from the cube studios in Palo Alto in Boston it's the cube covering the IBM thing brought to you by IBM we're back this is the cubes coverage of the IBM think 20/20 digital experience my name is Dave Volante is a wall-to-wall coverage over the multi-day event Harish promise here he's the general manager of the IBM public cloud rishi welcome back to the cube good to see you sorry we're not face to face but this will do yeah thank you great to see you again as well and you know it is the times what do you do you know I want to start by asking you you did a stint at a large bank I'd love to talk to you about that but but I want to stay focused you said last year on the cube you can't do everything in the public cloud certain things need to remain on Prem I'm interested in how your experience at the large financial institution and your experience generally working with you know your colleagues in in the banking industry how that shaped your vision of the IBM public cloud yeah I think that's a great question you know if you think about trying to transform yourself to a public cloud a lot of people what they try to do is you know they take applications that I've been running their enterprise and they try to redo them in its entirety with micro services using as level services I mean trying to put it all up in the public cloud now you know just think about some of these applications that are running your large institution right some of them will have regulatory ruled around it some of them have latency requirements or low latency requirements I should say some of them need to be close to the back end because that's where the data is so for all these reasons you know you have to think about a holistic cloud picture of which public cloud is you know integral to it but some of the things will need to remain on Prem right so when I build my public cloud out for IBM I kind of keep those in in the back of my mind as I get the team to work on it to ensure that we have the right capabilities on the public cloud and then where it makes sense you know have the right capabilities on the hybrid side as well working with my colleagues in IBM well you know the doc Ovid 19 pandemic that we've been talking to a lot of CISOs and CIOs we had a couple of roundtables with our data partner ETR and it was interesting you know organizations that maybe wouldn't have considered the cloud certainly as aggressively maybe they put some test dev in the cloud but you know have said well we're really reconsidering that one CIO actually said you know I'd love to delete my data center but but to your point you can't just delete the data center um first of all you don't want to necessarily move stuff second of all we've got a lot of experience from a consulting standpoint looking at this if you have to migrate migrates like an evil word especially with mission critical systems if you have to freeze code and you can't upgrade you know for some number of months you may be out of compliance or you're not remaining competitive so you have to really be circumspect and thoughtful with regard to what you do move I wonder if you could comment on that no I completely agree with what you're saying you know if you think about to your point right with Kovac things that really changed I've been speaking with a lot of cloud transformers I would say you know in the various industries but specifically with banks as well and the cloud leader for one of the large European banks said to me he said this was amazing because for four years he's been trying to get his he shows organization and risk and compliance etc to get their heads around moving applications to the cloud and he said that you know one month of kovat and having everyone locked down and home has been able to unblock more than what he's tried in the last four years so that's telling in itself right so look you know I've been working on public clouds for a good long time now both from a provider side as well as a consumer side and while you know you certainly just can't close your data centers that are running your large enterprise overnight you certainly can take a lot of stuff over there and move it to the public cloud in a meaningful fashion where you're able to take the pieces that really iterate more rapidly where you can get the end while keeping your data safe and you know being able to connect back into your back-end systems which will run a lot of your large processes in your enterprise as well so I think there is a balance to be had here and people especially banks I would say haven't been moving so much to the public cloud and I think this is the time where they're starting to realize that there is a time and place for a bunch of applications that can safely move and that gives them the agility and the productivity while everyone's locked at home and I think that's the eye opening so I'd love to have a frank conversation about why the IBM cloud I mean you know you got the the big guys you know Amazon Microsoft and Google maybe not as large people put them sort of in a category of hyper scalars great fair enough that people oftentimes dismiss you know the IBM public cloud however your point that you just made is critical and Ginni Rometty you was the first to kind of make this point Arvin's picked up on it that 80% of the workloads still are on trem and and it's that hard to move stuff that hasn't moved so and that's kind of IBM's wheelhouse I mean let's face it that the hard stuff it's the mission-critical you're kind of running the the banks and the insurance companies and the manufacturers and airlines around the world so what's the what's the case for the IBM cloud why the IBM cloud and why even move that stuff why not just leave it where it is yeah so I think there's a couple of answers here right one of them is the fact that when you talk to the hyper scalars and by the way I can't stress enough or a hyper scaler as well right people have taken a look at iCloud from about two plus years ago which you know at which point in time we were not but we certainly are and we can provision via size and so on and so forth as best as the best guys can so I want to just get that out of the way but to your point you know the reason why you would consider the IBM public cloud is when you talk to the other people they come at it from a very narrow perspective right they think about you know use vs is on x86 using cloud native pass services now you know I want to stress again that we do all three of those things extremely well but if you think about how large enterprises work nothing is as clean as that I did say there is a lot of applications that I've been running your institution that you can just willingly rewrite and then you have bare metal you'll have power systems whether it's AIX or I you'll have some Z in there Z Linux in there and then there's containers and then there's the VMware stack and there's containers running on bare metal containers running on vsi containers running on you know the VMware stack as well as the other architectures that I mentioned so we really meet our customers where they are in their journey and we give them a wide variety of capabilities and choices and flexibility to do their applications on the public cloud and that's what we mean by saying our cloud is enterprise ready as opposed to the nano answer of you'll do everything with vs is x86 and a service yeah I like that and I want to I want to circle back on that thank you for clarifying that point about hyper skills having said that it I've often said and I wonder if you could confirm or deny it's not IBM strategy to go head-to-head on cost per bit even though you you will you'll price it very competitively but your your game is to add value in other ways through your your very large software portfolio through AI things like blockchain and differentiable services that you can layer on top I've often made the point I think a lot of people don't understand that that insulates IBM from a race to the bottom with the alcohol traditional a cloud suppliers I wonder if you could comment yeah you know so I have to stress the point that just because I talk about all our other distinguishing capabilities that people don't walk away with the impression that we don't do what any of the other large cloud service providers do you know to your point we have AI we have IOT we've got a hundred ninety API driven cloud native pass services where you can write a cloud native application just like you build on the hyper scale other hyper scalars as well right so we give nothing away but for us the true value proposition here is to give you all of those capabilities in a very secure environment you know whether it is the fact that we are the only cloud where we don't have access to your data or your code because we have a keep your own key mechanism where we as a cloud service provider have no access to your key nobody else can say that so it is those Enterprise qualities of service and security that we bring to the table and the other architectures and the other you know constructs around bare metal and containers etc that distinguishes us further right and that's how it really so these are really important points that you're making and I know I'm kind of bringing out probably parts of the landscape that IBM generally doesn't want to talk about but I think it's important again to have that frank conversation because I think a lot of people misunderstand IBM is in the cloud game not only in the cloud game to your point but has very competitive you know from an infrastructure standpoint so many companies in the last decade we saw HP tried to get in they exited very quickly Joe to cheese's the CEO of EMC said we will be in the cloud you know they're buying mozi and you know exiting that so Dell right now doesn't you know it won't have a cloud play VMware tried to get in and now its course big partner of yours so you got in and that to me is critical just in terms of positioning for the next decade and beyond and and the other piece of differentiation that I want to drill into is the financial services cloud so what is that you obviously have a strong background there let's let's dig into that a little bit yeah if you look at the way most banks or actually every bank uses a public cloud is they build guardrail right they build guardrails from where their data center ends to where the public cloud begins but once you get into the public cloud then it really depends on the security that the cloud service providers provide and the csps will tell you that they have a lot of secure mechanisms there but if you ever speak with a bang you know they will never put their highly confidential data bearing apps with PII on a public cloud because they don't feel that the security that the cloud service providers provide is good enough for them to be able to put it there safely number one and number two prove to their regulators that they are in fact and compliant so what we've done is we work with a Bank of America and now you know a whole bunch of other banks that I'm not allowed to mention by name as yet where we're building a series of controls right these are both controls during your dev Sakharov cycle when you're building your app and another 400-plus controlled and the runtime that allow you is the bank to securely take your apps that have highly confidential data in III and put it on the public cloud and will give you the right things whether it's the isolation of the control plane and the data plane or it's their data loss prevention mechanisms the right auditing points the right logging points the right monitoring points the right reporting data sovereignty so we have controls built into the cloud that enable you to do all of this now banks will be quick to tell you that the onus of proof is on them alone to the regulators and we can claim that for them and they're absolutely right but today they spend hundreds of millions of dollars collecting all of that in providing that proof to the regulators you use our cloud we automate a whole bunch of that so you're not number one as a bank trying to implement these controls on a public cloud because that's not your job that's not your core expertise and number two when you actually build these compliance report you spending you know millions and millions of dollars trying to put it together whether compliance regulator will say yes this is okay we automate a large part of that for you and I think that's the key is the key issue we're solving you I want to follow up and just make sure I understand it is when I talk to executives in the financial services industry and other industries those they'll say things like look it's not that the cloud security is is bad it's just that I can't map the edicts of my organization into it certainly easily or even at all because I'm getting a sort of standard set of capabilities and it may not fit with what I need what I'm what I what I'm hearing is that IBM you know you guys are enterprise-c you used the specials but but so that's part of it but you also said you know they feel sometimes the cloud is that the security is not good enough and I want to understand what that is specifically if IBM is doing something differently so two things there one is your willingness whether it's auditability transparency mapping to corporate edicts and it may be other things that you're doing that make it better relative to go together yeah absolutely so one of the things is as I mentioned it's the mechanisms like keep your own key which is fundamental to building some of these compliance safeguards in but the the fundamental different thing we've done here is we work with the Bank of America and we've defined these controls to use your language that maps to their edicts right which should map to every banks edicts no you know there'll be a couple of extra controls here or there but largely they're all regulated by the same regulator so what satisfies one bang for the most part satisfies every other bank of the US as well right and so specifically what we've done is we've built those controls whether they are preventative controls or compensating controls in the CI CD pipeline as well as in the runtime on the cloud and that gives them a path to automation to produce the right results and the right reports to their auditors and that's really what we've helped them do so I know I'm pushing you here a little bit I'm gonna keep pushing if that's okay I was a great conversation when when IBM completed the acquisition of Red Hat you know the marketing was all about cloud cloud cloud and I came out and said yeah okay fine but what it's really about is application modernization that's the near-term opportunity for IBM you certainly saw that in the last earnings report where I think you're working with a hundred plus you know clients in terms of their application modernization so I said that is the way in which this thing becomes a creative which by the way it's already a creative and from a cash cash flow standpoint but but but but I'm gonna press you on on the cloud piece so talk about Red Hat and why it is cloud in terms of a cloud play yeah so you know this is the power of Red Hat and the IBM public cloud and of course Red Hat works or the other cloud print service providers as well so if you think about modernizing your application you know the industry pretty much has standardized around containers right as the best way to modernize their applications and those containers are orchestrated by kubernetes that's the orchestrator that's basically won the battle and Red Hat has OpenShift which is a industry-leading capability you know it's a coupon IDs control plane that manages containers and we from IBM we've put our content we've read backer a content into containers and we've made it run on an open ship and we have a cloud managed open ship server on the IBM public cloud as well as an on-prem that really helps bring our content to people who are trying to modernize their applications now think about an application that most people try to modernize you know the rough rule of thumb about 20 to 25 percent of it there's application code that is the onus is on the client to go and modernize that and they've chosen containers and turbidities and the other 75 to 80% arguably is middleware that they've got right and we've really tected in refactor that middleware into containers managed by open ship and we've done 80% of the work for them so that's how this whole thing comes together and you can run that on Prem you can run it on the IBM public cloud and I give you a cloud managed openshift service to do that effectively honor so that's interesting yeah that's very interesting I think there are you know probably at least three sort of foundational platforms one is obviously easy mainframe it's still much of IBM's customer base you know the tied to the Z and it drives all kinds of other software and so what the second is middleware to your point and you're saying you refactored and I think the third really is your choice of hybrid cloud strategy you kind of made the point you threw an on-prem it's to me it's that end-to-end that's your opportunity and your challenge if you can show people that look we've got this cloud-like experience of from cloud all the way to RM multi clouds that is a winning strategy it's jump ball right now nobody really owns that space and I think IBM's intent is to try to go after that I think you've called it a trillion-dollar market opportunity and it's obviously growing yes that's exactly right and the P spot so that I've been describing to you the you know the way people modernize our applications all fit very nicely into that now if you speak with the analysts they're going towards a whole different category called distributed cloud which basically means you know how do you bring these capabilities that run on your public cloud do on-prem and do other people's clouds and you know what I hinted at here is that's exactly where we're going with our set of capabilities and that is a technical journey I mean kubernetes is necessary but insufficient condition to have that sort of Nirvana of this distributed massive distributed system bring in edge edge systems as well so this is a you know at least a multi-year maybe even a decade-long journey there's a lot of work to be done there what would you say are their strategic imperatives for IBM cloud over the next several years so I think for us really it is you know building on this notion of the distributed cloud as I talked about it is you know fully building out the FSS cloud most of which we've already done and you know some of these things will never be at end of job because regulations keep changing and you keep adding to it and so you have to keep adding to it as well so a focus on FSS to begin with but then also to other industries as well right because there are other regulated industries here that can benefit from the same kind of automation that we're doing for FSS so we'll certainly do that and we're in a good position because it's not only our technology but it's our services practice it's a premonitory that deals with regulators etc so we have the whole package so we want to continue to build out on that branch into other industry verticals using our industry expertise across the board services product everything and then of course you know if there's one thing I BM has market permission for it is understanding the enterprise and building a secure product so we clearly want to evolve on that as well the IBM is a lot of arrows in its quiver including as we discuss cloud you know you just got to get her done as they say so iris thanks so much for coming to the cute great discussion appreciate your your transparency and and stay well Thank You YouTube thank you so much re welcome and thank you for watching everybody this is the cubes coverage of the IBM pink 2020 digital event experience we'll be right back right after this short break [Music]