in that journey, we will take everybody our partners helped to get there. So that's why, based on client request, we are leveraging our partners, and it has a special meaning for us because it makes our clients successful. >> OK, so, describe exactly what brokerage services does. Is it your job to get people to the cloud? But talk more about that; add some color please. >> I think the brokerage has evolved since I last talked to you a year ago. At this conference, right? A lot of people think brokerage is arbitrage. >> Peter: Is what? >> Arbitrage of services from one provider to the other, that's the limited definition of brokerage. So what we're really calling it is Hybrid Cloud Management System, not brokerage. Brokerage is one part of it. So the Hybrid Cloud Management System is the go-forward strategy of IBM in 2019, 2018 and beyond. Which includes three, four components. One is: how do you bring the entire cloud ecosystem into a federated management maodel? Which includes: business management of IT and cloud, our hybrid. Consumption: a standard consumption model through one point of access to all clouds, internal or external. Third: delivery, how do we deliver services, either automated or workflow? Bi-model, as Gartner calls it, in one model. And four: operations management across public, private, hybrid, internal or external. >> Let me make sure I got this, so, business services in the sense of running IT more like a business, >> Mohammad: Right! >> A consumption model in terms of presenting this in a way that's simple and easy for a business-person to use, a delivery model, in the sense that it's very simple and straightforward and fast to deliver, and then an operations model which makes sure that everything above it works well. >> Yes, and the consumers, in this case, are developers, IT operations people, and DevApp teams, and from a delivery perspective, it is automated or people-work-flow, so you support both, so bringing this federated model together is a very complex undertaking, and IBM services is the strategic partner clients are asking to take them on this journey. Hey, bring this together for us. It's very complex at all layers. It's not a simple thing, and in that bringing it together, partners have a big role to play. Azure, Amazon, Google, Service Now, VMWare, Cisco, they all have critical pieces of it that make this model work, and clients have made choices. Clients already have VMWare. Clients already have Service Now Clients already have Amazon, Azure. But there is no system that brings it together and manages it on an ongoing basis, and the important thing is, the clouds keep changing very fast, and keeping up with the clouds, leveraging the power of the clouds to the right teams within the enterprise to deliver new digital apps, to delivery revenue, is what IBM is enabling our clients to do. >> So wikibot has actually done a fair amount of research around what we call the cloud operating model, we call the Digital Business Platform. AWS has an example of that, as you mention. They all have their approaches to handle those four things that you mentioned. >> Mohammad: Yes! >> But when you get to a customer, who also has to marry across these clouds, sustain some on-premises assets, perhaps some near-premises assets within the cost-service provider, it's what you're trying to do is ensure that they have their operating model that is the appropriate mix of all these different capabilities for their business, we got that right? >> Exactly, you got it. So what we said was every cloud provider, internal or external, or even hosting cloud providers, IBM is a hosting cloud provider. >> Right! >> With the adjustment of business. They had their own model across those four things: Business, consumption, delivery, operations. Now, we cannot operate four silos. Every enterprise is using Amazon, every enterprise has Google, every enterprise has VMWare, every enterprise has IBM. We cannot have four models. >> Dave: Right! >> So what we have done is we have created one standard consistent target operating model. We have integrated all these offerings within that so clients don't have to do it. We offer services to create extensions to it based on variations clients might have, and then operate it as a service for them, so that their path to cloud gets accelerated, and they start leveraging the power of what's good today inside the data centers, and what's available outside in public clouds, in a very secure way. So that is the business IBM is in moving forward, which we are calling it, we are transforming our offerings portfolio, we are calling it: Hybrid Cloud Services Business >> OK so you've got this hybrid operating model, IT operating model that you're envisioning, you're letting the cloud partners do what they do best, >> Mohammad: Right. >> Including your IBM cloud partners, >> Mohammad: Including our operating partners, >> And then you guys are bringing it all together in a framework, in an operating model, That actually can drive business value. >> Exactly, that's what we're doing. We are giving them ease of access from one place, choice of delivery platform, choice of delivery models from one place. Single visibility into how they're running, performing, help, and diagnostics from one place, and then, one billing and payment model, not four. So when I pay monthly bills, I pay based on usage, qualification of that usage across everybody, and then reconciling with my ERP systems, and making the payments. So the CFO has a standard way to manage payments. So that's what IBM is bringing to the table. >> How far could you take this? Could you take this into my SAS portfolio as well, Or is that sort of next step? >> What right now we are doing InfoSecure as a service and platform as a service. Our goal is in '18 and '19 to move to software as a service, because software as a service is much easier because we don't own the infrastructure or the service, we just consume it as electricity, utility. So that we discover the usage of SAS and meter it for usage against our billing model that we have to as B2B contract between a SAS provider and an enterprise and then make sure we've done the license management right. So there's companies like Flexera and others who do that For SAS management there's companies like Skyhigh Networks that recently got acquired, we're bringing those companies in to give us that component. >> But doing that level of brokering amongst the different services, while very useful, valuable, especially if you can provide greater visibility in the cost, because this becomes an increasing feature of COGs in a digital business, right? You still got to do a lot about the people stuff. A lot of folks are focused on ITIL, ITSM, automation at that level. Describe how you'll work with an IT organization and a business to evolve its underlying principals for how the operating model is going to work. >> I think that's probably a more difficult challenge than the technology itself, and if you look at our business, it was a people, it is a people business with GTS. We're more than 90,000 to 100,000 employees babysitting infrastructure for major fortune 500 corporations, and InfoSecure is more into software-defined, that means that we are moving from configuration skills to programming skills, where your programming API is in Amazon to provision infrastructure and deploy, so the skillsets have to definitely move. They have to move to infrastructure teams now have to become programming teams, which they have not been used to. They used to go to VMWare, vSphere, vCenter and configure VMs and deploy VMs. Now they have the right programs to drive and provision infrastructure, so that's one part of it. Second, the process was you do development and then your throw it over to operations, and they'll go configure and deploy production. Now, when you're programming infrastructure. Second, you're doing it in collaboration with developers, because developers are defining their own infrastructure in the cloud. So the process is different. The skills are different, and the process you are to operate in is not the same, it's different. Third, the technologies are different that you work with. So there is change at all levels and what GTS has done is we have put a massive goal in place to re-scale our workforce to take our people and re-scale them in the new process, the new technology and the new roles and that's a very big challenge I think the industry is facing: we don't have enough people who know this. A lot of these people are in Netflix, Facebook, Google, in Silicon Valley, and now, it takes time, it has happened before. The training and the transfer of knowledge, all of that is going on right now. So right now we have a crunch, And the second thing that is becoming more difficult is there's a lot of data coming out of these systems. The volume of data is unbelievable. Like if you look at Splunk and other tools and platforms, they collect a lot of log data. So all these cloud platforms spit out a lot of machine data. Humans cannot comprehend that. It's incomprehensible. So we need machine learning skills and data science skills to understand how these systems are performing. >> Peter: And tools. >> And tools. So we need the AI skills, the data science skills, in addition to the infrastructure design architecture and programming skills. So we really have a challenge on our hands as an industry to kind of effectively build the next-gen management systems. >> Right and we've got, so we've got all these clouds, the ascendancy of clouds has brought cloud creep, >> Mohammad: Right. >> All these bespoke tools along with them, all these different operating models. You're clearly solving a problem there. What's the go-to-market model with all these partners that you've mentioned? You've got cloud, you got PRAM, eventually SAS, >> Yeah, so our cloud go-to-market is three ways We see clients adopting cloud in three ways. One is digital initiatives: They want to go build new IOD apps or mobile apps and they want to put it in production that drive revenue, okay? So we are creating offerings around the DevApps model. We'll say like look, the biggest challenge that our folks have is how to put a app that you build in production. I built a new feature, how can I get it to my client as soon as possible, in a secure way, that can scale and perform, that is the biggest problem with app developers. I can develop anywhere, it's all open-source. I'm not living in, and I can spin up a VM or a container in Amazon and develop a service in two days. But to put it in production, it takes a long time. How can we make offerings that accelerate that? Through our DevApp CICD automation process I was talking about, that's our revenue play. So our go-to-market is driven by how we can generate revenue for our clients through agile offerings for DevApps, that's one go-to-market. Second go-to-market is CIOs are saying like look, I'm spending a lot of money managing my current infrasatructure and my current app portfolio, and I can take money out of the system through cost reductions, so what is my migration and modernization path for my existing portfolio? >> Well, slightly differently, I used to get I used to get my eight to nine percent that I gave back to the business every year simply by following hardware price performance. >> Mohammad: That's exactly right. >> That's not available in the same way. I have to do it through process and automation. >> All automation right? So then we have to look at everything. What part of the portfolio can move to Amazon or cannot? What other refactoring I have to do to microservices and containers to build portability to move to the cloud? So we have created a migration, a global migration practice at IBM in a factory in India and in the US where we have created offerings to work with the CIO right from planning, cost planning, portfolio planning, application design planning and design review, to lift-and-shift, to deploy in cloud and operate it. So we have a series of offerings that track the life-cycle of migration. So that's our second go-to-market path. Our third go-to-market path is: Hey, my business per units are shadow IT; they're already in the cloud, now my CEO is telling me: Hey mister CIO, you make sure they all work and they're secure, and there's no loss in data. And this infrastructure is now in cloud and on-prem. So how do I provide, manage service, to manage your infrastructure and workloads in the cloud? IBM has offerings that will directly provide you multi-cloud management as managed service. So we are taking three client journeys and we are building go-to-market offerings around those three, and we have built, we have re-designed IBM portfolio to operate on those lines. >> Do the digital initiatives, chief digital officer, obviously, target their CIO for the portfolio rationalization optimization and line of business through the shadow IT? >> Right! >> And you bring those together with a constant consistent operating model? >> Exactly, so all three journeys lead to one operating model. >> Dave: Yeah! >> But going back to what Dave said, and we have time for just a little bit more, is, is, no offense, there's no way you can do it all by yourself. >> Mohammad: You cannot. >> So what are some of the core, what are some of the most important partnerships that users need to be looking to? >> I think we have defined what's goal to us. Not always go back to, if you are clearly going to market, what is the core competency of IBM? Okay, with (mumbles) we're going to service this company for a long time, right? We made sure we are, we bring the complexity and control and we manage the complexity; that's our core business. We had mainframe business, we had software business, and a very profitable software business. So we've done all three, hardware, software, and services. As we go forward, cloud services, cloud managed services, our IBM services, is a core competency for us, which is planning, design, managed services, and services integration, to bring these tool sets together from different partners, and operationalizing it, and babysitting it and offering it as a service. So services business is our core offering. Now in the software space, which is the management software, which is service now, (mumbles) Cisco, there there is many layers to it, as I talked about the four things: consumption, operations management, business management, >> And service delivery >> And service delivery. And in service delivery we have three choices: we have VMWare, we have Microsoft and we have IBM. We have stitched it together in a federated framework. The stitching together is our core competence. Okay, Operations management. We have created a federated data lake because data will drive everything going forward. So we own the data lake as our core competency and Watson driving intelligence. But some of the monitoring tools like AppDynamics, New Relic, Splunk, that collect the data, those are our partners. We're integrating that into our Watson framework. So we're looking at core versus non-core in all four layers, and wherever there's a overlap, we're creating unique vertical go-to-market strategies. Here, for this segment, we overlap with you, we agree to compete, to your clients you can lead with that, for our clients we'll lead with ours, so we agree to disagree, but we are going to stick to the target operating model, so that our clients are successful. So there's no confusion we are creating in their minds. So its a very complex dance at this point. >> But you laid it out and it's coherent. >> Right. >> It's got to start there. >> The most important thing is we need to tell our clients what is our core, and what is the core we're going to stand behind? And that core delivers them bottom-line value to move from point A to point B and be successful in the cloud. >> Well Mohammad, I think you've defined those swim lanes, you obviously trust and you've got the trust of your partners, trust of your customers. Like you say, you agree to compete where it makes sense, and you bring core competency and value to differentiate from your competition, so, >> Right. >> Dave: Congratulations on laying that out. We really appreciate you coming on theCUBE. >> Thank you very much. Appreciate it. >> You're welcome. All right, keep it right there everybody, we'll be back with our next guest. You're watching theCUBE live from Think 2018, we'll be right back. >> Mohammad: Thank you very much. (upbeat music)

>> Narrator: From Las Vegas, it's theCUBE. Covering IBM Think 2018. Brought to you by IBM. >> Welcome back to theCUBE. We are live on Day 1 at the inaugural IBM Think 2018 event in Las Vegas at the Mandalay Bay. I'm Lisa Martin with Dave Vellante. Welcoming back to theCUBE, a multiple type cube alumni, Matt Kalmenson, the vice president of sales portfolio and service providers at Veeam. Hey, Matt. >> Hello Lisa, nice to see you again. Dave, nice to see you. It's been a while. >> Yeah. And appreciate you having me back. >> Absolutely, we're in the middle of the Veeam sandwich, we just had Rick Vanover on about 20 minutes ago so-- >> That's a tough act to follow, but I'll do my best >> Not enough screen. >> That's true, that's true. So, IBM, Veeam, what is going on there from a cloud perspective, any news you want to share? >> There is so much going on there that I probably wouldn't know where to start. Now, I'll tell you we started the relationship with IBM and Veeam, from a cloud perspective for about a year or year and a half ago and last year we announced Veeam availability on the IBM cloud. And really, if you think about moving your virtual workloads to the cloud, Veeam in conjunction with IBM, specifically we started out on the VM we're a cloud foundation, which is called VCF. Giving the organizations the ability to move their virtual workloads from on-premise to into the cloud. And really we extended that by saying, "Hey, you're on this journey to the cloud, "let Veeam be the tool and the product "that helps you along that journey and streamline "the operations to move to the cloud." Now, that's where we started, but I have to tell you over the last couple of months, we have a lot of exciting things happen. Here at the show we're going to announce that we're also available for physical workloads. So, when you think about Veeam historically, people think about our virtual environments, right? But the reality is we've had major success with servers and workstations and the availability of servers and workstations and we're now making that available on the IPM platform as well. And, we're also working with the business resiliency team within IBM, so you can now purchase Veeam, it's a new offer that the Brazilian C team is bringing to market that allows you to have a full back up and managed service from the IBM GTS team where the business resiliency team resides. So, lots of really exciting things happening. >> So, let's start with the cloud piece, why Veeam and IBM cloud? What are the synergies there? What's so special about Veeam, and why is the fit so good? >> Yeah, that's a really good question and there's so many options out there. Lisa and I were talking before. We were kind prepping for the discussion here today and we're talking about the journey in the enterprise, and the journey, still has a long way to go. You'll hear different stats, but most of the stats reside around 15%. 15% of enterprises have started along this cloud journey in any kind of meaningful way. So, what does that mean? What we see all kind of statistics and what we see all kind of numbers and information about who's leading the battle and who's already won, it's far from over. Now, being in that position, we think we have a really unique value proposition combining Veeam with IBM. Number one, when you purchase Veeam on the IBM cloud, you get access to the entire Veeam portfolio. Okay? Now, when you take that portfolio when you make it available on the IBM cloud, IBM cloud is across some 50 some odd different data centers. Right? And across those different data centers, there's no charge for the bandwidth, so moving data from one data center to another data center is a really unique value proposition. So, on the one hand you take this organization that's had wild success in the data availability marketplace. And you give the access to IBM customers, so the whole portfolio and they have something in that portfolio that really differentiates them and that they don't charge for bandwidth, that means your economy is a scale greater, you've eliminated some of the economic barriers right at the gate, when you compare it to other cloud platforms that are out there. It gives you a lot of flexibility to move workloads and when you talk about back up and you talk about disaster recovery, which will all encompass within the business continuity or data availability story, moving workloads round is paramount. So, you take that combination of not having these extra charges, of having these unique value propositions from both organizations. And I believe it's just a phenomenal opportunity that we continue to build upon. >> There are many bandwidth charges can be some of the most expensive on the cloud bill, why is that Matt? Is it because IBM owns it's own infrastructure there? And so, it's a sunk cost, and passes that on to benefit on to it's customers? >> It really is one of the key differentiators. Some of IBM's clouds competitors who I won't mention, that's how they make their business. That's how they make their living. So, this is a literal sunk cost into the business that offers tremendous economic advantages to an IBM cloud over other clouds. >> And talk about the data movement, I mean a lot of people would say, I don't want to move my data because I don't want to pay the bandwidth cost, but as well, it's just moving a lot of data through a little pipe tank takes a long time. So, what are the use cases where you see people moving data, I mean obviously, offside data protection but what else? >> Yeah, so there's so many use cases, right? And when you think about the Veeam in particular, you could be talking about having Veeam as a part of a complete infrastructure as a service, right? So, you can come to the IBM cloud and purchase Veeam and have it as a part of the infrastructure service with your compute platform, your virtualized machine, your storage, and obviously, your back-up in data availability need will be protected. We can also work with customers that are just looking for a back-up as a service. So like we said, a lot of organizations have not made the journey to the cloud yet and they're just making this evolutionary journey, right? It's not something that happens overnight. So, they may still have traditional on prem uses of Veeam, but what do they want to do, they still need to move copies of their back up jobs offsite. They need to move them to another location and that goes back to what's called the 3-2-1 Work Rule. The 3-2-1 rule is having three copies of your data on two different media, with one of them being offsite. So, we give the ability just to use your on prem as part of a hybrid cloud solution moving just copies of your back-up jobs offsite too. In addition, we could talk about replication needs. Now, we have something called Veeam cloud connect back-up, which I've just talked about, follows the 3-2-1 Rule. But you can also replicate data from onsite to one of these cloud provider, cloud locations that we've discussed earlier. So there's lots of different use cases. >> With respect to IBM, what is the go to market strategy like for Veeam to go to market with IBM? Also, some of the things that you're announcing this week, what is that, how is that changing the game for Veeam going to market with your own sales organization? >> So, any time you're talking about service providers and cloud providers, it's really disruptive to what I would call the legacy organizations in the marketplace. It disrupts manufacturers, it disrupts resellers, it disrupts traditional sales teams. It gets complicated when you start talking about various commission plans. It really on the one hand have this mechanism that can bring so many advantages to the marketplace, but it can at the same time cause turmoil while under your own roof. At Veeam, I think we really done a nice job at cracking the code. So, while I represent the service provider business and the cloud provider business, I have peers across the country and across the globe, who would I call a lot more traditional, and user-facing sales people, all right? If you think multiple years back, what are they trying to do is have their customers consume Veeam as a license. And then after the license, they'll pay maintenance fees for perpetuity, hopefully. What we've decided is how do we put a plan in place, where our sales team can go after their end-users and their perspective end-users, and say to them how you consume is your business. What makes the most sense for you? Do you want to consume on-prem? Fantastic. Do you want to consume on-prem and make a copy of your back-up job and move it to the cloud? That's great too. Do you want to push all of the business and use IBM cloud as part of the infrastructure as a service but you won't own? Any of the Veeam technology on premises but IBM will own it and they'll provide it to you as a service? We have you covered there too. What we did was we came up with a compensation model internal that makes the cloud and service provider business in integral part of the go to market plan of our sales organization. So, we have compensation models that when an end-user's sales rep for like the better term is selling to their end customer, they can offer up consumption models that benefit the customer the best way and still get compensated at an even playing field. So, there's some mathematical equations behind the scene to make sure that we figured out how to compensate them and some operational tools we put in place, to make sure that they are compensated accordingly. And that really eliminates a lot of the friction between sales organizations. >> So, if an IBM cloud customer wants to buy back up as a service monthly, they can do that? They can pay, probably make them sign up for some period of time, is that right? So let's say it's an annual commitment or maybe it's a variety. >> We have various styles. Yes. >> Whatever it is, but, and I'm sure there's various incentives the longer you sign up, the cheaper it is per month. But they can consume monthly, pay monthly presumably or okay. And you guys work it out the back ends. >> Yes. >> You and IBM. >> Internally at Veeam, we worked it out so we could pay our sales teams, right? So, the IBM sales teams will continue to get paid based on consumption. >> Transparent to them? >> Transparent to them, that's the key. It's transparent to them. All they know is that they have an army of Veeam sales people that have vested interest to make their joint customers successful regardless of consumption models. >> Okay. And then, as it relates to the business resiliency team, that's some of them are different, well, could it involve cloud, obviously, but it's a different equation, right? So, you got IBM GTS guys in there maybe doing business impact analysis, do you guys participate in that or how does that relationship work? >> So, it's a very new relationship that we're all putting the foundational elements in place so that we would participate in those types of proofs of concepts and foundational elements where they make sense. And in those scenarios too, we do have programs and policies in place within Veeam to kind of mitigate, eliminate any friction between the sales organizations. >> Okay, go ahead. >> I was just going to say, in terms of with the cloud for a second, sounds like basically regardless of who's selling it, the end-user business, it's like a choose your own adventure, whatever is ideal and efficient for their business. Are you seeing any industries in particular that are sort of early adopters of what you guys are doing with IBM. You think of heavily regulated industries, financial services, healthcare, are you seeing any sort of leading industries there or is it sort of a horizontal challenge that-- >> Yeah, it's a really great question. When you think about the use cases for data availability, especially as it pertains to the cloud, back-up and disaster recovery are really one and two as far as cloud use cases. So, it's really universal. I would say I probably couldn't put my finger on one vertical market because they all have a need. Now, when you get into the highly regulated markets of healthcare and financial services, some of our cloud providers such as IBM, really has some unique expertise but everyone really needs the best solution for back-up and DR in the cloud. You know I can talk about some unique case studies like we have with Movius. Movius is an enterprise communications company, who happens to be here. And some of the Veeam's staff will be doing a session with the folks from Movius, talking about one Movius shows for their enterprise which has thousands of customers and really works with some of the largest telephony companies in the world. Why they chose the IBM cloud and why they chose IBM cloud with Veeam in particular? So, it crosses across all segments, really. >> Can you talk about the channel dynamic here? Basically, you think about the channel with cloud really started to take off, the message to the box or the box sounds we love you but, and was moving 90% of the market for a hardware and software but you could see that differentiation wasn't there. So, it was getting commoditized. You had to change, you had to add value somehow whether you're an SAP specialist, you're an Oracle specialist or VMware maybe an ISV and then you have who you service the cloud service providers, how is the channel adapted to all this? >> The channel is adapting and it's evolving rapidly. Just like any change in an ecosystem, some aren't going to be here in the years to come, if they don't evolve and adapt quick enough. What I'm really saying and what my team is saying is that a lot of our traditional channel partners are either teaming up with cloud providers, so IBM has a cloud provider program and a lot of the resellers we worked with they resell IBM cloud and Veeam on the IBM cloud. You have a lot of other channel partners that are really starting to develop their manage service practice. So, they'll put a wrapper around some of the cloud offerings and cloud services that are out there. That might be a multi-cloud environment which is inclusive of the IBM cloud, or might be a different scenario. But that's probably the fastest growing segment of the IT management spaces, really the service providers because they have to evolve and they have to adapt and a lot of them are trying to figure out what is their next play. How do they differentiate? Are they as expert in healthcare space? Are they an expert in the financial services space? But the first step is transitioning from that traditional, upfront cutbacks business model where they move in a box to building a revenue, recurring revenue based business model that offers cloud services and management of cloud services. >> How about the service providers? How do you see them differentiate? John and I had a big sort of debate this morning. AWS infrastructure service, how does IBM differentiate? Software was sort of my push. But how are you seeing the cloud service providers beyond the big three, four or five differentiating from the big whales? >> Every day, they're trying to figure out how to differentiate from the big whales. I mean that's part of what they get up every morning and when I go to sleep every night thinking about. So, sometimes they partner with the big whales, right? This is an island of technology so to speak. This is truly an ecosystem. Some of the best service providers within the ecosystem that I'm responsible for, offer phenomenal services to their customers. There are some workloads that they manage themselves. There are some workloads that they'll be the first to say you're better off being managed or run in a hyperscale type environment like in IBM cloud or in Azure or go in an AWS and they may provide some kind of management service. So, a lot of them do is again, they start to build these wraparound services, so that they can evolve. Because there is no one right answer and even within an organization there may not be one right answer because different workloads require different business, different clouds, different manage services. They need to be handled differently. If you have workloads that are very elastic, very spiky, so to speak, all right? Maybe it's an online application around the holiday season that's going to be hit hard and it's going to hit often but for a very short period of time perhaps that type of application you put up in the public cloud in a hyperscale or for again lack of the better term. There maybe kind of the old steady applications that the manage service provider might want to manage themselves, right? But, they will come in and they'll do the needs assessment. They'll evaluate the situation. They'll make the recommendation, and then they'll build their services around that recommendation. The beautiful thing about working with Veeam is that no matter what the answer is, we have the solution. >> So, VeeamON is coming up in May 14th to the 16th, theCUBE's going to be back there again. What are you excited about with the VeeamON 2018, maybe some customers that might be onstage sharing your stories? What can you share with us about what excites you about your big event? >> Sure, sure. When I think about VeeamON, what excites me? Now, this is a little bit personal cause I have to have responsibility for this team but for the last nine quarters, one of the fastest growing excitement of the Veeam business has been it's cloud business. We have grown over 50% year over year and that's a global number. So, while Veeam itself is having phenomenal growth, the marketplace in which we compete, growing 7% to 8% again depending on who you read. Veeam is a total 2016 to 2017 growing at 36%, our cloud business growing at over 50%, and helping that cloud become a part of everyone's story in everyone's business is really exciting to me. So, we'll have multiple service providers, multiple cloud providers up on stage doing case studies and testimonials, talking about how our mutual end-customers are benefited from the programs that we put in place to help everyone get better together. >> Yeah, I think the other thing, if I can interject. My takeaway from last year was you guys going hard. Everybody's going after multicloud, but your perspective on digital business and availability to support multiple clouds and you're building relationships with companies like IBM, and you got a good vision around that. So, I got to believe we're going to hear a lot about that as well. >> You sure will. (laughs) >> Well, sounds like a lot of momentum. Matt, thanks so much for stopping by theCUBE's sharing what's new, what excites you and the momentum that you guys are carrying forward. >> Thank you. >> Lisa: Pretty exciting stuff. >> Thank you for having me. I really appreciate it. It's great to be back and I'll look forward to speaking with you at VeeamON. >> Well, see you then. >> All right, see you then. >> We want to thank you for watching theCUBE live on day one of IBM Think 2018. I'm Lisa Martin for Dave Vellante. Check out Wikibon. Check out SiliconANGLE media for the latest news and analyst insights into all things cloud, AI, machine learning, watching et cetera. David and I are going to be right back with our next guest after a short break. We'll see you in just a few minutes. (upbeat music)

>> Announcer: Live from Las Vegas, it's theCUBE, covering Interconnect 2017. Brought to you by IBM. >> Hey, welcome back everyone. We're live here in Las Vegas at the Mandalay Bay for IBM InterConnect 2017 exclusive Cube coverage. I'm John Furrier, my co-host Dave Vellante, our next guest Dr. Angel Diaz who is the vice president of developer technology. Also you know him from the open source world. Great to see you again. >> Nice to see you. Thanks for spending time with us. >> Thank you. >> Boy, Blockchain, open source, booming, cloud-native, booming, hybrid cloud, brute force but rolling strong. Enterprise strong, if you will, as your CEO Ginni Rometty started talking about yesterday. Give us the update on what's going on with the technology and developers because this is something that you guys, you personally, have been spending a lot of time with. Developer traction, what's the update? >> Well you know if you look at history there's been this democratization of technology. Right, everything from object oriented programming to the internet where we realize if we created open communities you can build more skill, more value, create more innovation. And each one of these layers you create abstractions. You reduce the concept count of what developers need to know to get work done and it's all about getting work done faster. So, you know, we've been systematically around cloud, data, and AI, working really hard to make sure that you have open source communities to support those. Whether it's in things like compute, storage, and network, platform as a service like say Cloud Foundry, what we're doing around the open container initiatives and the Cloud Native Computing Foundation to all the things you see in the data space and everywhere else. So it's real exciting and it's real important for developers. >> So two hot trends that we're tracking obviously, one's pretty obvious. That's machine learning in cloud. Really hand and glove together. You see machine learning really powering the AI, hitting IOT all the way up to apps and wearables and what not, autonomous vehicles. Goes on and on. The other one is Kubernetes, and Kubernetes, the rise of Kubernetes has really brought the containers to a whole nother level around multi-cloud. People might not know it, but you are involved in the CNCF formation, which is Kubernetes movement, which was KubeCon, then it became part of the Linux Foundation. So, IBM has had their hand in these two trends pretty heavily. >> Angel: Oh yeah, absolutely. >> Give the perspective, because the Kubernetes one, in particular, we'll come back to the machine learning, but Kubernetes is powering a whole nother abstraction layer around helping containers go to the next level with microservices, where the develop equation has changed. It's not just the person writing code anymore, a person writing code throws off an application that has it's own life in relationship to other services in the community, which also has analytics tied to it. So, you're seeing a changing dynamic on this potential with Kubernetes. How important is Kubernetes, and what is the real impact? >> No, it is important. And what there actually is, there's a couple of, I think, application or architecture trends that are fundamentally changing how we build applications. So one of them I'll call, let's call it Code First. This is where you don't even think about the Kubernetes layer. All you do is you want to write your code and you want to deploy your code, and you want it to run. That's kind of the platform. Something like Cloud Foundry addresses the Code First approach. Then there's the whole event-drive architecture world. Serverless, right? Where it has a particular use case, event-driven, standing, stuff up and down, dealing with many types of inputs, running rules. Then you have, let's say the more transactional type applications. Microservices, right? These three thing, when combined allows you to kind of break the shackles of the monolith of old application architectures, and build things the way that best suit your application model, and then come together in much more coherent way. Specifically in Kubernetes, and that whole container stuff. You think think about it, initially, when, containers have been around a long time, as we all know, and Docker did a great job in making container accessible and easy, right? And we worked really closely with them to create some multisource activities around the base container definitions, the open container initiative in the Linux Foundation. But of course, that wasn't enough. We need to then start to build the management and the orchestration around that. So we teamed up with others and started to kind of build this Kubernetes-based community. You know, Docker just recently brought ContainerD into the CNCF, as well, as another layer. They are within the equation. But by building this, it's almost just Russian doll of capability, right, you know, you're able to go from one paradigm, whether it's a serverless paradigm running containers, or having your microservices become use in serverless or having Code First kick off something, you can have these things work well together. And I think that's the most exciting part of what we're doing at Kubernetes, what we're doing in serverless, and what we're doing, say, in this Code First world. >> So, development's always been kind of an art form. How is that art form evolving and changing as these trends that you're describing-- >> Oh, that's a great, I love that. 'Cause I always think of ourselves as computer science artists. You and I haven't spoken about that. That's awesome. Yeah, because, you know, it is an art form, right? Your screen is your canvas, right, and colors are the services that you can bring in to build, and the API calls, right? And what's great is that your canvas never ends, because you have, say, a cloud infrastructure, which is infinitely scalable or something, right? So, yeah. But the definition of the developer is changing because we're kind of in this next phase of lowering concept count. Remember I told you this lowering of concept count. You know, I love those O'Reilly books. The little cute animals. You know, as a developer today, you don't have to buy as many of those books, because a lot of it is done in the API calls that you've used. You don't write sorting algorithms anymore. Guess what, you don't need to do speech to text algorithms. You don't need to do some analysis algorithms. So the developer is becoming a cognitive developer and a data science developer, in addition to a application developer. And that is the future. And it's really important that folks skill up. Because the demand has increased dramatically in those areas, and the need has increased as well. So it's very exciting. >> So the thing about that, that point about cognitive developer, is that in the API calls, and the reason why we don't buy all those books is, the codes out there are already in open source and machine learning is a great example, if you look at what machine learning is doing. 'Cause now you have machine learning. It used to be an art and a science. You had to be a great computer scientist and understand algorithms, and almost have that artistic view. But now, as more and more machine learning comes out, you can still write custom machine learning, but still build on libraries that are already out there. >> Exactly. So what does that do? That reduces the time it takes to get something done. And it increases the quality of what you're building, right? Because, you know, this subroutine or this library has been used by thousands and thousands of other people, it's probably going to work pretty well for your use case, right? But I can stress the importance of this moment you brought up. The cognitive data application developer coming together. You know, when the Web happened, the development market blew up in orders of magnitude. Because everybody's is sort of learning HTML, CSS, Javascript, you know, J2E, whatever. All the things they needed to build, you know, Web Uize and transactional applications. Two phase commit apps in the back, right? Here we are again, and it's starting to explode with the microservices, et cetera, all the stuff you mentioned, but when you add cognitive and data to the equation, it's just going to be a bigger explosion than the Web days. >> So we were talking with some of the guys from IBM's GBS, the Global Business Services, and the GTS, Global Technology Services, and interesting things coming out. So if you take what you're saying forward, and you open innovation model, you got business model stacks and technology stacks. So process, stacks, you know, business process, and then technology, and they now have to go hand-in-hand. So if you take what you're saying about, you know, open source, open all of this innovation, and add say, Blockchain to it, you now have another developer type. So the cognitive piece is also contributing to what looks like to be a home run with Blockchain going open source, with the ledger. So now you have the process and the stacks coming together. So now, it's almost the Holy Grail. It used to be this, "Hey, those business processor guys, they did stuff, and then the guys coded it out, built stacks. Now they're interdependent a bit. >> Yeah. Well I mean, what's interesting to me about Blockchain, I always think of, at this point about business processes, you know, business processes have always been hard to change, right? You know, once you have partners in your ecosystem, it's hard to change. Things like APIs and all the technology allows it to be much quicker now. But with Blockchain, you don't need a human involved in the decision of who's in your partner network as long as they're trusted, right? I remember when Jerry Cuomo and Chris Ferris, in my team, he's the chairman of the Blockchain, of the hyperledger group, we're talking initially when we kind of brought it to the Linux Foundation. We were talking a lot about transactions, because you know, that was one of the initial use cases. But we always kind of new that there's a lot of other use cases for this, right, in addition to that. I mean, you know, the government of China is using Blockchain to deal with carbon emissions. And they have, essentially, an economy where folks can trade, essentially, carbon units to make sure that as an industry segment, they don't go over, as an example. So you can have people coming in and out of your business process in a much more fluid way. What fascinates me about Blockchain, and it's a great point, is it takes the whole ecosystem to another level because now that they've made Blockchain successful, ecosystem component's huge. That's a community model, that's just like open source. So now you've got the confluence of open source software, now with people in writing just software, and now microservices that interact with other microservices. Not agile within a company, agile within other developers. >> Angel: Right. >> So you have a data piece that ties that together, but you also have the process and potential business model disruption, a Blockchain. So those two things are interesting to me. But it's a community role. In your expert opinion on the community piece, how do you think the community will evolve to this new dynamic? Do you think it's going to take the same straight line growth of open source, do you think there's going to be a different twist to it? You mentioned this new persona is already developing with cognitive. How do you see that happening? >> Yes, I do. There's two, let's say three points. The first on circling the community, what we've been trying to do, architecturally, is build an open innovation platform. So all these elements that make up cloud, data, AI, are open so that people can innovate, skills can grow, anything, grow faster. So the communities are actually working together. So you see lots of intralocks and subcommittees and subgroups within teams, right? Just say this kind of nesting of technology. So I think that's one megatrend that will continue-- >> Integrated communities, basically. >> Integrated communities. They do their own thing. >> Yeah. >> But to your point earlier, they don't reinvent the wheel. If I'm in Cloud Foundry and I need a container model, why am I going to create my own? I'll just use the open compute initiative container model, you know what I'm saying? >> Dave: And the integration point is that collaboration-- >> Is that collaboration, right. And so we've started to see this a lot, and I think that's the next megatrend. The second is, we just look at developers. In all this conversation, we've been talking about the what? All the technology. But the most important thing, even more so than all of this stuff, is the how. How do I actually use the technology? What is the development methodology of how I add scale, build these applications? People call that DevOp, you know, that whole area. We at IBM announced about a year and a half ago, at Gene Kim's summit, he does DevOps, the garage method, and we open sourced it, which is a methodology of how you apply Agile and all the stuff we've learned in open source, to actually using this technology in a productive way at scale. Often times people talk about working in theses little squads and so forth, but once you hire, say you've got 10 people in San Francisco, and you're going to hire one in San Ramon, that person might as well be on Mars. Because if you're not on the team there, you're not in the decision process. Well, that's not reality. Open source is not that way, the world doesn't behave that way. So this is the methodology that we talked about. The how is really important. And then the third thing, is, if you can help developers, interlock communities, teach them about the how to do this effectively, then they want samples to fork and go. Technology journeys, physical code. So what you're start to see a lot of us in open source, and even IBM, is provide starters that show people how to use the technology, add the methodology, and then help them on their journey to get value. >> So at the base level, there's a whole new set of skills that are emerging. You mentioned the O'Reilly books before, it was sort of a sequential learning process, and it seems very nonlinear now, so what do you recommend for people, how do they go about capturing knowledge, where do they start? >> I think there's probably two or three places. The first one is directly in the open source communities. You go to any open source community and there's a plethora of information, but more so, if you hang out in the right places, you know, IRC channels or wherever, people are more than willing to help you. So you can get education for free if you participate and contribute and become a good member of a community. And, in fact, from a career perspective today, that's what developers want. They want that feeling of being part of something. They want the merit badge that you get for being a core committer, the pride that comes with that. And frankly, the marketability of yourself as a developer, so that's probably the first place. The second is, look, at IBM, we spend a huge amount of time trying to help developers be productive, especially in open source, as we started this conversation. So we have a place, developer.ibm.com. You go there and you can get links to all the relevant open source communities in this open innovation platform that I've talked about. You can see the methodologies that I spoke about that is open. And then you could also get these starter code journeys that I spoke about, to help you get started. So that's one place-- >> That's coming out in April, right? >> That's right. >> The journeys. >> Yeah, but you can go now and start looking at that, at developer.ibm.com, and not all of it is IBM content. This is not IBM propaganda here, right? It is-- >> John: Real world examples. >> Real world examples, it's real open source communities that either we've helped, we've shepherded along. And it is a great place, at least, to get your head around the space and then you can subset it, right? >> Yeah. So tell us about, at the last couple of minutes we have, what IBM's doing right now from a technology, and for developers, what are you guys doing to help developers today, give the message from what IBM's doing. What are you guys doing? What's your North Star? What's the vision and some of the things you're doing in the marketplace people can get involved in? You mentioned the garage as one. I'm sure there's others. >> Yeah, I mean look, we are m6anically focused on helping developers get value, get stuff done. That's what they want to do, that's what our clients want to do, and that's what turns us on. You build your art, you talk, you're going back to art, you build your drawing, you want to look at it. You want it to be beautiful. You want others to admire it, right? So if we could help you do that, you'll be better for it, and we will be better for it. >> As long as they don't eat their ear, then they're going to be fine. >> It's subjective, but give value of what they do. So how do they give value? They give value by open technologies and how we've built, essentially, cloud, data, AI, right? So art, arts technology adds value. We get value out of the methodology. We help them do this, it's around DevOps, tooling around it, and then these starters, these on-ramps, right, to getting started. >> I got to ask you my final question, a more personal one, and Dave and I talk about this all the time off camera, being an older guy, computer science guy, you're seeing stuff now that was once a major barrier, whether it's getting access to massive compute, machine learning, libraries, the composability of the building blocks that are out there, to create art, if you will, it's phenomenal. To me, it's just like the most amazing time to be be a computer scientist, or in tech, in general, building stuff. So I'm going to ask you, what are you jazzed up about? Looking back, in today's world, the young guns that are coming onto the scene not knowing that we walked barefoot in the snow to school, back in the old days. This is like, it's a pretty awesome environment right now. Give us personal color on your take on that, the change and the opportunity. >> Yeah, so first of all, when you mentioned older guys, you were referring to yourselves, right? Because this is my first year at IBM. I just graduated, there's nothing old here, guys. >> John: You could still go to, come on (laughs). >> What does that mean? Look you know, there's two things I'm going to say. Two sides of the equation. First of all, the fundamentals of computer science never go away. I still teach, undergrad seminars and so forth, and you have to know the fundamentals of computer science. That does not go away because you can write bad code. No matter what you're doing or how many abstractions you have, there are fundamental principles you need to understand. And that guides you in building better art, okay? Now putting that aside, there is less that you need to know all the time, to get your job done. And what excites me the most, so back when we worked on the Web in the early 90s, and the markup languages, right, and I see some in the audience there, Arno, hey, Arno, who helped author some of the original Web standards with me, and he was with the W3C. The use cases for math, for the Web, was to disseminate physics, that's why Tim did it, right? The use case for XML. I was co-chair of the mathematical markup language. That was a use case for XML. We had no idea that we would be using these same protocols, to power all the apps on your phone. I could not imagine that, okay? If I would have, trust me, I would have done something. We didn't know. So what excites me the most is not being able to imagine what people will be able to create. Because we are so much more advanced than we were there, in terms of levels of abstraction. That's what's, that's the exciting part. >> All right. Dr. Angel Diaz, great to have you on theCUBE. Great inspiration. Great time to be a developer. Great time to be building stuff. IOT, we didn't even get to IOT, I mean, the prospects of what's happening in industrialization, I mean, just pretty amazing. Augmented intelligence, artificial intelligence, machine learning, really the perfect storm for innovation. Obviously, all in the open. >> Angel: Yes. Awesome stuff. Thanks for coming on the theCUBE. Really appreciate it. >> Thank you guys, appreciate it. >> IBM, making it happen with developers. Always have been. Big open source proponents. And now they got the tools, they got the garages for building. I'm John Furrier, stay with us, there's some great interviews. Be right back with more after this short break. (tech music)

>> Announcer: Live from Las Vegas, it's theCUBE, covering InterConnect 2017, brought to you by IBM. >> Welcome back to InterConnect 2017 in Las Vegas. We're here at the Mandalay Bay hotel. This place is packed. We're right by the escalators, jamming all day, roughly 20,000 people here. Mohammed Farooq is with me. He's the GM of the cloud brokerage services under the GTS division of IBM. Mohammed, thanks very much for coming on theCUBE. >> Thank you very much, I appreciate for having me here. >> You're welcome. We were talking, having a great conversation off camera about your history, coming over from India, getting an education in Oklahoma, doing startups, selling companies and ultimately ending up at IBM. Let's start where you are today. Your role as GM of brokerage, cloud brokerage services. What does that entail? What does that mean, cloud brokerage services? >> Two things here, right? My role at IBM is one part of the question and what is cloud brokerage is the second part. I'll start with cloud brokerage. Cloud brokerage is the concept that has emerged in the last five years where as cloud services became one of the choices for consuming IT, the role of enterprise IT had to change from being a manager of technology to brokering what services businesses use either from internal IT or from external cloud providers. The CIOs and ITO organization had to take on the role of a broker. To play, effectively to play the role of IT broker, you need to really change the current IT model, which is people process technology. That had to be automated into a new platform that gave birth to the new requirement that you need a broker via technology in a platform where you can connect demand to supply. Demand can come from any business unit, either for infrastructure or applications or managed services, and you can connect it to the right supplier, just like manufacturing, just in time. The CIO would optimize the demand and supply and make sure the right services are available to be pulled at the right time for the right user. This is what Amazon has done. This is was Azure is doing. This is what SoftLayer has done. Give access to IT services on demand. But can you aggregate that and provide a standard consumption operating model for the enterprise? That is the new broker role and the broker's platform from IBM basically enables that role for the enterprise. >> Is that software? Is that an abstraction layer, a manger of managers, or is it people in process? >> It is both. It is an abstraction layer that connects to all cloud providers, internal or external. It has automated new processors for consumption, service management and governance, and it creates new roles in the enterprise for IT organizations and business users. It's a complete rethink of how IT operates, but importantly, it connects to the current processors. That's where you can run hybrid IT. You can connect to service now, to the current i2 processors in the enterprise. You can connect to the current governance dashboards and you can connect to the current data centers. We do have current applications on. It connects to the current and it connects to the new world of automated self-service and brings it together. >> So, you go back 20, 25 years, this business that you're in now was a break-fix business. It's totally transformed. Talk about the CIO. What's on his or her mind today? What should they be focused on? >> I think the CIO's role changes every two to three years. The areas of focus changes. Previously, they were in the business of building applications and managing it and managing the infrastructure. Then the packaged applications came, SAP Oracle. Then they were in the business of implementing. Then they started building web applications again for awhile and managing it. Now we have SAS, software as a service, so you can just rent an application. You have a pass. You don't have to build a bigger web. You can rent it. You have infrastructure, you can rent it. Excuse me. The CIO's role now, the CIO's role now is how do I govern it? That's the priority. I don't have to go build it. I need to govern what I have, but effectively. Second, I need to provide access to services that my business needs, and I need to do that at speed. Third, I need to be able to manage it security wise, compliance wise, whether the data is staying in the right places. It's not being exposed because data breach is a big issue. My infrastructure doesn't have holes for security. It can scale. So the concerns of the CIO are now different. The risks are different and that's a new role the broker is taking on. The most important role for the CIO right now is give me visibility into where my stuff is. It's in Amazon, Azure, SoftLayer. I've lost control of it. Tell me where it is and it's very complex, simplify this for me. >> It's interesting to hear you, Mohammed, talk about the CIO used to develop apps and then commercial, off-the-shelf applications came and then the web apps, they started developing apps again, et cetera, that progression. Now there's SAS. I wonder if I can get your comment on this. The other sort of trend that we see, we talk about it all the time, is that the, the companies talk about digital transformation all the time, part of that digital transformation is becoming SAS companies. Every company's becoming a SAS company. What's the role of a CIO in this new-- I think Benioff said it. There'll be more SAS companies for non-tech companies than tech companies. What's the role of a CIO in that world? >> If you look at it, the differentiation that a corporation has today is the digital experiences it requires either on the supply chain side or it's customers. Those applications are custom SAS applications that they're building. The CIO's role is to make sure it becomes the operator of SAS apps. Right? >> Interviewer: Whether internal-- >> Internal or external. So if his business units develop custom SAS apps, either mobile apps or social media apps or analytics apps, those apps should be available and running and scalable in the cloud 24 seven. Basically, he becomes a SAS operator. When you're a SAS operator, you're also a governor. Industry is calling it hybrid cloud, many clouds, multi-clouds and the role of the CIO is to operate them and make sure they're governed. Third, that it's business get access to the right services at the right time because that time is very critical. The connected stakes of an operator and governor is real-time access to services, continuous innovation and speed, and control. >> This is a huge skilling issue for CIOs. Is it not? The skills transformation, you're going from provisioning LUNs to being a cloud broker. How's that going for your clients and how are you helping? >> That's where IBM comes in. IBM is saying for us to play a role in a digital world we have to change the way our relationship work with our customers. So if the CIO is becoming a broker, then what is my relationship with a cloud broker in the enterprise? As adoption is stating now, in the beginning, there's no skillset in the enterprise to operate this model. IBM has developed the technology and the skills and telling the CIO we can build this and operate it for you. And when you are assured, we can transfer this to you. It's a build, operate, transform relationship that we are building so that the CIOs in Fortune 500 can strategically partner with IBM and take this journey together. The role of a broker will be different in every enterprise, customized to that enterprise based on it's priorities. IBM is basically redefining the experience and the relationship to it's customers. In turn, we are enabling our customers to transform faster, develop value to it's business faster and become digital faster. >> Let's talk about IBM's business GTS specifically. I said off camera and I'll say it again, many people may not realize 60% of IBM's business is still services, combined GTS and the consulting services, about 30% is software, but only about 10% is hardware these days, including the operating systems. It's quite a transformation that Ginni has effected. I certainly remember the days of John Akers when IBM was splitting apart and trying to focus on different parts of the industry and Gertsner said no, single point of contact for the customer, we will become a global service provider, very successful strategy. Now we're entering this cognitive age. What's the strategy, specifically with regard to GTS? Are you trying to codify that deep expertise and put into software, like that abstraction layer we talked about? It is sort of a hybrid model? I wonder if you could summarize. >> Two things. What was true when Lou Gertsner said we want to provide a single point of contact and we're going to put this together, that was systems integration business. We will take all the piece parts for the customer and we will take the responsibility to deliver it reliably and make sure it's available and it's performing. The large corporations will depend on us to run their enterprise IT systems. Fast forward 2017, we are now a service integration business. We are integrating services from cloud providers, either internal or external. We're still playing the same role. We are the single point of consumption and integration and delivery for the new supply chain. The supply chain now is 100 times more fragmented than it was before. >> Interviewer: It's way more complex. >> It's more complex. >> Yeah, this is a huge opportunity. >> This is the biggest opportunity, again, for IBM and we are practically going after that opportunity. Hey, our role is the same. We are the single point of consumption and delivery and governance for our service integration and service delivery. That's how IBM is defining it's role, again, in the services era from a systems era. Second, how does it impact our revenue? We have a massive opportunity, every dollar spent on cloud services, customers have to spend money on managing it, integrating it, operating it and enhancing it. We are building offerings that provide value on top of the cloud providers in all these areas and we manage it. We see significant revenue opportunities. The way you distributed the revenue structure of IBM, we see a 10x opportunity for us doing that. >> Well, so there was a while where people thought that, that to the extent that you could automate, it would eat into the services business. That's not happening you're saying. >> Right, so two things are happening, right? That is happening, but we see a tremendous opportunity there for IBM because IBM has invested significantly in automation and big data software and cognitive. Basically, what we're saying is, yes our core business is getting commoditized, our basic business, but we are adding higher value at your services in software. We are becoming a software plus services business, practically. From a software side, on GTS, we will drive higher margin revenues and differentiation in higher value added services that are digital. We'll complement that with our services business that can scale at volume. In effect, we are creating a hybrid business model for the software plus services era for IBM. >> You're becoming a software company like everybody else. >> Mohammed: Yes. >> Right? >> Right. And IBM has, IBM has seen it and IBM has responded to it. IBM is invested in it, so we are building the ideas of service platform. We have invested in it. We're delivering to the market. We are re-skilling our workforce and we are creating a superior method of delivery for the cognitive era using a cognitive technology services delivery platform. >> You actually have a, as a service component of software in your PNL, is that right? >> Mohammed: Exactly. >> And that's the growing part of your business? >> Mohammed: We're tracking that line item as software as a service. >> We have to break, but I just want to spend a minute on your personal story. You came from India. You were highly educated, both in India and in this country, and now you're a senior executive at IBM. Quick story about your journey 'cause I love it. >> My journey started in India. I was always fascinated with technology in the United States because when I grew up, the United States was the country that put the man on the moon. We always looked at, I always looked at the United States as, as the pioneer in technology and I wanted to see how I could learn from it. How could I professionally grow from it? I did not know how, but a life is a journey. It got me to Oklahoma on a scholarship from a Master's program in operations research and computer science and then an MBA in finance. I move to Austin looking for a job, from Oklahoma. I worked for the government, the governor's office for a while, almost three years and then in the dotcom wave, I wanted to be in giving birth to new technology. I joined a startup in Austin that got acquired by Commerce One. From there, the journey took me to working with SAP, to building their middleware platform and then brought me back to Austin as a CTO for Texas again where I worked very closely with IBM for managing the state's data centers and building the software platform using the soul from our client and the software portfolio from IBM. What I realized during that time is really, the nature of IT services, consumption and delivery will change with cloud and it needs a new operating model of CIOs and CTOs. I created a company by CIOs for CIOs of how they would operate in a new utility model of it's combined cutbacks and outbacks and it's unified consumption across a very diverse supply chain. >> This is 2007 timeframe, right? >> Mohammed: 2007 timeframe. >> Just before the downturn. Perfect timing. >> Right, so leverage the tailwinds of cloud to build an operating model for hybrid, which is not being called hybrid, but was really a consumption centric model and a supply chain model from manufacturing that I learned at Commerce One and SAP. I said the supply chain concepts are very true for IT now because every unit within the supply chain is a service. >> The vision was to transform IT consumption. >> To transform IT consumption, delivery and governance in the enterprise. That led to Gravitant and the brokerage platform that IBM acquired in 2015. Currently my role at IBM is to drive this transformation into the enterprise and in turn, transform the delivery model for GTS. >> Well that's where we started. We'll have to leave it there, Mohammed. Thanks very much for coming on theCUBE and sharing your story. >> Mohammed: Thanks very much. It's a pleasure to meet you today. >> Okay, keep it right there, buddy. We'll be back with our next guest right after this short break. It's theCUBE. We're live from InterConnect.