>> Announcer: Live from Boston Massachusetts. It's the cube. Covering IBM Chief Data Officer Summit, brought to you by IBM. >> Welcome back to the cube's coverage of the IBM Chief Data Officer Strategy Summit. I'm your host Rebecca Knight, along with my co-host Dave Vallante. We're joined by Sanjay Saxena, He is the senior vice president, enterprise data governance at Northern trust Corporation. Thanks so much for joining us Sanjay. >> Thank you. Thank you for having me. >> So, before the cameras were rolling, we were talking about how data governance is really now seen as a business imperative. Can you talk about what's driving that? >> Initially, when we started our data governance program it was very much a regulatory program, focused on regulations, such as GDPR, anti-money laundering etc. But now, as we have evolved, most of the program in my company is focused on business and business initiatives and a lot of that is actually driven by our customers, who want to clean data. We are custodians of the data. We do asset servicing, asset management, and what the customers have, are expecting, as stable stakes, is really clean data. So, more and more, I'm seeing it as a customer driven initiative. >> Clean data. can you ... >> So, many many businesses rely on data, financial services. It's all about data and technology, but when we talk about clean data, you're talking about providing data at a certain threshold. At a certain level of expectation. You are used to data quality when it comes to cars and gadgets and things like that. But, think about data and having a certain threshold that you and your customer can agree on as the right quality of data is really important. >> Well, and that's a lot of the, sort of, governance role, some of the back-office role, but then it evolved. >> Right. >> And begin to add value, particularly in the days where IBM was talking about data warehouse was king. You know master data management and single version of the truth. Data quality became a way in which folks in your role could really add business value. >> That's right. >> How has that evolved in terms of the challenge of that with all the data explosion? You know, how to do been big data it just increased the volumes of data by massive massive amounts and then lines of business started to initiate projects. What did that do for data quality, the data quality challenge? >> So the data quality challenge has grown on two dimensions. One, is the volume of data. You simply have more data to manage, more data to govern and provide an attestation or a certification, you say "Hey, it's clean data. It's good data." The other dimension is really around discoverability of that data. We have so much of data lying in data lakes and we have so many so much of meta-data about the data, that even governing that is becoming a challenge. So, I think both those dimensions are important and are making the jobs of a CDO more complex. >> And do you feel maybe not specific to you but just as an industry that, Let's take financial services, is the industry keeping pace? Because for years very few organizations, if any have tamed the data. Just a matter of keeping up. >> Has that changed or is it sort of still that treadmill? >> It's still evolving. It's still evolving in my from my perspective. Industries, again are starting to manage their models that they have to deliver to the regulators as essential, right? Now, more and more, they're looking at customer data. their saying "Look, my email IDs have to be correct. My customer addresses have to be correct." It's really important to have an effective customer relationship. Right? So, more and more, we are seeing front-office driving data quality and data quality initiatives. But have we attained a state of perfection? No. We are getting there, in terms of more optimization, more emphasis, more money and financials being put on data quality. But still it is evolving as a >> You talk a little bit about the importance of the customer relationship and this conference is really all about sharing best practices. What you've learned along the way, even from the stakes. Can you share a little bit with our viewers about what you think are sort of the pillars of a strong customer relationship, particularly with a financial services company? >> Right. So, in the industry that we are in, we do a lot of wealth management. We have institutional customers, but let's save the example of wealth management. These are wealthy, wealthy individuals, who have assets all around the world. Right? It's a high touch customer relationship kind of a game. So, we need to not only understand them, we need to understand their other relationships, their accountants, who their doctors are etc. So, in that kind of a business, not only it is about high touch and really understanding what the customer needs are. Right? And going more towards analytics and understanding what customers want, but really having correct data about them. Right? Where they live, who are their kids etc. So, it's really data and CRM, they actually come together in that kind of environment and data plays a pivotal role, when it comes to really effective CRM. >> Sanjay, last time we talked a little bit about GDPR. Can you give us an update on where you're at? I mean, like it or not, it's coming. How does it affect your organization and where are you and being ready for the, I mean GDPR has taken effect. people don't realize that, but the penalties go into effect next May. So, where are you guys at? >> So, we are progressing well on our GDPR program and we are, as we talked before this interview, we are treating GDPR as a foundation to our data governance program and that's how I would like other companies to treat GDP our program as well. Because not only what we are doing in GDPR, which is mapping out sensitive data across hundreds of applications and creating that baseline for the whole company. So that anytime a regulator comes in and wants to know where a particular person's information is, we should be able to tell them with in no uncertain terms. So we are using that to build a foundation for our data governance program. We are progressing well, in terms of all aspects of the program. The other interesting aspect, which is really important to highlight, which I didn't last time is that, there's a huge amount of synergy between GDPR and information security. Which is a much older discipline and data protection, so all companies have to protect the data anyway, right? Think about it. So, now a regulation comes along and we are, in a systematic fashion, trying to figure out where all where all our sensitive data is and whether it is controlled protected etc. It is helping our data protection program as well. So all these things, they come together very nicely from a GDPR perspective. >> I wonder, you, you remember Federal Rules of Civil Procedure. That was a big deal back in 2006, and the courts, you know maybe weren't as advanced and understanding technology as technology wasn't as advanced. What happened back then and I wonder if we could compare it to what you think will happen or is happening with GDPRs. It was impossible to solve the problem. So, people just said "Alright, we're going to fix email archiving and plug a hole." and then it became a case where, if a company could show that it had processes these procedures in place, they were covered, and that gave them defense and litigation. Do you expect the same will happen here or is the bar much much higher with GDPR. >> I believe the bar is much much higher. Because when you look at the different provisions of the regulation, right, customers consent is a big big deal, right? No longer can you use customer data for purposes other than what the customer has given you the consent for. Nor can you collect additional data, right? Historically, companies have gone out and collected not just your basic information, but may have collected other things that are relevant to them but not relevant to you or the relationship that you have with them. So it is, the laws are becoming or the regulations are becoming more restrictive, and really it's not just a matter of checking a box. It is really actually being able to prove that you have your data under control. >> Yeah so, my follow-up there is, can you use technology to prove that? Because you can't manually figure through this stuff. Are things like machine learning and so-called AI coming in to play to help with that problem. Yes, absolutely. So one aspect that we didn't talk about is that GDPR covers not just structured data but it covers unstructured data, which is huge and it's growing by tons. So, there are two tools available in the marketplace including IBM's tools which help you map the data or what we call as the lineage for the data. There are other tools that help you develop a meta-data repository to say "Hey, if it is date of birth, where does it reside in the repository, in all the depositories, in fact?" So, there are tools around meta-data management. There are tools around lineage. There are tools around unstructured data discovery, which is an add-on to the conventional tools and software that we have. So all those are things that you have in your repository that you can use to effectively implement GDPR. >> So my next follow-up on that is, does that lead to a situation where somebody in the governance role can actually, you know going back to the data quality conversation, can actually demonstrate incremental value to the business as a result of becoming expert at using that tooling? >> Absolutely, so as I mentioned earlier on in the conversation, right? You need govern data not just for your customers, for your regulators, but for your analytics. >> Right. >> Right. Now, analytics is yet another dimension effect. So you take all this information that now you're collecting for your GDPR, right? And it's the same information that somebody would need to effectively do a marketing campaign, or effectively do insights on the customer, right? Assuming you have the consent of course, right? We talked about that, right? So, you can mine the same information. Now, you have that information tagged. It's all nicely calibrated in repositories etc. Now, you can use that for your analytics, You can use that for your top line growth or even see what your internal processes are, that can make you more effective from an operations perspective. And how you can get that. >> So you're talking about these new foundations of your data governance strategy and yet we're also talking about this at a time where there's a real shortage of people who are data experts and analytics experts. What are what is Northern Trust doing right now to make sure that you are you have enough talent to fill the pipeline? >> So, we are doing multiple things. Like most companies, we are trying a lot of different things. It's hard to recruit in these areas, especially in the data science area, where analytics. And people not only need to have a certain broad understanding of your business, but they also need to have a deep understanding of all of the statistical techniques etc., right? So, that combination is very hard to find. So, what we do is typically, we get interns, from the universities who have the technology knowledge and we couple them up with business experts. And we work in those collaborated kind of teams, right? Think about agile teams that are working with business experts and technology experts together. So that's one way to solve for that problem. >> Great, well Sanjay, thank you so much for joining us here on the cube. >> Thank you. Thank you. >> Good to see you again. >> We will have more from the IBM CDO Summit just after this.

>> Announcer: Live from Las Vegas, it's theCUBE. Covering Interconnect 2017, brought to you by IBM. >> Okay, welcome back everyone. We're here live in Las Vegas for IBM Interconnect 2017, theCUBE coverage with SiliconANGLE Media. I'm John Furrier, with my co-host Dave Vellante. Next guest, Tom Ready, Senior Vice President with State Street Corporation. Welcome to theCUBE. >> Thank you, thank you. >> So State Street is obviously financial powerhouse you guys have, and that we're just talking before (laughing) we came on about the Red Sox. (laughing) You had season tickets. You guys own a pavilion there. Love Fenway Park, always great to visit. But seriously IBM, you've had history with IBM and State Street. >> Tom: Mm-hmm. >> What's going on? Why are you here? What's the conversations? >> Well, we've, as you said, right? We probably go back 30 years, in terms of the relationship State Street has with IBM, starting traditional technology, right? So hardware and software, and evolved to a much more dynamic services relationship about 4 years ago, right? Where, combined with IBM and Wipro, we've taken advantage of their capabilities, both on application and infrastructure management, and transitioned quite a bit of our services from in house managed to IBM managed. >> And your scope, specifically, in your role? >> The responsibilities I have are around infrastructure management, so which is the primary responsibility IBM has, right? Wipros on the application side of the house. >> Okay, so big hybrid cloud discussion, right (laughing). >> Tom: Yes. >> So what does that all mean from a practitioner's perspective? >> Well, I think our challenge, candidly, is we probably have about 1,700 applications, give or take, deployed today within the enterprise, within our enterprise. And predominately hosted within our own core data centers, and as other financial companies and GSIF's, right, we have been a little bit reluctant to take advantage of the emerging capability and opportunity that the cloud represents. We're starting our journey now to entertain IBM's capability in SoftLayer. We've got an initiative underway to move the predominance of our development infrastructure there, so our development teams can take advantage of that capability, if you would, speed. It's a mix of understanding what they've got, it's a mix of understanding how we take advantage of it. It really is a challenge for us to understand as those capabilities evolve, how a company like ours can continue to take advantage of it, not just for development but for real production work. >> So obviously you remember Y2K very well. >> Yeah. Everybody, every CIO went through an application portfolio, assessment before that. >> Yeah. Are we sort of entering a new wave of that assessment, >> Yes. understanding the portfolio, cloud ready and not? >> Well I think anyone would say it's >> Ongoing? one of the chapters in the playbook, right? Kind of application rationalization. I think a challenge that companies like we have are, one of our growth models is through acquisition, so every time we acquire another company, we just acquired two this year, it comes with some additional applications that honestly have to be rationalized back in right? So that's kind of what we've got, right? Combine that with data placement as it relates to privacy because we've got an awful lot of data under management, that's another challenge that has to factored. >> So talk about the application developer scene in your world, because if you look back, I mean we were kind of joking on a previous interview about throwback Thursday and hackathon for a mainframe, >> Yeah. there's a lot of workloads that are legacy enterprise or >> Yeah, mmhmm. mission critical. >> Yeah. You guys are a great example, but I probably have from soup to nuts, from old school to new school cloud native going on, but the rage right now is enterprise readiness, enterprise grade, enterprise strong as Ginni Rometty was saying, but the ap developers, it's been around for awhile but what's the new mojo, what's the new vibe, what's the new culture like for developers, in a large institution like State Street? >> Well we've been pushing the Agile framework and the Agile method, right? We undertook that about three years ago. We've got 200 certified teams, right? At State Street, that are actually using Agile now, and that's across probably six of the eight platforms that we run code on, everything from the mainframe all the way out to open systems, right, or distributed systems. We've got some stagnant platforms like AS400. We still have a few AS400's kicking around and some Deck systems still sit, tandem decks right, so? Some of that isn't necessarily >> Whose supports that system? (laughing) Yeah. Some that doesn't necessarily lend itself to multiple deployments, right? We just don't do much in that space, but yeah I mean they're energized around ... >> Are they all on the Agile bandwagon? Obviously Agile's pretty huge, so. >> They are, they absolutely are, and honestly, it's been a little bit tough for the infrastructure teams to keep up, right? So we're not unique in that regard either, right? One of the approaches that was done a few years ago was, we do have our own platform as a service that we developed, our own orchestration model going back five years, and the majority of that is supported today by the application teams, right? Application teams using Agile based methods, deploying onto that platform as a service, so that seems to work for us right? Where the challenge becomes is for the aps that don't run there, and as we look to deploy those applications into SoftLayer, how does that, if you would, seamless deployment work, right? From a SoftLayer development environment and test environment back into production, and that's what we need to learn. >> So you've got blue mix and your own paths >> Yeah. sort of coming together, right? >> That's right. And so, I mean it's a little out of your scope but what does that mean, and maybe specifically what does it mean from an infrastructure perspective? >> Well ... As I said, we've started that journey right now, so we'll have 1,000 posts migrated by the end of the year. That's the current target we've got, with full deployment across into the hybrid cloud, probably within a year and a half from now, right? So as we undertake that journey, they're going to have to learn, the development teams are going to have to learn. The underlying service components, infrastructure service components right? We're probably being a little heavy with that now so that the development and test environments are exactly like the production environments are now. We'll probably pare that back, as they understand what they need and don't need. Challenge on us to speed, that's our current challenge. How quickly can we get things turned up for them? Challenge on them on with regard to what they need, right? >> So Tom, from a practitioner's perspective, what's the driver for a hybrid cloud? Are there specific use cases, is it agility, is it bursting? Help us understand that. >> Well for us, it's probably all of that right? I think the challenge that any legacy shop like ours has is what's the speed by which you go to the cloud, the hybrid cloud, right? We've got our own centers, right? There's a financial model that needs to be achieved. You know, as we do rationalization and data center consolidation, that feeds it, right? So it ends up going at a rate and pace that isn't necessarily in line with the speed that a new company would potentially take advantage of, or that a forced migration would perhaps do as well, right? So it's a little bit of both. >> So it's the support that a little extra agility, kind of give you a tailwind for that initiative, or? >> Well, yeah, it's to enable the application guys, clearly, but you know, the ideal benefit on the infrastructure side becomes burstability, right? And the ability for that capacity to come up quickly, right? Today, you know, we'd struggle with that using traditional infrastructure based models. We are extremely interested in some of the work that IBM's got going on with regard to how some of these clouds actually comply with regulatory requirements, right? You know, we operate in 29 countries and have to satisfy 48 different regulators, so the work that they've got going on with understanding what a regulatory compliant cloud is, and which authorities does it satisfy and what do those controls look and feel like? That may actually be something that we could take advantage of fairly quickly. >> Can we talk about the security >> Yeah, sure. discussion a little bit? You know most people I think, early on in the cloud days, like, "Oh a cloud." I think most people would agree that there's a lot of advantages to the cloud from a security standpoint. That said, there's also a lot of specials >> Yeah. that a company like yours requires. >> Yeah. So it's not necessarily good or bad in the cloud, it's just does it meet the edicts of our organization? >> Yeah. I wonder if you can talk about that a little bit. >> Yeah, I think we've evolved. Our policies have evolved and I think the regulators have become clearer with regard to what it is they want and don't want, right? I think all three of those things have helped right? When we look at the security policies that we have to adhere to, right? They, our SISO teams have been working fairly consistently and tightly with the different regulatory entities, with regard to what it is we think we need to adhere to, right? That clarity allows us then to begin to look at the marketplace, understand what capabilities are there and begin to procure and use those, right? So yeah, I think it's come a long way but not only has the capability of the providers come a long way, it's the clarity around the controls and the regulatory. >> And what role and involvement do you have in security? Are you sort of a recipient of the edict and you have to enforce it, (Tom laughs) are you a contributor, are you meeting with the board? >> Tom: Yeah, I think it's a little bit of everything, right? >> Uh huh. So yeah, we receive, we're the recipient of the policies, (Dave laughs) if you would, so ... And therefor I have to be compliant with them. We participate in how those policies are set, right? So there's a process within our firm where we sit down, talk about emerging threats, talk about what policies perhaps should be implemented, and then agree upon what those policies are and the timeframes for adoption, so we have that. Then the team, my team, for the controls it's responsible for, have to stand up to regulatory oversight, right? So the term we use is first line of defense, right? We're the control owners and our controls have to satisfy our own policies and external regulators. >> You know one of the things I want to drill into, it brings up how hard it is with the cloud, and IT in general these days. You know Dave's in Massachusetts, I'm in Silicon Valley and Palo Alto. In Silicon Valley it's like, "Oh yeah, a new toy," you know? >> Yeah. Shiny new so let's go fast and loose. In fact Mark Zuckerberg once said, "Move fast, break stuff." Now they've gone to, "Move fast, be secure," so. (Tom laughs) Your world doesn't really, I mean you want to go fast and loose to get innovation, >> Yeah. but you have to also manage really, really heavy requirements around the compliance >> That's right. and security things, so you got to balance that, so that's a very tricky thing. Can you share some insight into what it takes to do that, because you want to have devops, >> Mmhmm. development and operations being faster, more nimble, >> Yeah. with Agile; At the same time you want to keep the pace of innovation and not be in the stone age, so what's the trick? What's the secret? What have you learned? Share some anecdotal data. >> Yeah, when we started out, when we first looked at hosting op offerings and opportunities five years ago, we didn't really think, for a combination of capability that was available generally in the marketplace, and the controls we thought we needed around that, we didn't think they were where they needed to be so we developed our own right? So that's the far end of the spectrum where a firm like ours actually spent money and time to deploy orchestration for platform as a service, so we started there. If we think of the continuum of that journey, we're to the point now where we're considering using hosting companies that have the same or similar capability and we're at an inflection point with regard to where we're going to make our investments right? Are we going to continue with our own or actually begin to migrate right? Honestly our challenge is just that, right? How do we progress on that journey, because as is always the case, it becomes very difficult when you're out of your sweet spot and out of your core competency, to maintain the investments that are needed, and in this particular case it's pretty classic, right? For us to keep pace with the likes of IBM or Amazon or any of them are doing tremendous investment stream, right? We question whether that investment is best suited from a shareholder's point of view. >> It's a buyer built thing too, >> Tom: That's right. >> 'cuz one of those things you say, "Okay well, I'm going to rely on IBM Cloud "or AWS," or whoever could be the provider, it could be like an RFP process. >> Tom: That's right. >> You just got to start think, so you look at it that way. >> We do, we do, and brokerage is going to help us there, right? So we'll get brokerage up and running fairly soon and assuming the capabilities are somewhat similar or neutral if you would, then we'll let the application team pick what they want based upon what their specific requirements are. >> Yeah, I just got to ask you in the few minutes we have left, >> Yeah. obviously Jimmy's up there and I've been a big believer for a long time that data >> Mmhmm. is the key asset, and we've been saying it for a long time, >> Yeah. but Dave and I have gone back almost ten years ago talking about data as a development asset, >> Yeah. for developers, but she said something pretty compelling. Data is you own (laughing) the data. >> Yeah. That's profound. Now we believe that to be the case, because if you're renting everything and you're buying or you're building your own, the data becomes the critical layer of value. You got to protect it. It's obviously your financial data, >> Yeah, yeah. so it's secure. How do you guys look at the data layer as an architectural philosophy? >> Well, we have probably over 12 petabytes under management today, so it's a pretty, pretty significant environment for us to manage. The challenge, honestly, isn't ... We've got the business side of the house wants to take advantage of that data, because it's got an awful lot of client information within it, that we should be able to take to market the right way, right? Clearly client confidentiality is important. But the data actually becomes a little bit of a millstone, if you would, around us because we've got privacy concerns over all of that data right? And that data has grown up over time, so strong lineage doesn't necessarily exist right? A real strong data framework isn't there for us to understand whose data it is, when what state it happens to be and where it sits at rest, so it's an investment - >> And then the motion piece is kick up huge. >> Tom: It is. >> With the mobile devices. >> Tom: That's right. >> That motion going. (laughs) >> Yeah, so it does all come back to the data but it does require a pretty strong framework around the data for you to actually be able to take advantage of it, right? >> It kind of leads to the digital transformation discussion. >> Mmhmm. It's the big buzzword today. Now you guys, you know you're not servicing mom and pop consumer situations, big institutions, >> Yeah. but nonetheless, they're ... Data implies digital, implies you're changing your business model. >> Yes. You got smaller companies that are disrupting your business, >> Mmhmm. so what does it all mean to you generally and specifically, to the infrastructure? Are you guys developing SAS products, mobile aps that have a ripple down effect to your infrastructure? >> Well we don't have, you wouldn't think of State Street as a retail operation. >> Right of course. So we don't have that right? But there is a need for probably a third of my colleagues to have access to data, you know via mobile framework. >> Dave: So it's internal? >> Internal, right? >> Yeah. In terms of external clients, we do have a framework that we are, that we do provide through my State Street, it's an internet portal, and it's all back office, middle office data that they would typically access. Do they require that to be generally mobile ... Is it mobile enabled, I guess is the term I'm struggling with, right? Our competition hasn't gone there and so we're undertaking the evaluation that says do we need to go there, from a differentiation perspective right? But traditionally people are accessing that data through web based portals and using it in their day job that way. Our clients are, right? >> Tom, thanks for coming on theCUBE, really appreciate it. Quick end to the segment. Your impression of the event here? People that are watching aren't here so they can't feel the vibe. What's your take of the show this year? Certainly we've been seeing the digital traffic, >> Yeah. on IBMGO, doubled from World of Watson which we thought was the hottest show (Tom laughs) IBM's ever done. Looks like Interconnect seems to be the hottest. What's the conversation, what's the vibe like, what's the experience here? >> I generally like the collaboration that takes place in these kinds of things, right? I think what IBM's done here in terms of how they've laid out the center, you know all of the space that's available, the sessions have all been reasonably collaborative. You know you go to some of these things where you kind of fall asleep in the back row. I haven't necessarily seen much of that here, so kudos to IBM for running this the way they have, right? >> Yeah, it's very engaging content. >> It is. >> Tom, thanks for coming on theCUBE, really appreciate your insight and sharing what's going on at State Street Corporation. I used to call it State Street Bank from being from New England 18 years ago, but great to see you and hope to see you at Red Sox games. >> Sounds good guys. >> So we'll hit you up for some tickets. (laughing) It's theCUBE, of course, always trying to get the Red Sox tickets. I'm John Furrier with Dave Vellante. Stick with us. More great interviews coming right up here. Day two of three days of coverage of IBM Interconnect 2017. We'll be right back.

>> Announcer: Live from Barcelona, Spain, it's theCUBE, covering Cisco Live 2020, brought to you by Cisco and its ecosystem partners. >> Welcome back to Barcelona, everybody, we're here at Cisco Live, and you're watching theCUBE, the leader in live tech coverage. We go to the events and extract the signal from the noise. This is day one, really, we started day zero yesterday. Eric Herzog is here, he's the CMO and Vice President of Storage Channels. Probably been on theCUBE more than anybody, with the possible exception of Pat Gelsinger, but you might surpass him this week, Eric. Great to see you. >> Great to see you guys, love being on theCUBE, and really appreciate the coverage you do of the entire industry. >> This is a big show for you guys. I was coming down the escalator, I saw up next Eric Herzog, so I sat down and caught the beginning of your presentation yesterday. You were talking about multicloud, which we're going to get into, you talked about cybersecurity, well let's sort of recap what you told the audience there and really let's dig in. >> Sure, well, first thing is, IBM is a strong partner of Cisco, I mean they're a strong partner of ours both ways. We do all kinds of joint activities with them on the storage side, but in other divisions as well. The security guys do stuff with Cisco, the services guys do a ton of stuff with Cisco. So Cisco's one of our valued partners, which is why we're here at the show, and obviously, as you guys know, with a lot of the coverage you do to the storage industry, that is considered one of the big storage shows, you know, in the industry, and has been a very strong show for IBM Storage and what we do. >> Yeah, and I feel like, you know, it brings together storage folks, whether it's data protection, or primary storage, and sort of is a collection point, because Cisco is a very partner-friendly organization. So talk a little bit about how you go to market, how you guys see the multicloud world, and what each of you brings to the table. >> Well, so we see it in a couple of different facts. So first of all, the day of public cloud only or on-prem only is long gone. There are a few companies that use public cloud only, but yeah, when you're talking mid-size enterprise, and certainly into let's say the global 2500, that just doesn't work. So certain workloads reside well in the cloud, and certain workloads reside well on-prem, and there's certain that can back and forth, right, developed in a cloud but then move it back on, for example, highly transactional workload, once you get going on that, you're not going to run that on any cloud provider, but that doesn't mean you can't develop the app, test the app, out in the cloud and then bring it back on. So we also see that the days of a cloud provider for big enterprise and again up to the 2500 of the global fortunes, that's not true either, because just as with other infrastructure and other technologies, they often have multiple vendors, and in fact, you know, what I've seen from talking to CIOs is, if they have three cloud providers, that's low. Many of 'em talk about five or six, whether that be for legal reasons, whether that be for security reasons, or of course the easy one, which is, we need to get a good price, and if we just use one vendor, we're not going to get a good price. And cloud is mature, cloud's not new anymore, the cloud is pretty old, it's basically, sort of, version three of the internet, (laughs) and so, you know, I think some of the procurement guys are a little savvy about why would you only use Amazon or only use Azure or only use Google or only use IBM Cloud. Why not use a couple to keep them, you know, which is kind of normal when procurement gets involved, and say, cloud is not new anymore, so that means procurement gets involved. >> Well, and it's kind of, comes down to the workload. You got certain clouds that are better, you have Microsoft if you want collaboration, you have Amazon if you want infrastructure for devs, on-prem if you want, you know, family jewels. So I got a question for you. So if you look at, you know, it's early 2020, entering a new decade, if you look at the last decade, some of the big themes. You had the consumerization of IT, you had, you know, Web 2.0, you obviously had the big data meme, which came and went and now it's got an AI. And of course you had cloud. So those are the things that brought us here over the last 10 years of innovation. How do you see the next 10 years? What are going to be those innovation drivers? >> Well I think one of the big innovations from a cloud perspective is like, truly deploying cloud. Not playing with the cloud, but really deploying the cloud. Obviously when I say cloud, I would include private cloud utilization. Basically, when you think on-prem in my world, on-prem is really a private cloud talking to a public cloud. That's how you get a multicloud, or, if you will, a hybrid cloud. Some people still think when you talk hybrid, like literally, bare metal servers talking to the cloud, and that just isn't true, because when you look at certainly the global 2500, I can't think any of them what isn't essentially running a private cloud inside their own walls, and then, whether they're going out or not, most do, but the few that don't, they mimic a public cloud inside because of the value they see in moving workloads around, easy deployment, and scale up and scale down, whether that be storage or servers or whatever the infrastructure is, let alone the app. So I think what you're going to see now is a recognization that it's not just private cloud, it's not just public cloud, things are going to go back and forth, and basically, it's going to be a true hybrid cloud world, and I also think with the cloud maturity, this idea of a multicloud, 'cause some people think multicloud is basically private cloud talking to public cloud, and I see multicloud as not just that, but literally, I'm a big company, I'm going to use eight or nine cloud providers to keep everybody honest, or, as you just said, Dave, and put it out, certain clouds are better for certain workloads, so just as certain storage or certain servers are better when it's on-prem, that doesn't surprise us, certain cloud vendors specialize in the apps. >> Right, so Eric, we know IBM and Cisco have had a very successful partnership with the VersaStack. If you talk about in your data center, in IBM Storage, Cisco networking in servers. When I hear both IBM and Cisco talking about the message for hybrid and multicloud, they talk the software solutions you have, the management in various pieces and integration that Cisco's doing. Help me understand where VersaStack fits into that broader message that you were just talking about. >> So we have VersaStack solutions built around primarily our FlashSystems which use our Spectrum Virtualize software. Spectrum Virtualize not only supports IBM arrays, but over 500 other arrays that are not ours. But we also have a version of Spectrum Virtualize that will work with AWS and IBM Cloud and sits in a virtual machine at the cloud providers. So whether it be test and dev, whether it be migration, whether it business continuity and disaster recovery, or whether it be what I'll call logical cloud error gapping. We can do that for ourselves, when it's not a VersaStack, out to the cloud and back. And then we also have solutions in the VersaStack world that are built around our Spectrum Scale product for big data and AI. So Spectrum Scale goes out and back to the cloud, Spectrum Virtualize, and those are embedded on the arrays that come in a VersaStack solution. >> I want to bring it back to cloud a little bit. We were talking about workloads and sort of what Furrier calls horses for courses. IBM has a public cloud, and I would put forth that your wheelhouse, IBM's wheelhouse for cloud workload is the hybrid mission-critical work that's being done on-prem today in the large IBM customer base, and to the extent that some of that work's going to move into the cloud. The logical place to put that is the IBM Cloud. Here's why. You could argue speeds and feeds and features and function all day long. The migration cost of moving data and workloads from wherever, on-prem into a cloud or from on-prem into another platform are onerous. Any CIO will tell you that. So to the extent that you can minimize those migration costs, the business case for, in IBM's case, for staying within that blue blanket, is going to be overwhelmingly positive relative to having to migrate. That's my premise. So I wonder if you could comment on that, and talk about, you know, what's happening in that hybrid world specifically with your cloud? >> Well, yeah, the key thing from our perspective is we are basically running block data or file data, and we just see ourselves sitting in IBM Cloud. So when you've got a FlashSystem product or you've got our Elastic Storage System 3000, when you're talking to the IBM Cloud, you think you're talking to another one of our boxes sitting on-prem. So what we do is make that transition completely seamless, and moving data back and forth is seamless, and that's because we take a version of our software and stick in a virtual machine running at the cloud provider, in this case IBM Cloud. So the movement of data back and forth, whether it be our FlashSystem product, even we have our DS8000 can do the same thing, is very easy for an IBM customer to move to an IBM Cloud. That said, just to make sure that we're covering, and in the year of multicloud, remember the IBM Cloud division just released the Multicloud Manager, you know, second half of last year, recognizing that while they want people to focus on the IBM Cloud, they're being realistic that they're going to have multiple cloud vendors. So we've followed that mantra too, and made sure that we've followed what they're doing. As they were going to multicloud, we made sure we were supporting other clouds besides them. But from IBM to IBM Cloud it's easy to do, it's easy to traverse, and basically, our software sits on the other side, and it basically is as if we're talking to an array on prem but we're really not, we're out in the cloud. We make it seamless. >> So testing my premise, I mean again, my argument is that the complexity of that migration is going to determine in part what cloud you should go to. If it's a simple migration, and it's better, and the customer decides okay it's better off on AWS, you as a storage supplier don't care. >> That is true. >> It's agnostic to you. IBM, as a supplier of multicloud management doesn't care. I'm sure you'd rather have it run on the IBM Cloud, but if the customer says, "No, we're going to run it "over here on Azure", you say, "Great. "We're going to help you manage that experience across clouds". >> Absolutely. So, as an IBM shareholder, we wanted to go to IBM Cloud. As a realist, with what CIOs say, which is I'm probably going to use multiple clouds, we want to make sure whatever cloud they pick, hopefully IBM first, but they're going to have a secondary cloud, we want to make sure we capture that footprint regardless, and that's what we've done. As I've said for years and years, a partial PO is better than no PO. So if they use our storage and go to a competitor of IBM Cloud, while I don't like that as a shareholder, it's still good for IBM, 'cause we're still getting money from the storage division, even though we're not working with IBM Cloud. So we make it as flexible as possible for the customer, The Multicloud Manager is about customer choice, which is leading with IBM Cloud, but if they want to use a, and again, I think it's a realization at IBM Corporate that no one's going to use just one cloud provider, and so we want to make sure we empower that. Leading with IBM Cloud first, always leading with IBM Cloud first, but we want to get all of their business, and that means, other areas, for example, the Red Hat team. Red Hat works with every cloud, right? And they don't really necessarily lead with IBM Cloud, but they work with IBM Cloud all right, but guess what, IBM gets the revenue no matter what. So I don't see it's like the old traditional component guy with an OEM deal, but it kind of sort of is. 'Cause we can make money no matter what, and that's good for the IBM Corporation, but we do always lead with IBM Cloud first but we work with everybody. >> Right, so Eric, we'd agree with your point that data is not just going to live one place. One area that there's huge opportunity that I'd love to get your comment here on is edge. So we talked about, you know, the data center, we talked about public cloud. Cisco's talking a lot about their edge strategy, and one of our questions is how will they enable their partners and help grow that ecosystem? So love to hear your thoughts on edge, and any synergies between what Cisco's doing and IBM in that standpoint. >> So the thing from an edge perspective for us, is built around our new Elastic Storage System 3000, which we announced in Q4. And while it's ideal for the typical big data and AI workloads, runs Spectrum Scale, we have many a customers with Scale that are exabytes in production, so we can go big, but we also go small. It's a compact 2U all-flash array, up to 400 terabytes, that can easily be deployed at a remote location, an oil well, right, or I should say, a platform, oil platform, could be deployed obviously if you think about what's going on in the building space or I should say the skyscraper space, they're all computerized now. So you'd have that as an edge processing box, whether that be for the heating systems, the security systems, we can do that at the edge, but because of Spectrum Scale you could also send it back to whatever their core is, whether that be their core data center or whether they're working with a cloud provider. So for us, the ideal solution for us, is built around the Elastic Storage System 3000. Self-contained, two rack U, all-flash, but with Spectrum Scale on it, versus what we normally sell with our all-flash arrays, which tends to be our Spectrum Virtualize for block. This is file-based, can do the analytics at the edge, and then move the data to whatever target they want. So the source would be the ESS 3000 at the edge box, doing processing at the edge, such as an oil platform or in, I don't know what really you call it, but, you know, the guys that own all the buildings, right, who have all this stuff computerized. So that's at the edge, and then wherever their core data center is, or their cloud partner they can go that way. So it's an ideal solution because you can go back and forth to the cloud or back to their core data center, but do it with a super-compact, very high performance analytics engine that can sit at the edge. >> You know, I want to talk a little bit about business. I remember seven years ago, we covered, theCUBE, the z13 announcement, and I was talking to a practitioner at a very large bank, and I said, "You going to buy this thing?", this is the z13, you know, a couple of generations ago. He says, "Yeah, absolutely, I'll buy it sight unseen". I said, "Really, sight unseen?" He goes, "Yeah, no question. "By going to the upgrade, I'm able to drive "more transactions through my system "in a certain amount of time. "That's dropping revenue right to my bottom line. "It's a no-brainer for me." So fast forward to the z15 announcement in September in my breaking analysis, I said, "Look, IBM's going to have a great Q4 in systems", and the thing you did in storage is you synchronized, I don't know if it was by design or what, you synchronized the DS8000, new 8000 announcement with the z15, and I predicted at the time you're going to see an uptick in both the systems business, which we saw, huge, 63%, and the storage business grew I think three points as well. So I wonder if you can talk about that. Was that again by design, was it a little bit of luck involved, and you know, give us an update. >> So that was by design. When the z14 came out, which is right when I first come over from EMC, one of the things I said to my guys is, "Let's see, we have "the number one storage platform on the mainframe "in revenue, according to the analysts that check revenue. "When they launch a box, why are we not launching with them?" So for example, we were in that original press release on the z14, and then they ran a series of roadshows all over the world, probably 60. I said, "Well don't you guys do the roadshows?", and my team said, "No, we didn't do that on z12 and 13". I said, "Well were are now, because we're the number one "mainframe storage company". Why would we not go out there, get 20 minutes to speak, the bulk of it would be on the Zs. So A, we did that of course with this launch, but we also made sure that on day one launch, we were part of the launch and truly integrated. Why IBM hadn't been doing for a while is kind of beyond me, especially with our market position. So it helped us with a great quarter, helped us in the field, now by the way, we did talk about other areas that grew publicly, so there were other areas, particularly all-flash. Now we do have an all-flash 8900 of course, and the high-end tape grew as well, but our overall all-flash, both at the high end, mid range and entry, all grew. So all-flash for us was a home run. Yeah, I would argue that, you know, on the Z side, it was grand slam home run, but it was a home run even for the entry flash, which did very, very well as well. So, you know, we're hitting the right wheelhouse on flash, we led with the DS8900 attached to the Z, but some of that also pulls through, you get the magic fairy dust stuff, well they have an all-flash array on the Z, 'cause last time we didn't have an all, we had all-flash or hybrids, before that was hybrid and hard drive. This time we just said, "Forget that hybrid stuff. "We're going all-flash." So this helps, if you will, the magic fairy dust across the entire portfolio, because of our power with the mainframe, and you know, even in fact the quarter before, our entry products, we announced six nines of availability on an array that could be as low cost as $US16,000 for RAID 5 all-flash array, and most guys don't offer six nines of availability at the system level, let alone we have 100% availability guaranteed. We do charge extra for that, but most people won't even offer that on entry product, we do. So that's helped overall, and then the Z was a great launch for us. >> Now you guys, you obviously can't give guidance, you have to be very careful about that, but I, as I say, predicted in September that you'd have a good quarter in systems and storage both. I'm on the record now I'm going to say that you're going to continue to see growth, particularly in the storage side, I would say systems as well. So I would look for that. The other thing I want to point out is, you guys, you sell a lot of storage, you sell a lot of storage that sometimes the analysts don't track. When you sell into cloud, for example, IBM Storage Cloud, I don't think you get credit for that, or maybe the services, the global services division. So there's a big chunk of revenue that you don't get credited for, that I just want to highlight. Is that accurate? >> Yeah, so think about it, IBM is a very diverse company, all kinds of acquisitions, tons of different divisions, which we document publicly, and, you know, we do it differently than if it was Zoggan Store. So if I were Zoggan Store, a standalone storage company, I'd get all credit for supporting services, there's all kinds of things I'd get credit for, but because of IBM's history of how the company grew and how company acquired, stuff that is storage that Ed Walsh, or GM, does own, it's somewhat dispersed, and so we don't always get credit on it publicly, but the number we do in storage is substantially larger than what we report, 'cause all we really report is our storage systems business. Even our storage software, which one of the analysts that does numbers has us as the number two storage software company, when we do our public stuff, we don't take credit for that. Now, luckily that analyst publishes a report on the numbers side, and we are shown to be the number two storage software company in the world, but when we do our financial reporting, that, because just the history of IBM, is spread out over other parts of the company, even though our guys do the work on the sales side, the marketing side, the development side, all under Ed Walsh, but you know, part of that's just the history of the company, and all the acquisitions over years and years, remember it's a 100-year-old company. So, you know, just we don't always get all the credit, but we do own it internally, and our teams take and manage most of what is storage in the minds of storage analysts like you guys, you know what storage is, most of that is us. >> I wanted to point that out because a lot of times, practitioners will look at the data, and they'll say, oh wow, the sales person of the competitor will come in and say, "Look at this, we're number one!" But you really got to dig in, ask the questions, and obviously make the decisions for yourself. Eric, great to see you. We're going to see you later on this week as well we're going to dig into cyber. Thanks so much for coming back. >> Great, well thank you, you guys do a great job and theCUBE is literally the best at getting IT information out, particularly all the shows you do all over the world, you guys are top notch. >> Thank you. All right, and thank you for watching everybody, we'll be back with our next guest right after this break. We're here at Cisco Live in Barcelona, Dave Vellante, Stu Miniman, John Furrier. We'll be right back.