>> From around the globe, it's The Cube, presenting Cube on Cloud, brought to you by SiliconANGLE. >> Welcome back to Cube on Cloud. I'm Paul Gillin, enterprise editor of SiliconANGLE. As we look ahead at what is in store for the cloud this year, one of the intriguing possibilities that has emerged is the rise of vertical clouds. IBM has been a leader in this area with its launch in late '19 of the IBM Financial Services cloud. That's a services-ready public cloud with exceptional security, as well as a policy framework for certifying compliance and services from the IBM subsidiary, Promontory. Now, with the IBM Financial Services cloud, that has been a major focus of our next guest, Hillery Hunter. She is the Vice President and CTO of IBM Cloud, an IBM Fellow, and a veteran of, I believe, three previous appearances on The Cube. Am I right, Hillery? >> Yep, sounds about right. Great to be back here today. >> Thanks for joining us. So let's start with getting an update on the IBM Financial Services cloud. What progress have you made in signing up customers and your ecosystem of partners? >> Yeah, we've made really significant progress advancing the IBM Cloud for Financial Services since we last talked, and we're really at that place of establishing a trusted platform for the industry. Just in some specifics, in addition to Bank of America which we had talked about as our U.S. anchor partner for the program, we've announced several global banks that are partnering with us for the global expansion of the program, including BNP party bar, which is one of Europe's largest banks. More than 70 ASVs are signed up with us now as part of the program and adopting IBM Cloud for Financial Services. This level of ecosystem is exciting because it means that banks will have the opportunity to transform what they're doing, but do so in a way which is driven by security and compliance so that they can be confident in those deployments on IBM Cloud for Financial Services. We also released the IBM Cloud policy framework for Financial Services. This is both the security and compliance posture of the environment, as well as guidance on controls, reference architectures, automation to help people onboard. And so both ISVs and banks now are able to onboard to this environment, and offer their wares and deploy their workloads. So it's a really exciting state for us on the program, and we're really in a place where there'll be an ongoing cadence of additional releases and announcements of additional partnerships and clients. So it's an exciting time in the program. >> One of the distinctive features, I think, of this launch is that you're working actively with your customers. They're working with you on building policy frameworks, as well as, I imagine, the features that you're offering on the cloud. How do you orchestrate all of these different customers and get them involved in, actually, co-development. >> Yeah, the ecosystem conversation and the partnership conversation are two of the fundamental aspects of the program. Like you said, this isn't just us sitting off in a bubble and inventing the future. We're working internally with partners within IBM, like IBM Promontory, which is a consultancy that has deep, deep regulatory expertise in jurisdictions globally, with IBM Security Services, and then with these individual partners and banks and clients. One of the ways that we bring everything together is through our council. So our council, our Cloud Council for Financial Services, is where we have global, systemically important financial institutions partnered with us and working together with one another, and that covers CIOs, it covers chief security officers, risk officers, et cetera. So we have some formality around how we work with all of these partners, really, as a body and as a group. >> And what have you learned from this experience? If you were to go into other vertical clouds, what have been the lessons? >> Ecosystem is so important. As I look at this space, I see that everyone has an existing business. They have a platform they're running, they have clients they're trying to service, but the software providers into this space are looking, themselves, to transform. They're looking to transform from being software vendors to being SaaS providers. The banks and financial institutions themselves are looking to transform from working on their own premises to benefit from the elasticity and the scale and the optionality that being in public cloud provides. So there's a lot of parties themselves that are trying to transform, and a lot of vendors into the financial space that are looking to transform. And in that time of a lot of change, ecosystem is absolutely key. And so the ISE and SaaS providers providing their wares on the cloud for financial services is really just as important as those financial services institutions, so that everyone can make that transition together, and so that banks that are looking to digitally transform can leverage partners that are really at the forefront of that change and that innovation in platforms for the industry. >> Would you say that there are- Is this the first of many? Are there going to be other vertical IBM clouds, or is the range of industries that really need that kind of specificity, limited? I think it's actually not limited, though I will say that within the space of industries that are heavily regulated, there's obviously a deeper need for specific cloud embodiments and cloud implementation, so regulated industries like insurance, like telco, health care, et cetera, these are the ones, I think, where there's the greatest opportunity to do verticals that are specific to industry. But as we look at this, this is absolutely part of an IBM Cloud strategy to deliver industry-specific clouds. And this comes from our decades of expertise. Even in financial services, being able to leverage those other entities within IBM that I mentioned, our regulatory background with companies, having helped them address regulatory needs for specific industries, and then translating that into cloud and cloud technologies. And then coming up from the other side, in terms of the technologies themselves, we've partnered with key industries to deliver security, and data protection, and cryptography technologies, and such, on premises, and we're contextualizing that now for cloud and public cloud deployments. And so it brings together the pieces of decades of expertise in platforms, and technology, and regulations, and contextualizes it into cloud, and I absolutely think that's an opportunity for other industries as well. >> Can you give us a bit of a preview? Do you have specific industries in mind? Is there a timeframe? >> Yeah, so late last year we did announce a second industry-specific cloud initiative, and that was IBM Cloud for Telco. So we have in that ecosystem, now, over 40 partners that are now, that are working with IBM and with Red Hat, especially with clients and partners that are looking to help with that transition into 5G and increasing use of IOT. 5G is really this disruptive opportunity for that industry, and also just for many other different types of companies and institutions that are looking to deploy with more efficiency, better operational efficiency, deploy with AI capabilities, really being able to do things at cellular network EDGE, and the places that they're doing business using IOT devices, and 5G will enable much of that to really transform and flourish. So a couple of the partners, initially, in addition to that ecosystem that I mentioned in Cloud for Telco, we've got Samsung working with us, Nokia, AT&T, et cetera, and so these partnerships and capabilities around network EDGE and specific capabilities in Cloud for Telco are that second public announcement that we've made around industry-specific cloud. >> And as far as your competitive position is concerned, are you taking away business from your competitors when you partner with these telcos and these banks, or is this an entirely new line of business that was not previously in the cloud? >> Yeah, these are really, I think, in, by and large, new opportunities. As we look at, for example, how we, as customers, expect to engage with our bank, we are looking to increasingly engage with a bank in a digital way, use our applications, use mobile devices. We're looking for individual bank outlets, branch outlets of a banking institution, to be increasingly smart, to service our needs more quickly, et cetera. And so as we look at 5G and telco EDGE, it's about delivery of smarter capabilities and such. I think much of it really is about, in this digital transformation space, about creating new capabilities, creating new experiences, creating new ways of engagement, and engagement and opportunity to customize and personalize, I think most of those are new experiences and new capabilities for most companies. >> So speak about IBM's positioning right now. You're not one of the big three cloud providers, unlikely to become one, but you do have a big cloud business, and you've got the verticals, you've got the multicloud. I know IBM has been a big champion of multicloud. How is IBM distinctively positioned in the cloud market right now? >> Yeah, we are all-in on hybrid cloud and AI, and if you listen to our CEO and chairman, you'll hear that. It is a really consistent message since he came into his role as as our CEO. So being all-in on hybrid cloud and AI, we really are looking to help our clients transform into holistic cloud architecture. So when I say all-in on hybrid cloud, I mean that there's been a lot of, I jokingly say, random acts of cloud usage. People have ended up using cloud because there's some SaaS function that they want, or some particular line of business has been highly motivated to pursue some service on a particular cloud. And hybrid cloud is really about taking a step back, having a holistic architecture for cloud consumption. And in that sense, clouds are IBM's partners. And we're really looking to enable our clients to have consistency in their deployments, to consolidate across their IT estate and across their cloud deployments so that they can have a common platform, so they can have efficiency in how their developers deploy capabilities, so they can deploy more quickly with security and compliance patterns, and have oversight over everything that's going on in a consistent way that really enables them to have that velocity in their business. And so when we then position things like industry cloud, we're leveraging IBM-specific technologies to deliver differentiated capabilities in data privacy, data protection, security and compliance, for these industries, in public cloud, yes, but it's in the context of helping our clients overall across all the different things, some of which may not need all of that data privacy or be leveraging particular SaaS content. We're looking to help them really have cloud architecture, have a holistic conversation across hybrid cloud, and yet to still be able to choose particular cloud deployments on our cloud for industries that enables data protection and policy for the most sensitive and enterprise grade things that they're looking to do at the core of their business. >> So speaking of hybrid hybrid cloud, the major cloud providers, Amazon, Microsoft, Google, Oracle's another one, all have on-premises offerings right now. Several of them are working with telcos to expand their reach out into co-location and into telecom data centers, all of this being to enable this distributed cloud fabric, a hybrid cloud fabric. What's IBM's play in this area? Do you have a similar strategy or is it different? >> Yeah, I really think, and I think you maybe wanted to get a little bit into trends and predictions here in this conversation, and we absolutely see that need for distributed cloud, for cloud to really be alive in all the places where it needs to be, in all the places that someone is doing business, and in a consistent way across cloud environments, to be one of those major trends that's emerging as a really hot conversation. We have introduced IBM Cloud Satellite, that is IBM's hybrid cloud, as a service platform. It enables our clients to leverage OpenShift and Kubernetes environments, developer tooling, consistency in a cloud catalog, visibility and control over all their resources across different environments, and to be able to run end-to-end with consistency from on-premises, to EDGE, to different public cloud providers, and this is absolutely something that, across industries but within, also, those industries, that we're focused on in particular, that we're seeing a lot of interesting conversations emerge, because if cloud is everywhere, if cloud is distributed and can be on premises and in public cloud, it enables this consistency and this parity, really that brings together that seamlessness, not just the random acts of cloud usage. It means that using cloud can be something that drives speed of release of new product. It means that you can deliver more capability and functionality into a retail outlet where you're doing business, or a banking brick-and-mortar location. You can have AI for IT ops and understand what's going on across those different environments, and ensure things are kept secure, and patched, and updated, and you're responding to incidents in efficient ways. And so, really, having a consistent cloud environment and a distributed cloud environment across different locations, it's really key to leveraging the promises of what everyone had originally hoped to get out of cloud computing. >> And of course, one of IBM's distinctive advantages in this area is, you've got a huge hardware install base out there. How do all those 360 mainframes figure into this? >> Yeah, with the OpenShift capabilities and our (audio skips) relations with Red Hat in this area, we are able to actually help our clients leverage Kubernetes, and Linux, and all those things, even on the mainframe. So across the mainframe family, the IBM power family, where folks may also have AIX or IBM i deployments, people can now do Linux, they can do OpenShift, they can do Kubernetes, and we have core technologies that enable that really to be stitched together, and I think that's one of the unique perspectives that IBM has in this whole conversation about hybrid cloud. There are many different definitions of hybrid cloud, but we really view it as stretching from the traditional enterprise IT, like you said, there's a lot of IT out there, and being able to also incorporate OpenShift and Kubernetes in a common cloud platform, on traditional enterprise IT, on private cloud, on fresh deployments, on private cloud, Amazon public cloud, that really is the whole IT estate. So when we talk about hybrid cloud, when we talk about distributed cloud, we're really talking about the entirety of the IT state, not just new deployments of SaaS, or something like that. >> So as someone who's on the front lines of what customers are asking about cloud, do you see customer, the questions that they're asking, changing? Are their decision criteria changing for how they choose a cloud provider? >> Yeah, I think that there's definitely a lot more conversation, and especially in this current era where there's an accelerated rate of cloud adoption, there's a lot more conversation around things like security, data protection, data privacy, being able to run in an environment that you trust not just, is it a cloud and what does it do, but can I trust it? Do I understand how my data is protected, how my workloads are secured? That's really why we started Cloud for Financial Services, because that industry shepherds such vital data, so the reason that they are highly regulated is because of the importance of what they are stewarding, very important data and financial information. So we began there with the Cloud for Regulated Industries, there with with Financial Services, but I see that across all industries. I was participating on a panel with a bunch of CIOs, and I was there interviewing some CIOs who were from a much more consumer-facing, and also from from foods industry, et cetera, and their conversation was exactly the same as I have with many other clients, which is that their cloud choices, their efficiency in cloud deployment, now are largely driven by the ability to get to a secure posture and the ability to demonstrate to their internal security and risk teams that they understand their data protection and data privacy posture. So we are seeing lots of pickup and conversation opportunity around confidential computing, specifically, and that's really about enabling our clients to have full authority and privacy in their computing, in their code, in their data, even when running in a cloud environment. And so I do see a shift. Everyone's more concerned about security, and I think we have great technologies, and we've been working with core partners to establish, and harden, and create generations of technology that can really answer those questions. >> I have to ask you about that term, confidential computing. I haven't heard that before. What does that involve? >> Yeah, it is a buzzword to watch out here for in 2021. So confidential computing means being able to run in an environment where there are others, in a cloud computing environment, for example, but still have full privacy and authority over what you're doing. So you are effectively in an enclave. Imagine yourself protected and secured. And so our confidential computing technology is, we're actually on, basically, our fourth generation of the hardware and software technologies to create that strong degree of isolation. This enables us to deliver a really rich portfolio, frankly, the richest portfolio in the industry, of actual services delivered using confidential computing and secure enclaves. And so we can enable our customers to solution things in a way, for example, where their data can not even be visible to our cloud operators, or where they retain full control over a database, and have full privacy as they're running in that environment. These are really great considerations, but they impact everything from health care, financial services. We have other partners and clients who are working to protect consumer data through these means, et cetera. And so across different industries, everyone's really looking at this topic of data privacy and data protection. And so we have a whole suite and a whole family of confidential computing-based services that we're able to offer, to offer those assurances and that privacy to them in their cloud computing. >> I do have to ask you about the multicloud, because this is a topic of constant debate in the industry of whether customers want to shift workloads across multiple clouds to protect themselves from lock-in. Is that a fantasy? Is that too restrictive? This has been a key part of IBM strategy is enabling the multicloud. How do you see customer attitudes developing right now? How do they want to use multiple clouds, or, in fact, do they? Are they concentrating perhaps more of their workloads in one or two? >> Yeah, we believe vendor lock-in goes against the true spirit of hybrid cloud, that desire to have consistency across environments, that desire to- and the business need to have continuity and resiliency and operations, et cetera, and so I do see this as a really important topic. From the perspective of managing environments, I think in multicloud, I think folks are starting to realize that multicloud isn't necessarily a strategy, it's a reality. People have deployments in lots of different cloud environments that happen somewhat organically, in many cases, and so the key question is how to then get to visibility and control over those resources. I think two of the core topics in that are multicloud management, being able to understand clusters, and virtual machines, and other things that are deployed across different environments, and manage them with a common set of policies, for example. And then, in addition to multicloud management, AI for IT operations is another really important topic in multicloud, being able to respond to incidents, understand and analyze and leverage AI for understanding what's going on across those environments is another really core topic. And then as you said, distributed cloud is a means of getting that consistency. Having a common control and deployment plane across those different environments can help it not just be accidental usage of multiple cloud environments, but very intentional deployment, based on the needs of particular workloads to the environment that they're best suited to. And that's really what you want to aim for. Not that multicloud is necessarily, I guess I would say, is a- It is a complexity that is manageable through these new types of technologies and multicloud management, and such like that, and distributed cloud. >> Well, Hillery 'tis the season for predictions, it's January. Everyone's prognosticating about what the future will look like. What do you think are going to be the main trend lines in cloud this year? >> Yeah, I sprinkled a few in there as we were talking, but I really do think that the conversation around hybrid cloud, number one, how to have an open innovation ecosystem for cloud, where you have consistency across environments, not just random acts of cloud usage, but intentional and holistic architecture. I really see that as the transition, as the second wave of of cloud adoption. And then, secondly, is we were talking earlier about security. Everyone is wondering about data policy, data privacy. We've always taken a strong stance that our client's data is their data. We are not going to be using their data to further develop our AI services on our cloud, or something. We have deployed technologies in confidential computing that enable them to keep full control over their keys so that even our cloud operators don't have access to data, computing in secure enclaves where they have a strong degree of isolation and full privacy and authority over their workload. I really think these two topics, open and secure hybrid computing and with consistency across environments, with distributed cloud technology, and secondly, security. I think these are really important topics for 2021. And they may seem a little bit obvious, but I think it's important as people look at this to look for technologies that are multiple generations into this journey, partner with folks who are committed very clearly to an open ecosystem and open source innovation on the one hand, and secondly, when we talk about security and data protection, you want to know that that provider is several generations into that journey so you really know that that technology has been vetted out, is at production scale, and has a stable basis. And so I think this is the year when folks are transitioning from cloud adoption to consistency in cloud, and security and privacy in cloud. >> A final question, and it has nothing to do with cloud. You're an IBM Fellow, and I see that term turn up occasionally with other other people I've spoken to from IBM. What is an IBM Fellow, how do you become one, and what privileges and responsibilities does it entail? >> Yeah, it's an exciting opportunity to be an IBM Fellow. There's about a hundred active IBM Fellows right now, so there aren't too many of us, but there is a small community of us. IBM Fellow is IBM's highest technical designation within our technical population, so I do have a role within our cloud business, but as one of our technical leaders, get to interact with the other Fellows, work on strategy for IBM in technology overall as a company, and I also get to be a trusted advisor to many of our clients, and so I get to work with CTOs and CIOs and VP of Application Development profiles, and VP of IT, and things like that, in our different clients, and really help them wrestle through those struggles of future IT transformation. And so part of what I enjoy most about the role, and the Fellow role, is being able to be that trusted advisor to many of our clients. There's been so much change in this last year for everyone, and being able to also help our technical population through that, in various means, and then help our clients through all of that change, and really being able to take and grasp onto the opportunities that this last year has had in the way that we work has changed, and the way that companies are looking to deliver capabilities has changed. So that's, for me, the exciting part of the role. >> Well, you're one in a hundred, then, and you do a great job of articulating the IBM strategy, and also the cloud landscape. Hillery Hunter, VP and CTO, excuse me, CTO of IBM Cloud, thank you so much for joining us today on Cube on Cloud. >> Thanks so much for having me. It was a pleasure. >> I'm Paul Gillin, stick with us. (upbeat music)

>>From around the globe. It's the cube presenting cube on cloud brought to you by Silicon angle. >>Welcome back to coupon cloud I'm Paul Gillan enterprise editor of Silicon angle. You know, as we look ahead at what is in store for the cloud this year, one of the intriguing possibilities that has emerged is the rise of vertical clouds. IBM has been a leader in this area with its launch in late 19 of the IBM financial services cloud. That's a services ready public cloud with exceptional security, as well as Polly, a policy framework for certifying compliance and services from the IBM subsidiary. Promintory now with the IBM financial services cloud, uh, that has been a major focus of our next guest, Hillary Hunter. She is the vice president and CTO of IBM cloud and IBM fellow and a veteran of, I believe, three previous appearances on the cube. Am I right Hillary? >>Yep. Sounds about right. Great to be back here today. >>Thanks for joining us. So let's start with getting an update on the IBM financial services cloud. What progress have you made in signing up customers and your ecosystem of partners? >>Yeah, you know, we've made really significant progress, uh, progress in advancing the IBM cloud for financial services since we last talked, you know, and, and we're really at that place of establishing a trusted platform for the industry, just in, you know, some specifics in addition to bank of America, which we had talked about as our us anchor partner for the program. Um, we've announced several global banks, um, that are partnering with us for the global expansion of the program, including BNP party, you know, which is one of Europe's largest banks. Um, more than 70 ASVs are signed up with us now as part of the program and adopting IBM cloud for financial services, this level of sort of ecosystem is, is exciting because it means that, you know, banks will have the opportunity to, to transform what they're doing, but do so in a way, which is driven by security and compliance, um, so that they can be confident in those deployments on IBM cloud for financial services. >>We also released the IBM cloud policy framework for financial services. This is both the sort of security and compliance posture of the environment, as well as, you know, guidance on controls, reference architectures automation to help people on board. And so both ISBNs and banks now are able to, um, onboard to this environment and offer their wares and deploy their workloads. So it's a really exciting state for us on the program. And we're really in a place where there'll be, you know, an ongoing cadence of, you know, additional releases and announcements of additional partnerships and clients. So it's an exciting time in the program. >>Uh, one of the distinctive features I think of this, uh, of this launch is that you're working actively with your customers. They're working with you on building policy frameworks, as well as I imagined the features that you're offering on the cloud. How do you orchestrate all of these different customers and get them involved and actually co-development >>Yeah. You know, it's the ecosystem conversation and the partnership conversation are two of the fundamental aspects of the program. Like you said, this isn't, you know, just us sitting off in a bubble, inventing the future. Um, you know, we're working internally with partners, uh, within IBM like IBM Promintory, um, which is a consultancy that has deep, deep regulatory expertise and in jurisdictions globally with IBM security services. And then with these individual partners and banks and clients, one of the ways that we bring everything together is through our councils. So our council, our cloud council for financial services, um, it's where we have global systemically important financial institutions partnered with us and, and working together with one another. And, and that covers, you know, CIO is it covers chief security officers, risk officers, et cetera. Um, so we have some formality around how we work with, um, all of these partners, uh, really as a body and as a group. >>And what have you learned from this experience? I mean, if you were to go into the, uh, into other vertical clouds, what have been the lessons >>Ecosystem is so important, right? It's as I look at this space, I see that, you know, everyone has an existing business, they have a platform they're running, they have clients they're trying to service. Um, but those, the software providers into this space are looking themselves to transform their they're looking to transform from being a software vendors, to being SAS providers, the banks and financial institutions themselves are looking to transform from working on their own premises to benefit from the Alaska city and the scale and the optionality of, you know, that being in public cloud provides. So there's a lot of, um, parties themselves that are trying to transform and a lot of vendors into the financial space that are looking to transform. And in that time of a lot of change ecosystem is, is absolutely key. And so, um, the ISE and SAS providers, you know, providing their wares on the cloud for financial services is, is really just as important as those financial services institutions so that everyone can make that transition together. Um, and so that banks that are looking to digitally transform can, can leverage partners that are really at the forefront of that change in that innovation and in platforms for the industry. >>Would you say that there are, is this the first of many, I mean, are there going to be other vertical financial or other vertical IBM clouds or is the range of industries that really need that kind of specificity limited? >>I think it's, it's actually not limited, you know, though, I will say that within the space of industries that are heavily regulated, there's obviously a deeper need for sort of specific cloud embodiments and cloud implementation. So regulated industries like insurance, like telco healthcare, et cetera. Um, these are the ones I think, where there's the greatest opportunity to do verticals that are specific to industry. Um, but you know, as we look at this, this is absolutely part of an IBM cloud strategy to deliver industry specific clouds. And, and, and this comes from our decades of expertise, right? Even in financial services, being able to leverage, you know, those other entities within IBM that I mentioned, right. You know, our, our regulatory, um, background with companies, you know, having helped them address regulatory needs for specific industries, and then translating that into cloud and cloud technologies. Right. And, and then coming up from the other side, you know, in terms of the technologies themselves, we've partnered with key industries, um, to deliver security and data protection and cryptography technologies and such on premises. And we're contextualizing that now for cloud and public cloud deployments. And so it kind of brings together the pieces of decades of expertise and platforms and technology and regulations and contextualizes it into cloud. And I absolutely think that's, you know, an opportunity for, for other industries as well. >>Can you give us a bit of a preview? I mean, do you have specific industries in mind? Is there a time? >>Yeah, so, so, uh, late last year we did announce a second industry specific cloud initiative and that was IBM cloud for telco. So we have in that ecosystem now over 40 partners that are announced, that are working with IBM and with red hat, especially with, um, clients and partners that are looking to help with that transition into 5g and increasing use of IOT. 5g is really this disruptive opportunity for that industry. And, and also just for many other different types of companies and institutions that are looking to deploy with more efficiency, better operational efficiency, deploy with AI capabilities, really being able to do things that like cellular network edge, um, and the places that they're doing business using IOT devices and 5g will enable much of that to really transform and flourish. So a couple of the partners, initially, in addition to that ecosystem that I mentioned in cloud for telco, um, you know, we've got Samsung working with us, Nokia ATNT, et cetera. Um, and so, you know, these, these partnerships and, and capabilities around network edge, um, and specific capabilities in cloud for telco, um, are sort of that second, you know, public announcement that we've made around industry specific cloud, >>As far as your competitive position is concerned. I mean, are, are you taking away business from your competitors when you partner with these, these telcos and these banks, or is this an entirely new line of business that was not previously in the cloud? >>Yeah. You know, these are really, I think in, by and large new opportunities as we look at, you know, for example, how we as customers expect to engage with, um, you know, our bank, right. You know, we are looking to increasingly engage with a bank in a digital way, use our applications, use mobile devices. We're looking for, you know, individual bank outlets, uh, branch outlets of, of a banking institution to be increasingly smart, to service our needs, you know, more quickly, et cetera. Um, and so as we look at, you know, 5g and telco edge, it's about delivery of sort of smarter capabilities and such. I think much of it really is about in this digital transformation space about, you know, creating new capabilities, creating new experiences, creating new ways of engagement, um, and engagement and an opportunity to customize and personalize. Um, I think most of those are sort of new experiences and new capabilities for most companies. >>So speak about IBM's positioning right now. I mean, you're not one of the big three cloud providers to, to become one. Uh, but you do have as a big cloud business and, uh, you've, you've got the verticals, you've got the multi-cloud, uh, I know IBM is big, has been a big champion of multi-cloud. I mean, how is IBM distinctively positioned in the cloud market right now? >>Yeah. You know, we are all in, on hybrid cloud and AI. And if you listened to our CEO and chairman, you'll hear that it is a really consistent message. And he, since he came into his role as, as our CEO, um, so being all in, on hybrid cloud and AI, you know, we really are looking to help our clients transform into holistic cloud architecture. Right? So, so when I say all in, on hybrid cloud, I mean that, you know, it's, there's been a lot of sort of, I jokingly say random acts of cloud usage, right? People have ended up using cloud because there's some SAS function that they want, or some particular line of business has been highly motivated to pursue some service on a particular cloud. And hybrid cloud is really about taking a step back, having a holistic architecture for cloud consumption. And in that sense, you know, uh, clouds, uh, are IBM's partners. >>Um, and we're really looking to enable our clients to have consistency in their deployments to consolidate across their it estate and across their cloud deployments so that they can have, um, a common platform, so they can have efficiency in how their developers to like capabilities. So they can deploy more quickly with security and compliance patterns and have oversight over everything that's going on in a consistent way that really enables them to have that velocity in their business. And so when we then, you know, positioned things like industry cloud, we're leveraging IBM specific technologies to deliver differentiated capabilities and data privacy, data protection, security compliance, where these industries in public cloud. Yes. But it's in the context of helping our clients overall across all the different things. Some of which may not need all of that data privacy or, or, or be leveraging particular SAS content we're looking to help them really have cloud architecture have a holistic conversation across hybrid cloud. Um, and yet to still be able to choose particular cloud deployments on our cloud for industries, um, that enables data protection and policy for the most sensitive and, and enterprise grade things that they're looking to do at the core of their business. >>So speaking of hybrid hybrid cloud, I mean the major cloud providers, Amazon, Microsoft, Google, Oracle, and other one all have on premises offerings right now. Uh, several of them are working with telcos to expand their reach out into, uh, into co-location and into telecom, uh, data centers. Uh, all of these things were to enable is this distributed cloud fabric kind of a hybrid cloud fabric what's, IBM's play in this area. Uh, do you have a similar strategy or is it different? >>I really think, and I think you maybe wanted to get a little bit into sort of, you know, trends and predictions here in this conversation and, and, and, you know, we, we absolutely see that need for distributed cloud for cloud to really kind of be alive in all the places where it needs to be in, in all the places that someone is doing business and in a consistent way across cloud environments, um, to be one of those major trends, that's emerging as a really hot conversation. We have introduced IBM cloud satellite, um, that is IBM's hybrid cloud as a service platform, um, and enables our clients to leverage, um, uh, OpenShift and Kubernetes environments, developer tooling, uh, consistency in a cloud catalog, visibility and control over all their resources, um, across different environments. And to be able to run end, to end with consistency from on-premises to edge to different public cloud providers. >>Um, and this is absolutely something that across industries, but, you know, within also those industries that we're focused on in particular, um, that we're seeing a lot of interesting conversations emerge because if cloud is sort of everywhere, if cloud is distributed and can be on premises and in public cloud, it enables this consistency in this parody, um, really that sort of brings together that, that seamlessness, not just the random acts cloud usage, right? I mean, it means that using cloud, um, can be something that, that drives, you know, speed of release of new product. It means that you can deliver more capability and functionality into, you know, a retail outlet where you're doing business or a banking, you know, brick and mortar location. Um, you can have, you know, AI for it ops and understand what's going on across those different environments and ensure things are kept secure and patched and updated, and you're responding to incidents in efficient ways. Um, and so really having a consistent cloud environment and a distributed cloud environment across different locations, um, it's really key to leveraging the promises of what everyone had originally hoped to get out of out of cloud computing. >>Of course, one of IBM's distinctive, uh, advantages of this area is you've got a huge hardware install base out there. I mean, how do all those three 60 mainframes figuring it out, figure into this, >>Um, with the OpenShift capabilities in our Clara operations with red hat in this area, we are able to actually help our clients leverage Kubernetes and Linux and all those things, even on the mainframe. So across the mainframe family, the IBM power family, um, you know, where folks may also have AIX or IBMI deployments, people can now do Lennox, they can do open shifts, they can do Coopernetti's. Um, and we have core technologies that enable that really to be stitched together. And I think that's one of the unique perspectives that IBM has in this whole conversation about hybrid cloud. Um, there are many different definitions of hybrid cloud, but we really view it as stretching from the traditional enterprise. It, like you said, there's a lot of it out there and being able to also incorporate OpenShift and Kubernetes in a common cloud platform, um, on traditional enterprise, it on private cloud, on fresh deployments, on private cloud, Amazon public cloud, that really is the whole it estate. So when we talk about hybrid cloud, when we talk about distributed cloud, really talking about the entirety of VIT state, not just sort of new deployments of, of SAS or something like that. >>So as someone who's on the front lines of, you know, what customers are asking about cloud, do you see customer the questions that they're asking changing? Are they, are they their decision criteria changing for how they choose a cloud provider? >>Yeah. You know, I think that, um, there's definitely a lot more conversation, especially in this current era where there's an accelerated rate of cloud adoption. Um, there's a lot more conversation around things like security, um, data protection, data, privacy, being able to run in an environment that you trust, not just is it a cloud and what does it do, but can I trust it? Do I understand how my data is protected, how my workloads are secured? Um, you know, that's really why we started cloud for financial services because that industry shepherds such vital data, right? So the reason that they are highly regulated is because of the importance of what they are stewarding very important data and financial information. Um, so, you know, we began there with the cloud for regulated industries there with, with financial services, but I see that across all industries, I was participating on a panel, um, that was, uh, with a bunch of CEOs. >>And I was there interviewing some CEOs who were from a much more sort of consumer facing and also from, from foods industry, et cetera. And their conversation was exactly the same as I have with many other clients, which is that their cloud choices, their efficiency and cloud deployment now are largely driven by the ability to get to a secure posture and the ability to demonstrate their, to their internal security and risk teams that they understand their data protection, data, privacy posture. So we are seeing lots of pickup and, and conversation opportunity around confidential competing specifically. Um, and you know, that's really about enabling, uh, our clients to have full authority and privacy in their computing, in their code and their data, even when running in a cloud environment. And so I do see a shift everyone's more concerned about security, and I think we have great technologies and we've been working with core partners to establish and harden and, and create, um, generations of technology that can really answer those questions. >>I have to ask you about that term confidential computing. I haven't heard that before. What, what does that involve? >>Yeah. You know, it's, it is a buzzword to watch out here for an in 2021. So confidential computing means being able to run in an environment where there are others in a, in a cloud computing environment, for example, um, but still have full privacy and authority over what you're doing. So you are effectively in an enclave, uh, imagine yourself sort of protected and secured. And so our confidential competing technologies, um, we're actually on basically our fourth generation of, of, of the hardware and software technologies to create that strong degree of isolation. Um, this enables us to deliver a really rich portfolio. Um, frankly, the, the, the richest portfolio in the industry of actuals services delivered, um, using confidential, competing and secure enclaves. And so we can enable our customers to solution things in a way, for example, where their data, you know, can not even be visible to our cloud operators or where they, uh, retain, you know, full control over, you know, a database and have full privacy as they're running in that environment. Um, these are really great, um, you know, considerations, but they impact everything from health care financial services. Uh, we have other partners and clients who are working to protect consumer data, um, you know, through these means et cetera. And so, um, across different industries, everyone's really looking at this topic of data, privacy, data protection. Um, and so we have a whole suite and whole family of confidential competing based, uh, services that we're able to offer to, uh, offer those assurances and that privacy to them in their cloud competing. >>I do have to ask you about the multi-cloud because this is a topic of constant debate in the industry of whether customers want to move shift workloads across multiple clouds to protect themselves from lock-in. I mean, is that a fantasy? Is that real? Is that a too restrictive? Uh, this has been a key part of IBM strategy is enabling the multi-cloud. How do you see customer attitudes developing right now? How do they want to use multiple clouds or in fact, do they, are they, are they, uh, concentrating perhaps more of their workloads in one or two? >>Yeah. You know, we believe vendor locking goes against the true spirit of hybrid cloud, right. Um, that desire to have consistency across environments, um, that desire to, uh, and the business need to have, you know, continuity and resiliency and operations, et cetera. Um, and so I do see this as a really important topic, um, from the perspective of, you know, managing environments, I think in multi-cloud, um, I think folks are starting to realize that multicloud isn't necessarily a strategy. It's a reality. Um, people have deployments in lots of different cloud environments, um, that happened somewhat organically in many cases. And so the key question is how to then get to visibility and control over those resources. Um, I think kind of two of the, the, the core topics in that are multicloud management, um, you know, being able to understand, you know, clusters and virtual machines and other things that are deployed across different environments and manage them with a common set of policies, for example. >>Um, and then in addition to multicloud management, um, I, for it, operations is another really important topic in, in multi-cloud being able to respond to incidents, understand and analyze and leverage AI, um, for what's going on for understanding what's going on across those environments, um, is another really core topic. And then as you said, you know, distributed cloud is a means of getting that consistency, having a common, you know, control and deployment plane across those different environments, um, can help it not just be sort of accidental usage of multiple cloud environments, but very intentional deployment based on the needs of particular workloads to the environment that they're best suited to. Um, and, and that's really what you want to aim for. Um, not that multi-cloud is necessarily, um, you know, uh, uh, I guess I would say is, is it is a, um, it is a complexity that is manageable, um, through these, you know, new types of technologies and multicloud management and such like that, and cloud >>Well, uh, Hillary TIS, the season for predictions is January, uh, everyone's prognostic table of what the future will look like. What do you think are going to be the main trend lines in cloud this year? Yeah, >>You know, I, I sort of sprinkled a few in there as we were talking, but I really do think that, um, the conversation around hybrid cloud number one, how to have an open innovation ecosystem for cloud, where, um, you have a consistency across environments, you know, not just random acts of cloud usage, but intentional and holistic architecture. Um, I really see that as the transition to sort of the second wave of, of cloud adoption. Um, and then secondly, as we were talking earlier about security, right, everyone is wondering about data policy and data privacy. Um, we've always taken a strong stance that, you know, our client's data is, is, is their data. We are not going to be using their data to, you know, further develop our, um, you know, AI services on our cloud or something. Um, we have deployed technologies and confidential computing that enabled them to keep full control over their keys so that, you know, even our caught operators center have access to data, um, competing in secure enclaves, where they have a strong degree of isolation and full privacy and authority over their workload. >>I really think, you know, these two topics open and secure hybrid computing and with consistency across environments, but distributed cloud technology. Um, and secondly, security, I think these are really important topics for 2021, and they may seem a little bit obvious, but I think it's important as people look at this to look for technologies that are multiple generations into this journey, right. Um, you know, partner with, um, folks who, um, are, you know, committed, uh, very clearly to an open ecosystem and open source innovation on the one hand. Um, and secondly, you know, um, when we talk about security and data protection, you want to know that that provider is several generations into that journey. Um, you know, so you really know that that technology has been vetted out is that production scale and has the stable basis. And so I think this is the year when folks are transitioning from cloud adoption, uh, to consistency in cloud and security and privacy in cloud >>Final question. And it has nothing to do with cloud. You're an IBM fellow. And I see that term, uh, turn up occasionally with other other people I've spoken to from IBM, what is it? IBM fellow, how do you become one and what right. Privileges and responsibilities as an entail. >>Yeah. You know, it's an exciting opportunity to be an IBM fellow. There's about a hundred active IBM fellows, um, right now. Um, so there aren't too many of us, but there is a small community of us. Um, IBM fellow is IBM's highest technical designation within our technical population. Um, so I do have a role within our cloud business. Um, but as one of our technical leaders, um, get to interact with the other fellows, um, you know, work on strategy for IBM in technology overall as a company. Um, and I also get to sort of be a trusted advisor to many of our clients. And so, um, I get to with CTOs and CEOs and VP of application development, um, you know, kind of, kind of profiles and VP of, of it and things like that, um, in our different clients and really help them wrestle through those struggles, um, of, you know, future it transformation. >>And so, um, you know, part of what I enjoy most about sort of the role and, and the fellow role is, is being able to kind of be that trusted advisor to many of our clients. There's been so much change in this last year for everyone. Um, and being able to, you know, also, you know, help our technical population through that, you know, in various means and then help our clients, um, through all of that change and really being able to take and grasp onto the opportunities, um, that this last year has had in the way that we work has changed. And the way that companies are looking to deliver capabilities has changed. Um, so that's, for me, the exciting part of, of the role, >>Or you're wondering a hundred then, and you do a great job of articulating the IBM strategy and also the, uh, the cloud landscape, Hillary Hunter, VP and CTO, excuse me, CTO of IBM cloud. Thank you so much for joining us today on Cuban cloud. >>Thanks so much for having me. It was a pleasure. >>I'm Paul Gillan stick with us.

(soft electronic music) >> Welcome to this CUBE Virtual Conversation. I'm your host, Rebecca Knight. Today, I'm joined by Hermanth Manda. He is the Executive Director, IBM Data and AI, responsible for Cloud Pak for Data. Thanks so much for coming on the show, Hermanth. >> Thank you, Rebecca. >> So we're talking now about the release of Cloud Pak for Data version 3.5. I want to explore it for, from a lot of different angles, but do you want to just talk a little bit about why it is unique in the marketplace, in particular, accelerating innovation, reducing costs, and reducing complexity? >> Absolutely, Rebecca. I mean, this is something very unique from an IBM perspective. Frankly speaking, this is unique in the marketplace because what we are doing is we are bringing together all of our data and AI capabilities into a single offering, single platform. And we have continued, as I said, we made it run on any cloud. So we are giving customers the flexibility. So it's innovation across multiple fronts. It's still in consolidation. It's, in doing automation and infusing collaboration and also having customers to basically modernize to the cloud-native world and pick their own cloud which is what we are seeing in the market today. So I would say this is a unique across multiple fronts. >> When we talk about any new platform, one of the big concerns is always around internal skills and maintenance tasks. What changes are you introducing with version 3.5 that does, that help clients be more flexible and sort of streamline their tasks? >> Yeah, it's an interesting question. We are doing a lot of things with respect to 3.5, the latest release. Number one, we are simplifying the management of the platform, made it a lot simpler. We are infusing a lot of automation into it. We are embracing the concept of operators that are not open shelf has introduced into the market. So simple things such as provisioning, installation, upgrades, scaling it up and down, autopilot management. So all of that is taken care of as part of the latest release. Also, what we are doing is we are making the collaboration and user onboarding very easy to drive self service and use the productivity. So overall, this helps, basically, reduce the cost for our customers. >> One of the things that's so striking is the speed of the innovation. I mean, you've only been in the marketplace for two and a half years. This is already version 3.5. Can you talk a little bit about, about sort of the, the innovation that it takes to do this? >> Absolutely. You're right, we've been in the market for slightly over two and a half years, 3.5's our ninth release. So frankly speaking, for any company, or even for startups doing nine releases in 2.5 years is unheard of, and definitely unheard of at IBM. So we are acting and behaving like a startup while addressing the go to market, and the reach of IBM. So I would say that we are doing a lot here. And as I said before, we're trying to address the unique needs of the market, the need to modernize to the cloud-native architectures to move to the cloud also while addressing the needs of our existing customers, because there are two things we are trying to focus, here. First of all, make sure that we have a modern platform across the different capabilities in data and AI, that's number one. Number two is also how do we modernize our existing install base. We have six plus billion dollar business for data and AI across significant real estates. We're providing a platform through Cloud Pak for Data to those existing install base and existing customers to more nice, too. >> I want to talk about how you are addressing the needs of customers, but I want to delve into something you said earlier, and that is that you are behaving like a startup. How do you make sure that your employees have that kind of mindset that, that kind of experimental innovative, creative, resourceful mindset, particularly at a more mature company like IBM? What kinds of skills do you try to instill and cultivate in your, in your team? >> That's a very interesting question, Rebecca. I think there's no single answer, I would say. It starts with listening to the customers, trying to pay detailed attention to what's happening in the market. How competent is it reacting. Looking at the startups, themselves. What we did uniquely, that I didn't touch upon earlier is that we are also building an open ecosystem here, so we position ourselves as an open platform. Yes, there's a lot of IBM unique technology here, but we also are leveraging open source. We are, we have an ecosystem of 50 plus third party ISVs. So by doing that, we are able to drive a lot more innovation and a lot faster because when you are trying to do everything by yourself, it's a bit challenging. But when you're part of an open ecosystem, infusing open source and third party, it becomes a lot easier. In terms of culture, I just want to highlight one thing. I think we are making it a point to emphasize speed over being perfect, progress over perfection. And that, I think, that is something net new for IBM because at IBM, we pride ourselves in quality, scalability, trying to be perfect on day one. I think we didn't do that in this particular case. Initially, when we launched our offense two and a half years back, we tried to be quick to the market. Our time to market was prioritized over being perfect. But now that is not the case anymore, right? I think we will make sure we are exponentially better and those things are addressed for the past two and one-half years. >> Well, perfect is the enemy of the good, as we know. One of the things that your customers demand is flexibility when building with machine learning pipeline. What have you done to improve IBM machine learning tools on this platform? >> So there's a lot of things we've done. Number one, I want to emphasize our building AI, the initial problem that most of our customers concerned about, but in my opinion, that's 10% of the problem. Actually deploying those AI models or managing them and covering them at scales for the enterprise is a bigger challenge. So what we have is very unique. We have the end-to-end AI lifecycle, we have tools for all the way from building, deploying, managing, governing these models. Second is we are introducing net new capabilities as part of a latest release. We have this call or this new service called WMLA, Watson Machine Learning Accelerator that addresses the unique challenges of deep learning capabilities, managing GPUs, et cetera. We are also making the auto AI capabilities a lot more robust. And finally, we are introducing a net new concept called Federator Learning that allows you to build AI across distributed datasets, which is very unique. I'm not aware of any other vendor doing this, so you can actually have your data distributed across multiple clouds, and you can build an aggregated AI model without actually looking at the data that is spread across these clouds. And this concept, in my opinion, is going to get a lot more traction as we move forward. >> One of the things that IBM has always been proud of is the way it partners with ISVs and other vendors. Can you talk about how you work with your partners and foster this ecosystem of third-party capabilities that integrate into the platform? >> Yes, it's always a challenge. I mean, for this to be a platform, as I said before, you need to be open and you need to build an ecosystem. And so we made that a priority since day one and we have 53 third party ISVs, today. It's a chicken and egg problem, Rebecca, because you need to obviously showcase success and make it a priority for your partners to onboard and work with you closely. So, we obviously invest, we co-invest with our partners and we take them to market. We have different models. We have a tactical relationship with some of our third party ISVs. We also have a strategic relationship. So we partner with them depending on their ability to partner with us and we go invest and make sure that we are not only integrating them technically, but also we are integrating with them from a go-to-market perspective. >> I wonder if you can talk a little bit about the current environment that we're in. Of course, we're all living through a global health emergency in the form of the COVID-19 pandemic. So much of the knowledge work is being done from home. It is being done remotely. Teams are working asynchronously over different kinds of digital platforms. How have you seen these changes affect the team, your team at IBM, what kinds of new kinds of capabilities, collaborations, what kinds of skills have you seen your team have to gain and have to gain quite quickly in this environment? >> Absolutely. I think historically, IBM had quite a, quite a portion of our workforce working remotely so we are used to this, but not at the scale that the current situation has compelled us to. So we made a lot more investments earlier this year in digital technologies, whether it is Zoom and WebEx or trying to use tools, digital tools that helps us coordinate and collaborate effectively. So part of it is technical, right? Part of it is also a cultural shift. And that came all the way from our CEO in terms of making sure that we have the necessary processes in place to ensure that our employees are not in getting burnt out, that they're being productive and effective. And so a combination of what I would say, technical investments, plus process and leadership initiatives helped us essentially embrace the changes that we've seen, today. >> And I want you to close us out, here. Talk a little bit about the future, both for Cloud Pak for Data, but also for the companies and clients that you work for. What do you see in the next 12 to 24 months changing in the term, in terms of how we have re-imagined the future of work. I know you said this was already version nine. You've only been in the marketplace for, for not even three years. That's incredible innovation and speed. Talk a little bit about changes you see coming down the pike. >> So I think everything that we have done is going to get amplified and accelerated as we move forward, shift to cloud, embracing AI, adopting AI into business processes to automate and amplify new business models, collaboration, to a certain extent, consolidation of the different offerings into platforms. So all of this, we, I obviously see that being accelerated and that acceleration will continue as we move forward. And the real challenge I see with our customers and all the enterprises is, I see them in two buckets. There's one bucket which are resisting change, like to stick to the old concepts, and there's one bucket of enterprises who are embracing the change and moving forward, and actually get accelerating this transformation and change. I think it will be successful over the next one to five years. You know, it could be under the other bucket and if you're not, I think it's, you're going to get, you're going to miss out and that is getting amplified and accelerated, as we speak. >> So for those ones in the bucket that are resistant to the change, how do you get them onboard? I mean, this is classic change management that they teach at business schools around the world. But what are some advice that you would have to those who are resisting the change? >> So, and again, frankly speaking, we, at IBM, are going through that transition so I can speak from experience. >> Rebecca: You're drinking the Kool-Aid. >> Yeah, when, when I think, one way to address this is basically take one step at a time, like as opposed to completely revolutionizing the way you do your business. You can transform your business one step at a time while keeping the end objective as your goal, as your end goal. So, and it just want a little highlight that with full factor, that's exactly what we are enabling because what we do is we enable you to actually run anywhere you like. So if most of your systems, most of your data and your models, and analytics are on-premise, you can actually start your journey there while you plan for the future of a public cloud or a managed service. So my advice is pretty simple. You start the journey, but you can take, you can, you don't need to, you don't need to do it as a big bang. You, it could be a journey, it could be a gradual transformation, but you need to start the journey today. If you don't, you're going to miss out. >> Baby steps. Hey Hermanth Manda, thank you so much for joining us for this Virtual CUBE Conversation >> Thank you very much, Rebecca. >> I'm Rebecca Knight, stay tuned for more of theCUBE Virtual. (soft electronic music)

>> Announcer: From theCUBE studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE Conversation. >> Hi everybody, this is Dave Vellante, and back in 2013, when it was becoming pretty obvious that the cloud was going to have a major impact on our industry, the IT industry, I wrote at the time that the way incumbents were going to have to compete was to really go into vertical markets and build ecosystems for their own clouds, and that's exactly what IBM did late last year, when it announced a major partnership with Bank of America in the financial services cloud, and guess what, Hillery Hunter is back in the house, she's the vice president and CTO of the IBM cloud, and an IBM fellow, Hillery, great to see you again, thanks for coming back on. >> Thanks so much for having me again, always a pleasure to be here. >> So we had an awesome conversation, I think we got into the FS cloud a little bit, but as I was saying, you guys announced last year, Bank of America, but let me start here. Why does the industry need a financial services cloud? >> Yeah, you know, it's key that we ground ourselves in that question of why a financial services cloud, and I think it really goes back to the sensitivity of the workloads and the data that that industry stewards. The financial services industry stewards the data of millions and millions of customers, and they are heavily regulated because of that, and they handle very high value transactions, and being able to take that context and translate that into what does it mean to do high value transactions, sensitive data, consumer data computing, also with all those benefits of elasticity and the value proposition of different deployment locations, is really what financial cloud is about. And those needs of that industry are a little bit different, the regulations are higher, the bar and data protection is higher, and the need to interlock across workload characteristics and the cloud deployment is a bit different. And so, we are bringing what we know about that industry to bear in the context also of cloud computing. >> Okay, so you're making some new announcements, there's some hard news here, but I want to know, if you're an executive, or business leader in the financial services industry, what's in it for me in these announcements? >> Yeah, what's in it for you is that we are moving into the next phase of financial services cloud in making the policy framework that has been developed through an enormous amount of work available to additional industry participants, and we're also moving into a phase of global expansion, and so being able to take this value proposition of an end to end considered secure and confine environment for financial services, out to more players in the industry, out to additional geographies and deployment locations, it's an exciting moment because everyone's really not looking just for a cloud, but they're looking for a choice of deployment locations, they're looking to move more workload to the cloud, and this is really about providing a cloud solution that more workload can move to, not just the first couple phases of analytics and things like that, but also moving into more transformation of the core of banking and the core of banking business, so it is about getting more workload to the cloud, getting that done faster, and getting it done at a net improved security and compliance posture. >> Got it, so I want to ask you about some learnings, now you're the double whammy of learnings here. When you announced the collaboration with B of A, obviously one of the top banks of the world, you've obviously made some progress since then, but the other part of that whammy was COVID. So what did you learn from the collaboration with B of A, and have you guys, how have you expanded your thinking BC, from before COVID, versus AC, after COVID? >> Yeah, you know, the initial motivation for this program was about having trust and transparency in public cloud, and having a public cloud suited also to sensitive and even core banking workloads. We have seen this conversation and the need for it and the urgency for it only pick up since COVID. A lot of things in the world kind of took a pause, but cloud computing really accelerated. We're seeing that businesses need to digitally transform their banking, so core banking transformation is a very hot topic. They need to deal with elasticity, we worked with banks during COVID that were having to suddenly stand up their national equivalent of the Payroll Protection Program. Banks that had to suddenly have three times the elasticity, because all of a sudden consumers were interacting with them purely digitally. And cloud can enable all of those kind of things, and so COVID has really accelerated the motivation toward banking in the cloud, and also toward core banking transformation, which is at the heart of setting a very high security bar in public cloud, to be able to also enable those kind of workloads. >> Yeah, so many changes as a result of COVID, I mean the volume of loans, like you said, everything was digital. I know a lot of older people that always still like to go into the bank, that like to see people, and they knew people and people knew them, well they had no choice but to go digital, so that's huge, if you didn't have a digital solution, and cloud is fundamental in that equation. But let's get into it a little bit more. We talked a little about this at IBM Think, but what are the key attributes that make the IBM financial services cloud suitable for financial services, is it the certifications, I wonder if you could add some color there. >> Yeah, so the key elements of the financial services cloud program are number one, a policy framework, which is a set of controls that are customized to the financial services industry, so this isn't about some existing standard, this is a customization of controls and security for the financial services industry, and that's a major element of what we're announcing right now. In addition to the policy framework is also the way that the different elements of the industry and of regulatory expertise are coming together, so this cloud, and these public cloud offerings, were co-developed and co-designed with IBM Promontory, with IBM Security Services that work with banks, with our anchor partner, and moving forward, we'll be advised by an advisory council of CSOs who have that day to day experience with security and with regulations. And so that is also a very unique context for not this being just a point in time with a policy framework, but being an ongoing initiative that will stay up to date, as security concerns and as regulatory concerns change. And the third aspect is a really unique set of technologies that make all of that possible, so you have to define how the cloud is going to be secure, and then you have to actually do it, and the unique capabilities that we have in IBM public cloud that have enabled this program include a number of things, but amongst them, the industry's highest standard for data protection, with our FIPS-140-2 Level 4 based key protect service, it includes capabilities that we'll be releasing through our acquisition of Spanugo around cloud security and compliance posture management, mapped back to that context of financial services. And so it's really three things, it's a policy framework custom and optimized for the financial services industry, the forward evolution of that through industry expertise, and participation of multi parties in that, and then core technologies that enable folks to accomplish that security posture through data protection, through cloud security posture management, et cetera. >> I forgot about the Promontory, you guys made that acquisition several years ago, that's a nice little feature of the FS cloud. But I want to ask, how hard is it to get these certifications? I mean it's obviously not a layup. Lot of work, lot of time, my reason of my question, is this a moat for you, as you guys start to scale? How difficult is it? >> Yeah, so we have been putting in the time and effort, and so that's why this is an exciting moment for us with the initial work product of this effort. And so our intention really is not for that to be a moat, but for us having traversed the moat, to now have a bridge there through the methodology that we built, through the control framework that we built, for others to now get across that moat. And so this is really about taking what is an extensive amount of work, and an extensive amount of expertise, IBM Promontory, you just mentioned, but they monitor over 70 regulatory obligations in over 20 jurisdictions globally, right? I mean this is a tremendous depth of expertise, and so having crossed the moat, and having built the bridge across it, this is where we can then help others to save time in this process of adopting public cloud for further workloads. >> You've mentioned workloads, you've talked about core financial workloads, but maybe give us a little insight on what type of workloads are the most suitable for the financial services cloud, because let's face it, most of the hardcore mission-critical workloads haven't moved, actually probably none of 'em have moved to the cloud, you kind of referenced that before. Ginni Rometty talks about that all the time. But what are the right workload strategic fits for your cloud? >> Yeah, you know you mentioned Ginni Rometty, and so I'll take a quick note there from some of the language that you'll hear her use, she talks about, there was chapter one of the cloud journey, and stuff that was on less sensitive data, analytics, some things on public information, were certainly done, also in finance and also in regulated industries in the cloud. And she talks about chapter two, chapter two being mission-critical workloads. And this program really is the definition of chapter two for the financial services industry. It is the enabling expertise, the enabling control set, the enabling security technologies, the enabling cloud services, for that chapter two, right, for that next layer of adoption of things that had been kept behind the firewall, had been kept in a private cloud context, can now be considered also for public cloud. And so easing that adoption, streamlining that process, et cetera, is really what we're looking to accomplish. >> I mean obviously IBM, huge presence in the banking community, is this really for just big banks? What about the ecosystem, what do you got in there for ISVs and SaaS providers? >> Yeah, you know, you asked me a question at the beginning here about COVID and what's happened, and I think, the transformation of ISV providers to become SaaS providers, the expansion of their capabilities being needed in payments and digital client experiences and such, also for regionals and second and third tier banking institutions and such, is as much of what is happening right now as anything else, amongst the first tiers, because there's just as much pressure for transformation and digital consumer experience, and other things like that, also in the regionals and second and third tiers. So part of our announcement is around the ecosystem of partners that we have now for the financial services cloud program. And that includes ISVs and SaaS providers that are servicing many different types of needs of institutions large and small, so we're seeing those that are servicing core banking, and payments, those that are servicing analytics use cases for this industry, and even HR function, just because of that concern about stewarding data well for these industries and those first tier banks, and so that transition to digital, that drive to infuse AI capabilities, the need to transform core banking, is something that's very much also happening within the ISV and SaaS providers, and we're thrilled with the wide variety of partner base that we're seeing develop there within our ecosystem for this program. >> I was talking to a CIO friend of mine several years ago, and he said to me, "You know, this idea of lifting and shifting, "it's fine, you get little cost savings, maybe, "but unless you change your operating model "and you drive an innovation agenda, "you really aren't going to get the type "of telephone number returns from cloud "that you would want or expect." So my question is around innovation, and we've said many times in theCUBE that the new innovation cocktail, it's not Moore's law anymore, it's the combination of data applying machine intelligence and then the cloud, and the reason why the cloud is important is scale, okay, there's maybe a little bit of cost as well, but it's also innovation. It's the ability to attract people into an ecosystem, and that resonates with line of business. If your cloud is just about making IT's life better, well that's nice, but what's in this announcement and in this initiative for the line of business? >> Yeah, it is all about the workloads. I always say that to me the cloud journey is about, number one your platform, which is the thing onto which you modernize. It is what are you going to get out of moving to containers, what are you going to get out of moving to microservices, how does that help all of those cloud metrics that you mentioned? But number two, it's about the workload, right, which workloads are we talking about, how will they deliver, how will those workloads be able to because of cloud deliver not just TCO but improvement in customer experience, how will those workloads be able to meet elasticity, resiliency, cybersecurity concerns, changes in the way the workforce is working these days, et cetera. And from the line of business perspective, there is a tremendous need to consume, for example, fintech-based innovation. But a lot of folks have struggled to move past POCs because of concerns about security and compliance, for those deployment scenarios, and so being able to bring the ISVs and SaaS providers, and then also fintechs into an ecosystem with a prescriptive and proactive security and compliance context is really what we're all about here. And that will enable a flourishing of adoption of innovation. >> You know, I always love to talk about the competition on these episodes. But I want to ask differentiation, how different is this, can I just go to any cloud supplier and get this, will I eventually be able to, what's IBM's differentiation, Hillery? >> Yeah, so you want to think of it that, in financial services, you are concerned, and you have to be concerned about everything. You have to be concerned about things into the details of the cloud itself, you have to be concerned about things that are related to the behavior and the permissions of your developers in that environment. Financial services cloud really has to be an end to end, soup to nuts conversation, and so this is a program of our public cloud, where end to end, we can stand behind and provide trust and resiliency and this policy framework, end to end within an environment that can be trusted for mission-critical workload. And so when we look at differentiation, our investments are in bringing together IBM's expertise all the way going back to regulations and security consulting that we've been doing for decades in this industry, applying that to that cloud context, taking capabilities that are developed all the way down into the transistors, investments we've made even into the silicon around how cryptography is done, bringing that into the cloud context. And so having brought those things together into our public cloud context, that's how we're able to solution this in a different way, because it really is end to end about the expertise, from all of that regulatory advising, that security context, all the way down into the silicon and the transistors, and I think that's a very unique value proposition, as a cloud provider, it's a tremendous opportunity for us to bring together those pieces. And to continue to be a trusted partner to these companies that we have long been a trusted partner of. >> Now of course you guys have a relationship with VMware, you were the first, actually, to announce a VMware cloud relationship. And so let's say, okay, I got some VMware workloads, I move 'em into your FS cloud. Make sure that I've got the security and compliance checked. Six months down the road, so I've done that sort of first step, what's next for me, is that the end, or are there other things on my journey? >> Yeah, so absolutely, I mean VMware is part of what we are solution financial services clients to, but also cloud-native, and OpenShift, containerization, that modernization journey, is an ongoing journey for everyone, and so to your point of what's next, we're seeing a continual conversation of balancing lift and shift and modernization across workloads, and there are different reasons at different points in time, for people to consider that. I think the key is that they trust where they are taking that data, and whatever the form is that the workload goes, it needs to be in the context of that trust around the data in a security context, and so we're absolutely seeing everything, honestly, from financial services institutions looking to engage with us, also in our new research innovation lab, where we're engaging directly with financial services clients that are trying to work through this differentiation, is it virtualization, is it containerization, is it even serverless? What is the right and most effective balance of how workloads are programmed and run for the next generation of banking. >> You know, Hillery, I've been doing a lot of interviews in the last decade, and it's been interesting to see the ascendancy of cloud, of course, but also the change in perception, particularly in financial services, in the early days of cloud, cloud was an evil word. The C that should not be named. And so I want to understand if I'm, and of course COVID has also changed the perception, because if you weren't digital and you didn't have cloud, you couldn't really transact businesses as well, you didn't have that business resiliency. So, what if I'm a financial services person now, okay, I'm through the knothole, I want to get started, where do I start? >> Yeah, well call us first, but past that, I think that the conversations, the first conversations that we're having with our clients are, number one, do you have an architecture? So is cloud not just a place, like I like to say, but is cloud a plan, is there an architectural plan to enable you to have consistency, for example, in your developer experience between your private cloud environment and your public cloud environment? Architecturally are there those foundational choices around common services about being able to deploy capabilities in one location, and develop them in another, et cetera. All those value propositions of what we have been creating around OpenShift and Cloud Paks in our public cloud, and consistency across different environments and such, I think that's the first thing to start with is architecting a cloud, not accidental usage of multiple environments, but architecting use of multiple environments. And then I think the second conversation is to make a security and compliance plan that is going to be robust enough to withstand even the intense scrutiny of a regulated industry CCO and risk team, and so that's the other foundational conversation that we're having with our clients, and helping them with, so we can provide services and reference architectures, and all that other kind of thing, to enable them to stabilize planning on both fronts, both architecturally for what cloud means in its entirety, not just a cloud, but in its entirety, all clouds, multicloud, hybrid cloud, et cetera. And then secondly, then, a comprehensive security plan for that public cloud choice, and that's what we're really locking down with this policy framework, is bringing standardization on that for public cloud. >> Well, lot of innovation for the financial services community, which is again your wheelhouse. I wrote a piece right around Think that IBM's future rests on its innovation agenda, and I'm glad you brought up the notion of private, public, and then the whole hybrid thing, because I see OpenShift as a key, and RedHat as a key enabler of that across whether it's cloud, on-prem, edge, across multiple clouds. That's an ambitious agenda, as somebody who's responsible for cloud. That is something that is real innovation, and really differentiable I think, in the marketplace, and probably pretty expensive to build out across all those different platforms. >> Yeah, it is, but I think on the word innovation, my mind, as an IBMer, goes to the IBM research division. Thousands of researchers globally, and they've very much been a part of this journey with us. The journey with us on containerization, the journey on workload modernization from monolith to microservices, the journey of our public cloud, and now also very much a part of our work in financial services, so our research division is this incredible gift and asset that we have, that is working with us also on our cloud security and compliance posture management, that security and compliance control center that we're talking about in this announcement, et cetera, and so them being a part of this innovation stream for us is a really exciting part, again, of bringing together all these different pieces that IBM has to offer in this space to make it all stack up, to be a cloud for financial services. >> I got a couple of little housekeeping items before we close here. This is announced for the US first, right? What about other regions, first of all, is that correct, and what about other regions? >> That's correct, and we are also announcing additional participation of global banking partners as well in this announcement. And so this is also again our initial public statement of our expansion past the US. >> Last question, so just give us a glimpse of the future, where do you want to be in a few years, thinking about let's say three years down the road, what's that outcome look like? >> Yeah, you know I think that three years from now, we would love to see that people are able to make a decision, going back to your question about the line of business owners, make a decision about what they're trying to accomplish with a workload, and not be held back by security and compliance concerns in terms of putting that workload where it needs to be, where it will be most efficient, and where it can be embraced by a set of cloud capabilities that enable it to move in a competitive pace forward, infusing AI into everything that is done. Leveraging the latest in technologies, and serverless computing and all these other kind of things that can facilitate a line of business delivering more value so that cloud really continues, but also realizes its promises in that chapter two version of the story, also for regulated industries and also for their mission-critical workloads. >> Well Hillery, good luck with this, I mean congratulations on the progress that you've made, really since you guys announced this late last year, and really excited to see this start to take off, and you're a great guest, love having you on, thank you so much. >> Thanks so much for having me, pleasure talking to you as always. >> All right, cheers. And thank you everybody for watching, this is Dave Vellante for theCUBE, and we'll see you next time. (calm music)

>>From the cube studios in Palo Alto and Boston gets the Q covering IBM thing brought to you by IBM. >>Welcome back to our coverage of IBM think 2020 the digital version of IBM. Thank, my name is Dave Vellante and you're watching the cube. Hillary Hunter is here. She's the vice president and CTO of IBM cloud and also an IBM fellow. Hillary, thanks for coming on. Good to see you. >>Thanks so much for having me today. >>All right, let's get really, let's get into it. We want to focus on security and compliance. It's a key, obviously a key aspect and consideration for customers. But I have to start by asking you, there's this sort of the age old conflict between being secure and then having the flexibility and agility and speed that business people need. How does IBM clouds sort of square that circle? >>Yeah, you know, it's, it's really interesting because cloud itself is detained, um, designed to deliver agility, um, and speed. And that's everything from the release cadence to being able to consume things as APIs. And so when we say cloud and security, it's about the things that we implement as a cloud provider and the services that we stand up. And all of that is API driven. Um, all of that is intended to enable, you know, data protection through API APIs intended to enable security monitoring through PIs and dashboards and other things like that. And so actually when delivered as cloud services, security functions can actually even go more quickly and can facilitate that speed and agility in and of themselves. So it's really interesting that the means of delivering cloud capabilities actually can facilitate that agility in the security area. >>Yeah, I mean I think it's, especially in these times with COBIT 19 a lot of why is that? We're talking, you were saying, Hey, yeah, we're really going harder, uh, for the cloud because the downturns have been actually pretty good for them. For the cloud. I presume you're sort of seeing the same thing, but if you think about the cost of a breach, it's millions of millions of dollars on average. And think about the time it takes for an organization to identify when there's been an infiltration. Mmm. I know small companies like ours, we feel good that we can tap into, you know, cloud infrastructure. what are your thoughts? Oh, on sort of that whole notion cloud essentially maybe even having better security in a way, but however you define better. >>Yeah. You know, I, I actually agree with those statements and I think it's played out in many of our client engagements. Um, because when you are talking about cloud and you're talking about security, we have the opportunity to present to you a proactive approach, right? Where we're saying, okay, leverage this type of technology in order to do your key management or data encryption. It is up by us already fully as a service. You consume it API driven. Um, and so we are able to say that this will enable you to have end to end data encryption or corruption according to some standard or key management, um, where the keys remained in your hands or you know, use these things that are security services so that there isn't, um, there doesn't have to be, um, as detailed of a conversation. Um, as you often have to have in your solution, in your own it. >>You can say, okay, what's the objective we're trying to get to what is the net security and compliance posture? And we as a cloud provider can be proactive and telling you, Hey, therefore then use this combination of services and use them in this following way and that will enable you to reach those outcomes. And so moving past, um, you know, being fully self service where you have to configure hundreds and hundreds of things yourselves. To me being more prescriptive and proactive and goal oriented and outcome oriented, um, is an opportunity that we have in cloud where we're standing up Janning up capabilities. And so we really tried to talk to clients about, okay, what's the, what are you trying to accomplish? Are you concerned about control over your it? Are you concerned about meeting particular documentation on particular regulatory compliance? What's the point? And then how does that relate into a conversation about data compute, networking, et cetera, and then what does that matter too in terms of how you should then use certain cloud capabilities. >>I want to follow up on that, Hillary, because I want to see it. If I can discern, maybe there's some difference in the way IBM approaches this. I've often said in the cube that bad user behavior trumps good security every time. And of course you've got multiple layers, you've got IBM securing, you know it's infrastructure and it's cloud. You've got it in whatever role there and you've got the end user now. Yeah. Somebody fishes the end user or end user admin. Okay. There are things you can do fine. Hmm. But there's also the, it kind of in the middle you mentioned managed services is IBM's approach, you know, somewhat different >>no >>cloud suppliers. Maybe you could elaborate on that. >>Yeah. So, you know, we really look to protect the services that we're standing up, whether it's infrastructure services, where it's yeah, networking, whether or not it's container service or you know, other services that we're providing. We're looking to protect it, those, you know, down to the core of what that service is and how it works and, and how it provides security and then the technologies that that service integrates into. Right? So services seamlessly integrating into bring your own key and our, um, FIPs one 40 dash two level four baths, um, keep your own key, et cetera. So, so we take other things for our clients and then in doing so, we enable end to end the client to understand both what the status of the service itself is as well as, um, you know, how they use it in order to take into account other security considerations. >>And, and I think it is a fundamentally different, um, approach then one takes for, you know, your own it, you're responsible end to end for everything. In this case, you know, we a secure what we're doing. And then we enable through things like our security advisor, um, to do configurations in such that, that governed the developer behavior and ensure that overall together between us and the client, the posture, even of what the developers and such is understood and can be monitored and ensured that it is secure and compliant. Okay. So I just want to take an example of that. So you are responsible for let's say, securing the object store as an example, but yet at the same time the clients it organization policies that map to the edict of their organization. So they've got flexibility sort of a partnership. Okay. Am I understanding that correctly? >>Yeah, absolutely. And the question is then that it organization that's taken policies, um, we then enable our clients to use tools, everything from things that can be integrated into the dev sec ops pipeline of red hat, you know, and initiatives that are going on. We had CNCF and NIST and other places like that. Yeah. So how can they translate their risk, insecurity, postures into concrete tools? That's that we deliver, right? Everything from dev, sec ops and OpenShift. So then tools and dashboards that we have, like security advisor, um, so that they can then most effectively implement the entirety of what constitutes security on in public cloud environment with confidence. Yeah. So security in compliance slash privacy or sort of two sides of the same coin. So I want to understand, Oh, IBM cloud is approaching, Oh, compliance, obviously GDPR, yeah, yeah. Whatever. They may have, I guess 2018 in terms of the fines. >>Oh, the, the California consumer privacy act. Everybody sort of has their own little GDPR now States and regions and countries, et cetera. How is IBM supporting clients in regard to Oh, compliance such initiatives? Yeah. You know, and this is an area where, you know, again, we are working to make it as easy as possible for our clients to not only see our status on certain compliance areas, which is visible through our website on compliance, but also to achieve compliance is where there is some joint or shared responsibility. So for example, in Europe with the European banking 30, we have kind of an industry unique position and enabling clients you achieve, um, what is needed. And so we provide proactive, you know, guidance. I'm on European banking authority or a PCI DSS or other things like that. So we really are trying to take a very proactive approach to Mmm, uh, providing the guidance that clients need and meeting them in that journey over all. >>We, in addition have a specific program for financial services, um, where we announced our partnership back in November with the bank of America for financial services for a very significant control setting compliance, um, that is not just a of a bunch of little existing things, but it really is a tailored control set for the financial services industry. Um, that acknowledges the fact that, you know, getting compliance in that space can be particularly, ah, particularly challenging. So we are, are taking a very proactive approach, do helping our clients across different doctors, um, deal with those changing, you know, postures and internally as a cloud organization. Um, we are advised also by IBM Promitory, which, um, it has extensive background over 70 jurisdictions globally, changes in all these postures and in compliance and rules and such like that, that they consistently and continuously monitor. Um, and help us design the right cloud moving forward. Cause is compliance as you said is it's very much a dynamic and changing landscape. >>You know, when you talk to chief information security officers and ask them what their biggest challenges, they'll tell you. Yeah. The lack of skills. Uh, and so they're looking to automation. It really helped close that gap. And clearly cloud is sort of all about automation. So I wonder if you could just talk a little bit about what you're seeing with regard to automation generally, but specifically how it's helping, you know, close that skills gap. >>Yeah, you know, it, the, the, the topic of automation is so interesting when it intersects security because I really view this, um, transition to cloud and the use of cloud native and the use of containers and such actually is an opportunity again, yet again to improve security and compliance posture. Um, because cloud, um, and uh, the dev ops and CICB pipelines, um, and all of that of, of a cloud native build and a containerized build give you a certain opportunity both to prevent a bunch of behaviors as well as to collect certain information that may become useful later on. Um, I think actually called modernization because of the automation it brings, um, is a really, really topic for both CSOs and risk officers right now because it can not just improve the agility that you started with as a motivation to go to cloud, but it can also improve visibility into what's going on with all your workloads. >>You know, to know that a developer used a particular library and then you see, oops, maybe there's a concern about that library and you instantly know where across the entirety of your IOT that that's been deployed. That's a tremendous amount of knowledge. Um, and you can take either, you know, immediate action on that or you can through automation push out changes and things like that. Um, we use internally as a cloud provider the best of SRE and automation practices to keep our estate patched and other things like that. And that can also then translate into people's own workloads, which I think is a really exciting opportunity of cloud. >>You know, we're out of time, but I want to close and asking you sort of what we should look at 42, we had a great conversation earlier, well with Jamie Thomas about, about quantum and she talked about ideas. You get that on the IBM what what should we look forward to sort of in the coming months and even years in IBM cloud. >>Yeah. You know, we're really excited about that agility, that cloud itself for us as a company and provides, right? Like you said with quantum, it is the place that we can bring out the latest and greatest things, um, in, you know, uh, for our clients to use and experiment with and adopt their algorithms and such juice. So you're going to continue to see us taking a very aggressive posture in turning the latest and open source and technologies into cloud delivered fully managed services. Um, and so, you know, everything from what we've done already with, um, Istio is a service and can native as a server, a service and quantum as a service, et cetera. Um, you'll continue to see us take that approach that, um, you know, we want to be a fresh and vital environment for developers to consume the latest and greatest that's out there. Um, but yet as an enterprise focused company and a company, you know, very much focused on security and compliance, you'll continue to see us back those things with our own efforts to secure and then enable security, um, on our environment. >>Well, Hillary, thanks so much for coming on the cube. It's always great to have experts like yourself, uh, share with, uh, with our community. Appreciate it. >>Great. Thank you so much for having me. >>And so we're seeing cloud acceleration as a result of covert 19, but it's always been a, a real wave for the last 10 years. We're just seeing it again, accelerate even faster. This is Dave Volante for the cube. You're watching the cubes, continuous coverage of IBM thing, digital thing, 2020 people right there, but right back, right after this short, >>right.

>> Live, from San Francisco, it's theCUBE covering IBM Think 2019. Brought to you by IBM. >> Hello everyone, welcome back to theCUBE's live coverage here in San Francisco for IBM Think 2019. I'm John Furrier, Stu Miniman with theCUBE. Stu, it's been a great day. We're on our fourth day of four days of wall to wall coverage. A theme of AI, large scale compute with Cloud and data that's great. Great topics. Got two great guests here. Rohit Badlaney, who's the director of IBM Z As a Service, IBM Systems. Real great to see you. And Nataraj Nagaratnam, Distinguished Engineer and CTO and Director of Cloud Security at IBM and Hybrid Cloud, thanks for joining us. >> Glad to be here. >> So, the subtext to all the big messaging around AI and multi-cloud is that you need power to run this. Horsepower, you need big iron, you need the servers, you need the storage, but software is in the heart of all this. So you guys had some big announcements around capabilities. The Hyper Protect was a big one on the securities side but now you've got Z As a Service. We've seen Linux come on Z. So it's just another network now. It's just network computing is now tied in with cloud. Explain the offering. What's the big news? >> Sure, so two major announcements for us this week. One's around our private cloud capabilities on the platform. So we announced our IBM Cloud Private set of products fully supported on our LinuxOne systems, and what we've also announced is the extensions of those around hyper-secure workloads through a capability called the Secure Services Container, as well as giving our traditional z/OS clients cloud consumption through a capability called the z/OS Cloud Broker. So it's really looking at how do we cloudify the platform for our existing base, as well as clients looking to do digital transformation projects on-premise. How do we help them? >> This has been a key part of this. I want to just drill down this cloudification because we've been talking about how you guys are positioned for growth. All the REORG's are done. >> Sure, yeah >> The table's all set. Products have been modernized, upgraded. Now the path is pretty clear. Kind of like what Microsoft's playbook was. Build the core cloudification. Get your core set of products cloudified. Target your base of customers. Grow that and expand into the modern era. This is a key part of the strategy, right? >> Absolutely right. A key part of our private cloud strategy is targeted to our existing base and moving them forward on their cloud journey, whether they're looking to modernize parts of their application. Can we start first with where they are on-premise is really what we're after. >> Alright, also you have the Hyper Protect. >> Correct. >> What is that announcement? Can you explain Hyper Protect? >> Absolutely. Like Rohit talked about, taking our LinuxOne capabilities, now that enterprise trusts the level of assurance, the level of security that they're dependent on, on-premise and now in private cloud. We are taking that further into the public cloud offering as Hyper Protect services. So these are set of services that leverage the underlyings of security hardening that nobody else has the level of control that you can get and offering that as a service so you don't need to know Z or LinuxOne from a consumption perspective. So I'll take two examples. Hyper Protect Crypto Service is about exposing the level of control. That you can manage they keys. What we call "keep your own keys" because encryption is out there but it's all about key management so we provide that with the highest level of security that LinuxOne servers from us offer. Another example is database as a service, which runs in this Hyper Secure environment. Not only encryption and keys, but leveraging down the line pervasive encryption capabilities so nobody can even get into the box, so to say. >> Okay, so I get the encryption piece. That's solid, great. Internet encryption is always good. Containers, there's been discussions at the CNCF about containers not being part of the security boundaries and putting a VMware around it. Different schools of thought there. How do you guys look at the containerization? Does that fit into Secure Protect? Talk about that dynamic because encryption I get, but are you getting containers? >> Great question because it's about the workload, right? When people are modernizing their apps or building cloud-native apps, it's built on Kubernetes and containers. What we have done, the fantastic work across both the IBM Cloud Private on Z, as well as Hyper Protect, underlying it's all about containers, right? So as we deliver these services and for customers also to build data services as containers or VM's, they can deploy on this environment or consume these as a compute. So fundamentally it's kubernetes everywhere. That's a foundational focus for us. When it can go public, private and multicloud, and we are taking that journey into the most austere environment with a performance and scale of Z and LinuxONE. >> Alright, so Rohit, help bring us up to date. We've been talking about this hybrid and multi-cloud stuff for a number of years, and the idea we've heard for many years is, "I want to have the same stack on both ends. I want encryption all the way down to the chip set." I've heard of companies like Oracle, like IBM say, "We have resources in both. We want to do this." We understand kubernetes is not a magic layer, it takes care of a certain piece you know and we've been digging in that quite a bit. Super important, but there's more than that and there still are differences between what I'm doing in the private cloud and public cloud just naturally. Public cloud, I'm really limited to how many data centers, private cloud, everything's different. Help us understand what's the same, what's different. How do we sort that out in 2019? >> Sure, from a brand perspective we're looking at private cloud in our IBM Cloud Private set of products and standardizing on that from a kubernetes perspective, but also in a public cloud, we're standardizing on kubernetes. The key secret source is our Secure Services Container under there. It's the same technology that we use under our Blockchain Platform. Right, it brings the Z differentiation for hyper-security, lockdown, where you can run the most secure workloads, and we're standardizing that on both public and private cloud. Now, of course, there are key differences, right? We're standardizing on a different set of workloads on-premise. We're focusing on containerizing on-premise. That journey to move for the public cloud, we still need to get there. >> And the container piece is super important. Can you explain the piece around, if I've got multi-cloud going on, Z becomes a critical node on the network because if you have an on-premise base, Z's been very popular, LinuxONE has been really popular, but it's been for the big banks, and it seems like the big, you know, it's big ire, it's IBM, right? But it's not just the mainframe. It's not proprietary software anymore, it's essentially large-scale capability. >> Right. >> So now, when that gets factored into the pool of resources and cloud, how should customers look at Z? How should they look at the equation? Because this seems to me like an interesting vector into adding more head room for you guys, at least on the product side, but for a customer, it's not just a use case for the big banks, or doing big backups, it seems to have more legs now. Can you explain where this fits into the big picture? Because why wouldn't someone want to have a high performant? >> Why don't I use a customer example? I had a great session this morning with Brad Chun from Shuttle Fund, who joined us on stage. They know financial industry. They are building a Fintech capability called Digital Asset Custody Services. It's about how you digitize your asset, how do you tokenize them, how you secure it. So when they look at it from that perspective, they've been partnering with us, it's a classic hybrid workload where they've deployed some of the apps on the private cloud and on-premise with Z/LinuxONE and reaching out to the cloud using the Hyper Protect services. So when they bring this together, built on Blockchain under the covers, they're bringing the capability being agile to the market, the ability for them to innovate and deliver with speed, but with the level of capability. So from that perspective, it's a Fintech, but they are not the largest banks that you may know of, but that's the kind of innovation it enables, even if you don't have quote, unquote a mainframe or a Z. >> This gives you guys more power, and literally, sense of pretty more reach in the market because what containers and now these kubernetes, for example, Ginni Rometty said "kubernetes" twice in her keynote. I'm like, "Oh my God. The CEO of IBM said 'kubernetes' twice." We used to joke about it. Only geeks know about kubernetes. Here she is talking about kubernetes. Containers, kubernetes, and now service missions around the corner give you guys reach into the public cloud to extend the Z capability without foreclosing the benefits of Z. So that seems to be a trend. Who's the target for that? Give me an example of who's the customer or use case? What's the situation that would allow me to take advantage of cloud and extend the capability to Z? >> If you just step back, what we're really trying to do is create a higher shorten zone in our cloud called Hyper Protect. It's targeted to our existing Z base, who want to move on this enterprise out journey, but it's also targeted to clients like Shuttle Fund and DAX that Raj talked about that are building these hyper secure apps in the cloud and want the capabilities of the platform, but wanted more cloud-native style. It's the breadth of moving our existing base to the cloud, but also these new security developers who want to do enterprise development in the cloud. >> Security is key. That's the big drive. >> And that's the beauty of Z. That's what it brings to the table. And to a cloud is the hyper lockdown, the scale, the performance, all those characteristics. >> We know that security is always an on-going journey, but one of the ones that has a lot of people concerned is when we start adding IoT into the mix. It increased the surface area by orders of magnitude. How do those type of applications fit into these offerings? >> Great question. As a matter of fact, I didn't give you the question by the way, but this morning, KONE joined me on stage. >> We actually talked about it on Twitter. (laughs) >> KONE joined us on stage. It's about in the residential workflow, how they're enabling here their integration, access, and identity into that. As an example, they're building on our IoT platform and then they integrate with security services. That's the beauty of this. Rohit talked about developers, right? So when developers build it, our mission is to make it simple for a developer to build secure applications. With security skill shortage, you can't expect every developer to be a security geek, right? So we're making it simple, so that you can kind of connect your IoT to your business process and your back-end application seamlessly in a multi-cloud and hybrid-cloud fashion. That's where both from a cloud native perspective comes in, and building some of these sensitive applications on Hyper Protect or Z/LinuxONE and private cloud enables that end to end. >> I want to get you guys take while you're here because one of the things I've observed here at Think, which is clearly the theme is Cloud AI and developers all kind of coming together. I mean, AI, Amazon's event, AI, AI, AI, in cloud scale, you guys don't have that. But developer angle is really interesting. And you guys have a product called IBM Cloud Private, which seems to be a very big centerpiece of the strategy. What is this product? Why is it important? It seems to be part of all the key innovative parts that we see evolving out of the thing. Can you explain what is the IBM Cloud Private and how does it fit into the puzzle? >> Let me take a pass at it Raj. In a way it is, well, we really see IBM Cloud Private as that key linchpin on-premise. It's a Platform as a Service product on-premise, it's built on kubernetes and darker containers, but what it really brings is that standardized cloud consumption for containerized apps on-premise. We've expanded that, of course, to our Z footprint, and let me give you a use case of clients and how they use it. We're working with a very big, regulated bank that's looking to modernize a massive monolithic piece of WebSphere application server on-premise and break it down into micro-services. They're doing that on IBM Cloud Private. They've containerized big parts of the application on WebSphere on-premise. Now they've not made that journey to the cloud, to the public cloud, but they are using... How do you modernize your existing footprint into a more containerized micro-services one? >> So this is the trend we're seeing, the decomposition of monolithic apps on-premise is step one. Let's get that down, get the culture, and attract the new, younger people who come in, not the older guys like me, mini-computer days. Really make it ready, composable, then they're ready to go to the cloud. This seems to be the steps. Talk about that dynamic, Raj, from a technical perspective. How hard is it to do that? Is it a heavy lift? Is it pretty straight-forward? >> Great question. IBM, we're all about open, right? So when it comes to our cloud strategy open is the centerpiece offered, that's why we have banked on kubernetes and containers as that standardization layer. This way you can move a workflow from private to public, even ICP can be on other cloud vendors as well, not just IBM Cloud. So it's a private cloud that customers can manage, or in the public cloud or IBM kubernetes that we manage for them. Then it's about the app, the containerized app that can be moved around and that's where our announcements about Multicloud Manager, that we made late last year come into play, which helps you seamlessly move and integrate applications that are deployed on communities across private, public or multicloud. So that abstraction venire enables that to happen and that's why the open... >> So it's an operational construct? Not an IBM product, per say, if you think about it that way. So the question I have for you, I know Stu wants to jump in, he's got some questions. I want to get to this new mindset. The world's flipped upside down. The applications and workloads are dictating architecture and programmability to the DevOps, or infrastructure, in this case, Z or cloud. This is changing the game on how the cloud selection is. So we've been having a debate on theCUBE here, publicly, that in some cases it's the best cloud for the job decision, not a procurement, "I need multi-vendor cloud," versus I have a workload that runs best with this cloud. And it might be as if you're running 365, or G Suite as Google, Amazon's got something so it seems to be the trend. Do you agree with that? And certainly, there'll be many clouds. We think that's true, it's already happened. Your thoughts on this workload driving the requirements for the cloud? Whether it's a sole purpose cloud, meaning for the app. >> That's right. I'll start and Rohit will add in as well. That's where this chapter two comes into play, as we call Chapter Two of Cloud because it is about how do you take enterprise applications, the mission-critical complex workloads, and then look for the enablers. How do you make that modernization seamless? How do you make the cloud native seamless? So in that particular journey, is where IBM cloud and our Multicloud and Hybrid Cloud strategy come into play to make that transition happen and provide the set of capabilities that enterprises are looking for to move their critical workloads across private and public in bit much more assurance and performance and scale, and that's where the work that we are doing with Z, LinuxONE set of as an underpinning to embark on the journey to move those critical workloads to their cloud. So you're absolutely right. When they look at which cloud to go, it's about capabilities, the tools, the management orchestration layers that a cloud provider or a cloud vendor provide and it's not only just about IBM Public Cloud, but it's about enabling the enterprises to provide them the choice and then offer. >> So it's not multicloud for multicloud sake, it's multicloud, that's the reality. Workload drives the functionality. >> Absolutely. We see that as well. >> Validated on theCUBE by the gurus of IBM. The cloud for the job is the best solution. >> So I guess to kind of put a bow on this, the journey we're having is talking about distributed architectures, and you know, we're down on the weeds, we've got micro-services architectures, containerization, and we're working at making those things more secure. Obviously, there's still a little bit more work to do there, but what's next is we look forward, what are the challenges customers have. They live in this, you know, heterogeneous multicloud world. What do we have to do as an industry? Where is IBM making sure that they have a leadership position? >> From my perspective, I think really the next big wave of cloud is going to be looking at those enterprise workloads. It's funny, I was just having a conversation with a very big bank in the Netherlands, and they were, of course, a very big Z client, and asking us about the breadth of our cloud strategy and how they can move forward. Really looking at a private cloud strategy helping them modernize, and then looking at which targeted workloads they could move to public cloud is going to be the next frontier. And those 80 percent of workloads that haven't moved. >> An integration is key, and for you guys competitive strategy-wise, you've got a lot of business applications running on IBM's huge customer base. Focus on those. >> Yes. >> And then give them the path to the cloud. The integration piece is where the linchpin is and OSSI secure. >> Enterprise out guys. >> Love encryption, love to follow up more on the secure container thing, I think that's a great topic. We'll follow-up after this show Raj. Thanks for coming on. theCUBE coverage here. I'm John Furrier, Stu Miniman. Live coverage, day four, here live in San Francisco for IBM Think 2019. Stay with us more. Our next guests will be here right after a short break. (upbeat music)

>> Live from Seattle, Washington it's theCUBE, covering KubeCon and CloudNativeCon North America 2018. Brought to you by Red Hat, the Cloud Native Computing Foundation, and its ecosystem partners. >> Hey, welcome back everyone, it's theCUBE live here in Seattle for day three of three of wall-to-wall coverage. We've been analyzing here on theCUBE for three days, talking to all the experts, the CEOs, CTOs, developers, startups. I'm John Furrier, Stu Miniman, with theCUBE coverage of here at dock, not DockerCon, KubeCon and CloudNativeCon. Getting down to the last Con. >> So close, John, so close. >> Lot of Docker containers around here. We'll check it on the Kubernetes. Our next two guests got a startup, hot startup here. You got Norman Hsieh, head of business development, LogDNA. New compelling solution on Kubernetes give them a unique advantage, and of course, Daniel Berg who's distinguished engineer at IBM. They have a deal. We're going to talk about the startup and the deal with IBM. The highlights, kind of a new model, a new world's developing. Thanks for joining us. >> Yeah, no problem, thanks for having us. >> May get you on at DockerCon sometimes. (Daniel laughing) Get you DockerCon. The container certainly been great, talk about your product first. Let's get your company out there. What do you guys do? You got something new and different. Something needed. What's different about it? >> Yeah, so we started building this product. One thing we were trying to do is finding a login solution that was built for developers, especially around DevOps. We were running our own multi-tenant SaaS product at the time and we just couldn't find anything great. We tried open source Elastic and it turned out to be a lot to manage, there was a lot of configuration we had to do. We tried a bunch of the other products out there which were mostly built for log analysis, so you'd analyze logs, maybe a week or two after, and there was nothing just realtime that we wanted, and so we decided to build our own. We overcame a lot of challenges where we just felt that we could build something that was easier to use than what was out there today. Our philosophy is for developers in the terms of we want to make it as simple as possible. We don't want you to manage where you're going to think about how logs work today. And so, the whole idea, even you can go down to some of the integrations that we have, our Kubernetes integration's two lines. You essentially hit two QCTL lines, your entire cluster will get logged, directly logged in in seconds. That's something we show often times at demos as well. >> Norman, I wonder if you can drill in a little bit more for us. Always look at is a lot of times the new generation, they've got just new tools to play with and new things to do. What was different, what changes? Just the composability and what a small form factor. I would think that you could just change the order of magnitude in some of the pricing of some of these. Tell us why it's different. >> Yeah, I mean, I think there's, three major things was speed. So what we found was that there weren't a lot of solutions that were optimized really, really well for finding logs. There were a lot of log solutions out there, but we wanted to optimize that so we fine-tuned Elasticsearch. We do a lot of stuff around there to make that experience really pleasurable for our users. The other is scale. So we're noticing now is if you kind of expand on the world of back in the day we had single machines that people got logs off of, then you went to VMware where you're taking a single machine and splitting up to multiple different things, and now you have containers, and all of a sudden you have Kubernetes, you're talking about thousands and thousands of nodes running and large production service. How do you find logs in those things? And so we really wanted to build for that scale and that usability where, for Kubernetes, we'll automatically tag all your logs coming through. So you might get a single log line, but we'll tag it with all the meta-data you need to find exactly what you want. So if I want to, if my container dies and I no longer know that containers around, how am I going to get the logs off of that, well, you can go to LogDNA, find the container that you're looking for, know exactly where that error's coming from as well. >> So you're basically storing all this data, making it really easy for the integration piece. Where does the IBM relationship fit in? What's the partnership? What are you guys doing together? >> I don't know if Dan wants to-- >> Go ahead, go ahead. >> Yeah, so we're partnering with IBM. We are one of their major partners for login. So if you go into Observability tab under IMB Cloud and click on Login, login is there, you can start the login instance. What we've done is, IBM's brought us a great opportunity where we could take our product and help benefit their own customers and also IBM themselves with a lot of the login that we do. They saw that we are very simplistic way of thinking about logs and it was really geared towards when you think about IBM Cloud and the shift that they're moving towards, which is really developer-focused, it was a really, really good match for us. It brought us the visibility into the upmarket with larger customers and also gives us the ability to kind of deploy globally across IBM Cloud as well. >> I mean, IBMs got a great channel on the sales side too, and you guys got a great relationship. We've seen that playbook before where I think we've interviewed in all the other events with IBM. Startups can really, if they fit in with IBM, it's just massive, but what's the reason? Why the partnership? Explain. >> Well, I mean, first of all we were looking for a solution, a login solution, that fit really well with IKS, our Kubernetes service. And it's cloud-native, high scale, large number of cluster, that's what our customers are building. That's what we want to use internally as well. I mean, we were looking for a very robust cloud-native login service that we could use ourselves, and that's when we ran across these guys. What, about a year ago? >> Yeah, I mean, I think we kind of first got introduced at last year's KubeCon and then it went to Container World, and we just kept seeing each other. >> And we just kept on rolling with it so what we've done with that integration, what's nice about the integration, is it's directly in the catalog. So it's another service in the catalog, you go and select it, and provision it very easily. But what's really cool about it is we wanted to have that integration directly with the Kubernetes services as well, so there's the tab on the Integration tab on the Kubernetes, literally one button, two lines of code that you just have to execute, bam! All your logs are now streaming for the entire cluster with all the index and everything. It just makes it a really nice, rich experience to capture your logs. >> This is infrastructure as code, that's what the promise was. >> Absolutely, yes. >> You have very seamless integration and the backend just works. Now talk about the Kubernetes pieces. I think this is fascinating 'cause we've been pontificating and evaluating all the commentary here in theCUBE, and we've come to the conclusion that cloud's great, but there's other new platform-like things emerging. You got Edge and all these things, so there's a whole new set, new things are going to come up, and it's not going to be just called cloud, it's going to be something else. There's Edge, you got cameras, you got data, you got all kinds of stuff going on. Kubernetes seems to fit a lot of these emerging use cases. Where does the Kubernetes fit in? You say you built on Kubernetes, just why is that so important? Explain that one piece. >> Yeah, I mean, I think there's, Kubernetes obviously brought a lot of opportunities for us. The big differentiator for us was because we were built on Kubernetes from the get go, we made that decision a long time ago, we didn't realize we could actually deploy this package anywhere. It didn't have to be, we didn't have to just run as a multi-tenant SaaS product anymore and I think part of that is for IBM, their customers are actually running, when they're talking about an integrated login service, we're actually running on IBM Cloud, so their customers can be sure that the data doesn't actually move anywhere else. It's going to stay in IBM Cloud and-- >> This is really important and because they're on the Kubernetes service, it gives them the opportunity, running on Kubernetes, running automatic service, they're going to be able to put LogDNA in each of the major regions. So customer will be able to keep their logged data in the regions that they want it to stay. >> Great for compliance. >> Absolutely. >> I mean, compliance, dreams-- >> Got to have it. >> Especially with EU. >> How about search and discovery, that's fit in too? Just simple, what's your strategy on that? >> Yeah, so our strategy is if you look at a lot of the login solutions out there today, a lot of times they require you to learn complex query languages and things like that. And so the biggest thing we were hearing was like, man, onboarding is really hard because some of our developers don't look at logs on a daily basis. They look at it every two weeks. >> Jerry Chen from Greylock Ventures said machine learning is the new, ML is the new SQL. >> Yup. (Daniel laughing) >> To your point, this complex querying is going to be automated away. >> Yup. >> Yes. >> And you guys agree with that. >> Oh, yeah. >> You actually, >> Totally agree with that. >> you talked about it on our interview. >> Norman, wonder if you can bring us in a little bit of compliance and what discussions you're having with customers. Obviously GDPR, big discussion point we had. We've got new laws coming from California soon. So how important is this to your customers, and what's the reality kind of out there in your user base? >> Yeah, compliance was, our founders had run a lot of different businesses before. They had two major startups where they worked with eBay, compliance was the big thing, so we made a decision early on to say, hey, look, we're about 50 people right now, let's just do compliance now. I've been at startups where we go, let's just keep growing and growing and we'll worry about compliance later-- >> Yeah, bite you in the ass, big time. >> Yeah, we made a decision to say, hey, look, we're smaller, let's just implement all the processes and necessary needs, so. >> Well, the need's there too, that's two things, right? I mean, get it out early. Like security, build it up front and you got it in. >> Exactly. >> And remember earlier we were talking and I was telling you how within the Kubernetes service we like to use our own services to build expertise? It's the same thing here. Not only are they running on top of IKS, we're using LogDNA to manage the logs and everything, and cross the infrastructure for IKS as well. So we're heavily using it. >> This also highlights, Daniel, the ecosystem dynamic of having when you break down this monolithic type of environments and their sets of services, you benefit because you can tap into a startup, they can tap in to IBM's goodness. It's like somewhat simple Biz Dev deal other than the RevShare component of the sales, but technically, this is what customers want at the endgame is they want the right tool, the right job, the right product. If it comes from a startup, you guys don't have to build it. >> I mean, exactly. Let the experts do it, we'll integrate it. It's a great relationship. And the teams work really well together which is fantastic. >> What do you guys do with other startups? If a startup watches and says, hey, I want to be like LogDNA. I want to plug into IBM's Cloud. I want to be just like them and make all that cash. What do they got to do? What's the model? >> I mean, we're constantly looking at startups and new business opportunities obviously. We do this all the time. But it's got to be the right fit, alright? And that's important. It's got to be the right fit with the technology, it's got to be the right fit as far as culture, and team dynamics of not only my team but the startup's teams and how we're going to work together, and this is why it worked really great with LogDNA. I mean, everything, it just all fit, it all made sense, and it had a good business model behind that as well. So, yes, there's opportunities for others but we have to go through and explore all those. >> So, Norman, wonder if you can share, how's your experience been at the show here? We'd love to hear, you're going to have so many startups here. You got record-setting attendance for the show. What were your expectations coming in? What are the KPIs you're measuring with and how has it met what you thought you were going to get? >> No, it's great, I mean, previous to the last year's KubeCon we had not really done any events. We're a small company, we didn't want to spend the resources, but we came in last year and I think what was refreshing was people would talk to us and we're like, oh, yeah, we're not an open source technology, we're actually a log vendor and we can, and we'll-- (Stu laughing) So what we said was, hey, we'll brush that into an experience, and people were like, oh, wow, this is actually pretty refreshing. I'm not configuring my fluentd system, fluentd to tap into another Elasticsearch. There was just not a lot of that. I think this year expectation was we need the size doubled. We still wanted to get the message out there. We knew we were hot off the presses with the IMB public launch of our service on IBM Cloud. And I think we we're expecting a lot. I mean, we more than doubled what our lead count was and it's been an amazing conference. I mean, I think the energy that you get and the quality of folks that come by, it's like, yeah, everybody's running Kubernetes, they know what they're talking about, and it makes that conversation that much easier for us as well. >> Now you're CUBE alumni now too. It's the booth, look at that. (everyone laughing) Well, guys, thanks for coming on, sharing the insight. Good to see you again. Great commentary, again, having distinguished engineering, and these kinds of conversations really helps the community figure out kind of what's out there, so I appreciate that. And if everything's going to be on Kubernetes, then we should put theCUBE on Kubernetes. With these videos, we'll be on it, we'll be out there. >> Hey, yeah, absolutely, that'd be great. >> TheCUBE covers day three. Breaking it down here. I'm John Furrier, Stu Miniman. That's a wrap for us here in Seattle. Thanks for watching and look for us next year, 2019. That's a wrap for 2018, Stu, good job. Thanks for coming on, guys, really appreciate it. >> Thanks. >> Thank you. >> Thanks for watching, see you around. (futuristic instrumental music)

>> Live from Seattle, Washington it's theCUBE covering KubeCon and CloudNativeCon North America 2018 brought to you by Red Hat the Cloud Native Computing Foundation and it's Ecosystem Partners. >> Well, everyone welcome back to theCube's live coverage here in Seattle for KubeCon and CloudNativeCon 2018. I'm John Furrier with Stu Miniman. Three days of coverage around the Cloud Native growth, around the Ecosystem around open source, and the role of micro servers in the cloud. Our next guest is Roland Barcia who's the IBM Distinguished Engineer for IBM's Hybrid Cloud. Welcome to theCube. >> Thank you, glad to be here. >> Thanks for joining us. Being a Distinguished Engineer of IBM is a pretty big honor so congratulations. >> Thank you. >> it means you got technical chops so we can get down and dirty if we want to. >> Sure. >> I want to get your take on this because a lot of companies in IT are transforming and then that's been called digital transformation, it's happening and cloud has developed scale. And the wish list if you had the magic wand that could make things do better is actually happening. Supernetting's actually creating some goodness that if you had the magic wand, if I asked that question three years ago, if you had a magic wand what would an environment look like? Seamless operations around the cloud, so it's kind of happening. How are you guys positioned for this? Talk about the IBM cloud, what you're doing here, and how you see this cloud native market exploding. It's almost 8,000 people here up from 4,000 last year. >> Yeah, that's a great question I think. I work a lot with our enterprise clients. I'm part of what's called the IBM Cloud Garage, so I'm very customer facing. And often times, we're seeing that there is different paces of a journey. And so for example, I worked with a client that started building a cloud native application. They built about 60 micro services. And at the end of that, they were deploying it as one job which means they defeated the whole purpose of micro service architecture. And so what we really need to think about is an end to end journey. I think the developers are probably the more modern role in an enterprise, but we're starting to see modernization of an operations team for example, and adopting culture, and cutting down the walls of IT organizational groups into mixed squads, adopting something like a Spotify model. And I think a lot of the challenges in adopting kubernetes is really in cultural aspects and in enterprise. Does that make sense? >> Yeah. And because network guys are different than the app guys, and now they have policy knobs on kubernetes they can play with. Network guys love policy. >> Yeah, and they're fighting over ownership, right? >> Roland indeed. We look at that modernization, the application modernization really is that long home intent. And what we hear here is you need to be able to meet customers where they are. Sure, there's some stuff they're building shiny and new and have the developers, but enterprises have a lot of application and therefore there's a grand spectrum. What do you hear from customers? What's the easy part and where's the parts they're getting stuck? >> Yeah, so I think the easy part is writing the application. I think where they're getting stuck is really scaling it to the enterprise, doing the operations, doing the DevOps. I always tell people that a modernization journey might be better started by taking a certain class of applications like middleware where we have a WebSphere heritage from IBM, and saying why don't we take a look at containerizing that. We've built tools like Transformation Advisor that'll scan your WebSphere applications and tell you what do you need to change in that middleware application to make it behave well in a containerized platform. Then from there, you build your DevOps engine, your DevOps pipeline and you really start to get your operations teams going in delivering containers, delivering applications as containers. And then getting your policies and your standards in place. Then you can start opening up around innovation and start really driving towards building cloud native new applications in addition to that. >> One of those areas we've been talking about in the industry for decades is automation. The conversation's a little bit different these days. Maybe you can bring us up to speed about what's different than say it was earlier days. >> Yeah, I think IT organizations have always done a bit of automation. I think they write scripts, they automate builds. I think the mantra that I use is automate everything, right? Organizations need to really start to automate in a new way. How I deliver containers, but delivering the app is not enough. I need to automate all levels of testing in a modern way. Test driven development is big. At the IBM Cloud Garage, we have something we call the IBM Cloud Garage Method which really takes a set of practices like test driven development, pair programming, things out of lean startup, extreme programming, and really start to help enterprises adopt those practices. So I say why can't we automate end to end performance testing in the pipeline, and functional testing, and writing them early and in the beginning of projects? That way, as I'm deploying containers which are very dynamic, along with configuration, and along with policy you're testing it continuously. And I think that level of automation is what we need to get to. >> Talk about security as well 'cause security's one of those things where it's got to be baked in upfront. You got to think about it holistically. It's also now being pulled out of IT, it's more of a board function because the risk management is one hack you could get crushed. And so you got to have security. And the container there's a security boundary issue, so it's important. >> Last week we met with an insurance company. We did a workshop. And they walked us through all the compliant steps that they need to go through today. How they do it with traditional middleware and virtual machines and hardware and it was a very, what I'm going to say governance driven process. And so a lot of checks and balances, stop don't move forward, which is really the industry for developing and innovating is going the opposite way: self service and enabling. And there's a lot of risk with that. And so what we're really trying to do with technology is like Multicloud Manager, technology we have around multicluster, management is how do I do things like I want to check which clusters are Hipaa compliant and which ones are out. How do i force that policy? >> That's smart. >> Now that everything is software driven, software developed, there's an opportunity to really automate those checks. >> So your point automate everything. >> Yeah, I want to automate everything. >> Governance is a service. (laughing) >> Yeah, that's right. And actually, that can help get away from error prone human checks where they had all these tons of documents of all different policies they have to go through can now be automated in a seamless way. >> So compliance and governance could be a stumbling block or it can be just part of the software. That's what you're getting at here. >> That's right, that's what I'm getting at. I think the transition is look at it as an opportunity now that everything is software driven, use software disciplines that developers are used to in those security roles and those CSO roles, etc. >> So I want to ask you a question. So one of the things we're seeing obviously with the cloud is it's great for certain things, and then on premises it has latency issues. We saw Amazon essentially endorse this by saying RDS on VMware on premises. They announced Outpost had reinvent oh, latency. Things aren't moving into the cloud as fast. So you're going to see this hybrid environment. So hybrids, we get that, it's been around, check. No real discussion other than it's happening. The real trend is multicloud, right? >> That' right. >> And so multicloud is just a modern version of the word multi vendor about the client server days. So systems were a multi vendor man choice. This is a fundamental thing. It's not so much about multicloud as it is about choice. How do you guys see that? You are in an environment where you have a lot of customers who don't have one cloud, so this is a big upcoming trend in 2019. >> Most of our clients have at least five different clouds that they deal with, whether it be an IaaS, a PaaS, a SaaS base solution. What we're seeing as a trend is we talked about on premise and private and enterprise is I think is 80% of workloads are still in the data center. And so they want to build that private cloud environment as a transitionary point to public, but what we're seeing across the multicloud space is I'm going to say a new integration space. So if you really think 15 years ago, SOA and enterprise service bosses in a very centralized fashion, I think there's a new opportunity for integration across clouds and on-prem in a more decentralized way. So I think integration is kind of the next trend that we're seeing in this multicloud space because the new applications that we're seeing with cognitive data AI are mixing data sources from multiple clouds and on-prem and needing to control that in a hybrid control plane is key. >> It's funny, the industry always talks about these buzzwords, multicloud. If we're talkin' about multicloud, then it's a problem. The idea of infrastructure as code it's not even use the word multicloud. I mean, if you think about it, if you're programming the infrastructure and enabling the stuff under the covers, why even talk about cloud? It should be automated, so that's the future state, but in reality, that's kind of what enterprisers are tryin' to think about. >> They are, and I think it's a tension between innovation and moving fast and control, right? The enterprisers want to move fast, but they want to make sure that they don't break security protocol, that they don't break resiliency that they're maybe have used to with their existing customers and applications. I do think the challenge is how operations teams and management teams start to act like developers to get to that point. And I think that's part of the journey. >> Open source obviously a big part of this show, and that's open source, people contribute upstream It's great stuff. IBM is a big contributor, and it'll be even more when Red Hat gets into the mix. So upstream's great, but as you got 8,000 people here, you're startin' to see people talkin' about business issues, and other things. One of the downstream impacts of this conference being so open source centric is the IT equation and then just the classic developer. So you have multiple personas now kind of interacting. You got the developer, you got the IT architect, cloud architect pro whatever, and then you got the open source community members. Melting pot: good, challenges, thoughts? >> So I think it's so developers love that, right? I think from an enterprise perspective, there are issues. We're seeing a lot of our clients with our private cloud platform ask us to build out what's called air gapped environment which is how do I build up an open source style ecosystem within my enterprise. So things like getting an artifactory registry or a Docker registry or whatever type of registry where I get certified, open source packages in my enterprise that I've gone and done security vulnerability scans with, or that I've made sure that I look at every layer from the Linux kernel all the way up to whatever software is included. So what we're seeing is how do I open the aperture a bit, but do it in a more responsible fashion I think is the key. >> Yeah, and that's for stability, right? So Stu, one of things I've been talkin' about and want to get your thoughts on this role is that you got the cloud as a scalable system then one of the things that's being discussed in Silicon Valley now for the first time, we've been sitting on theCube for years, is the cloud's a system. It's just some architecture, it's network distributing, computing, art paradigm, all that computer science has been around for awhile, right? >> Yes, yes. >> So if you've been a systems person whether hardware or whatever, operating systems, you get cloud. But also you got the horizontal specialism of applications that are using machine learning and data and applications which is unique on top. So you have the collision of those two worlds. This is kind of a modern version of two worlds that we used to call systems and apps, but they're happening in a real dynamic way. What's your thoughts on this? Because you got the benefits of horizontally scalable cloud and you now have the ability to power that so we're seeing things like AI, which has been around for a long, long time, have a renaissance because now you got a lot of compute. >> That's right, and I think data is the real big challenge we're seeing with a lot of our clients. They have a lot of it in their enterprise, they don't want to unlock it all right away. We recently did what's called IBM Cloud Private for Data, in which we brought in a set of technologies around our AI, our Watson core to really start leveraging some of those tools in a private manner. And then what we're seeing is a lot of applications that are moving to the cloud have a data drag. It might start as something as simple as caching data and no SQL databases, but very quickly they want to learn a lot more about that data. So we're seeing that mix happening all the time. >> We've had it, we've had someone say in theCube ML's the new SQL. >> Yeah. >> Because you're starting to see SQL abstraction layers are a beautiful thing if they're connected. So I want to get your thoughts on this because everyone's kind of in discovery mode right now. Learning, there's a lot of education. I mean, we're talkin' about real, big time players. Architects are becoming cloud architects. Sysadmins are becoming operators for large infrastructure scale. You see network guys goin' wait a minute, if I don't get on the new network programmable model I'm going to be irrelevant. So a lot of persona changes in the enterprise. How are you guys handling that with customers? I know you guys have the expert program. Comment on that dynamic. >> I think what we're doing is we use the IBM Cloud Garage to bring in practices like the Spotify method where we start pushing things like >> What's the Spotify method? >> Spotify method is a way of doing kind of development where rather than having your disciplines of architects, development, operations, we're now splitting teams, let's say functionally, where I have mixed disciplines in a squad and maybe saying hey, the person building the account team has an SRE, an ops guy, a dev guy all within their same squad. And then maybe have guilds across disciplines, right? And so what we do at the Garage is we bring 'em in to one of the Garages. We have four team locations worldwide. Maybe do your first project. Then we build enablement and education around that, bring it back to the enterprise and start making that viral. And that's what we're doing in the IBM Cloud Garage. >> So not a monolithic thing, breakin' it down, integrating multiple disciplines, kind of like a playlist. >> Yeah, that's right. And I think the best way to do it is to practice it, right, in action. Let's pick a project rather than talking about it. >> If I had to ask you in 2019, what is the IT investment going to look like with kubernetes impact? How does kubernetes change the IT priorities and investments for an enterprise? >> Yeah, so I think you'll see kubernetes become a vehicle for enterprises to deliver content. So one, the whole area around helm and other package managers as a way to bundle software. I think as people build more clusters, multicluster management is going to be the big trend of how do I deal now with clusters that I have in public cloud and private cloud, all different clouds? And I think that integration layer that I talked about where what does modern integration look like across kubernetes based applications. >> Someone asked me last week at Reinvent hey, can't we just automate kubernetes? And then I was like, well it's kind of automated now. What's your thoughts on that? >> So I think when someone asks a question what does it mean to automate that I think the kubernetes stack really sits on top of IaaS infrastructure. And so for example, our IBM Cloud Private you can run it on zLinux or Power. And we have a lot of IBM folks that run multi architecture clusters. And therefore, they still need a level of automating how I create clusters over IaaS and there's technologies like Terraform and others that help with that, but then there's also automating standing up the DevOps stack, automating deployment of the applications over that stack. And I think they mean automating how I use kubernetes in an environment. >> So 2019, the year of programmability and automation creating goodness around kubernetes. >> Yeah, absolutely, >> Roland, thanks for comin' >> Thank you, it was great. >> on theCube, thanks for that smart insight. TheCube coverage here, day two winding down. We got day three tomorrow. This is theCube covering KubeCon and CloudNativeCon 2018. We'll be right back with more day two coverage after this short break. (happy electronic music)

>> Narrator: Live from Chicago Illinois, it's theCUBE! Covering VeammOn 2018. Brought to you by Veamm. >> Welcome back to VeammOn 2018 everybody, and you're watching theCUBE. The leader in live tech coverage. We go out to the events, we extract the signal from the noise. This is day one of our coverage of VeammOn, the second year theCUBE has been here. I'm Dave Vellante with my co-host Stu Miniman. Zeb Ahmed is here, he's the Senior Offering Manager for VMWare, with the IBM Cloud, at IBM of course. Thanks for coming on theCUBE, good to see you Zeb. >> Thank you for having me, very excited to be here. >> Yeah so IBM, Cloud, big part of our business. Obviously VMWare, you've been there for a long time. Partnerships with Veamm. Lay it all out for us, what's going on at IBM, IBM Cloud. >> Yeah so we started the VMWare partnership a couple years ago, and our goal was really to build a practice run VMWare which was automated, take it to the next level essentially, not just be a me too player, what everybody else was doing out there, but rather, make the transition from on premises to the Cloud much easier for those VMWare customers. So we've automated a lot of things on the VMWare platform, you can deploy the inverse stack, in a matter of minutes, instead of days and months. So it's a much easier transition, we also work with a lot of partners, such as Veamm, but customers was using on premises, and we've allowed them to have those capabilities in the Cloud as well, in a very automated fashion. >> Quickly if I remember, I think you guys were first doing something with VMWare in the Cloud, you're kind of a year ahead of most. I mean-- >> Stu: It was a few months ahead, they were the first big partner out there with the VMWare Cloud basically. We got, put in Cloud air and everything. >> But in terms of shipping, actually, you guys-- >> We were the first ones, yeah. So we were the first ones to market with Cloud foundation stack right? Yeah and then the other vendors followed as well, but yeah that's been doing great, right? And again, it's fully automated, matter of minutes you can deploy the whole stack, a lot of value add there. >> Yeah Zeb, maybe help set the picture for us a little bit. 'Cause we talk about this multi-cloud world, IBM owns a lot of applications, IBM partners with a lot, where does IBM see themselves playing in this multi-cloud, multi-app world? >> Great question, I think I, so I refer to it two T's. So the first one being the transition, and then the transformation. So the transition is really where the challenge has been for those customers, the barrier to entry, how do these customers actually make that move seamless to the Cloud, especially the space that IBM is in on the enterprise side, these applications are legacy, very very complicated design, a lot of dependencies, so that was a challenge that we tried to solve for. And I think we're at a state now where we've not only solved for that, we've also, I don't know if you guys have seen HCX that we had with VMWare recently, which was a great migration tool, and helps customer on board Cloud, and adapt to Cloud much much faster. And then also build that ecosystem partner network. So all those tools, that we were using on premises like Veamm, right? Making those available in the Cloud for those customers, and it has been great, and also in the transformation side, right? So not only just move them to the Cloud, but also help them leverage, and go up the stack. So micro-services, blockchain, Watson, containers, all those things are available to our customers. >> I think that's a key point that I wanted to highlight is, people often say, how does IBM compete with some of the big Cloud players? You're not just infrastructure as a service, you've got a giant SAS portfolio, you mentioned Watson so, talk about your strategy in that regard. >> Yeah I mean so, the enterprise customer, typical customer, whether it's financial industry or whether health care or transportation et cetera, nobody is just looking for a partner where they can just move the infrastructure too. They're looking for the next state, they're looking to transform the business, they're trying to utilize all those new capabilities that exist in the Cloud today. And IBM has sought for that exactly because not only just use, move your infrastructure and workloads, but now you can consume all those additional gallywads, in the Cloud like Watson, make it for a more intelligent solution in the end. >> Right, so that's a key differentiator. There's only a couple of companies that have that, well I guess you guys, Oracle, Microsoft obviously has the applications, and IBM talks a lot about the cognitive piece, am I correct you can only get Watson in the IBM Cloud, is that still the case, or are you now have it on prem? >> No no, Watson can be consumed using an API. So it's a PAS platform, and if somebody wanted to consume Watson for the on premises workloads and wanted to bring that intelligence for that on premises environment they can do that. >> Dave: Are you seeing more demand for that? >> Oh yes. >> Or is it primarily in the Cloud? >> We've got huge traction in the healthcare space especially, there's a lot of financial customers that are onboarding that as well. So Watson's doing great in that regard. >> Sort of privacy reasons and-- >> Zeb: That's right. >> Zeb one of the things we've been watching with Veamm for the last few years is how do they penetrate deeper into the enterprise. Of course IBM has a strong position in the enterprise, help connect for us how the Veamm and IBM partnerships go together. >> So I think this was a very easy answer for a lot of our customers, because Veamm has a lot of penetration on the on premises workloads, especially on the back-up and business continuity space. So when we looked at the partners and the products that existed in the space, we really looked at the market space, what the customers were consuming. Veamm had a huge market share, and like I said previously, we wanted to solve for those problems and we wanted to keep the tools at the same tool set that they were using today on the premises, so this was very seamless for us, and it is seamless for the customers, to move to IBM Cloud and leverage those same tools exactly. >> So talk about choice because, I can imagine you're getting a call from Ed Walsh, "Hey, how about using my data protection software instead of Veamm?". How do you manage that? >> Zeb: It is tough, right? It is obviously tough, IBM also has a huge portfolio of products, right? In the end the decision was or it really came down to, what is it the customers are looking for? When it came to the back-up space, especially on the VMWare platform, The answer was there, a lot of the VMWare customers use Veamm. In addition to that, Veamm also checks a lot of other boxes for us. So, not only does VMWare stack, but also, I don't know if it's been announced yet or not, but AIX is something of beta that they're launching, at this event, so that is huge for IBM. >> Dave: Really? >> Oh yes, they're also in the bare metal space, so a consolidated view of all your back-ups, all your bare metal, for AIX, for virtualized platform. >> So the power guys will be happy. >> For those that aren't as familiar anymore, I mean remember AIX back in the day, but this is second week in a row I'm talking about AIX. It was Nutanix last week, and it's Veamm today. How much AIX is there still out in the wild? >> There's quite a bit, I mean IBM, if you guys know the background, right? When software was acquired it was a bare metal shop. So with that a lot of the power stuff came as well. So we have a huge power practice in IBM. >> Right, and well it's still, I remember the Steve Mills charts, which showed the availability of AIX versus, the only more available platform was the mainframe, and then with AIX, and then, and you had all that other stuff that everybody else buys but, it's a volume market so it kind of makes sense though. People will pay up for that. And still, a huge install base, now growing, and Nutanix has a relationship with the power guys, so maybe that's where sort of factored in, right? But Linux, of course, is the hot space, right? I mean sure you see it's powering the web. >> Well I'm a VMWare guy, so (laughs). >> There's Linux sitting on top of some of that. >> That's right, of course, of course. >> You've got Linux of mainframe, right? Okay, alright so, talk a little bit more about what you're seeing from the VMWare customer base, how it's synergistic and not just sort of a one way trip into a hotel California. >> Yeah, so a typical VMWare customer that we're seeing who's on premises today are looking to IBM Cloud, or actually take a leap into the Cloud, especially on the enterprise base, these customers want to transform. I mean, there has been a lot of questions for them, especially the customer base IBM focused on, questions around security, compliance, business continuity and data protection and such. So these customers not only want to just make the leap into the Cloud, but they also want to solve for some of these challenges, and also go up to stack like I was mentioning. So, we're seeing a huge push for containers, for those customers that are moving to VMWare, they want to build up the stack, on the PAS layer, and also want to leverage Watson and services like that. >> Yeah, could you expand on that a little more, things like are you working with PKS, the solution with VMWare and Pivotal, and the Kubernetes stuff, or? >> Yes, Kubernetes, Dockers, we also give the customers ability to do their own stuff, go up the stack. I mean, in the end, you know, they can consume us from an IS standpoint and build their PAS on top, or we can, they can use our own, so Kubernetes, Dockers, et cetera. >> What's the story, Stu, with Cloud foundry these days? There was a big push early on, and I fell like I can, I'm not as close as you are, but there seems to be a, I don't want to say a pull back, but maybe less enthusiasm, what's the lay of the land? >> Sure, I mean IBM was one of the earliest bloomix, I believe, and with IBM Cloud, IBM has a few different offerings, I didn't see as big of a push from IBM at the Cloud foundry summit I was at last month, but IBM, like most of the Cloud providers are giving customers choice. >> Zeb: That's right. >> So I guess the question is what-- >> And heavy in Open Source, I mean I'm seeing IBM heavy push, I'm wondering server-less, if you've got any commentary there. We've been looking at like Open Whisk and some of the pieces there. >> Yeah Open Whisk is there, there's, server-less is a thing that a lot of these customers, back to your own original question, a lot of these customers are looking for those types of services, and they're all available in the catalog. >> It's still pretty early, that hasn't overtaken the discussions of the (mumbles) and the (mumbles) stuff in your world has it? >> It hasn't, but I think the enterprise customers who are looking to move to Cloud, they are thinking about those things. So these are some of the check boxes that need to be checked for them for the future growth, et cetera. >> So you've got VMWare's obviously visualization strategy, you've got containers coming, I remember when we had Pat Gelsinger on theCUBE several years ago, when containers were, docker was rocketing, and everybody was like oh docker's going to kill VMWare. And Pat's response was, "Look, we've got the best containers in the world. We're going to embrace containers". They're like, oh sure. But that's exactly what happened. What's IBM's point of view on it? >> Yeah, here's the thing, we want to give them the option to do whatever they want to do. We're seeing a lot of traction on the micro-services side, on the containerization, but I think it's going hand in hand, a lot of the customers are using VMWare platform still, yet they're also leveraging some of these other micro-services and containers, so I think Pat's right on. I think originally what was people were talking about getting rid of the IS layer of VMWare and just going containers completely. Our take is, give the customers all the functionality and the ability to do whatever they want to do, we are seeing it's more of a mix at the moment. >> And we had Edouard Bugnion on recently, found of, one of the founders of VMWare, and he was talking about the challenges in the data center at scale. And in particular when you introduce virtualization and you reduce some of the hardware resources, how do you deliver predictable, high-performance, at scale, and some of the challenges there. That's even on prem. Now introduce Cloud, and you've got distance and latency and other physics so, what's the discussion like with customers around how to architect the ideal Cloud, on prem, hybrid. >> It's a great question, because that is a question I get asked all the time, because in the enterprise base like I said, these customers in a lot of cases have a hybrid or multi-cloud strategy, so network becomes a key part of that discussion. For us, the answer is very simple. We've laid down the fiber of (mumbles) across all these data centers, so when you're talking about latency, and data transfer, and those types of speeds, or having a multi-cloud strategy across the globe, it's a very simple and easy conversation because not only do we make all that information available to our customers, far as what latency they expect from which data center to another one across the globe, but also it's all private, and it's all secure, and it makes for a very good multi-cloud story. >> I don't know if you saw Jenny Remmetti's talk at IBM Think, but she used the term, a lot of people tongue in cheek, but I kind of like it, "incumbent disruptors". I mean look if you're IBM and you've got the client base that IBM has, you better come up with a term like that because that's exactly what you're trying to help your customers do. So, my question is, where does the Cloud and your offering with VMWare fit into the incumbent disruptive scenario? >> Yeah, so VMWare like I said earlier, we didn't want to be a me too player with VMWare. Not only did we want to have a good story with VMWare because obviously VMWare is a huge market share when it comes to virtualization, but on top of that, we wanted to be more futuristic, and solve for those, some of those questions and concerns that the enterprise customer had. So, tight integration on the enterprise base, on the micro-services, containerization, Watson is a huge part of the VMWare platform, you can seamlessly integrate into Watson and really have intelligent decision making on the VMWare platform. So, we wanted to ensure that we were helping our enterprise customers move to Cloud, yet also solve for the future problems. >> So the incumbent piece, both VMWare and IBM, right, incumbent customers, the disruptor would be I guess Cloud, all the new Cloud services, certainly the machine intelligence cognitive, et cetera, components is the disruptive capability, now it's up to you to figure out, okay, how do you apply all that, presumably IBM and your partners can help. >> Yeah and here's the thing, you mentioned earlier, IBM is one of the only companies in the world that can have an end-to-end, not just infrastructure, but also services wrapped around it. So if you're a customer who's not only looking to move to the Cloud but also have services wrapped around, to go end-to-end, IBM is the company to do that for you. >> Dave: Well that's interesting. Okay, I got to ask him Stu. So we had, we were at Dell Technologies World a couple weeks ago, and we had Jeff Clark on, and we asked him, we said, "Look, companies like IBM, HPE, sort of, IBM selling off its X86 division, and HPE splitting, Dell did the opposite. The mega merger". And his comment was, "Well I don't see how you can do end-to-end without both ends". Now, his definition of end is obviously different to your end definition, and I have to ask you, what do you mean by end-to-end? Is the client sort of just a commodity, we can get that anywhere, it's not really an integration challenge? >> So when I'm saying end-to-end what I'm talking about is a enterprise customer looking to move to the Cloud, solve for the future problems, essentially re-invent themselves, transform their business, leverage the new applications, micro-services that are there, but also have services wrapped around it, right? Somebody who's there to help them end-to-end, whether it's just doing migrations for example, right, from on premises to the Cloud, but also help them onboard and guide them on what is there in the Cloud, or the micro-services, or our PAS layer, and how they can transform really. >> So that to me Stu is, Zeb's talking about not a hardware view, of end-to-end, but a, maybe a systems and a software view of end-to-end, in the Cloud services. Alright, Zeb, thank you very much for, do you have one more? You good? Thanks so much for coming on theCUBE. >> Guys, thank you very much, appreciate it. >> Appreciate it. Alright, keep it right there buddy, Stu and I will be back with our next guest. This is theCUBE, we're live from VeeamOn 2018, in Chi-town, we'll be right back. (electronic music)

>> Announcer: Live from Los Angeles. It's theCUBE covering Open Source Summit North America 2017. Brought to you by, the Linux Foundation and Red Hat. >> Hello everyone, welcome back. Our live coverage, theCUBE's live coverage, of the Open Source Summit in North America, it's a part of the Linux Foundation. I'm John Furrier your host, with Stu Miniman our co-host. Our next guest is Tanmay Bakshi, who is an IBM honorary cloud advisor, algorithmist, former CUBE alumni. Great to see you. >> Thank you very much! Glad to be here! >> You get taller every year. It was what, three years ago, two years ago? >> I believe yeah, two years ago, Interconnect 2016. >> IBM show... doing a lot of great stuff. You're an IBM VIP, you're doing a lot of work with them. IBM Champion. >> Thank you >> Congratulations. >> Thank you. >> What's new? You're pushing any code today? >> Definitely! Now today, getting ready for my BoF that I've got tonight, it's been absolutely great. I've been working on a lot of new projects that I'm going to be talking about today and tomorrow at my keynote. Like I've been working on AskTanmay, or course you know, Interconnect 2016, very first time I presented AskTanmay. Since then, a lot has changed, I've incorporated real, deep learning algorithms, custom, with tensorflow. Into AskTanmay, AskTanmay now thinks about what it's actually looking at, using Watson as well, it's really interesting. And of course, new projects that I'm working on, including DeepSPADE, which actually, basically helps online communities, to detect, and of course report and flag spam, from different websites. For example, Stack Overflow, which I'm working on right now. >> So you're doing some deep learning stuff >> Tanmay: Yes >> with IBM Watson, the team, everything else. >> Tanmay: Exactly, yes. >> What's the coolest thing you've worked on, since we last talked? (laughing) >> Well it would have to be a tie between AskTanmay, DeepSPADE, and advancement to the Cognitive Story. As you know, from last time, I've been working on lots of interesting projects, like with AskTanmay, some great new updates that you'll hear about today. DeepSPADE itself though, I'd like to get a little bit more into that. There's actually, I mean of course, everyone listening right now has used Stack Overflow or Stack Exchange at one point in their lives. And so, they've probably noticed that, a little bit, here and there, you'd see a spam message on Stack Overflow, on a comment or post. And of course there are methods to try and prevent spam on Stack Overflow, but they aren't very effective. And that's why a group of programmers, known as Charcoal SE, actually went ahead and started creating, basically this sweep to try and prevent spam on Stack Exchange. And they call it, SmokeDetector. And it helps them to find and remove spam on Stack Exchange. >> This is so good until it goes out, and the battery needs to be replaced, and you got to get on a chair. But this whole SmokeDetector, this is a real way they help create a good, healthy community. >> Yes, exactly. So, they try and basically find spam, report to moderators, and if enough alarms are set off, they try and report it, or flag it automatically, via other people's accounts. And so basically, what I'm trying to do is, I mean, a few weeks ago, when I found out about what they're doing, I found out that they use regular expressions to try and find spam. And so they have, you know, years of people gathering experience, they're experts in this field. And they keep, you know, adding more regular expressions to try and find spam. And since I, you know, am really really passionate about deep learning, I thought why not try and help them out, trying to augment this sort of SmokeDetector, with deep learning. And so, they graciously donated their data set to me, which has a good amount of training, training rows for me to actually train a deep learning system to classify a post between spam or non-spam. And you'll be hearing a lot more about the model architecture, the CNN plus GRU model, that I've got running in Keras, tonight during my BoF. >> Now, machine learning, could be a real benefit to spam detection, cause the patterns. >> Tanmay: Exactly. >> Spammers tend to have their own patterns, >> Tanmay: Exactly. >> as do bots. >> Tanmay: Yes, exactly, exactly. And eventually, you realize that hey, maybe we're not using the same words in every post, but there's a specific pattern of words, or specific type of word, that always appears in a spam message. And machine learning would help us combat against that. And of course, in this case, maybe we don't actually have a word, or a specific website, or a specific phone number, that would trigger a regular expression alarm. But in the context that this website appears, machine learning can tell us that, "hey, yeah, this is probably a spam post." There are lots of really interesting places where machine learning can tie in with this, and help out with the accuracy. In fact, I've been able to reach around 98% accuracy, and around 15 thousand testing rows. So, I'm very glad with the results so far, and of course, I'm continuing to do all this brand retuning and everything... >> Alright, so how old are you this year? I can't keep the numbers straight. Are you 13, 14? >> Well originally, Interconnect 2016, I was 12, but now I'm 13 years old, and I'm going to be 14 in October, October 16th. >> Okay, so you're knocking on 14? >> Tanmay: Uh, not just yet there, I'll be 14... >> So, Tanmay, you're 14, you're time's done, at this point. But, one of your missions, to be serious, is helping to inspire the next generation. Especially here, at the Open Source Summit, give us a preview of what we're going to see in your keynote. >> Sure, definitely. And now, as you mentioned, in fact, I actually have a goal. Which is really to reach out to and help 100 thousand aspiring coders along their journey, of learning to code, and of course then applying that code in lots of different fields. In fact I'm actually, already around 4,500 people there. Which, I'm very very excited about. But today, during my BoF, as I mentioned, I'm going to be talking a lot about the in-depth of the DeepSpade and AskTanmay projects I've been working on. But tomorrow, during my keynote, you'll be hearing a lot about generally all the projects that I've been working on, and how they're impacting lots of different fields. Like, healthcare, utility, security via artificial intelligence and machine learning. >> So, when you first talked to us about AskTanmay, it's been what almost 18 months, I think there. What's changed, what's accelerating? I hear you throw out things like Tensorflow, not something we were talking about two years ago. >> Tanmay: Yeah. >> What have been some of the key learnings you've had, as you've really dug into this? >> Sure, in fact, this actually something that I'm going to be covering tonight. And that is, that AskTanmay, you could say, that it's DNA, well, from AskMSR, that was made in 2002. And I took that, revived it, and basically made it into AskTanmay. In its DNA, there were specific elements, like for example, it really relies on data redundancy. If there's no data redundancy, then AskTanmay doesn't do well. If you were to ask it where it was, where's the Open Source Summit North America going to be held, it wouldn't answer correctly, because it's not redundant enough on the internet. It's mentioned once or twice, but not more than that. And so, I learned that it's currently very, I guess you could say naive how it actually understands the data that it's collecting. However, over the past, I'd say around six or seven months, I've been able to implement a BiDAF or Bi-Directional Attention Flow, that was created by Allen AI. It's completely open-source, and it uses something that's called a SQuAD data set, or Stanford Question and Answer Data Set. In order to actually take paragraphs and questions, and try to return answers as snippets from the paragraphs. And so again, integrating AskTanmay, this allows me to really reduce the data redundancy requirement, able to merge very similar answers to have, you know better answers on the top of the list, and of course I'm able to have it more smart, it's not as naive. It actually understands the content that it's gathering from search engines. For example, Google and Bing, which I've also added search support for. So again, a lot has changed, using deep learning but still, sort of the key-points of AskTanmay requires very little computational power, very very cross-platform, runs on any operating system, including iOS, Android, etc. And of course, from there, open-source completely. >> So how has your life changed, since all the, you've been really in the spotlight, and well-deserved I think. It's been great to have you On theCUBE multiple times, thanks for coming on. >> Thank you No, definitely of course. >> Dave Vallante was just calling. He wants to ask you a few questions himself. Dave, if you're watching, we'll get you on, just call right now. What's going on, what are you going to do when... Are you like happy right now? Are you cool with everything? Or is there a point where you say, "Hey I want to play a little bit with different tools", you want more freedom? What's going on? >> Well, you see, right now I'm very very excited, I'm very happy with what I'm doing. Because of course I mean, my life generally has changed quite a bit since last Interconnect, you could say. From Interconnect 2016 to 17, to now. Of course, since then, I've been able to go into lots of different fields. Not only am I working with general deep learning at IBM Watson, now I'm working with lots of different tools. And I'm working especially, in terms of like, for example Linux. What I've been doing with open-source and everything. I've been able to create, for example, AskTanmay now integrated Keras and tensorflow. DeepSpade is actually built entirely off of tensorflow and Keras. And now I've also been able to venture into lots of different APIs as well. Not just with IBM Watson. Also things like, we've got the Dandelion API. Which AskTanmay also relies off of Dandelion, providing text similarity services for semantic and syntactic text similarity. Which, again, we'll be talking about tonight as well. So, yeah, lot's has changed, and of course, with all this sort of, new stuff that I'm able to show, or new media for which I'm able to share my knowledge, for example, all these, you know CUBE, interviews I've been doing, and of course all these keynotes, I'm able to really spread my message about AI, why I believe it's not only our future, but also our present. Like, for example, I also mentioned this last time. If you were to just open up your phone right now, you already see that you're, half of your phone is powered by AI. It's detecting that hey you're at your home right now, you just drove back from work, and it's this time on this day, so you probably want to open up this application. It predicts that, and provides you with that. Apart from that, things like Siri, Google Now, these are all powered by AI, they're already an integral part of our lives. And of course, what they're going to be doing in our lives to come is just absolutely great. With like, healthcare, providing artificial communication ability for people who can't communicate naturally. I think it's going to be really really interesting. >> Tanmay, it's always great have you on theCUBE. Congratulations. >> Tanmay: Thank you very much. >> AskTanmay, good projects. Let's stay in touch, as we start to produce more collaboration, we'd love to keep promoting your work. Great job. And you're an inspiration to many. >> Tanmay: Thank you very much, glad to be here. >> Thanks for coming on theCUBE. Live coverage from the Open Source Summit's theCUBE, in Los Angeles. I'm John Furrer, Stu Miniman. We'll be back with more live coverage after short this break. (upbeat music)

(upbeat music) >> Announcer: Live from Las Vega, it's theCUBE. Covering InterConnect 2017. Brought to you by IBM. >> Welcome back everyone. We are live in Las Vegas where IBM InterConnect 2017. It's theCUBE's coverage of IBM's Cloud Show, Cloud and Data Show. I'm John Furrier, and my Co-Host Dave Vellante. Our next guest is Abby Kearns, Executive Director of Cloud Foundry Foundation. Welcome to theCUBE. >> Welcome, thank you. >> Thanks for joining us. So, Cloud Foundry, you're new as the executive role. Sam had moved on to Microsoft. >> Abby: Google. >> Google, I'm sorry, Google. He was formerly at Microsoft. Former Microsoft employee. But at Google, Google Cloud Next was a recent show. So you're new. >> I'm new. >> John: To the reins, but you're not new in the community. >> I've been a part of the community for several years. Prior to joining the Foundation a year ago, I was at Pivotal for a couple of years. So I've been part of the Cloud Foundry community for several years and it's a technology that's near and dear to my heart. And it's a community that I am very passionate about. >> And the emergence of Cloud Foundry, I think about it, it's really kind of changed the game. It's really lifted all the boats, if you will, rising tide floats all boats. IBM uses it, you've got a lot of customers. Just go down the list of the notable folks working with Cloud Foundry. >> Well, I look no further than those that are on our Board and those that represent the strategic vision around the Cloud Foundry, so IBM, Pivotal, but DellEMC and Cisco and SAP and VMware and Allianz and Swisscom and, you know, of course Pivotal. And I think all of them really bring such a broad perspective to the table. But, then broadening beyond that community, our community has grown so much since. So, a lot of people don't realize that Cloud Foundry has only been an open source project for just a little over two years. So, January 2015 marked when it become an official open source project. Prior to that it was part of Pivotal. And in that a little over two years, we've grown to nearly 70 members in our community. And our disk x high continued to grow, and bring more perspectives to the table. >> So, what has been the differences. A lot of people have taken a different approach, on. For Bluemix, for instance, they have good core at Cloud Foundry. Is it going the way you guys had thought, as a community that this was the plan all along? Because you see people really kind of making some good stuff out of the Cloud Foundry. Was that part of the plan? This open direction? >> Well, I think part of the plan was really coalescing around a single vision of that abstraction. And what's the whole vision of Cloud Foundry? It's to make, allow developers to create code faster. In whatever realm that takes. And our industry is evolving and it's evolving so quickly, and exciting, all of these organizations. These enterprise organizations that are becoming software companies. And how, I mean, how exciting is that? As we think about the abstraction that Cloud Foundry can provide for them, and the automation it can provide and allows them to focus on one thing, and one thing only, creating code that changes their business. So, we're really focused myopically on ensuring the developers have the ability to quickly and easily create code and innovate quickly as an organization. >> So, on the development side. I mean sometimes standards can go, fall down by forcing syntax or, you know, forcing certain things. You guys had a different approach. Looking back now, what were the key things that were critical for Cloud Foundry to maintain its momentum? >> I think a couple of things. You know, obviously, it's a complex distributed system, but it's put together amazingly well. Quality was first and foremost, part of its origins. And it's continued to adhere to that quality and that control around the development process, and around the release process. So, Cloud Foundry as an open source project is very much a governance by contribution. So we look for those in the organizations and different communities to be part of it, and contribute and so we have the full time committers. That are basically doing this all day, every day. And we have the contributors that are also part of the community providing feedback and value. >> And there was a big testimonial of American Air Lines on stage. That's a big win. >> Abby: Yes, it is a big win. >> John: Give some color on that deal. >> I can't give you any details on the deal that IBM has. >> But that's a Cloud Foundry, IBM. >> But it is Cloud Foundry, yes. >> You guys were part of the Bluemix thing. >> Yes. >> Okay. >> And American Airlines is a company that I have a lot of history with. They were a customer of mine for many years in the early 2000s, so I'm thrilled to see them innovating, and taking advantage of a platform. >> So, help us unpack this conversation that's going on around PaaS, right. Some people say, oh PaaS is passe. But, it's development tools and it's programming. And it's a platform that you've created. So, what do you make of that conversation? What is it, what implications does it have to your strategy and your ecosystem strategy? >> Well, I for one don't like the term Paas anyways. So, I'm happy to say, PaaS is passe. Because I do think it's evolved. So, when I talk about Cloud Foundry, I talk about it as a cloud application platform. Because at the end of the day, our goal is to help organizations create code faster. You know, the high degrees of automation, the abstraction that the platform brings to the table, isn't just a platform, it is an enabler for that development. So we think about what that means. It's can I create applications faster? Do I have proliferation of services, to your ecosystem point, that enable those applications to be, to grow and to scale, and to change the way that organization works? Because it's a technology enabled business transformation for many of these organizations. >> John: It's app driven too, that's the key to success. >> It's app driven, which is why we talk so much about developers, is because that's the key. If I'm going to become a software company, what does that mean? I am writing code, and that code is changing the way I think about my business, and my consumers. >> And the app landscape has certainly changed with UX creativity, but now you've got IoT, there's a real functional integration going on with the analog world going digital. It's like whoa, I've gotten all this stuff that's now instrumented connected to the internet. IoT, Internet of Things. That's going to be interesting. Cloud has to power that. >> I think it does, because what is IoT reliant on? Applications that take advantage of that data. I mean that's what you're looking to gain. You're looking to have small applications streaming large amounts of data from sensors, be it from cars or be it from a manufacturing plant, if you're thinking industrial IoT. So Cloud Foundry provides the platform for many of these applications to be developed, created, and scaled. At the level that companies like GE and Siemens and others are looking to build out and tackle that IoT space. >> It's open. I mean we can all agree that Cloud Foundry's the most open platform to develop applications on. But, you're. Developers have choices. >> Yeah. >> You're seeing, you know, infrastructure as a service, plus, and you're seeing, SaaS kind of minus emerge. How should we be thinking about the evolution. You said earlier it evolved. Where is it evolving to? Obviously you've bet on open. Good bet, all right. Other, more proprietary. I don't even know what open is anymore, sometimes. (laughter) But, we can agree that Cloud Foundry is open. >> We're open. >> But how should we be thinking about the evolution going forward? >> Well, that's the beauty of open, right. Like, what is open source? Open source brings together a diverse set of perspectives, and background to innovate faster. And that's where we are. We're seeing a lot of technology evolve. I mean, just think about all the things that have evolved in the last two years. Where we've had technologies come up, some go down, but there is so much happening right now, because the time is now. For these companies that are trying to develop more applications and are trying to figure out ways not only to develop these applications, but develop them as scale, and really grow those out and build those, and IoT, and you're getting more data. We're having, capturing those data, and operationalizing that data. And it comes back to one thing. Applications that can take advantage of that. And so I think there is the potential as we build out and innovate both the ecosystem, but the platform will naturally evolved and take advantage of those wins from these organizations that are driving this to scale. >> So scale is the lynch pin, right? And if you think about traditional PaaS environments, if I can use that term, they're limited in scale and obviously simplicity. Is that another way to think about it? >> Well, I think the platform. I think about it this way. The platform enables you to run fast. You know, you're not running fast with scissors. You want to be able to run fast safely. So, it provides that abstraction and those guardrails so you can quickly iterate and develop and deploy code. If I look at what let's do HCSC is a company. They went from developing an application. It took them 35 people and nine months to create an app, right? Now, with Cloud Foundry, they're able to do it with four people in six weeks. It changes the way you work as an organization. Now, just imagine as you scale that out, what that means. And imagine the changes that can bring in your organization. When you're software centric, and you're customer first, and you're bringing that feedback loop in. >> Now, you guys do a lot of heavy lifting on behalf of the customer, but you're not hardening it. Hardening to the point where they can't mold it and shape it to what they want. That's kind of what I'm. >> No, we want to give. We want to abstract away and automate as much as possible for things you care about. Resiliency, auto-scaling, the ability to do security and compliance, 'cause those are things you care about as an enterprise. But, let's get that, let's make that happen for you, but then give the control to the developer to self-provision, to scale, to completely deploy and iterate. Do continuous delivery. All of those things that allow you to go from developing an app once a year to developing an app and iterating on that app constantly all the time. >> So Abby, I want to ask you, kind of take a step back. And look at the community trends right now. You see Open Stack has trajectory, it's becoming more an infrastructure as a service. Settling in there. That's gone through a lot of changes. Seeing a lot of growth in IoT which we talked about. You starting to see some movement in the open source community, CNCF has got traction, the Linux Foundation, Cloud native you've got Kubernetes. I call it the Cold War for orchestration, you know, going on right now, and it's. So it's really interesting time. Microservices are booming. This is the Holy Grail for developers for the next gen. It's going to be awesome. Machine learning. Everyone's getting intoxicated on that these days. So, super cool things coming down the pike. >> For sure, I think we're in the coolest time. >> What's going on in the communities? Is there any movement, is there trends, and is there a sentiment among the developer communities that you see that you could. Any patterns developing around what people are gravitating to? >> I think developers want the freedom to create. They want the ability to create applications and see those come to fruition. And I think. I think a lot of things that were new and innovative a couple of years ago, and even now, are becoming table stakes. For example, five years ago, having a mobile app as a bank was new and interesting and kind of fun. Now, it's table stakes. Are you going to go bank with a bank that doesn't have one? Are you going to bank with a bank that doesn't have it? It becomes table stakes. Or who doesn't, if you don't have fraud detection, which is basically event driven responses, right. So, you think about what table stakes are, and what, as we think about the abstraction moving up, that's really where it's going to get interesting. >> Yeah, but open source communities are going to move to these new ground. What I'm trying to get at is to see what's happening, what's the trend in the developer community? What's hot, what's fashionable? Is there new projects popping up that you could share that you think is cool and interesting? >> Well, they're all cool and interesting. >> John: You'd rather not comment. >> (laugh) I think they're all cool and interesting. I think you know, CNCF is a sister organization underneath the Linux Foundation. I, you know. >> John: They kind of inherit that from KubeCon, Kubernetes Con. >> Yeah, I think they're doing interesting things. I think any organization that's promoting cloud native application architecture and the value of that, you know, we all deserve to be part of the same conversation, because to your point earlier, a rising tide lifts all boats. And if every organization is doing cloud native application architectures, and cloud native solutions, it's going to be super interesting. >> I mean we certainly were just at Strata Hadoop, we ran our own event last week called Big Data SV, and it's very clear to us that the big data world and industry and cloud are coming together, and the forcing function is machine learning, IoT and then AI is the, you know, appeal. That's the big trend that kind of puts a mental model around it. But, IoT is driving this data and the cloud horsepower is forcing this to move faster. It seems to be very accelerated. >> But, it also enables so much. I mean, if you can operationalize this data that you're aggregating and turn it into actionable apps that do things for your business, save money, improve logistics, reach your users better and faster, you start to see the change and the shift that that can bring. You have the data married with the apps married with the endpoint sensors, and all of the sudden, this gets to be a really interesting evolution of technology. >> All right, so what's your 100 day plan. Well, you're already in a 100 day plan already. So what's your plan for this year? As new Executive Director for Cloud Foundry, what's on the agenda, what's your top three thing you're going to chip away at this year for objectives? >> Developers, developers, developers. Does that count as top three? >> More, more, more. (laughter) Increase of developer count. >> Just really, reaching out to developers and ensuring that they're able to be successful in Cloud Foundry. So I think you'll hear more from us in the next couple of weeks about that. But, >> John: So proof points basically. >> The proof points, but just ensuring they can be successful. Ensuring that scale is affable for them. And then really our summits are even changing. We have actually added developer tracks to our summits to make them a place not only where you can learn about Cloud Foundry, but also where you can work with other developers and learn from them, and learn about specific languages. But also, how to enable those into cloud native application architecture. And I think our goal this year was to really enrich that development community, and build that pipeline and help fill those gaps. >> And celebrate the wins like American Airlines of the world, and as IBM and others are successful, then it gets to be less. You don't want to have cognitive dissonance as a developer, that's the worst thing that developers want to make sure they're on a good bus. To you know, with good people. >> Well, you've got, you've obviously got some technology titans behind you. IBM, you know, the most prominent, I would say. But obviously, guys like VMware and Cisco and others, but you're also got a number of practitioner organization. Guys like Allianz. >> Abby: Allianz, yeah. >> VW, Allstate I think was early on in the program. >> JPMC, City Bank. >> Yeah, I don't want to. I shouldn't have started, 'cause I know I'd leave some out. (laughter) You're the Executive Director, so you have to fill in the gaps. But so, that's somewhat unique in a consortium like this. Somewhat, but that many is somewhat unique. Is there more traction there? What's their motivation in your. >> Abby: As a user? >> Yeah. >> Well, to your other point. We're an open source, right. What's the value? Me, if I'm an enterprise, and I'm looking to take advantage of a platform, but also an open source platform. Open source allows me to be part of that conversation. I could be a contributor, I could be part of the direction. I can influence where it's going. And I think that is a powerful sentiment for many of these organizations that are looking to evolve and become more software-centric, and this is a good way for them to give back and be part of that momentum. >> Yeah, and cloud's exploding. More open source is needed. It's just a great, great mission. Congratulations on the new job, and good luck this year. We'll keep in touch. >> Thank you. >> John: And certainly see you at the Cloud Foundry Summit. That's in San Francisco again this year? >> Santa Clara. June 13th through 15th. >> So every year you guys always have the fire code problem. (laughter) >> Well, I think, and I'm going to go on record now, and officially say this, this will be our last year there. Which I think everyone's excited about, because I think we're all over Santa Clara right now. (laughter) >> All right, well we'll see you there. Abby Kearns, Executive Director of Cloud Foundry Foundation. Here inside theCUBE, power in the cloud. This is theCUBE's coverage of IBM InterConnect 2017. Stay with us, more coverage after this short break. (upbeat music)

>> From theCUBE Studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE and ETR, this is "Breaking Analysis" with Dave Vellante. >> A decade of big data investments combined with cloud scale, the rise of much more cost effective processing power. And the introduction of advanced tooling has catapulted machine intelligence to the forefront of technology investments. No matter what job you have, your operation will be AI powered within five years and machines may actually even be doing your job. Artificial intelligence is being infused into applications, infrastructure, equipment, and virtually every aspect of our lives. AI is proving to be extremely helpful at things like controlling vehicles, speeding up medical diagnoses, processing language, advancing science, and generally raising the stakes on what it means to apply technology for business advantage. But business value realization has been a challenge for most organizations due to lack of skills, complexity of programming models, immature technology integration, sizable upfront investments, ethical concerns, and lack of business alignment. Mastering AI technology will not be a requirement for success in our view. However, figuring out how and where to apply AI to your business will be crucial. That means understanding the business case, picking the right technology partner, experimenting in bite-sized chunks, and quickly identifying winners to double down on from an investment standpoint. Hello and welcome to this week's Wiki-bond CUBE Insights powered by ETR. In this breaking analysis, we update you on the state of AI and what it means for the competition. And to do so, we invite into our studios Andy Thurai of Constellation Research. Andy covers AI deeply. He knows the players, he knows the pitfalls of AI investment, and he's a collaborator. Andy, great to have you on the program. Thanks for coming into our CUBE studios. >> Thanks for having me on. >> You're very welcome. Okay, let's set the table with a premise and a series of assertions we want to test with Andy. I'm going to lay 'em out. And then Andy, I'd love for you to comment. So, first of all, according to McKinsey, AI adoption has more than doubled since 2017, but only 10% of organizations report seeing significant ROI. That's a BCG and MIT study. And part of that challenge of AI is it requires data, is requires good data, data proficiency, which is not trivial, as you know. Firms that can master both data and AI, we believe are going to have a competitive advantage this decade. Hyperscalers, as we show you dominate AI and ML. We'll show you some data on that. And having said that, there's plenty of room for specialists. They need to partner with the cloud vendors for go to market productivity. And finally, organizations increasingly have to put data and AI at the center of their enterprises. And to do that, most are going to rely on vendor R&D to leverage AI and ML. In other words, Andy, they're going to buy it and apply it as opposed to build it. What are your thoughts on that setup and that premise? >> Yeah, I see that a lot happening in the field, right? So first of all, the only 10% of realizing a return on investment. That's so true because we talked about this earlier, the most companies are still in the innovation cycle. So they're trying to innovate and see what they can do to apply. A lot of these times when you look at the solutions, what they come up with or the models they create, the experimentation they do, most times they don't even have a good business case to solve, right? So they just experiment and then they figure it out, "Oh my God, this model is working. Can we do something to solve it?" So it's like you found a hammer and then you're trying to find the needle kind of thing, right? That never works. >> 'Cause it's cool or whatever it is. >> It is, right? So that's why, I always advise, when they come to me and ask me things like, "Hey, what's the right way to do it? What is the secret sauce?" And, we talked about this. The first thing I tell them is, "Find out what is the business case that's having the most amount of problems, that that can be solved using some of the AI use cases," right? Not all of them can be solved. Even after you experiment, do the whole nine yards, spend millions of dollars on that, right? And later on you make it efficient only by saving maybe $50,000 for the company or a $100,000 for the company, is it really even worth the experiment, right? So you got to start with the saying that, you know, where's the base for this happening? Where's the need? What's a business use case? It doesn't have to be about cost efficient and saving money in the existing processes. It could be a new thing. You want to bring in a new revenue stream, but figure out what is a business use case, how much money potentially I can make off of that. The same way that start-ups go after. Right? >> Yeah. Pretty straightforward. All right, let's take a look at where ML and AI fit relative to the other hot sectors of the ETR dataset. This XY graph shows net score spending velocity in the vertical axis and presence in the survey, they call it sector perversion for the October survey, the January survey's in the field. Then that squiggly line on ML/AI represents the progression. Since the January 21 survey, you can see the downward trajectory. And we position ML and AI relative to the other big four hot sectors or big three, including, ML/AI is four. Containers, cloud and RPA. These have consistently performed above that magic 40% red dotted line for most of the past two years. Anything above 40%, we think is highly elevated. And we've just included analytics and big data for context and relevant adjacentness, if you will. Now note that green arrow moving toward, you know, the 40% mark on ML/AI. I got a glimpse of the January survey, which is in the field. It's got more than a thousand responses already, and it's trending up for the current survey. So Andy, what do you make of this downward trajectory over the past seven quarters and the presumed uptick in the coming months? >> So one of the things you have to keep in mind is when the pandemic happened, it's about survival mode, right? So when somebody's in a survival mode, what happens, the luxury and the innovations get cut. That's what happens. And this is exactly what happened in the situation. So as you can see in the last seven quarters, which is almost dating back close to pandemic, everybody was trying to keep their operations alive, especially digital operations. How do I keep the lights on? That's the most important thing for them. So while the numbers spent on AI, ML is less overall, I still think the AI ML to spend to sort of like a employee experience or the IT ops, AI ops, ML ops, as we talked about, some of those areas actually went up. There are companies, we talked about it, Atlassian had a lot of platform issues till the amount of money people are spending on that is exorbitant and simply because they are offering the solution that was not available other way. So there are companies out there, you can take AoPS or incident management for that matter, right? A lot of companies have a digital insurance, they don't know how to properly manage it. How do you find an intern solve it immediately? That's all using AI ML and some of those areas actually growing unbelievable, the companies in that area. >> So this is a really good point. If you can you bring up that chart again, what Andy's saying is a lot of the companies in the ETR taxonomy that are doing things with AI might not necessarily show up in a granular fashion. And I think the other point I would make is, these are still highly elevated numbers. If you put on like storage and servers, they would read way, way down the list. And, look in the pandemic, we had to deal with work from home, we had to re-architect the network, we had to worry about security. So those are really good points that you made there. Let's, unpack this a little bit and look at the ML AI sector and the ETR data and specifically at the players and get Andy to comment on this. This chart here shows the same x y dimensions, and it just notes some of the players that are specifically have services and products that people spend money on, that CIOs and IT buyers can comment on. So the table insert shows how the companies are plotted, it's net score, and then the ends in the survey. And Andy, the hyperscalers are dominant, as you can see. You see Databricks there showing strong as a specialist, and then you got to pack a six or seven in there. And then Oracle and IBM, kind of the big whales of yester year are in the mix. And to your point, companies like Salesforce that you mentioned to me offline aren't in that mix, but they do a lot in AI. But what are your takeaways from that data? >> If you could put the slide back on please. I want to make quick comments on a couple of those. So the first one is, it's surprising other hyperscalers, right? As you and I talked about this earlier, AWS is more about logo blocks. We discussed that, right? >> Like what? Like a SageMaker as an example. >> We'll give you all the components what do you need. Whether it's MLOps component or whether it's, CodeWhisperer that we talked about, or a oral platform or data or data, whatever you want. They'll give you the blocks and then you'll build things on top of it, right? But Google took a different way. Matter of fact, if we did those numbers a few years ago, Google would've been number one because they did a lot of work with their acquisition of DeepMind and other things. They're way ahead of the pack when it comes to AI for longest time. Now, I think Microsoft's move of partnering and taking a huge competitor out would open the eyes is unbelievable. You saw that everybody is talking about chat GPI, right? And the open AI tool and ChatGPT rather. Remember as Warren Buffet is saying that, when my laundry lady comes and talk to me about stock market, it's heated up. So that's how it's heated up. Everybody's using ChatGPT. What that means is at the end of the day is they're creating, it's still in beta, keep in mind. It's not fully... >> Can you play with it a little bit? >> I have a little bit. >> I have, but it's good and it's not good. You know what I mean? >> Look, so at the end of the day, you take the massive text of all the available text in the world today, mass them all together. And then you ask a question, it's going to basically search through that and figure it out and answer that back. Yes, it's good. But again, as we discussed, if there's no business use case of what problem you're going to solve. This is building hype. But then eventually they'll figure out, for example, all your chats, online chats, could be aided by your AI chat bots, which is already there, which is not there at that level. This could build help that, right? Or the other thing we talked about is one of the areas where I'm more concerned about is that it is able to produce equal enough original text at the level that humans can produce, for example, ChatGPT or the equal enough, the large language transformer can help you write stories as of Shakespeare wrote it. Pretty close to it. It'll learn from that. So when it comes down to it, talk about creating messages, articles, blogs, especially during political seasons, not necessarily just in US, but anywhere for that matter. If people are able to produce at the emission speed and throw it at the consumers and confuse them, the elections can be won, the governments can be toppled. >> Because to your point about chatbots is chatbots have obviously, reduced the number of bodies that you need to support chat. But they haven't solved the problem of serving consumers. Most of the chat bots are conditioned response, which of the following best describes your problem? >> The current chatbot. >> Yeah. Hey, did we solve your problem? No. Is the answer. So that has some real potential. But if you could bring up that slide again, Ken, I mean you've got the hyperscalers that are dominant. You talked about Google and Microsoft is ubiquitous, they seem to be dominant in every ETR category. But then you have these other specialists. How do those guys compete? And maybe you could even, cite some of the guys that you know, how do they compete with the hyperscalers? What's the key there for like a C3 ai or some of the others that are on there? >> So I've spoken with at least two of the CEOs of the smaller companies that you have on the list. One of the things they're worried about is that if they continue to operate independently without being part of hyperscaler, either the hyperscalers will develop something to compete against them full scale, or they'll become irrelevant. Because at the end of the day, look, cloud is dominant. Not many companies are going to do like AI modeling and training and deployment the whole nine yards by independent by themselves. They're going to depend on one of the clouds, right? So if they're already going to be in the cloud, by taking them out to come to you, it's going to be extremely difficult issue to solve. So all these companies are going and saying, "You know what? We need to be in hyperscalers." For example, you could have looked at DataRobot recently, they made announcements, Google and AWS, and they are all over the place. So you need to go where the customers are. Right? >> All right, before we go on, I want to share some other data from ETR and why people adopt AI and get your feedback. So the data historically shows that feature breadth and technical capabilities were the main decision points for AI adoption, historically. What says to me that it's too much focus on technology. In your view, is that changing? Does it have to change? Will it change? >> Yes. Simple answer is yes. So here's the thing. The data you're speaking from is from previous years. >> Yes >> I can guarantee you, if you look at the latest data that's coming in now, those two will be a secondary and tertiary points. The number one would be about ROI. And how do I achieve? I've spent ton of money on all of my experiments. This is the same thing theme I'm seeing across when talking to everybody who's spending money on AI. I've spent so much money on it. When can I get it live in production? How much, how can I quickly get it? Because you know, the board is breathing down their neck. You already spend this much money. Show me something that's valuable. So the ROI is going to become, take it from me, I'm predicting this for 2023, that's going to become number one. >> Yeah, and if people focus on it, they'll figure it out. Okay. Let's take a look at some of the top players that won, some of the names we just looked at and double click on that and break down their spending profile. So the chart here shows the net score, how net score is calculated. So pay attention to the second set of bars that Databricks, who was pretty prominent on the previous chart. And we've annotated the colors. The lime green is, we're bringing the platform in new. The forest green is, we're going to spend 6% or more relative to last year. And the gray is flat spending. The pinkish is our spending's going to be down on AI and ML, 6% or worse. And the red is churn. So you don't want big red. You subtract the reds from the greens and you get net score, which is shown by those blue dots that you see there. So AWS has the highest net score and very little churn. I mean, single low single digit churn. But notably, you see Databricks and DataRobot are next in line within Microsoft and Google also, they've got very low churn. Andy, what are your thoughts on this data? >> So a couple of things that stands out to me. Most of them are in line with my conversation with customers. Couple of them stood out to me on how bad IBM Watson is doing. >> Yeah, bring that back up if you would. Let's take a look at that. IBM Watson is the far right and the red, that bright red is churning and again, you want low red here. Why do you think that is? >> Well, so look, IBM has been in the forefront of innovating things for many, many years now, right? And over the course of years we talked about this, they moved from a product innovation centric company into more of a services company. And over the years they were making, as at one point, you know that they were making about majority of that money from services. Now things have changed Arvind has taken over, he came from research. So he's doing a great job of trying to reinvent themselves as a company. But it's going to have a long way to catch up. IBM Watson, if you think about it, that played what, jeopardy and chess years ago, like 15 years ago? >> It was jaw dropping when you first saw it. And then they weren't able to commercialize that. >> Yeah. >> And you're making a good point. When Gerstner took over IBM at the time, John Akers wanted to split the company up. He wanted to have a database company, he wanted to have a storage company. Because that's where the industry trend was, Gerstner said no, he came from AMEX, right? He came from American Express. He said, "No, we're going to have a single throat to choke for the customer." They bought PWC for relatively short money. I think it was $15 billion, completely transformed and I would argue saved IBM. But the trade off was, it sort of took them out of product leadership. And so from Gerstner to Palmisano to Remedi, it was really a services led company. And I think Arvind is really bringing it back to a product company with strong consulting. I mean, that's one of the pillars. And so I think that's, they've got a strong story in data and AI. They just got to sort of bring it together and better. Bring that chart up one more time. I want to, the other point is Oracle, Oracle sort of has the dominant lock-in for mission critical database and they're sort of applying AI there. But to your point, they're really not an AI company in the sense that they're taking unstructured data and doing sort of new things. It's really about how to make Oracle better, right? >> Well, you got to remember, Oracle is about database for the structure data. So in yesterday's world, they were dominant database. But you know, if you are to start storing like videos and texts and audio and other things, and then start doing search of vector search and all that, Oracle is not necessarily the database company of choice. And they're strongest thing being apps and building AI into the apps? They are kind of surviving in that area. But again, I wouldn't name them as an AI company, right? But the other thing that that surprised me in that list, what you showed me is yes, AWS is number one. >> Bring that back up if you would, Ken. >> AWS is number one as you, it should be. But what what actually caught me by surprise is how DataRobot is holding, you know? I mean, look at that. The either net new addition and or expansion, DataRobot seem to be doing equally well, even better than Microsoft and Google. That surprises me. >> DataRobot's, and again, this is a function of spending momentum. So remember from the previous chart that Microsoft and Google, much, much larger than DataRobot. DataRobot more niche. But with spending velocity and has always had strong spending velocity, despite some of the recent challenges, organizational challenges. And then you see these other specialists, H2O.ai, Anaconda, dataiku, little bit of red showing there C3.ai. But these again, to stress are the sort of specialists other than obviously the hyperscalers. These are the specialists in AI. All right, so we hit the bigger names in the sector. Now let's take a look at the emerging technology companies. And one of the gems of the ETR dataset is the emerging technology survey. It's called ETS. They used to just do it like twice a year. It's now run four times a year. I just discovered it kind of mid-2022. And it's exclusively focused on private companies that are potential disruptors, they might be M&A candidates and if they've raised enough money, they could be acquirers of companies as well. So Databricks would be an example. They've made a number of investments in companies. SNEAK would be another good example. Companies that are private, but they're buyers, they hope to go IPO at some point in time. So this chart here, shows the emerging companies in the ML AI sector of the ETR dataset. So the dimensions of this are similar, they're net sentiment on the Y axis and mind share on the X axis. Basically, the ETS study measures awareness on the x axis and intent to do something with, evaluate or implement or not, on that vertical axis. So it's like net score on the vertical where negatives are subtracted from the positives. And again, mind share is vendor awareness. That's the horizontal axis. Now that inserted table shows net sentiment and the ends in the survey, which informs the position of the dots. And you'll notice we're plotting TensorFlow as well. We know that's not a company, but it's there for reference as open source tooling is an option for customers. And ETR sometimes like to show that as a reference point. Now we've also drawn a line for Databricks to show how relatively dominant they've become in the past 10 ETS surveys and sort of mind share going back to late 2018. And you can see a dozen or so other emerging tech vendors. So Andy, I want you to share your thoughts on these players, who were the ones to watch, name some names. We'll bring that data back up as you as you comment. >> So Databricks, as you said, remember we talked about how Oracle is not necessarily the database of the choice, you know? So Databricks is kind of trying to solve some of the issue for AI/ML workloads, right? And the problem is also there is no one company that could solve all of the problems. For example, if you look at the names in here, some of them are database names, some of them are platform names, some of them are like MLOps companies like, DataRobot (indistinct) and others. And some of them are like future based companies like, you know, the Techton and stuff. >> So it's a mix of those sub sectors? >> It's a mix of those companies. >> We'll talk to ETR about that. They'd be interested in your input on how to make this more granular and these sub-sectors. You got Hugging Face in here, >> Which is NLP, yeah. >> Okay. So your take, are these companies going to get acquired? Are they going to go IPO? Are they going to merge? >> Well, most of them going to get acquired. My prediction would be most of them will get acquired because look, at the end of the day, hyperscalers need these capabilities, right? So they're going to either create their own, AWS is very good at doing that. They have done a lot of those things. But the other ones, like for particularly Azure, they're going to look at it and saying that, "You know what, it's going to take time for me to build this. Why don't I just go and buy you?" Right? Or or even the smaller players like Oracle or IBM Cloud, this will exist. They might even take a look at them, right? So at the end of the day, a lot of these companies are going to get acquired or merged with others. >> Yeah. All right, let's wrap with some final thoughts. I'm going to make some comments Andy, and then ask you to dig in here. Look, despite the challenge of leveraging AI, you know, Ken, if you could bring up the next chart. We're not repeating, we're not predicting the AI winter of the 1990s. Machine intelligence. It's a superpower that's going to permeate every aspect of the technology industry. AI and data strategies have to be connected. Leveraging first party data is going to increase AI competitiveness and shorten time to value. Andy, I'd love your thoughts on that. I know you've got some thoughts on governance and AI ethics. You know, we talked about ChatGBT, Deepfakes, help us unpack all these trends. >> So there's so much information packed up there, right? The AI and data strategy, that's very, very, very important. If you don't have a proper data, people don't realize that AI is, your AI is the morals that you built on, it's predominantly based on the data what you have. It's not, AI cannot predict something that's going to happen without knowing what it is. It need to be trained, it need to understand what is it you're talking about. So 99% of the time you got to have a good data for you to train. So this where I mentioned to you, the problem is a lot of these companies can't afford to collect the real world data because it takes too long, it's too expensive. So a lot of these companies are trying to do the synthetic data way. It has its own set of issues because you can't use all... >> What's that synthetic data? Explain that. >> Synthetic data is basically not a real world data, but it's a created or simulated data equal and based on real data. It looks, feels, smells, taste like a real data, but it's not exactly real data, right? This is particularly useful in the financial and healthcare industry for world. So you don't have to, at the end of the day, if you have real data about your and my medical history data, if you redact it, you can still reverse this. It's fairly easy, right? >> Yeah, yeah. >> So by creating a synthetic data, there is no correlation between the real data and the synthetic data. >> So that's part of AI ethics and privacy and, okay. >> So the synthetic data, the issue with that is that when you're trying to commingle that with that, you can't create models based on just on synthetic data because synthetic data, as I said is artificial data. So basically you're creating artificial models, so you got to blend in properly that that blend is the problem. And you know how much of real data, how much of synthetic data you could use. You got to use judgment between efficiency cost and the time duration stuff. So that's one-- >> And risk >> And the risk involved with that. And the secondary issues which we talked about is that when you're creating, okay, you take a business use case, okay, you think about investing things, you build the whole thing out and you're trying to put it out into the market. Most companies that I talk to don't have a proper governance in place. They don't have ethics standards in place. They don't worry about the biases in data, they just go on trying to solve a business case >> It's wild west. >> 'Cause that's what they start. It's a wild west! And then at the end of the day when they are close to some legal litigation action or something or something else happens and that's when the Oh Shit! moments happens, right? And then they come in and say, "You know what, how do I fix this?" The governance, security and all of those things, ethics bias, data bias, de-biasing, none of them can be an afterthought. It got to start with the, from the get-go. So you got to start at the beginning saying that, "You know what, I'm going to do all of those AI programs, but before we get into this, we got to set some framework for doing all these things properly." Right? And then the-- >> Yeah. So let's go back to the key points. I want to bring up the cloud again. Because you got to get cloud right. Getting that right matters in AI to the points that you were making earlier. You can't just be out on an island and hyperscalers, they're going to obviously continue to do well. They get more and more data's going into the cloud and they have the native tools. To your point, in the case of AWS, Microsoft's obviously ubiquitous. Google's got great capabilities here. They've got integrated ecosystems partners that are going to continue to strengthen through the decade. What are your thoughts here? >> So a couple of things. One is the last mile ML or last mile AI that nobody's talking about. So that need to be attended to. There are lot of players in the market that coming up, when I talk about last mile, I'm talking about after you're done with the experimentation of the model, how fast and quickly and efficiently can you get it to production? So that's production being-- >> Compressing that time is going to put dollars in your pocket. >> Exactly. Right. >> So once, >> If you got it right. >> If you get it right, of course. So there are, there are a couple of issues with that. Once you figure out that model is working, that's perfect. People don't realize, the moment you decide that moment when the decision is made, it's like a new car. After you purchase the value decreases on a minute basis. Same thing with the models. Once the model is created, you need to be in production right away because it starts losing it value on a seconds minute basis. So issue number one, how fast can I get it over there? So your deployment, you are inferencing efficiently at the edge locations, your optimization, your security, all of this is at issue. But you know what is more important than that in the last mile? You keep the model up, you continue to work on, again, going back to the car analogy, at one point you got to figure out your car is costing more than to operate. So you got to get a new car, right? And that's the same thing with the models as well. If your model has reached a stage, it is actually a potential risk for your operation. To give you an idea, if Uber has a model, the first time when you get a car from going from point A to B cost you $60. If the model decayed the next time I might give you a $40 rate, I would take it definitely. But it's lost for the company. The business risk associated with operating on a bad model, you should realize it immediately, pull the model out, retrain it, redeploy it. That's is key. >> And that's got to be huge in security model recency and security to the extent that you can get real time is big. I mean you, you see Palo Alto, CrowdStrike, a lot of other security companies are injecting AI. Again, they won't show up in the ETR ML/AI taxonomy per se as a pure play. But ServiceNow is another company that you have have mentioned to me, offline. AI is just getting embedded everywhere. >> Yep. >> And then I'm glad you brought up, kind of real-time inferencing 'cause a lot of the modeling, if we can go back to the last point that we're going to make, a lot of the AI today is modeling done in the cloud. The last point we wanted to make here, I'd love to get your thoughts on this, is real-time AI inferencing for instance at the edge is going to become increasingly important for us. It's going to usher in new economics, new types of silicon, particularly arm-based. We've covered that a lot on "Breaking Analysis", new tooling, new companies and that could disrupt the sort of cloud model if new economics emerge. 'Cause cloud obviously very centralized, they're trying to decentralize it. But over the course of this decade we could see some real disruption there. Andy, give us your final thoughts on that. >> Yes and no. I mean at the end of the day, cloud is kind of centralized now, but a lot of this companies including, AWS is kind of trying to decentralize that by putting their own sub-centers and edge locations. >> Local zones, outposts. >> Yeah, exactly. Particularly the outpost concept. And if it can even become like a micro center and stuff, it won't go to the localized level of, I go to a single IOT level. But again, the cloud extends itself to that level. So if there is an opportunity need for it, the hyperscalers will figure out a way to fit that model. So I wouldn't too much worry about that, about deployment and where to have it and what to do with that. But you know, figure out the right business use case, get the right data, get the ethics and governance place and make sure they get it to production and make sure you pull the model out when it's not operating well. >> Excellent advice. Andy, I got to thank you for coming into the studio today, helping us with this "Breaking Analysis" segment. Outstanding collaboration and insights and input in today's episode. Hope we can do more. >> Thank you. Thanks for having me. I appreciate it. >> You're very welcome. All right. I want to thank Alex Marson who's on production and manages the podcast. Ken Schiffman as well. Kristen Martin and Cheryl Knight helped get the word out on social media and our newsletters. And Rob Hoof is our editor-in-chief over at Silicon Angle. He does some great editing for us. Thank you all. Remember all these episodes are available as podcast. Wherever you listen, all you got to do is search "Breaking Analysis" podcast. I publish each week on wikibon.com and silicon angle.com or you can email me at david.vellante@siliconangle.com to get in touch, or DM me at dvellante or comment on our LinkedIn posts. Please check out ETR.AI for the best survey data and the enterprise tech business, Constellation Research. Andy publishes there some awesome information on AI and data. This is Dave Vellante for theCUBE Insights powered by ETR. Thanks for watching everybody and we'll see you next time on "Breaking Analysis". (gentle closing tune plays)

(upbeat electronic music) >> Welcome to theCUBE's continuing coverage of AWS Summit New York 2022. I'm Dave Nicholson, and I am thrilled to be joined by Ramkumar Pandurangan. He is Practice Leader of the Cloud Advisory and Consulting Organization at Kyndryl. Ram, welcome. >> Thanks for having me, David, it's a pleasure. >> First time on theCUBE I believe. >> Ah, yes it is, so a little excited, and anxious as well, but it's great to be here. >> Fantastic. Well, when we're done, you'll be a CUBE alumni, which is actually a very distinguished badge of honor to have so. So, let's get started. Tell me about Kyndryl. I'm particularly interested in a bit of the history, how did Kyndryl come about? >> Yeah, so -- >> And what do you do now? >> I'm sorry. Before we talk about who we are and what we do, let me talk about Kyndryl's, philosophy, right? Basically so, people don't buy the cloud, people buy outcomes, and with this explosive growth in the market, as well as the complexity in which the technology has evolved, it's very challenging for everybody to find the right partner, as well as who to go to deliver it for them. And we do understand that technology is supposed to help drive your business capabilities, but not hinder. So, Kyndryl's primary philosophy is to how we can help enable our clients get the business capabilities using technology. So, having said that, we are a spinoff from IBM in 2021, and we have a strong base of 90,000 skilled professionals across a hundred countries. And, you know, we have almost 75 of the 100 Fortune 100 companies, and we almost cater half of the Fortune 500 companies, just to give you a background. And we have people across applications, data, AI, you know, network, edge, security and resiliency across the globe, but of course, cloud. >> So, do you work with partners from a cloud perspective? What does that look like? >> We have a whole broad ecosystem of partners, and, you know, anywhere from all the hyper scalers, to all the large product companies. And we understand that with a combined force of our years of experience helping our clients to be successful, partnering with our partners to help drive their capabilities. And you know, let's talk about AWS. Everybody knows that AWS has been a pioneer in the public cloud, coming up with a whole catalog of services, which is there, available for anybody. And I would like to call them as construction materials. Right? So, you could take these services, assemble them, and it could be a simple house, or it could be as big as a very complex model, kind of an environment. So, this is where we partner with AWS and bring our years of experience and help our clients go through the journey and successfully deliver in whatever complexity that they have, their existing environments. So, just an example of how we partner with our partners. >> Yeah. That makes a lot of sense. In fact, I heard someone once describe AWS as being like Home Depot, in the sense that they offer all of the bits and bytes. Of course, the AWS folks were like, "What? No, we're nothing like Home Depot!" It's like, well, you kind of are. (laughs) Because it really is important for an organization like Kyndryl to be there, to bridge the divide between the tools and the outcomes, as you mentioned. Well, what are some of the customers, or kinds of customers that you work with in this arena? >> Yeah. So, just to double click on what I said about the 75 of the 100 Fortune 100 companies, we currently manage the top five ad lanes of all ad lanes, we probably manage four of the five largest retailers, and 49% of the mobile connections are supported for the customers, and 61%, or roughly around 60% of the top 50 banks assets are managed by our service. So, we have a huge portfolio across the financial services, public sector, you know, communications, and distribution market across the globe. >> So is it fair to say that each of these customers is somewhere along the digital transformation timeline? Are they all thinking in terms of transforming digitally, what that means? Whether it's application modernization, of course, movement to cloud is part of that, does that sound like the profile of a lot of your customers? >> Exactly. So, each of them are in various, what I call in the paradigm of everybody are trying to modernize, right? Modernization is the way to go. Even though in the last three years we saw that the physical slowdown of the world, like digital transformation took an explosive growth, so everybody realized that not doing the business in a traditional way is going to get to where they want to go. And traditionally, people are cutting costs, or trying to trim down, and trying to see how they can, you know, do incremental modernization. And then they realize, especially in the last three years, that they need to holistically look at how they need to be modernizing it. Right? And that is where either it's a datacenter-driven modernization, or it's an application-centric modernization, which is moving the transformation journey. Or in general, people are holistically looking at how they can improve their overall presence in the digital world. >> So, do you think that the pandemic accelerated that? >> Absolutely. I would say that everybody started realizing how critical, and the businesses who were already a leg up in that world were quickly able to grab that opportunity, and they were able to run with that, and everybody are trying to catch up on that journey. And, you know, a lot of people who started that journey have realized that if they do not have a proper strategy to start off with, they get stuck somewhere. And that is where we can go and help them, wherever they are. >> Talk to me about some of the challenges that you see out in the field working with the actual organizations that are seeking to transform, to go through this digital transformation. What are some of the things that might surprise someone looking in from the outside? >> Again, if you go back to the basics, right, in the digital transformation world, it's not just the technology which is driving everything. People who have not clearly mapped their business objectives to the technology drivers, or the imperatives, are the ones which are, you know, feeling the pinch, that they have some technology driven transformation, but once it is done, they don't see that it's translating back to a business objective which they are trying to accomplish. That's one of the larger things which I see. So, we are trying to go back and help clients to bridge that gap, to make sure that, first, their strategy is in place, and the strategy is holistically looked at. That's one part of it. The second, larger challenge, which I'm seeing a lot of people is, they were able to quickly, you know, grapple around the technology explosion and able to start the journey, but the process and the people associated the transformation regarding those two are a lot more associated with the culture and everything else. So, it's a combination of technical resources, with not able to quickly adapt the operating model, which is the newer operating model required for the digital transformation, are the challenge which is an ongoing one. And none of this is news to anybody, but, practically, when I walk into a company, those are the areas which I continue to see where people are struggling. >> So, Kyndryl isn't solely involved with the virtual movement of workloads from one place to another, you actually work with customers to make those kinds of organizational changes and operational environment changes that need to take place. Is that right? >> Absolutely. So, as I told you, we have a whole suite of clients whom we have been supporting for decades. So, we have one set of those clients who have trusted us for years. And then we have another set of clients who we are providing some kind of services, and now we have newer clients. So between all of them, they're starting to realize that we have the end-to-end capabilities. The differentiator is, we can start from building a business case for somebody, and then strategizing it, creating a roadmap, and then actually doing the design, implement it, and help them to migrate it. And once the migration is done, continue to help optimizing it, and then not only stopping there, but the key thing where everybody have, you know, fallen behind, is how do you operate, manage it once you start migrating it. So, this is where Kyndryl is sitting in a very sweet spot, because we already are managing most of our clients, or we have the client base, they're operating theirs either holistically, or some portions of it, and now when they're trying to go on their journey we are very well suited because we already understand their environment. And while they are transforming into the cloud space, we are also able to bridge that gap by managing their existing and to manage to the cloud. So, we can, end-to-end. >> And yeah, talking about true end-to-end, you know, we're talking to you from AWS Summit New York 2022, of course, so the focus is AWS, but Kyndryl works with other hyperscale cloud partners as well. So I mean, you are primarily an advocate for the customer. Is that a fair? That's what they call in the business "a softball question." (Ramkumar and David laughing) Because if you answer, "no, we're not primarily in involved in the business of advocating for our customers," we should just stop this conversation right now. But seriously, the point is, you are truly an objective consultant in this game. >> Absolutely. Thank you for asking that, (David laughing) because we are a vendor neutral service provider. So we go, and when we walk into the client, we like to hear from the client what their challenges are. Right? Where are they trying to be? If they already started the journey, where they are. They could be anywhere from an on-premises trying to just modernize some aspects of their, you know, operational, or from the application side, or they could be anywhere in the hybrid cloud. And most of them are hybrid multicloud. So, it's not just AWS, it could be Azure, GCP, OCI, Oracle, or IBM cloud. It doesn't matter. We go and meet the client where they are. If they ask us for a point of view, we will provide them once we understand what their objectives, and their technology workloads they are having, and how they want to do it based on that we can. But if they already started journey, we are more than happy to partner with them on any of the cloud journeys. And most of them are in the hybrid multi-cloud as I said, so we are very well suited to help them. And as I said, we are not completely an agnostic service provider. >> Well, if I am an existing business that's seeking to go through digital transformation, I would recognize that there is a lot of power in this idea that you have a history in on-premises IT, going back to, you know, the sort of DNA for IBM global services. And the reason why I think that's important is because anyone can stand up a net new service with nothing existing, in one of the hyperscale clouds. It's a whole different proposition when you have decades of legacy infrastructure and processes that need to be massaged and moved over. I wonder, does Kyndryl get a lot of mileage out of that in terms of being able to say, "Hey, we understand your existing environment because we've been working in this world for decades." Or is the message more, "Hey, we are super cool cloud kids too?" How do you come down on that? Maybe that's a little bit of inside info. (Ramkumar laughing) >> No, the reality on the ground basically, David, is not everybody can move all their workloads to cloud, and not all workloads are suited to go to cloud as well. So, it is us who need to make sure that we can help our clients make the right choices by doing a rationalization of their workloads, and make sure that we understand their business, their end clients whom they're servicing, their capabilities, and then based on that, we can help them to do both, right? Whether it's just on-premises modernization, or help them to take them in a hybrid cloud mode. So the answer is both, right? Even though we currently manage their environment, doesn't mean that we need to continue to support, but, you know, we are moving up the stack to help them, to support them in their hybrid cloud journey as well. And not only that, this gives us a capability or an ability to help them in a much more holistic way by looking at their full ops, right? That's a huge area where people are trying to go into the cloud, or they already started to go into the cloud, but how do they optimize their environment? Right? These are the areas where, and then if you want to modernize some of their operating model, right, how do we deploy the SRE, or the DevSecOps, or the DevOps? So, we kind of look up all those aspects as people are trying to move into the cloud aspect so we can help them both on-premises, or if they want to modernize much more we can do it in the hybrid cloud as well. I don't know whether that fully answered your question. >> Absolutely, it does. In fact, Ram, what you and Kyndryl are doing is what we at theCUBE refer to as having adult conversations about cloud with the clients that you serve. With that, looks like we are at the end of our time together. I really appreciate the chance to hear about what you're doing, and to hear all about Kyndryl. From me, Dave Nicholson, at theCUBE, I'd like to say, stay tuned for a continuing coverage of AWS Summit New York 2022, and always stay tuned to theCUBE. (upbeat electronic music)

>> From around the globe, It's theCUBE. With digital coverage of IBM Think 2021, brought to you by IBM. >> Hi, welcome back to theCUBE's coverage of IBM Think 2021 virtual. I'm John Furrier host of the CUBE. We got a great guest here. Brian Bouchard is the co-founder president and CEO of Alacrinet. Brian great to see you remoting in all the way from Puerto Rico to Palo Alto. >> That's right. >> Great to see you. >> Thanks for First of all, thanks John, for having me. I really appreciate the opportunity. >> Yeah, great to see you. Thanks for coming on. First of all, before we get into what you guys do and and how this all ties in to Think. What do you guys do at Alacrinet? Why the name? A it's good you're at the top of the list and alphabetically, but tell us the, the, the the secret behind the name and what you guys do. >> So, first of all Alacrinet is based on the root word alacrity which means a prompt and willing, a prompt a joyous prompt to, excuse me, to achieve a common goal. So we ultimately are a network of individuals with the traits of alacrity. So Alacrinet. So that's our name. >> Great. So what's your relationship with IBM and how you guys have been able to leverage the partnership program in the marketplace? Take us through the relationship. >> So, well, first of all Alacrinet is a platinum IBM business partner and it was awarded recently the 2020 IBM North American partner of the year award. And we were selected amongst 1600 other business partners across North America. We've been actually a consulting, an IT consulting company for almost 20 years now. And we were founded in 2002 in Palo Alto and we have focused specifically on cyber security since 2013. And then as part, go ahead. >> What are some of the things that you guys are working on? Because obviously, you know, the business is hot right now. Everyone's kind of looking at COVID saying we're going to double down on the most critical projects and no time for leisurely activities when it comes to IT. And cloud scale projects, you know mission critical stuff's happening what are you guys working on? >> So we're, we're focused on cybersecurity, our security services really compliment IBM's suite of security solutions and cover the full spectrum from our research and penetration testing, which helps identify vulnerabilities before a breach occurs. And we also have managed security services which helps prevent, detect and remediate attacks in real time. And then finally, we also have a security staffing division and a software resell division, which kind of rounds out the full amount of offerings that we have to provide protection for our clients. >> What are some of the biggest challenges you guys have as a business, and how's IBM helping you address those? >> Well, as you know, John, we all know the importance of cybersecurity in today's world, right? So it's increasing in both demand and importance and it's not expected to wane anytime soon. Cyber attacks are on the rise and there's no there's no expected end in sight to this. And in fact, just this week on 60 minutes, Jay Powell, the chairman of the federal reserve board he noted that cyber attacks were the number one threat to the stability of the US economy. Also this week, a public school in Buffalo New York was hacked with ransomware and the school you know, this, the school district is just contemplating you know, paying the ransom to the hackers. So there's literally thousands of these attacks happening every day, whether it's in local school district or a state government, or an enterprise even if you don't hear about them, they're happening In adding to the complexity that the cyber attackers pose is the complexity of the actual cybersecurity tools themselves. There isn't a single solution provider or a single technology, that can ensure a company's security. Our customers need to work with many different companies and disconnected tools and processes to build an individual strategy that can adequately protect their organizations. >> You know, I love this conversation whenever I talk to practitioners on cybersecurity, you know that first of all, they're super smart, usually cyber punks and they also have some kinds of eclectic backgrounds, but more importantly is that there's different approaches in terms of what you hear. Do you, do you put more if you add more firefighters, so to speak to put out the fires and solve the problems? Or do you spend your time preventing the fires from happening in the first place? You know, and you know, the buildings are burning down don't make fire fire, don't make wood make fire resistance, you know, more of a priority. So there's less fires needing firefighters So it's that balance. You throw more firefighters at the problem or do you make the supply or the material the business fireproof, what's your take on that? >> Yeah, well, it kind of works both ways. I mean, we've seen customers want it. They really want choice. They want to, in some cases they want to be the firefighter. And in some cases they want the firefighter to come in and solve their problems. So, the common problem set that we're seeing with our that our customers encounter is that they struggle one, with too many disparate tools. And then they also have too much data being collected by all these disparate tools. And then they have a lack of talent in their environment to manage their environments. So what we've done at Alacrinet is we've taken our cybersecurity practice and we've really specifically tailored our offerings to address these core challenges. So first, to address the too many disparate tools problem, we've been recommending that our clients look at security platforms like the IBM Cloud Pak for security the IBM Cloud Pak for security is built on a security platform that allows interoperability across various security tools using open standards. So our customers have been responding extremely positively to this approach and look at it as a way to future-proof their investments and begin taking advantage of interoperability with, and, tools integration. >> How about where you see your business going with this because, you know, there's not a shortage of need or demand How are you guys flexing with the market? What's the strategy? Are you going to use technology enablement? You're going to more human driven. Brian, how do you see your business unfolding? >> Well, actually really good. We're doing very well. I mean, obviously we made the, the top the business partner for IBM in 2020. They have some significant growth and a lot of interest. I think we really attack the market in a, in a with a good strategy which was to help defragment the market if you will. There's a lot of point solutions and a lot of point vendors that various, you know, they they spent specialized in one piece of the whole problem. And what we've decided to do is find them the highest priority list, every CSO and CIO has a tick list. So that how that, you know, first thing we need we need a SIM, we need an EDR, we need a managed service. We need, what's the third solution that we're doing? So we, we need some new talent in-house. So we actually have added that as well. So we added a security staffing division to help that piece of it as well. So to give you an idea of the cybersecurity market size it was valued at 150 billion in 2019 and that is expected to grow to 300 billion by 2027. And Alacrinet is well-positioned to consolidate the many fragmented aspects of the security marketplace and offer our customers more integrated and easier to manage solutions. And we will continue to help our customers select the best suite of solutions to address all types of cybersecurity, cybersecurity threats. >> You know, it's it's such a really important point you're making because you know, the tools just have piled up in the tool shed. I call it like that. It's like, it's like you don't even know what's in there anymore. And then you've got to support them. Then the world's changed. You get cloud native, the service areas increasing and then the CSOs are also challenged. Do I, how many CLAWs do I build on? Do I optimize my development teams for AWS or Azure? I mean, now that's kind of a factor. So, you have all this tooling going on they're building their own stuff they're building their own core competency. And yet the CSO still needs to be like maintaining kind of like a relevance list. That's almost like a a stock market for the for the products. You're providing that it sounds like you're providing that kind of service as well, right? >> Yeah, well, we, we distill all of the products that are out there. There's thousands of cybersecurity products out there in the marketplace and we kind of do all that distillation for the customer. We find using, you know, using a combination of things. We use Forrester and Gartner and all the market analysts to shortlist our proposed solutions that we offer customers. But then we also use our experience. And so since 2013, we've been deploying these solutions across organizations and corporations across America and we've, we've gained a large body of experience and we can take that experience and knowledge to our customers and help them, you know, make make some good decisions. So they don't have to, you know, make them go through the pitfalls that many companies do when selecting these types of solutions. >> Well congratulations, you've got a great business and you know, that's just a basic search making things easier for the CSO, more so they can be safe and secure in their environment. It's funny, you know, cyber warfare, you know the private companies have to fight their own battles got to build their own armies. Certainly the government's not helping them. And then they're confused even with how to handle all this stuff. So they need, they need your service. I'm just curious as this continues to unfold and you start to see much more of a holistic view, what's the IBM angle in here? How, why are you such a big partner of theirs? Is it because their customers are working with you they're bringing you into business? Is it because you have an affinity towards some of their products? What's the connection with IBM? >> All of the above. (chuckles) So I think it probably started with our affinity to IBM QRadar product. And we have, we have a lot of expertise in that and that solution. So that's, that's where it started. And then I think IBM's leadership in this space has been remarkable, really. So like what's happening now with the IBM Cloud Pak for security you know, building up a security platform to allow all these point solutions to work together. That's the roadmap we want to put our customers on because we believe that's the that's the future for this, this, this marketplace. >> Yeah. And the vision of hybrid cloud having that underpinning be with Red Hat it's a Linux kernel, model of all things >> Yeah. Super NetEase. >> Locked in >> It's portable, multiple, you can run it on Azure. IBM Cloud, AWS. It's portable. I mean, yeah, all this openness, as you probably know cyber security is really a laggard in the security in the information technology space as far as adopting open standards. And IBM is I think leading that charge and you'll be able to have a force multiplier with the open standards in this space. >> Open innovation with open source is incredible. I mean, if you, if, if if open source can embrace a common platform and build that kind of control plane and openness to allow thriving companies to just build out then you have an entire hybrid distributed architecture. >> Yeah. Well, I think companies want to use the best in breed. So when we, when we show these solutions to customers they want the best in breed. They always say, I don't, when it comes to security they don't want second best. They want the best it's out there because they're securing their crown jewels. So that makes sense. So the problem with, you know having all these different disparate solutions that are all top in their category none of them talk to each other. So we need to address that problem because without that being solved, this is just going to be more it's going to compound the complexity of the problems we solve day to day. >> Awesome. Congratulations, Brian, great story. You know entrepreneur built a great business over the years. I think the product's amazing. I think that's exactly what the market needs and just shows you what the ecosystem is all about. This is the power of the ecosystem. You know, a thousand flowers are blooming. You got a great product. IBM is helping as well. Good partnership, network effects built in and and still a lot more to do. Congratulations. >> Absolutely. >> Okay. >> Thank you very much >> Brian Bouchard >> Made my impression. I appreciate that >> Thanks for coming on theCUBE Appreciate it. I'm John Furrier with IBM thinks 2021 virtual coverage. Thanks for watching. (outro music plays)

>> Announcer: From around the globe. >> (upbeat music) It's the cube with digital coverage of IBM Think 2021 brought to you by IBM. >> Hi, welcome back everyone to the Cubes coverage of IBM Think 2021 virtual. I'm John Furrier, host of the cube. Got a great guest, Rick Smith, CTO of IBM Anthem client team. Rick. Great to see you. Thanks for coming on the cube. >> Yeah. Thank you, John. Nice to see you as well, virtually. >> First introduce yourself, what you do there, what's going on on your plate these days, honestly, COVID, we're coming out of it soon. Take a minute to introduce yourself. >> Yeah, so I've got about 15 years in the seat with Anthem. Previous to that I worked at Pretty university as the CTO in Indiana. So haven't really left, but started working with Anthem as a technical architect, eventually moved into the CTO role and have been part of, you know, a long journey with them that started at a managed services agreement in 2005. And here we are in 2021. So I've been through a lot of changes they've made to improve themselves and move into digitalization. And certainly the changes we've made too to accommodate that as we went through the years. >> Awesome. Well, thanks for that setup. I really want to dig into this expansion of project Cirrus. You guys have had a multi decade partnership with IBM and then last year you launched this expansion, project Cirrus. Can you describe this project? And what does it mean? And this new term I've heard, enterprise hybrid cloud as a service. Sounds very interesting. >> Yeah. So that's my term. I'm hoping you made it patent or something like that. But the reality is you hear our CEO talk and say that 75% of corporate workloads are not in the cloud yet. Right? And Anthem is no different, right? So they starting to go into cloud and those kinds of things. But they said to us, you know, "Hey, we've got a long series of excellence with you from a delivery perspective, reliability perspective is kind of the bedrock of what we do, but we don't want to be in the data center business, right? And we want to transform and move to cloud. We want to become a more of an AI company and these kinds of things. And we said, well, we think we can actually put together a program... Excuse me, program for you to allow you to do that, right? And so we formed something called project Cirrus which is really an expansion of our partnership. So if I look back, John, we did about 80% of the end-to-end delivery for Anthem from a managed services perspective. In other words, they did a few pieces and we said, we think we could improve that if we had the entire 100%. And so project Cirrus was about, you know, extending from 80% to 100%. It was also about taking a series of applications that were important to them and actually say, we'll actually take them on and transform them 100% all the way to cloud and take advantage of new things. It was about a commitment to closing those data centers, right? So they have five strategic data centers. And about 24,000 hosts that we said we will actually commit to getting those, you know, getting you out of the data centers and moving those to either IBM cloud or close to IBM cloud if you will, I'll come back to that in a minute. And we'll also build something called ATEC, Anthem Technology Excellent Center, if you will. And that's near and dear to my heart because that's sort of my baby, right? So it's a transformation engine and we can talk a little bit more about that in a second. But he said the key to this for us is that, if we look at our trend line, John, over the number of years with Anthem, when we started about 2007 looking at this data, we've grown the number of hosts. We've had to manage, over 600% during that time period. But we've driven down high priority incidents by over 90%. So think about that. You know, this is really important for them to have resiliency and stability in their organization. You know, huge acceleration number of hosts, but drive down the a P zero incidents, if you will. And they said, we need to maintain that and continue to improve upon that. Right? >> Yeah. >> So Cirrus was a commitment to take that further, right? Start driving AAN, AI into the operations, if you will in everything that we do. So Anthem is transforming to do AI and machine learning for their members. We're committed to transforming and doing the same kind of thing on our operational side if you will. >> Yeah, that's awesome. And I think one of the things that's interesting that jumps out at me just as you're talking, first of all super exciting that project you got out there, a lot going on to unpack, but let's do that. I mean, what I hear you saying which is getting me kind of all triggered in a good way is you got transformation going on and innovation same time. You're innovating with this new enterprise hybrid clouds of service concept. You take in more efficiency, you're doing the classic transformational things, making things more efficient, all that good stuff for agility, but it's actually innovative. So this idea of an enterprise hybrid cloud as a service is pretty innovative because now you're talking about things with AI and scale that come into play, right? So you got the setup, you got it moving into being innovative but scales right there. What is this enterprise hybrid cloud as a service? Because is it just agility, is it the AI piece? Where do you see that going? >> Yeah, that's a great question. Right? And you're a great stuff, man, Johnson. (Smith laughs) So again, Anthem's not ready to move all of their workload to cloud, right? And we recognize (indistinct)is going to be out of the data center business. So how can we take non traditional workloads, right? Get them close to cloud, right? Get them very close to cloud, get us out of the managing the data center and actually allow us to move seamlessly from non traditional workloads into cloud. And so what we did was something we think is very innovative. This is the enterprise hybrid cloud piece for me, right? 'Cause normally hybrid cloud says, you have a client data center location and you have cloud. We marry the two together. We said, you're not going to have a data center location anymore. We're going to have our data centers, you know, IBM cloud. And we're actually going to put some dedicated space right next to cloud. And when I say next to cloud, I literally mean within a few feet. And we're going to bring these non traditional workloads there, we're going to take the network operation brain and bring it there. And we're going to allow you then to basically be able to move seamlessly from that to directly into cloud and improve operations at the same time. There's other a side benefit to this too. The other unintended sort of benefit is that what any organization, right? That you find stuff in the data center that hasn't been looked at for a long period of time, right? Application teams haven't looked at it, et cetera, et cetera. We're literally touching every single host. Right? So this gives us an opportunity to also work with our teams and find things that really can just be thrown away. Right? And this is great because we're actually making them more efficient, optimizing the cost structures as we go about it. >> Yeah. I mean the operational model changes me. You mentioned that just that whole point about you're kind of doing some discovery on apps, this becomes kind of sets the table for AI ops which is just code word for day two operations or full cloud native environments, which now you're seeing cloud native include legacy. Yes. Because you can put containers into the mix and you can then create these integration points that you don't have to kind of get rid of the old to bring in the new. So the dimension of what's going on here is pretty interesting, right? When you start thinking about that, "Okay. I can modernize the same time as connect two existing systems." >> That's exactly right. And we put the things very close to one another. And if there's any concerns over data security compliance or healthcare regulated industry, of course, we can have the workloads located in the best location to ensure that security is in place. Right? So that's what's beautiful about it, right? We can kind of hit every layer that's possible from having it just as secure as completely privatized to going directly over to public cloud or connecting the two together as we go along. >> Well, you're definitely a pioneer. I love that enterprise hybrid cloud as a service. I think that's something that's relevant. We're living in a hybrid world. I mean, the cube, we used to go to events now it's virtual events, but when now the events come back, they're hybrid events. Every company is experiencing this phenomenon on hybrid something, not just technology. The ops got to adapt, so super cool. You mentioned something that was your baby. I want to get back to you. And you said you want to talk about, I want to just bring that up. This Anthem technology excellence center is your baby. ATech I think you said for short. >> Yeah. We call it Atech for short. And really, John, we said that it's got to be more than just taking that other 20% that we don't run today. And we're doing some very innovative things moving non-traditional workloads. Like I said, all that kind of stuff was very cool, right? But we need a transformation engine, right? And we need the ability to transform skills. Like upscale the people at Anthem as well as IBM, right there on the account team, it's a big account. We want to think of new ways to work together. Right? Traditional managed services is like, what? Someone cuts a ticket and says, "Give me X by her seat." Right? That's the traditional model. And we said, that's not good enough. We need to collaborate better together. And we are willing to redefining how we form our teams to work with Anthem. Right? So if we want to form, for example, a product ownership team that builds it, runs it, maintains it. And that team has Anthem plus IBM together. we're going to use ATEC as a vehicle to design that and drive it and make sure they have all the skills they need within that group to do that. Right? That's new ways of working together. And it's also to drive things like site reliability engineering, right? Cloud service management operations, make sure that Anthem has the right training, make sure we work together on these kinds of things. So it's really kind of an exciting thing. And it's intended to be a co-created model, right? So we actually work with the Anthem, we co-create using IBM garage methodologies and then the idea is to coast staff it, but it's tended to be a thin layer of world-class engineering. That's really the whole point of it. And yeah, I'm super excited about that. As you move forward, yeah. >> While you're speaking our language, the cube we'd love the co-creation we do with media. It's always fun to create content together. And sometimes in real time put it together like we're doing now. And it creates a bond. I mean, I got to bring this up because this is becoming more and more obvious. And now mainstream, the notion of co-creation, the notion of ecosystems and ecosystems really meaning network effect and integrating with other parties, right? Companies and our systems. If you look at the underlying business model as a systems management software bottle. Okay. So with that, these ecosystems, the network effect. If you build together, you stay together. I mean, this is a different mindset. It's different dynamic. It's a different relationship that companies are now looking for in what used to be called suppliers. Are you supplying something? Are you building together? Right. So this seems to be the theme. Can you expand on this new trend? >> Right. And get away from the strict racing, this person does, this person does that. Instead, we build a team together that has all the skills necessary and that team owns a product life cycle. They build it, run it and maintain it. And that's changing the way we deliver services from IBM perspective significantly, right? Because that's not our traditional model but that's what we're doing. So we're really out in the front end, on the front edge if you will. Changing that model completely. And it's one of the most exciting things for me, you know, as far as going forward. >> You know, this whole idea of partnerships has always kind of been there but now it gets modernized and uplifted if you will, to a new level. And it really is about watching each other's backs too when you have that kind of... 'Cause we're talking about like pushing the envelope on probably the biggest confluence of tech trends I've ever seen in my career. And I've seen many big waves, you know, from the different revolutions and inflection points. Now it's sort of all coming together, right? At scale too, it's happening very fast. I mean, the change over is happening in years that once you took decades before. So it's really is a team approach. >> Yeah. There's no doubt about it. And I see it every day in the work we're doing. And it's like, for example, at Atech where we're working with the data scientists at the Anthem, we're thinking of new ways to build things they've never done before. We're hoping to enable their science, enable the things they want to do for digitization standpoint, the same token I'm taking, you know, a data scientist and putting them on the operation side too. Right? So we're doing both these kinds of things together. And really I didn't say this before, but this whole thing is about driving automation, right? Driving down, no human touch, soft service, automation. That is kind of been the linchpin of this. And I also want to say John, that doing this all during a pandemic, you know, we signed our new agreement together with them at a quarter, at the end of March in 2020. And we went live in August 1st with all the changes, the extra 20% capacity to over 300 plus applications completely, started Atech from co-creation in a pandemic. And we both agreed as a company, I give great credit to our client and to the numbers involved that everyone set up front and during March. The pandemic's not an excuse to get anything done. So, we're going to go forward and make it happen. That's probably the thing I'm most proud about. That was just... It's crazy when you think of how big the project was and do pull it off during a pandemic. >> Yeah. There's going to be two sides of the street and this one, this pandemics over the ones who made it through and refactored and or innovated. Cause it's not just about being and having a tale, it's about taking advantage of the situation and the ones who didn't do anything. Whether they were in the cloud or not, that's not to me. That's not the issue of you're in the cloud you had an advantage. >> It's not. Right. >> But there's going to be two sides of the streets. And I think the one thing that the pandemic has shown us and I'd love to get your reaction as a final comment here is that when you pull back when the pandemic, it showed all the scabs, it shows everything. And you can see what's obvious and it becomes a forcing function. Necessity's the mother of all invention as expression goes so you can see what's worth doubling down on and you can see the productivity gains and that becomes clear. >> Yeah. Yeah. And I think there's good and bad with everything, right? Pros and cons, like you said, and you know, one of the cons I think is the having to schedule all interactions is definitely a con, right? Because when you spend time not only with the client virtually but in person, you do get the advantage of having, you know, chalk talks and things like that. They're not scheduled. Right? So that's definitely one of the cons side, but one of the pro side is it did provide some focus, right? Kind of extreme focus and on what's important and allowed us to, you know, I think dove some bonds with the Anthem leadership team and the application teams doing it virtually over cameras like this that maybe happen at a larger scale than they might have normally been because the pandemic kind of allowed us to do that and made that happen. >> Great stuff, Rick, great insight. Great to have you on the cube as always. Great to talk tech, talk business, talk about the transformation and innovation and the cloud scale. Thanks for coming on Rick Smith, CTO of the IBM Anthem client team. Thanks for coming on the cube. >> You're welcome. Thanks John. >> Okay. Cube coverage of IBM Think 2021. I'm John. For your host of the cube. Thanks for watching. (soft music) (upbeat music)