>> Announcer: Live from Las Vegas, it's theCUBE, covering VMworld 2017. Brought to you by VMware and its ecosystem partners. >> We're back. I'm Stu Miniman with Justin Warren, and you're watching SiliconANGLE Media's production of theCUBE, live from Las Vegas at VMworld 2017. Always excited when we get to talk to one of the end users at the show. Joe Cowan, first time on theCUBE, is a systems engineer with Carlisle Interconnect Technology. Thanks so much for joining us. >> Thank you. >> So Joe, software might be eating the world, but eventually things live places, and one of the things that connects it all together is just the cabling and plant. And I've spent many years in my career dealing with those sort of things, it's not all wireless and things likes that. So tell us a little bit about Carlisle, the organization itself and your role there. >> Sure, what I do, I'm a IT systems engineer, and the company as itself creates power and data cabling. So anything from commercial to military applications, airlines, vehicles, heads-up displays, anything that requires special adapters, cables, and end connectors, that's what my company makes. >> You had nothing to do with the new MacBook Pros though, right? >> Joe: I would not. >> Dongles and everything. Your role at the company, what's your purview, your team, and how much stuff do you manage? >> Well because my company has grown through acquisitions, every site has their own intelligence variety. So what we've done at the corporate level is try to bring that together. So my role, as a systems engineer, is to find those solutions, develop those solutions, document, package, and then turn over to sites to execute. So my role is to make sure that compliance is met, security is maintained, and that the execution of those products and applications are actually deployed properly. >> Yeah, anybody's that dealing with kind of mergers and acquisitions, it's like, "Oh my gosh. What did I get this time?" Is it "Oh that's something easy for me to change," or, "Oh, hey they're doing something cool "that we never thought about"? How is that typically go for your environment? Do some of the inquiring companies push back on the new oversight? >> So it is very interesting. So whenever an acquisition is done, we are very excited to find out who they have, what are they doing. And we do have standards at a corporate level, but those standards can also be changed if they're doing something better than we are. We didn't think of that, that's a great idea, let's all do that. And so my job is to assess all of that, look at it, saying, "That is a great idea. "Let's redo what we've standardized, "and let's do this instead." Because it's not only better, they're using it better. They've actually documented it better, and we adopt it across the board. So acquisitions become very exciting to what they're doing. >> Joe, why don't you walk us through your current infrastructure, you're a user of, I guess we'll call it hyper-conversion infrastructure. Maybe you weren't looking for HCI when you looked out, but I'm curious, give us what led you down that decision tree. >> Sure, how do we get from there to here. >> Yeah well, was there something wrong before, or what was going on? >> Well, that's just it. You find yourself in a position, and our position was the fact that we had an opportunity. We were ready to renew some legacy support on equipment we had across the board. And that was a great stopping point, because now we're at a budgetary moment where we can say, "We're at a great spot to where "this is now legacied and depreciated. "Do we need to do something else "or should we continue with what we're doing?" It was a great decision point. So our decision after evaluating the products that were out there and the ability to turn a vertical subject matter expert, as storage controllers go and storage appliances. Well look, sometimes those are very specific. You have to be an SME to really get in, carve it up, pass it out and make it available. Well, we wanted a product that didn't hone us in to a single set of people. We chose a product that was easily deployable, we can train up very quickly all of our system admins to actually maintain it, use it for back ups, deploy, carve it up, and it turns our subjectmatic experts across the board. So we didn't have to have all these verticals on our company of three people know that, two people know that. We were able to allow more people to easily understand and use it without having heavy training. >> Yeah, one of the things that a lot of the hyper-converged vendors will do, and in fact the IT vendors, in general, is that they focus on cost savings, particularly around things like operational simplicity, gives you operational savings. But for this kind of situation, it sounds more like you've actually retasked your staff to be doing different things. Maybe you could tell us a bit more about what you're actually doing now that you weren't doing before, or perhaps doing more of. >> We are doing a lot more of. So when it came to deploying something, we needed to allocate more storage, get more storage, expand more dynamically and quickly on demand, that was the reason we chose the products that we did is because, now, each person can actually look into the product that we're using, assess what's going on, and quickly decide what's going to happen next. So one of the things that was very important is that we ask all of the people that work at the sites, because remember we grew through acquisitions, how does your site do business? So if they didn't understand how their division or site was doing business, how're you make these technology choices? We can't just be reactive, you actually have to go learn how we're doing it so we can provide the service, so instead of saying, "Hey we need this, no problem, "we're flexible, here you go," that wasn't the model, especially financially to stay in because that's too reactive. So getting in and having more meetings from the operator up to the operations CEO, to actually find out how are we conducting business, let me help you with these pieces, we can do better, and that's where our technology went. >> So I want to go back to that decision that you made. Did you have some idea in your head that it was going to be HCI, or were looking at it, what the options were. What was the decision tree? And don't keep us in any suspense, what did you actually end up buying? >> So the decision tree was what we were going to choose to do next. Was it viable to stay in our current storage array, and so after we looked at many products in many meetings, we did decide on on Nutanix. And the reason why did that is again, we can turn subjectmatic experts and divide that out because its more easily understandable for more admins to operate in that zone. >> When you made that decision, were you intending that you would then retask people, and that's what would drive it? >> Joe: Absolutely. >> So that's a really different kind of role for people who would be used to doing "I'm a storage admin. "That's what I do. "And now you want me to go and do these other things." Can you talk us about how did you manage that change? Were people embracing the change and ran towards it, or did you have to convince some naysayers? >> Well, we got to see people's personalities come out. And so people that were very accepting like, "Cool, new things," oh the great "Yes," and when they actually got into their product, they thought it was going to be really complicated, and when we showed them it's not, when you present that storage to VMware, there you go, it's just a couple clicks and you're done. When you actually want to upgrade the ESXI, it's one click, and you're done. And they're like, "That sounds too simple." And the other ones that just didn't want to, they're fine with what they're doing, it made it easy to document it, to actually pass it over, because it is very simply laid out the way Nutanix does it. >> Joe we've been tracking Nutanix for quite a while. We were at the .NEXT Conference actually, and Nutanix positioned themselves as an enterprise cloud company. I'm curious, does Carlisle have, do you have a cloud strategy, how does Nutanix fit into that discussion? What do you think of all the buzz words that people throw around? >> Because we have all of these different sites, it was great to have a remote office, business office, set block of Nutanix, but we do have a private cloud. And in that private cloud, it made it very easy not only do offsite replication, but it also became our DR. And so it made it very simple to capture the block-level snapshots very quickly, import them off to our private cloud, which we have a huge stack of Nutanix. >> So with some of the announcements at the show today, VMware on AWS is a thing. So are you VMware based on the Nutanix? >> Joe: Yes, we are. >> So are you looking to use something like VMware on AWS to extend outside your private cloud? >> That's a great question because not every site fits the bill. So we do have certain sites that are even smaller. Where do we put their stuff? Well they don't have a closet, well it isn't feasible to send them a block. So using that service is exactly what I will be suggesting for the smaller sites because they need their data. And everything going to cloud is only as good as your internet connectivity. If that should halt, falter, jitter your production line stops, that's a problem. That's one of the main reasons why you still have on-prem, private cloud, as compared to someone else managing it, which is total cloud. >> Joe, talk to us a little bit about your application portfolio. How you manage that, did switching over to Nutanix change anything? Talk about older applications I don't what you're doing with. Anything that you'd call cloud-native but I'd like to understand from an application standpoint what you're doing. >> Well that's the great thing, it didn't. So we were able to change our infrastructure in seamless changeover, if you will, from one hardware backend to another, and they saw nothing, which is great. The whole point is, is IT doing its job? Well do you notice anything? No. Then we're doing our job. >> Excellent. Do you get any credit, though, when everything just works? It's like plumbing, it's brilliant until it breaks, and you just assume that it's there. How do you actually show visibility and show that, "We're doing a great job, reward us give us more stuff." >> That's the responsibility of my leadership. So it's for them to see. But do I go around tooting my horn? No, we all did it. So whenever I refer to IT, it's never I, it's we. IT did it, we did it. And so everyone obviously has to have the credit because we're all doing the same effort. >> Joe, I'm curious. You're pretty thoughtful, you've got a corporate strategy. When you implemented Nutanix, if you look back, do you have matrics or metrics, or sometimes we call hero numbers that say, "Here's where we're this much more efficient." Or heck, "I've got this stack of projects "on the side that never got done." I talked to one Nutanix customer once who's like, "Yeah, you know that two-year-old security project "that I kept kicking down the road?" He's like, "Now I did it." What can you markedly go to, whether it's a metric or new projects that you've gotten to do? >> Not only we're able to expand very quickly, especially with storage is concerned, so new projects come on that require terabytes of space. How do we dynamically grow that immediately? So another way we're able to do that was also backups and DR. So to actually have backups and DR, at a certain level, and get them off-site replicated, we actually were able to get rid of our tape backups. So that was another thing. Do we want to renew this old legacy storage method for something that's faster, more dynamic, we don't have to put it on tape, we just ship it offsite via our connection to our private cloud. And so we're able to do that saving quite a bit of money. And, because remember, we grew through acquisition, everybody had their own backup strategy, everyone had all these different products. We're like, we're going to change all of that, get rid of that, and get rid of your tape drives. Everybody's like, "Thank you, thank you very much." And I felt really good I'm like, "Well I'm glad you like it because it's better." >> It sounds like you built a really strategic resource for your organization really, in being able to do M&A very, very well. And having the ability to absorb new ideas and then roll them out across the board, has that resulted in an increase in M&A activity? Because, well actually we're good at this, so we can go and do more things because the risk of the acquisition not working very well, or not being implemented very well is so much lower. >> Right, well the idea that the work will never stop coming. But it did provide us more time. It gave us more elbow room to move around, especially once we actually moved everything into it, our budget actually shrank, because we didn't have to buy all of these different facets to go along with it. So Nutanix allowed us to do that. >> So Joe, you talk, you're a VMware customer, you're a Nutanix customer, I'm sure there's more in the stack of your private cloud. The question I have for you is, what's on your list of, your wish list, what would make your life even easier? I mean, of course, lower prices that kind of stuff is a given. But what's on your roadmap that you'd like to see from the ecosystem? >> I'd like to see certain things come together. Many other products, especially that are showing here, are showing a lot of overlap. Where do I find my information easily? Some products aren't as easy as others, that's why there's vendors saying, "Look, we can bolt onto that, we can make it easier for you." So there's a few facets of performance, a few facets of tracking and logging and aggregation. How do we put more of that data together? And that's what's happening. I'd like to see all those products start, overlapping APIs, saying, "We can provide you that information." That's what makes it so wonderful to come to VMworld, and see all the vendor's products because you try to Google for what you need, you're going to be lost. You need a little bit of help, but to be able to come here, and see what's going on here, you actually get these little mini conferences, if you will, every 15 minutes. You could have a new conversation about, "You know what? "That fills my need, that fills the hole I was looking for." >> Has there been any standout vendor or someone that you didn't know about that you've seen here at the show, and that's impressed you? >> Now the AWS one, that was impressive, because they didn't know that was going to come to fruition, I didn't know when it was going to be launched, so it's great that that was happening. There's a few other companies, and forgive me I forget their names, but the way they bolted on to VMware to actually show you stats, what are people doing, especially in VDI instances, how do you see somebody YouTubing and they're cutting down the bandwidth, how do you find that one person, that one key thing that's killing it for everybody? Now there's software to see that. >> Joe, I want to give you the final word, what brings you back to a show like VMworld? You've been here a couple of times, what's your favorite things, what really gets you going? >> Putting all the vendors together. Having the huge room where you can walk, talk, get the paperwork, get contacts, set up peripheral concepts within a few minutes, and go to the next one, that's valuable to me. Getting the information. If you don't know, then you're lost. >> All right, well Joe Cowan, really appreciate you joining us. So much information. Justin Warren, and I'm Stu Miniman. We're going to be back with more coverage here as we're getting towards the end of day two of three of theCUBE's coverage of VMworld 2017. Thanks so much. You're watching theCUBE.

(bouncy electronic music) [Narrator] Live from Las Vegas, it's the CUBE. Covering InterConnect 2017 brought to you by IBM. >> Hey welcome back everyone, we are live in Las Vegas for IBM InterConnect 2017. This is the CUBE's coverage of IBM's Cloud and data show. I'm John Furrier, with my co-host Dave Vellante. Our next guest is Abby Kearns, Executive Director of Cloud Foundry Foundation. Welcome to the CUBE! >> 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 Google, Google Cloud Next was a recent show. >> Yeah. >> So, you're new. >> I'm new. >> John: To the reins but you're not new, new to 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 if you think about it has 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, 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, Dell EMC, and Cisco and SAP and VMware and Allianz and Swisscom. And of course, Pivotal. 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. 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 became an official open-source project. Prior to that it was part of Pivotal. And in that little-over-two years, we've grown to nearly 70 members in our community and are just excited to continue to grow and bring more perspectives to the table. >> So what has been the differences, a lot of people have been taking a different approach on for Bluemix, for instance, they have a 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 the single vision of that abstraction And what's the whole vision of Cloud Foundry, it's to allow developers to create code faster. And whatever realm that takes. Our industry is evolving and it's evolving so quickly and exciting, all of these enterprise organizations that are becoming software companies. 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, it allows them to focus on one thing and one thing only, creating code that changes their business. We're really focused myopically on ensuring that developers have the ability to quickly and easily create code and innovate quickly as an organization. >> So on the development side, sometimes standards can go fall down by forcing syntax or 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. It's a complex distributed system but it is 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. So we have the full-time committers that are basically doing this all day, every day, and then we have the contributors that are also part of the community providing feedback and value. >> And there was a big testimonial with American Airlines on stage, that's a big win. >> Abby: Yes, it is a big win. >> Give us 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. 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 pase," 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 implications does it have to your strategy and your ecosystem strategy? >> Well, I for one don't like the term PaaS anyway, so I'm happy to say PaaS is pase. 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. The high degrees of automation, the abstraction that the platform brings to the table, it 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 and do I have a proliferation of services to your ecosystem point that enable applications 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 got 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. 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 developers have choices. You're seeing infrastructure as a service, plus you're seeing SAS kind of minus emerge. How should we be thinking about the evolution, you said earlier it evolved, where is it evolving to? Obviously you bet on open, good bet. Other more propriet... I don't even know what open is anymore sometimes (Abby laughs) >> But we can agree that Cloud Foundry's open. But how should we be thinking about the evolution going forward? >> Well that's the beauty of open, right? What is open-source, open-source brings together a diverse set of perspective 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 of the things that evolved the last two years. Where we've had technologies come up, some go down, but there's so much happening right now, because the time is now. For these companies that are trying to develop more applications, or trying to figure out ways to not only develop these applications, but develop them at scale and really grow those out and build those and IoT, and you're getting more data, and we're 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's the potential, as we build out and innovate both the ecosystem but the platform will naturally evolve and take advantage of those winds from these organizations that are driving this to scale. >> So scale is the linchpin. >> Abby: Yeah. >> If you think about traditional paths, environments, if I can use that term, they're limited in scale, and obviously simplicity. Is that another way to think about it? >> I think about it this way, the platform enables you to run fast. You're not running fast with scissors. You want to be able to run fast safely. And so it provides that abstraction and those guardrails so you can quickly iterate and develop and deploy code. If I look at what... HCSE as a company. They went from developing an application, it took them 35 people and nine months to create an app, right? And now with Cloud Foundry, they're able to do it with four people and six weeks. It changes the way you work as an organization. Just imagine as you scale that out, what that means. 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. >> And you guys do a lot of heavy lifting on behalf of the customer, but you're not hardening it to the point where they can't mold it and shape it to what they want is kind of what I'm-- >> No, we want to abstract away and automate as much as possible, the things you care about. Resiliency, auto-scaling, the ability to do security and compliance, because those are things you care about as an enterprise. Let's make that happen for you, but then give the control to the developer to self provision, to scale, to quickly 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 I've been wanting to ask you to kind of take a step back, and look at the community trends right now. PC Open Stack has a trajectory, it's becoming more of an infrastructure, as a service, kind of settling in there. That's gone through a lot of changes. Seeing a lot of growth in IoT, which we talked about. You're starting to see some movement in the open-source community. CNCF has got traction, The Linux Foundation, Cloud Native, you've got the Kubernetes, I call it the Cold War for orchestration going on right now so it's a really interesting time, microservices are booming. This is the holy grail for developers for the next gen. It's going to be awesome, like 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, 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. 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? And 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. >> But open-source community, is it 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. (laughs) >> I think they're all cool and interesting, I think, you know, CNCF is a sister organization underneath The Linux Foundation. >> John: They kind of inherited that from Kub Con though. Kubernetes Con. >> Yeah, I think they're doing interesting things. I think any organizations that's promoting Cloud Native application architecture and the value of that, we all deserve to be part of the same conversation because to your point earlier, a rising tide lifts all boats. And if every organizations is doing Cloud Native application architectures and Cloud Native solutions, it's going to be super interesting. >> We just had STRAD at Duke, we ran our own event last week called Big Data SV, and it's very clear to us that the big data world industry and Cloud are coming together and the forcing function is machine learning, IoT, and then AI is the appeal, that's the big trend that's kind of, puts a mental model around 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 in point sensors and all of a sudden this gets to be a really interesting evolution of technology. >> So what's your hundred day plan, well you're in the hundred 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 things you're going to chip away at this year for objectives? >> Developers, developers, developers, does that count as top three? >> More, more, more? Increase the developer count? (laughs) >> Just really, reaching out to the 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, ensuring-- >> John: The proof points, basically? >> The proof points, but just ensuring they can be successful and ensuring that scale is affable for them, and then really, our summits are even changing. We've actually added developer tracks to our summit, 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 architectures and I think our goal this year is to really enrich that development community and build that pipeline and help fill those gaps. >> And celebrate the wins like the 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, developers want to make sure they're on a good bus with good people. >> You've obviously got some technology titans behind you, IBM the most prominent, I would say, but obviously guys like VMware, and Cisco, and others, but you've also got [Interference] organizations, guys like Allianz, VW, Allstate I think was early-on in the program. >> JPMC, Citibank. >> Yeah, I shouldn't have started, 'cause I know I'd leave some out, but you're the Executive Director, so you have to fill in the gaps. 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? >> Abby: As a user? >> Yeah. >> Well, to your earlier point, we're an open-source, right? And what's the value, 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 can be a contributor, I can 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. >> And Cloud's exploding, more open-source is needed, it's just a great mission. Congratulations on the new job, and good luck this year. We'll keep in touch, and certainly see you at the Cloud Foundry Summit, that's in San Fransisco again this year? >> Santa Clara, June 13th through 15th. >> John: So every year, you guys always have the fire code problem. (laughs) >> Well I think 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, 'cause I think we're all over Santa Clara right now. (laughs) >> Alright, well, we'll see you there. Abby Kearns, Executive Director of Cloud Foundry Foundation, here inside the CUBE, powering the Cloud, this is the CUBE's coverage of IBM InterConnect 2017. Stay with us, more coverage after this short break. (bouncy electronic music)

>> Announcer: Live from Las Vegas, it's theCUBE, covering InterConnect 2017. Brought to you by IBM. >> Hey, welcome back, everyone. Here live at the Mandalay Bay in Las Vegas for theCUBE's three-day exclusive coverage of IBM InterConnect 2017. I'm John Furrier. My co-host, Dave Vellante. Our next guest here is Greg Pepper, head of cloud security architects at Check Point Software Technologies. >> You got it. Good afternoon, gentlemen. >> Welcome, welcome to theCUBE. So, security obviously is big. You're seeing compel all the networks, every company out there is buying security, so there's been a security sprawl. But now you guys have a stock that's trading at a very high, 52-week high. Congratulations. >> Yeah, thank you. You know, some people forget about us. We've been doing this for 24 years, we've been the leaders in this industry for over two decades, but sometimes, we're the best kept secret in the industry. >> Unleash some of those secrets here. I know you guys probably can't go into too much secret sauce as a public company, but what's the software secret? Obviously, relationship with IBM is part of why you're here, but what's the Check Point secret sauce right now? >> I think first and foremost, we've built upon a legacy for the last 20 years. We didn't just acquire technology through acquisition, duct tape and paper clips and call it an architecture for our customers. We've built upon a consistent common platform building on our core strengths. I think the second thing that really differentiates us from some of the other guys you mentioned is our commitment and focus to security first. We are a security company end to end, and everything we do is built off of those tenets. And especially with the growth in security in the data center, its migration to cloud, the industry has kind of come back around to software, and though for a while we delivered hardware appliance to customers, 'cause it was the preferred consumption model, when customers go to the cloud, whether it's SoftLayer, Azure, Amazon, Google, and others, we don't have hardware to bring with you, so you need a software defined security strategy to play in the cloud today. >> What is that software defined security strategy? What's the hottest product that you guys have that's working best? >> Everything we have built on our core competencies of management and the gateways themselves. But these days, it's not enough to just be a firewall vendor, so advanced threat prevention, the ability to both prevent and detect malware from getting on the network, rather than just alerting you that something bad happened. We're providing additional access controls with data awareness. I don't need to plug into the network to tell you people are going to YouTube, Netflix, but what's the information about your organization that's being posted out there? Those are the interesting things that we can help differentiate and alert customers to what's going on. >> So, the perimeter's, with the cloud, all these APIs, microservices coming down the pike with cloud, that's the challenge. I mean, this whole idea of being data and software focused. How do you guys play in that world, and what's this focus there? >> The biggest change is moving away from the traditional management architecture to one that's driven by code. These days especially in the cloud to be agile with dev-ops, you have to have security be able to be deployed, programmed, managed, and monitored all through an API, and this is something over the last few years we've enhanced our products to enable automatic deployment in the cloud providers, automatic management, and also integration with people like IBM QRadar in a highly automated way. >> The big discussion in the last couple years in security has been, hey, it's not enough just to dig a moat around the castle. The queen wants to leave her castle, so we've got to, security's got to be everywhere, it's got to follow the data, and also response is another major focus of discussion, we've got to shift spending there. How has that impacted, first of all, you buy that, second of all, how has that impacted your business and your strategy? >> We definitely do agree, which is why as part of our end to end security strategy, the laptops, the desktops, the mobile devices is an area of increased focus for us. Where really just having the traditional perimeter alone is not adequate. The second thing we started to talk about is the ability to move into the cloud. A lot of the competitive solutions out there don't play as well in the cloud because they're dependent on proprietary hardware. If you're a vendor that has custom ASICs, well, you don't have those ASICs when you go to the cloud. Whereas for us, our software defined security strategy, when we go to Amazon, Azure, SoftLayer, and other cloud providers, 100% of our core capabilities moves along with us. >> Talk that through the value proposition and the customer impact. So, it's more flexibility. Is it lower cost, is it speed, is it better response? >> I believe the primary driver for cloud adoption is agility, not always cost savings, although in some cases that is the case. However, the ability to grow and shrink on demand. In the past, our traditional enterprise customers would consume technology for their max resources. If I'm a large department store, I need to be able to handle Black Friday. Well, that's one week a year that you need that peak utilization. That ability to scale up and scale down is one of the major things driving people to the cloud. Well, security has to have the same model. We have to be able to automatically deploy, scale up for those large-scale events, but then also come back down to an average run-time use to help customers save money. >> How about analytics? How does that play into the security business? >> Yeah, I mean look, the whole reason we exist is to give interesting information for technology to be able to chew on, and the ability to provide the forensic auditing accounting for access controls and for our threat prevention, whether it's on the perimeter, in the cloud, in the core, on mobile and end-point devices, there's a reason after 20 years we've been the lead in the industry is 'cause we provide the best forensics data and integration with all the major leading SIM vendors out there. >> Yeah, the 20-year stair with Check Point. Obviously, the company's evolved a lot since then. Talk about the relationship with IBM, obviously we're here at IBM InterConnect, what are you guys doing with IBM? >> IBM's one of our best partners for over the last two decades. For over 18 years now, they've been a customer, a reseller, and a managed services security partner, so there's multiple organization within IBM that have relationship with Check Point to help secure the corporate assets, customer projects in our managed data centers, or even just purely security managed services. One of the exciting projects that we've been working on that was demonstrated at the security booth was an automated security deployment for the hybrid cloud, where the IBM team worked with us to help take security, automatically roll it out into Amazon and Azure, but also bring it into their MSS environment, their managed security services with zero touch, and they're able to provision, have it managed, monitored, and ready to rock and roll in less than 30 seconds. >> And they were doing that all in software? >> Greg: 100% in software, 100% in code with no human intervention. >> So take us through some of those use cases going forward. As you go talk to customers with IBM or on your own, you write on a lot of white board, I can imagine, so what are some of the white board conversations you're having, 'cause security architecture's one of these, kind of a moving train right now. What are some of the patterns you're seeing right now? >> First and foremost, there's a lot of cloud novice, this is new for all of us. So in the walk-jog-run mentality, we all need to come up with the basic terminology and fundamentals so we can have a more advanced conversation. Once we provide the basic knowledge transfer, the second step is how can you help me lift this legacy application and move it to a cloud-centric application, yet still give me the same levels of security and visibility, 'cause I can't go to the board and tell 'em, "Oh, we screwed up. "We moved to the cloud, and now our apps are not secure." As a matter of fact, for our largest customers, the most critical applications will not move to the cloud unless they have a clearly defined security strategy in place. >> So you lay out those parameters up front, then you kind of walk through it, I'd say crawl, walk, run, then jog. >> Greg: Absolutely. >> However you had it, but I mean, lot of people are kind of crawling, but now also, multi-cloud's a big theme here. So now, you're looking at multiple clouds, and some workloads might make sense for cloud one, two, or three depending on the workloads, but some stay on prem. >> 100%. >> And now you got the true private cloud trend where I'm going to have a cloud-like environment on prem. That's cool, development environment looks the same as the cloud, but I got multiple clouds. How do you guys deal with the multi-cloud and this idea of being consistent on prem and on cloud? >> First and foremost, being a software defined gateway, we have this unique capabilities that's the same on premise, Amazon, Azure, Google, SoftLayer, and others as well. Since we're not dependent upon hardware, we have consistent capabilities across all the clouds. The second thing I want to add is from a management perspective, we've built, excuse me, tight integrations with all the data center and cloud providers, so we're able to trust Amazon, VMware, Cisco, OpenStack, Google, and others and real-time integrate their applications and objects and metadata into our security policies, further tightening the integration and automation capabilities between those cloud providers. >> So, you're actively working with all the clouds to integrate in tightly to manage the security. You become the Switzerland for-- >> Look, we were the first of the major security vendors to both be in Amazon and Azure. We were the first achieve Amazon security competency. We were the first to support basic things like clustering and scale set support, which has been a very common deployment in the cloud as well. We've been in this cloud game for the last seven or eight years now, or as I like to joke, we've cloud up-times longer than some of my competitors have been in business. >> Microsoft was actually down on the cloud. We published a report today on siliconangle.com. Three cloud vendors down in a week. I'll give Amazon a little week there, but it's still, you're still going to see some these bumps in the road, but security, you can't have bumps, you got to be rock solid. >> The thing with today in cloud, whether it's the application, the servers, the storage and securities, you have to anticipate for that total failure situation. Heaven forbid, what happens if an east region went down? Case in point, when Amazon had their storage outage, Netflix was not interrupted at all. Now, other organizations that were only deployed in a single region, we were impacted. This is where, I think from an application architecture, one, we have to think beyond single region, single cloud provider. We have to anticipate the total catastrophic failure and how does our business continuity and disaster recovery work. And then, security has to be an integral portion of that. We can't bolt it on after the fact, it's got to be part of the foundation. >> Greg, great point. And by having software, gives you so much flexibility, I love that hybrid cloud example, but I want to get your thoughts on what you said earlier about lift and shift. That seems to be the parlance of the generation. It used to be rip and replace on the enterprise side, but that's not as easy as it is. To your point, you can't just throw it to the cloud, you might have some gaps. As people look to lift and shift, which I always say is be careful, you got to have some concerns. How do you advise your customers when you say, "Hey, we're lifting and shifting to the cloud." >> For those people, I say don't bother. Right, if I'm going to move the same applications and same products and processes from my private data center to the cloud, why bother? If we're not taking advantage of the agility, elasticity, automation, and all the benefits that clouds has to offer, companies should be building new cloud-ready applications for the cloud. We should not just be lifting our legacy applications and like for like moving them to the cloud, 'cause we're not going to get the benefit in return on investment. >> And it's risky, too, by the way. I would agree with you. So, net new applications, no brainer. If the cloud's available, why not? >> Absolutely. >> Let's go back to the workload. Some clouds have better, like analytics use case is a great cloud, just throw IOT data into Amazon or Azure or Office 365 is Azure, and Amazon gets Kinesis, good stuff, and you've got Bluemix over here. You're starting to see that swim lanes of the different vendors. How do you view the differentiation between the vendors, and how do you advise customers? "Hey Greg, I don't know which cloud to go to. "What's your advice?" >> First and foremost, there's pros and cons to everyone's offering. >> It's kind of like Red Sox, Yankees, you know. It's like trying to-- >> Well, let's stop right there, Yankees for sure. >> Dave: You think? >> Absolutely. >> Dave: You really think? >> Well, maybe not in 2017, but-- >> Who's the Yankees, Microsoft or AWS? >> Microsoft probably the Yankees right now. Then again, from my perspective as a Red Sox fan, I'd say it's a tough call. >> (muttering) is the Yankee-killer. Anywhere, let's... >> Alright, go back. >> We digress. >> What I was I going to make a comment of is look for the adjunct services behind the basics, beyond the basic storage, compute and networking services that everybody has as kind of table stakes. For example, if you're someone who's a very heavy Microsoft Office 365 SharePoint user, you're using their business application suite, well, probably migration to Azure is a more natural transition, right. People who are similarly in the Google environment and using the Google suite of applications, it's a benefit to moving the applications there. And to be honest, people who are purely just into the raw compute horsepower and probably the most mature and largest cloud platform, well, Amazon has probably got a five-year head start on the rest of the guys. So, we try not to sit here and determine which of the three clouds is better, 'cause for us, we play in all of them, and our security footprint has to be consistent across all of them. I'll share with you an anecdotal use case from one of my retail customers is building a commerce platform in AWS. But all the corporate applications are moving to Azure, and separately now, they're looking at Google for other global applications as well. So for them, they're going to be in all three cloud providers, just with different applications finding more natural homes. >> Justin Youngblood was just on. He said, the IBM data said 70% of all organizations, or 70% of the organizations have three or more clouds, infrastructure clouds, right. >> I would believe that. >> Back to the security, I mean, the market's booming. In a way, it's unfortunate that the market's booming is 'cause it's such a huge problem that doesn't end. It's great for you. Each year, we look back at last year and say, okay, we feel more secure, and we don't. So, what's happening in the market? Are we finally going to get a handle on sort of how to deal with this, or is it just always going to be this good guy, bad guy, leap-frogging sort of endless loop? >> The big change these days are the bad guys are pros. This is their full-time job, they're very well funded, trained, and able. >> Dave: And they only have to succeed once. >> And remember, the cost of defense is exponentially higher than the cost of offense. So what it costs my banks and hospitals to secure their environment is 10 to 100-fold over what it costs the bad guys, either in the U.S. or some other nation-state, to attack those environments. I think the biggest challenge that most of our customers face, to be honest, is technology saturation. They've bought every product known to mankind. As I like to joke, for every threat, there's an app for that, and most of our customers have bought all three of them. But then they struggle operationally with the technology, and this is more of a people and a process issue than it is a product issue. There's a lot of great technology out there, ours and other vendors as well, but if it's not implemented and maintained properly, those potentially represent the weakest links. >> And there's new threats emerging, ransomware, for instance, is to your point they're overmanned, and the cost to even compare, or defend against that, but they're already hacked. They'll pay the ransom in bit coin to get their stuff back. >> And look, it's cheaper, quicker, and faster to maybe just whack the system and try and do some forensics clean-up than deploy a next generation end-point to try and detect and mitigate against ransomware, disk encryption, or other bots that may get on the end-points themselves. >> But I almost feel like the mitigation, I mean, you've got to have perimeter security, obviously, and continue to invest in that, but I feel like you're never going to stop somebody from penetrating your organization. What's the status on average, the company's penetrated for 200 and whatever end days before they know? 220, 250, whatever number you want. There's got to be more investment in remediating, responding, managing that complexity. And so, I guess the answer to my earlier question was, well, not any time soon. We're going to have to continue to invest in new approaches, new methodologies to deal with this inundation of data, which isn't going to subside. >> Well, but part of it too is in the past, most of the security controls that companies invested in, they put at the perimeter. So, they're overprotecting on the perimeter, but now, the attacks are coming in through the side door. Spearfishing attempts >> Dave: Or internally. >> They're coming in from laptops or mobile devices that leave the organization and come back in, and since most customers lack internal segmentation, a very small infection becomes a very big problem very quickly. So, a lot of customers now are trying to figure out how do I take what I've done in the perimeter and treat my data center, my campus as untrusted, segment and silo and create smaller fault-isolation domains so that heaven forbid there is a breach or an outbreak, it's contained to a smaller subzone, rather than, look at the Target situation, which came in from an HVAC vendor, moved into a payment system, and then exfiltrated millions of credit card records. >> And, or, and not or, but, and techniques to allow the response to focus on the things that matter, and like you said, organizations, CCOS, are inundated with technology, and they don't know necessarily which threats to go deal with. They've got so much data, and to the extent that they can narrow down those high value threats, that's going to help solve the problem. That's why I was asking the question about analytics before. >> That's where I think the partnership with IBM is so important for us, right, 'cause both what they do with Watson and big data analytics and QRadar as well, it's one thing to just create a bunch of alerts, but for most customers, that's a lot of noise. Give me the interesting bits of information. I don't care about these 10 million alerts over the last week. What are the most critical things that my team needs to address right now? And those are the things that collectively IBM and Check Point help. >> How about the competitive landscape? And you guys are kickin' butt, you're well over a billion, what, $1.7 billion company, roughly? >> A little more, but yeah. >> A little more than that, almost a $20 billion market cap, which you said earlier, John, stocks almost at an all-time high, so obviously compete with Palo Alto. Do you compete with HPE, with ArcSight a little bit? I mean, that acquistion, they sort of, that's-- >> They jettisoned some of their core products that were competitive, like TippingPoint. They've kept some of their ArcSight and other big data analytics, the drive service and storage and services out there. But they're as much a partner as they are a competitor. >> Dave: They are? Okay. >> I mean, I would say the usual competitive suspects, some of the guys you mentioned, some of the big route switch vendors like a Cisco or a Juniper out there. Actually, we're in the end-point mobile space as well, which brings in the Symantec and McAfee and Kaspersky. >> And so, right, okay, so what's your big differentiation? >> I think first and foremost is that we have an enterprise management solution that goes from the mobile to the end-point to the cloud to the network. We do it all through a singular console. We have the most scalable security platform in the marketplace today, and to be honest, we have the best security solution out there, both in terms of the effectiveness as well as the manageability. >> Dave: And you're profitable and you're growing. I'm going to throw that in. >> Greg: We've been profitable since day one. >> Greg, thanks for coming onto theCUBE. We really appreciate, give you the final word on the segment as the outlook going forward. Obviously, all the cloud vendors, you work with them all, all trying to be enterprise-ready. >> Yes. >> And they're all, we're the enterprise cloud. Amazon's now the enterprise cloud, Google was flaunting it at Google Next, they got some work to do. IBM certainly is in the enterprise, Oracle's in the enterprise, Microsoft's in the enterprise. Enterprise readiness and the next few years as security evolves, what are the key table stakes that the cloud guys need to continue to work on, continue to invest in, continue to innovate? >> I think the first thing, and this is across all technology, not just cloud, is that interoperability is the new best of breed. All of our customers are going to have a couple of trusted partners. No one enterprise is single-vendor end to end. But we have to be able to play nicely in the sandox. So, whether it's working with Cisco or McAfee or Microsoft or Symantec, if I don't work well with the other investments my companies and customers have invested in, they're not going to have me around for very long. >> And that's the truth. And multi-cloud, and workloads will fit best, 'cause the SaaS also defines some of these big cloud vendors as well. Microsoft SaaS is Office 365, if you have Microsoft, that's going to be some things for ya. Greg, thanks so much, appreciate it. Great commentary with Check Point Software Technologies, talking security, head of architecture here. Greg Pepper, thanks for joining us. This is theCUBE, more live coverage here, day three coverage from theCUBE after this short break. (electronic keyboard music)

(electronic music) >> Announcer: Live from Las Vegas, it's theCUBE, covering Interconnect 2017. Brought to you by IBM. >> Welcome back to Interconnect 2017 everybody, this is theCUBE, the leader in live tech coverage. Russ Kennedy is here. He's the Vice President of Product Strategy and Customer Success at IBM. Russ, good to see you again. >> Good to see you, Dave. >> So Russ, of course, you and I have known each other for years. >> Yes. >> From the Cleversafe. You guys came in from the Cleversafe acquisition-- >> Right. >> A phenomenal move for you guys. Great exit, awesome move for IBM. >> Yep. >> So we're now well over a year in. >> Umm-hmm. >> So the integration, you've been long past Blue Washing (laughing) you're now in, and you're integrating with other services. >> Right. >> You're embedded in the cloud, still selling on prem-- >> Right. >> Hybrid messaging, so give us the update. What's happening at Interconnect? >> Sure, well, thanks for having me on. >> Dave: You're welcome! >> It's great to see you again. And you're absolutely right. Things have been moving very rapidly since the acquisition. It's about 15 months since we've been part of IBM now. And we still have a very robust on prem business that was our heritage in the Cleversafe days, but now that we're part of IBM we're well entrenched in the cloud. We've got cloud services, object storage services in the cloud, and a variety of different flavors there. We announced a couple of new things this week that I think are very exciting for clients. I'm sure we'll get into that as we go through this discussion. And we have a hybrid combination, so if clients want to have some of their data on prem, some of their data in the cloud, we offer that hybridity as well. And I think that's very exciting for enterprises that are looking to figure out where their workloads run best, and be able to have that flexibility to move things back and forth if they need to. >> We were talking off-camera, I remember I was saying to you, Cleversafe was one of Wicky-Bon's first clients-- >> Umm-hmm. >> Back when we were tiny-- >> Umm-hmm. >> And you guys were just getting started and-- >> Right. >> I remember we were working with you guys, and sort of talking about some positioning and things like that, and I remember saying, Look, it's going to cloud! >> Russ: Right, right, right. >> It's all going there. And at the time, it was like, you guys were saying, Yeah, we think so, too, but it's just not here yet (laughing). >> Right. >> (laughing) And we're a small startup you got-- >> Yeah. >> And so, you have the conviction of belief that it's going to happen, but at the same time you have to survive-- >> Sure, sure! >> And you got investors and it's... >> Yep. >> But the growth of unstructured data and then all of a sudden the combination of that, plus cloud happened. And then boom that was a huge tailwind. >> Right. >> Talk about that. >> Right, right, no, you're exactly right. In the early days it was very, very difficult to get people to understand the value of object storage and understand the value of cloud. And we were out there pioneering discussions around this concept, but we knew that the wave was going to happen. The growth of unstructured data was already obvious. You had music services, you had video services, everything going online. People wanting to distribute information and share information, and so you knew that the wave was coming. It took a little bit longer than I think everybody thought. I think certainly success in other public cloud services like Amazon and Microsoft kind of helped drove that as well. But we were certainly there with leading technology, and as soon as people started to realize the benefits of object storage for storing large, unstructured data objects, it just took off. >> Well, you know, too, the cloud progression was really interesting. >> Umm-hmm. >> You're right. Amazon sort of popularized it. >> Yep. >> And then the downturn in 2007, 2008, caused a lot of CFOs to say, Hey, let's try this cloud thing. >> Exactly. >> And then they came out of it-- >> Russ: Exactly, yep. >> And said, Hey, this cloud thing's actually really cool. >> Russ: Umm-hmm, umm-hmm. >> Now, let's operationalize it (laughing). >> Right. >> And go mainstream. And so, and now you've got this big discussion going on around data value, right. >> Russ: Of course. >> Everybody's talking about the value of data and what it means-- >> Russ: Sure, sure. >> And moving conversations up the stack away from sort of bit slicing and-- >> Right, right (laughing). >> Object stores-- >> Yeah, exactly. >> And ups the data value. >> You're exactly right. >> What are you seeing here? >> I think that's another new interesting area that we're getting into. It's the value of information, and I think what's driven that is the tools and the technologies that are now available to analyze data in variety of formats, right. The whole analysis and analytics capability that exist in the marketplace today is giving organizations a reason to take a look at their data, and to leverage their data, and to use their data, to drive business outcomes, to be more competitive, to be more agile, to be more flexible. So they're using the information. They have tools now that can give them insight into all kinds of things, their own data, external sources of data, new data that's being generated through applications and those kinds of things. All that can come together and analysis can go on top of it, to give people really quick insights into how to drive their business. And I think that's the really exciting part about being part of IBM's cloud because IBM has all those tools. >> We've been having conversations now for... It's well over several months and going into years-- >> Umm-hmm. >> Where the CIO's not so much thinking about storage, and certainly not worried about the media. >> Right. >> But definitely talking about what services can I tap to enhance the value of my data? >> Sure. >> How do I monetize, not necessarily data itself, but how does data contribute to the monetization of my company? >> Umm-hmm. >> And you guys fit into that. >> Sure. >> So maybe talk about that a little bit-- >> Sure, well, we talked to clients all the time about the value of the data, regardless of what industry you're in, financial services, healthcare, manufacturing, all of those types of organizations have information and it's information that can help them be more productive. It can help them be more agile. It can help them win in the marketplace. All they need to do is open it up and use it, leverage it, analyze it, look at it, look at it from a variety of different sources, and it can help them do a lot of things more efficiently, so we talked to clients all the time about the value of data. Storage is certainly something that makes that value realizable, and it's the interfaces between applications and tools that make the data usable. And we open that up to clients with our storage system very easily, whether it's on prem or it's in the cloud, and that's what they like. Now, we heard David Kenny on stage the other day-- >> Umm-hmm. >> He announced IBM Cloud Object Storage Flex-- >> Yes. >> And he said, We do have a marketing department, and yes, they did come up with that name. (laughing) A funny tongue-in-cheek moment. >> Yes, yes. >> But talk about Flex. What is it? And why is it relevant? >> So a lot of clients that we've engaged with recently have talked about... They love the cloud model. They certainly love the simplicity and the ease of growth and those kinds of things that cloud gives them. But they're a little confused about the pricing and they're worrying about whether they're paying too much for the workload that they have in the cloud. So we designed Flex as a way to look at storing data. First of all, it's a very low cost entry point for storing the data. And then it's designed for data where the workload may be unpredictable. It may be cold for some period of time, and then it may become very active for a period of time, and then go back to being cold again. What Flex does is it ensures that you don't overpay when you actually utilize that data, when it's very active, very hot, maybe you're running some sort of analytics against that data. Maybe it's some sort of cognitive recognition analytics process that you're running against the data. It makes it very usable, but yet, you're not paying too much to access that data. So Flex is designed for those kinds of uneven, varied workloads, or workloads where it's very cold for some period of time and very hot. Traditional tiers are designed for hot workloads, mid-level workloads, and very cold workloads. Flex actually covers the whole gamut, and it ensures that you're not paying too much for storing and using your data. >> So that's a problem that people have because-- >> Umm-hmm. >> They don't really understand how to optimize cost-- >> Right, right. >> If they don't understand their workloads. >> Right. >> They get the cloud bill at the end of the month. They go, Whoa-- >> Yep, exactly. >> What just happened? >> Exactly. >> It's complicated for people, there's a lot of times it's different APIs for different services. >> Russ: Sure, sure. >> So talk a little bit more about how customers... How you see customers deploying that and what it's going to mean to... >> Sure. >> What's the business impact? >> Yeah, no it's a great question. So Flex, first of all, you only have to remember four numbers. There's a number to store the data, a cost to store the data, a cost to retrieve the data, a cost for what we call Class A Operations, which are write operations and then Class B, which are read operations. Four numbers you have to remember. You know that you're not going to pay over a certain amount, regardless of how often you use the data, so it's very simple for people to understand. It's one set of numbers. It doesn't matter what the workload is. You know you're not going to be overcharged for that workload. >> You set a threshold. >> Exactly, you set a cap, you set a threshold. >> Yeah. >> And you're not going to pay over that amount, so it's very simple for them to utilize. Then, so they start to use it, and let's say that over a six-month period of time they start to understand their workload, and they know it's a very active workload. They can then change that data into maybe our standard tier, and actually even save more money because it's consistent, it's predictable when it's active, they'll actually lower their cost. And we're very open with clients about that because we want to take away that complexity of using the storage, and certainly the complexity of billing, like you talked about. And give clients a very easy transition into the cloud, and make sure that they can use it and leverage it the way they need to be more productive. >> So the key to that is transparency. >> Russ: Yes, absolutely. >> And control. And that's an elastic sort of dial-up, dial-down-- >> Absolutely. >> As you need it. >> Russ: Very, very much so. Yes, definitely. >> I wanted to ask you, so we've been obviously watching... IBM made the SoftLayer acquisition, it was like, Okay, we're going to buy this bare metal hosting company. >> Umm-hmm. >> And then they bring in Bluemix, and then they start bringing in applications. >> Yes, yes. >> And then all of a sudden it's like, IBM does what IBM does (laughing), and boom! Now, you've got this machine going. >> Yes. >> And so, several acquisitions that are relevant here, Aspera. >> Yes. >> Clearleap. >> Yes. >> UStream fits there because we know Ustream because we broadcast on UStream-- >> Russ: Yes, yes, uh-huh. >> And, of course, Cleversafe. >> Umm-hmm. >> Are you beginning to leverage those acquisitions and potentially others through Bluemix-- >> Yes. >> To create services and new value for clients? >> Yeah, so we're fully integrated with all those technologies, right, the object storage system through our APIs. Every single one of those technologies can leverage and utilize the storage system underneath. I'll give you an example, Aspera, as you mentioned, a very, prominent product in the marketplace. I think just about every company in media and entertainment and certainly any company that's dealing with unstructured data objects knows and uses Aspera. They have a service now in the cloud where you can actually move data very rapidly over their protocol, into the cloud, and then store it in the object storage system. That's easy, that's simple. That makes it easy to start to leverage cloud. UStream the same way, Clearleap the same way. All of this comes together in Bluemix. Bluemix is the glue, so to speak, so if you're developing new applications you have all of the Bluemix tools that you can use, and then you got all these technologies that are integrated, including the object storage system, which is the foundation, everything's going to... All the data's going to reside in an object storage system. That makes it all usable for clients, very simple, very easy. They have a whole portfolio of things that they can do. And it's all tied together through APIs. It's very, very nice-- >> And has that opened up when you're small startup... (laughing) You don't have all these resources-- >> Right. >> How has it opened up new opportunities for you guys? >> So we see a lot of new startups coming on board, and taking advantage of the storage system-- >> Right. >> And all the different services that sit on top. Many companies today are born on the cloud, or they're new applications that are being born on the cloud, and so, they have access to, not only infrastructure, like you said within Bluemix, they also have access to other services, video services, high-speed data transfer services, object storage services. So they're able to take advantage of all those different services, build applications very quickly. Another thing that's interesting about IBM, they have this concept, you may have heard of it, this Bluemix Garage concept-- >> Dave: Yeah, I have. >> Which is a rapid deployment, rapid application development, using design thinking and agile methodologies, to quickly develop a minimum viable product that now uses object storage as part of the services, right. So as a new client, you can come in, sit in the Bluemix Garage, work on the application, and have some really rapid prototyping going on, and leverage the storage system underneath. And that gets you started, gets you going. I can see a lot of new applications coming to market through that same-- >> So they're like seven garages, is that right around the world? >> Russ: Yes, yes. Yeah, they're around the world. And so, I didn't realize... So Cleversafe's a fundamental part of that, in the object storage. >> It is now. And we just announced it this week at Interconnect, but it is now. >> So what does that mean? So I go in and I can... It's basically a set of... Sets of best practices-- >> Correct, correct. >> And accelerance and-- >> Right. And obviously in the cloud world, you need a place to place your data, right. So the integration with Cloud Object Storage, Cleversafe now called Cloud Object Storage is now all part of that, so it's integrated into the app dev that's going on in those garages. And we're excited about that because I think we'll see a lot of new technologies coming through that methodology, and certainly ones that leverage our storage technology, for sure. >> What's it been like to go from relatively small Illinois-based startup. (laughing) And now you're in IBM. >> Right. >> What was the integration like (laughing)? Are you on the rocket ship now? You were kind of on it before, but now it's like, steep part of the S-curve-- >> Sure. >> With all these global resources. Describe that. >> Well, I think the biggest part that's happened to us as an organization is exposure to a number of different accounts that we as a small company may not have had access to, certainly in certain industries, IBM's in every part of the world, in every industry, and that exposure from IBM's go to market has been very, very exciting for us. And certainly, global now, right. As Cleversafe, we were only in North America and Europe, for example, and now we're all over the world, or had the chance to be all over the world, so that's been really exciting. And then on top of that the whole integration into the cloud, right, because IBM's cloud business unity is the one that drove the acquisition of Cleversafe because they wanted the technology in the cloud. And now that we're there, we can offer storage services, object storage services as a foundation to anyone all over the world. And I think that's really exciting, and it's the exposure to all kinds of different businesses that's been exciting since we've been part of-- >> Yeah, and the speed at which you can get to that object store as a service as opposed to-- >> Absolutely. >> As opposed to saying, Okay, knocking on-- >> Yes. >> All the cloud doors, (laughing) And, hey, do you want to buy my cloud? And like, Well, you know we got our own, or whatever it is. >> Right, right. >> And now it's just boom global-- >> It's shortened that sale cycle tremendously, right. People are up and running in a few days now, or even a few hours, whereas before it may take months or, even quarters, to get started. You can get started now just by going to the portal, signing up for object storage services, starting to write data into the cloud, starting to leverage these other services that we walked about. It's very simple-- >> And the commentorial effects of what we were talking about before with, like Aspera and UStream, and so fourth-- >> Russ: Umm-hmm, umm-hmm. >> Give you the ability to add even new services. IBM 's always been very good at-- >> Yes. >> Acquisitions. >> Yes. >> We forget that sometimes IBM... (laughing) >> Acquisitions are always hard-- >> Yeah. >> But we've been fortunate we've had a lot of support and a lot help in getting integrated into the various businesses, And I think it's been a good journey. >> So what should we look for? What kind of milestones? Can you show a little leg on futures (laughing)? What should we be paying attention to? >> Well, we're going to continue to do what clients are asking us to do. We're going to develop features and functions, both on prem and in the cloud. We're going to integrate with a lot of different technologies, both IBM technologies and other company technologies. You may have seen our announcements with NetApp and VERITAS this week. >> Yeah. >> So we're going to continue to expand our integration with other technologies that exist in the marketplace because that's what clients want. They want solutions. They want end-to-end solutions, both on on prem and in the cloud. So we're focused on that. We're going to continue to do that. We'll certainly integrate with other IBM services as they come to market in the cloud. That's a really exciting thing, so we're going to continue to focus on driving success for our clients. And that's exciting. >> Oh! Russ, belated congratulations on the acquisition, and going through the integration. I'm really happy for you guys, and excited for your future. Thanks for coming on theCUBE. >> Thank you. >> You're welcome. >> Thank you, Dave. >> Alright, keep right there everybody. We'll be back with our next guest. This is theCUBE, we're live from Interconnect 2017. Be right back! (electronic music)

>> Announcer: Live from Las Vegas, it's theCUBE. Covering InterConnect 2017. Brought to you by IBM. >> Okay, welcome back everyone, we are live here at the Mandalay Bay for exclusive CUBE three-day coverage of IBM InterConnect 2017, I'm John Furrier with my co-host, Dave Vellante for all three days, we're on day three, winding down, great show, our next guest is Justin Youngblood, VP of Hybrid Cloud Management with IBM, welcome to theCUBE. >> Thank you for having me. >> Great to have you on, because a lot of the talk, obviously, cloud, we could blockchain, but a lot of under-the-hood production workload stuff still needs to manage with all this stuff. You guys had an announcement on day one on the cloud automation management. Big part of the keynote, so it was kind of a primetime spot. Can you share us, well, why'd you get that great slot, how did you get the great slot, and what's the impact? >> Well, it really all starts with what's happening in the market, and the team's been working hard inside of IBM, we announced IBM Cloud Automation Manager, it was elevated to a tier-one offering, very strategic space for IBM in multi-cloud management. What we know is, every enterprise is now moving towards multi-cloud environments, cloud adoption is well into its maturity, and really, it's 71% of enterprises have three or more clouds, and they need to manage those clouds with a common management platform, and that's what cloud-- >> And it's big paying point too, it's one of those non-sexy items like blockchain, it's like, AI and blockchain took the headlines, but a lot of the blocking and tackling is going on in hybrid right now, so you see that orchestration piece between multi-cloud, little things like latency, security, workload migration, this is what you guys are doing, bringing the IT operations to a modern level, is that kind of the main thing? >> That's exactly right, and there're really two entry points to this, because on the one hand, it is that IT team, when you think of the modern enterprise, every modern enterprise is trying to move faster, trying to get applications out faster, trying to better engage with their customers, essentially trying to digitally transform, be the disruptor instead of the disrupted, and often, they'll look at their IT team and say, "You're not keeping up, you're too slow," so this is an automation and orchestration tool that allows the IT teams to rapidly deploy applications and infrastructure to the line of business and to their devops teams. >> Well, that's the thing, you got developers, not just IT, you got developers and the line of business who have a financial stakeholder, the top line revenue, to make it happen, and you got the movement to true private cloud happening. What's different now for you guys with automation? What's the key unique thing in this announcement that makes it go to the next level? >> Several things there, but no solution is complete from IBM these days without cognitive, and so bringing in those cognitive services and insights to analyze and help optimize the performance of workloads on any cloud environment, and also really to provide an advisor role, prescriptive guidance and recommendations on where to place workloads to optimize performance, cost, compliance right within company policy and security and regulatory environments. >> So we had Mohammed Farooq on earlier, and he was talking about cloud brokerage services, and I wonder, as you enter this market, if you're starting to see different KPIs emerge, the traditional IT operations KPIs, okay, the light on the server's on, it's uptime, planned downtime, unplanned downtime, percentage of my backups that fail, whatever it is, are there new KPIs emerging as people become cloud brokers? >> Yeah, absolutely, and Mohammed's a good friend, we're both Austenites, right, in the same building. >> Dave: Another Austenite! Austin's dominating theCUBE this week! >> We talk regularly, and really, we see a nice synergy because the cloud brokerage tool, which is brokering across the application readiness assessments of putting workloads onto the cloud and then planning and cost analysis and so on, and then the orchestration of actually deploying those workloads, so there's a nice synergy, and then, really, the third leg of the stool in my mind then plays into service management, and having the integration across all those pieces is really important, so being both cloud agnostic for multi-cloud environments, but then also having an open API, an ecosystem that you can enable and plug in with existing tools. >> Now, there was a period of time where IT was almost afraid of automation, but then this cloud thing sweeps over them, are we past that now? >> We are past that, and it's a great point, because sometimes, IT can be afraid of automation, 'cause they can think, "That's threatening my job." But we've got client success stories where we're running our cloud orchestration and hybrid cloud management solutions at massive scale, literally saving dozens of full-time equivalent hours, and what we're finding is these enterprisers saying, "Finally! "Now I can get to the innovation "and the transformative projects "that are on the strategic agenda "rather than working within manual IT processes," so it's really been a win-win. >> And when you talk about that average stat, the average enterprise has, you said three clouds? >> Three or more clouds, 71% of enterprises have three or more clouds. >> Are you excluding SaaS in that number? 'Cause-- >> Excluding SaaS, because you think about-- >> Dave: Alright, so that's infrastructure clouds, right? >> Absolutely, private clouds, public clouds, and a lot of departmental clouds or shadow IT where different cloud services are being consumed even if the IT team may not be managing it. >> So that brings the question, then, where does SaaS play, if I'm a cloud broker, and I've got these corporate edicts, and I've got these KPIs around running the business and transforming the business. How do I apply those edicts to SaaS, and can you help me do that? Is that futures, or is that just sort of a separate island? >> Yeah, it's a little bit futures right now, many times with the cloud management platforms in particular, these tools are used to automate the deployment of the infrastructure, and what's unique in our solution is the full stack application and even the day two operations, but the SaaS applications are tending to come in through a slightly different channel now, over time, I think what we're going to see is all applications, whether they're delivered by the IT team, or from the cloud, need to come into a common-- >> And should CIOs be worried about that? Because each SaaS provider has different infrastructure, some of the different availability profiles, different definitions, different SLAs, that's a whole 'nother problem area to be attacked, I guess. >> No, it is a concern, just the application sprawl, infrastructure sprawls, cloud sprawl, and this is why I think any time we're entering into a new industry, we're going to see that expanse and then back to a convergence, and honestly, I presented with Dave Bartoletti from Forrester this week, and a lot of his insights and things that he writes about and what I spoke about, and what my team did in our sessions was the need for a common management platform because of that sprawl, it's reining in the chaos. >> What are some of your favorite examples, customer case, the early wins? >> Yeah, so a great case study is that Swiss Re, large global insurance company, 60 global offices, this is a company that uses our cloud orchestrator solution with business process manager, their environment includes WebSphere, but also Microsoft Active Directory, ServiceNow, Puppet, et cetera. When they came and used our solution to, really, to automate the deployment of applications to put applications and IT as a service into a self-service catalog for their line of business and development users, at the end of the day, they have automated 45,000 processes executed each month, and literally dozens of offerings into the service catalog now. >> So the IT service management business has been evolving very rapidly, cloud has impacted that, the on-premise ratios are going to probably shift a little bit, but not radically, but then again, the use cases for public cloud are going to be dependent upon the workload, so that's kind of well-defined and discussed. The question I have for you is, from a customer standpoint, the number one competition we're having, and we're seeing, digitally at least, on Twitter and theCUBE is, what does enterprise readiness mean? So I'm an enterprise, and I want to go to the cloud. I have to then evaluate which cloud is best for which workload, but then I also have to put it through the prism of readiness, their table stakes, do they have the table stakes? >> Yeah, absolutely. >> Google's got some great machine learning, but the SLAs might not match up, or Amazon's got some great Kinesis for analytics, but I can't run my other thing on that. That's comes up a readiness problem. >> It is a readiness, and I would say, there is no single cloud that is purpose-built for all workloads, and a lot of the messages you heard here at InterConnect this week, even from Ginni Rometty herself, where IBM has the enterprise-ready cloud, and a lot of data points to back that up, including every enterprise that's going to be cognitive, and the way we think about that is cloud and cognitive are two sides of the same coin, a famous quote also from Ginni. But now we're getting into trusted networks and Hyperledger and blockchain, I don't want to get too far offtrack, but it's some-- >> But they'll all bent the change on the disruption side, on the innovation side, and honestly impact some of the blocking and tackling table stakes. >> The blocking and tackling, so that gets down to some of the regulatory concerns and other pieces, which is why we've invested now to have 51 data centers around the world, because of data locality and security concerns that companies have, so there's a lot-- >> Well, I love her line, she's the best, I got to say, very memorable, enterprise strong, made me think of the whole Boston strong thing instilled in my head, 'cause, being from that area. Enterprise strong, data first, cognitive to the core, those are the three pillars, you can unpack that in every different way, so you guys have to bring that into your offering, so I get the enterprise strong. Data first, how are you guys using the cognitive piece, specifically, in this? Data first, is that an architectural thing? And then where's the cognitive piece fit in? >> Yeah, perfect, so as we architected this solution, it was really important to us to put cognitive at the core. And really, two use cases, primarily, the first is around, as companies go deploying their applications and workloads on the cloud, every application is going to have its downtimes, its slowdowns, its outages, and that impacts end user experience, that's why it matters, it can impact revenue or NPS scores for the company. So the first is a cognitive operations capability, and you can think of that analytics moving from log analytics to quickly pinpoint the root cause of issues, up through predictive analytics to prevent an outage or an issue before it impacts your end users, ultimately into the cognitive domain, which is a true machine learning, and the capabilities that we're working on on our labs now, and that we demonstrated this week at InterConnect, we actually have a chat ops interface for the IT operator to come and interact with a cognitive system that's part of Cloud Automation Manager, and get prescriptive guidance and confidence levels-- >> Going to be a voice-activated Watson, basically, in the future. "Hey, move to cloud nine!" >> So that's the differentiation, right, if I were to push you on that, it's trust, everybody's going to say they have cloud, but like you said, it's a multi-cloud world, and it's the cognitive piece, is that right? It's really the trust and the cognitive piece. >> The cognitive piece is absolutely the number one piece of differentiation that no one has. >> Because a lot of big enterprise hardware and software companies are going to say, "You trust us," people do trust us, that's how they got to be multi billion dollar companies, but talk a little bit more about the differentiation with respect to cognitive. >> Yeah, so that's one aspect of it, and that's just cognitive operations management, and even that is that one level of value. Where I think there's additional value is getting into really letting Watson, and cognitive services, become an advisor to your business, so imagine your smartest IT operator in the business, if Watson can learn from that person, Sally or Jeff, whoever it is, learn from that, and help every IT operator in your business always make the best decision as smart as the smartest subject matter expert is in IT operations, and so this is the learning aspect of cognitive, and in that advisor role now, all of a sudden, a cognitive chat ops interface can begin to provide prescriptive guidance when there's an outage. Or imagine an application or workload going down, and Watson taking automatic action to redeploy the workload on a different cloud that has not been impacted, no interruption of service to the end user, and then come back and say, now let's pinpoint the root cause of the problem and fix that, but I've already address the main point, so-- >> And what's key about that is it's a learning machine model, so you have the domain expertise of the specific use cases, it's not trying to use some sort of vocabulary and map that on through an infrastructure environment or software environment. >> Very plain language, natural language understanding, and it's really, really powerful capability. >> Alright, so the question is, how do customers get access to this, Bluemix storage, is there IBM.com, what's the vehicles for getting this in the hands of customers? >> The easiest way is at IBM.biz/tryibmCAM, so if you go there, it'll take you right into our Bluemix service, and customers can get started right away, we have a free addition that allows customers to get started with the-- >> I know this is a tough personal question, but I'll ask anyway, no one likes to pick who their favorite child is, but what's most exciting about the product from your standpoint, looking at the success of the announcement, obviously, primetime on the keynote, congratulations, but what's the one thing that you get most excited about the product? >> Yeah, the most exciting thing is, it's all about the application. It's all about the application and digital transformation, so, certainly, the cognitive piece, and we've talked about that, but I want to highlight one other thing, which is, we in IBM are providing pre-built automation content from the infrastructure up through full-stack applications and getting into the day two operations, the monitoring, the backup, et cetera, we can orchestrate that end-to-end, unlike anyone in the industry. >> End-to-end is the key word. This is now big part of the architecture. End-to-end cross vendor. >> Exactly. >> And opensource. >> Yep. >> That's kind of the big-- >> Dave: That's what you call automation packs? >> These are the cloud automation packs, exactly, in the past, we called them patterns, we're moving to an open-pattern technology base, and we call 'em cloud automation packs. And I'll just say more about that, we're going to make them available in a marketplace, in the IBM cloud marketplace so clients can come, learn about, discover, try, and buy these automation-- >> Alright, so here's the hard question for you. Well, might be easy for you, hard for me, but as you go end-to-end, which is totally the right way, I believe, that's what everyone wants, end-to-end, but you're crossing horizontal and vertical specialty across multiple vendors, and new things coming, so now 5G comes enables autonomous vehicles, now you got smart cities, now you got Watson trying to learn new environments that I've never seen before in IT. How do you guys prepare for that, what are you guys doing to get out in front of that next wave? >> Yeah, so in the past, I think a lot of applications, and even management tools have been built as monolithic applications. With the Cloud Automation Manager, we built it from the ground up, it's cloud-native, microservices-based, just like a lot of applications out there in the enterprise are bring run, that allows us to be much more composable and flexible than we've ever been in the past, and we augment that with a set of open APIs to integrate with clients' existing tools, you heard me mention the example of integrating with ServiceNow, of course, we can integrate with UrbanCode or other devops tools, APM and monitoring tools, et cetera. >> That's the key, integration is the new table stake. >> That is the new table stake. >> Justin Youngblood, thanks for coming on theCUBE, great, congratulations on the success of your launch, and good luck with the adoption, and we'll see ya out in the marketplace, thanks for coming on theCUBE, Justin, the VP of Cloud Management inside theCUBE, more cloud action, more data action, more predictive content here on theCUBE, more great interviews coming, stay with us, I'm John Furrier with Dave Vellante, we'll be right back.

>> Announcer: Live from Las Vegas, it's theCUBE, covering InterConnect 2017. Brought to you by IBM. >> Welcome back everyone. We are here live in Las Vegas at the Mandalay Bay for exclusive Cube coverage for three days for IBM InterConnect 2017. I'm John Furrier. My co-host, Dave Vellante. Our next guest is Ed Walsh, General Manager of Storage and Software-Defined Infrastructure at IBM. Welcome back. >> Ed: That was a mouth full wasn't it? >> Welcome back to The Cube. Welcome back to the fold at IBM. >> Thank you very much, always good. >> You're leading up a big initiative. Take a quick second to talk about what you're the general manager of scope wise, and then we'll jump right in. >> Yeah, so I run basically the storage division, which has all of our storage from mainframe to open systems, tape, software defined storage and software defined compute, but it's all under our storage portfolio. So development, sales, you know, run the PINA. >> Right, and the new innovations that are coming out, what do you have your eye on? What's your goal, you know, you got a spring in your step. What's the objective? >> So we talked probably in October, I was 90 days in. So now I'm a whopping 8 months in. I think we kind of talked about it. I kind of... my hypothesis for coming here was you know, clients are going through this big change and some of your write ups lately about the True Private cloud and how they're trying to go from where they are now to where they're trying to get to. And that confusion eats up leadership so as confusion... IBM has the right vision, but it's like clouding cognitive, as is much on PRIM. So we have the right vision to help them get through that. And we have a history of doing that. And the second one was that we have a portfolio that's pretty broad. So we almost have an embarrassment of riches on what we can do with someone when they're really trying to look to modernize environments or transform, we can help them from anything. From the biggest and baddest. But it really doesn't matter. The broad portfolio allows us to engage and bring it forward and get them to the... Whatever their path forward is we can give that vision. And then, the one thing I was really talking about is he could bring in IBM. If I could bring in IBM, the greater IBM, the True Cognitive, the analytic team, and bring that together to bear for our infrastructure clients, or inside storage itself, that would be where we'd have the trifecta taking off. So we're in the middle of that transformation. Going very well. But along the same lines I have a fantastic product line. We're going to continue, in fact we're putting more investments on that. Not only on the hardware raise, but as much on the software-defined, and going all flash just because a lot of operational benefits. But then really what we're able to do by bringing the large IBM behind us... IBM also did some interesting organizational changes in January. Arvind Krishna is now running Hybrid Cloud and research for IBM so it's bringing the girth of IBM behind what's on PRIM hybrid into the Cloud. So it allows us to play a very strategic role. >> So a couple Wikibomb buzzwords, right? The True Private Cloud, we talked about server sandwiches, really sort of instantiation of software-defined. Really the impetus is that customers on PRIM want to run the Public Cloud. With that kind of agility and automation. So what are you seeing? What is IBM delivering to support that? First of all, are you seeing that? >> So it's kind of funny, so that... I do talk about study a lot because I thought the True Private Cloud, the way you coined it, is the right way to almost just say it's not what you're thinking I'm about to say. But the study, it's everything you get in the Public Cloud and you want to bring it on PRIM. All the flexibility, all the development models, right? How you engage developers. All the financial models as well, but bring that. And then it easily extends the Hybrid Cloud. When you start going through that, every one of our clients we engage, they know we understand the value of Cloud. They're at different maturity levels of how they're using Cloud, but it's all in their vision. We do a lot of work to help people bridge. So where are you know, let's talk about where you need to get to and have some meaningful steps to get there. So the True Private Cloud resonates with them. And then what we're doing is launching. In fact we launched this week with Cisco. So we have a converged offering with Cisco called VersaStack. But what we're operating on is, how do you make a Private Cloud as agile, and has the same use cases specifically for developers or DBA's that you have on the Public Cloud? And we're bringing that to the offering set for a converged offering. So what we do around on API later... So a key use case would be to do would be, why do people go to Public Cloud? Business units like it because the developers. It's easy to use, they have true DevOps capabilities. They're able to swipe a credit card. Single line of code. Spin up an environment. Signal out a code. Spin it down. They don't have to talk to an IT guy. They don't have to wait three weeks or do a ticket system. So how do you do that on PRIM? So what we have now, in market is, imagine a API abstraction layer, that for storage allows all the orchestration and all the DevOps tools to literally do the exact same thing on PRIM. So once you set it up, it allows the IT team, it's called Spectrum Copy Data Management, allow the IT team to set up templates. But through roles based access, allow a developer or a DevOps tool like Chef or Puppet to literally infrastructures code. Single line of code, spin up a whole environment. An environment would be, let's say three or four VM's, last good snapshot, maybe Datamaster or not. Most times it's Datamast. Bring up an offense network, but literally it goes from, on PRIM I just can't get it done. It takes me two or three weeks. So that's why I go the Public Cloud for other reasons. I can not only choose where I put it, where it's the right place to do, but I can give the exact same use case on PRIM by just doing API calls and they use exactly the same tools for development that are used in the Cloud, like Chef, Puppet, Urbancode, Python scripts. >> How's the reaction been to that? Give us some anecdotal... >> So once you have that conversation, that's just one of the things we're doing to make the True Private Cloud come to life. Of course the extension to SoftLayer, in other Clouds to get the... People, all of the sudden they see a path forward. It's not as easy to... You have to explain how it works, but the fact of the matter is they don't have a lot of tools now to make... We can bring down cost, give you a little bit more efficiancy, consolidate it. But that's not really how True Private Cloud is. You need the automation. So they're responding to it well. In fact it's the number one demo on the floor. For us, as far as systems, people trying figure out actually how to do the DevOps on the PRIM. >> John: That's awesome. >> Talk more about he Cisco relationship. There's a lot of interesting things going on in the storage business. There's consolidation, and you know the whole VCE thing and then Cisco looking for partners. You guys selling off BNT, it opens up a whole new partnership potential. So how has that evolved and where do you want to take it? >> So I think, match made in heaven between us, especially in storage, and Cisco. If you look at the overall environment conversion Hipaa converts account for about a third of the storage industry, so we play well. There's no overlap between us and Cisco. It's great. We're after the exact same accounts and actually, from a... You think of the very top level of our organization all the way down, the two companies have a lot of the same cultures and to be honest we're very tight. So it allows us to have a great relationship. We've already had a good relationship. About 25 thousand joint clients, which is amazing. And then what we're doing with VersaStack specifically is we're putting in the next generation, so we have a great converged offering that has all our all flash storage, but also software-defined. But what we added is we brought in what they did with their CliQr acquisition, which is called CloudCenter, and you add that on top make it single click, deploy and application anywhere, both on PRIM in the different Clouds, and it makes it very simple for developers. We talked about the API Layer. You bring that in to DevOps environment. So we feel really strong that as far as, if you're looking to bring in a True Private Cloud probably the best answer that we could do, is what we do with VersaStack. And we just announced it this week. And also we gave a preview. It's Cisco live in Melbourne a week ago. I think it's been a good uptake. But it kind of plays to... When you know what people were trying to do, but you need to bring the automation. You got to make it self-service and that really drives, for the business units, as well as developers. That drove what we brought into VersaStack. So we brought different assets in it from Cisco and IBM to make that kind of a reality. >> John and I were talking earlier on theCUBE this week and somebody brought up, yeah the CIO, they really don't think about storage. They certainly don't want to be thinking about the media. And the conversation shifted way off... Even flash now, it's like, oh yeah, yeah we get it. But you mentioned something earlier and this is very relevent to CIO's. They want to get from point a to point b with this minimal disruption, they don't want to have to buy a boat load of services to get it done. And now you're talking about things like automation and self-service. What are the discussions like with senior IT executives and how are you helping them get from point a to point b with minimum disruption? >> So the good thing about... You think about the IBM brand. It's as much about trust and helping people through it. So people give us just a credit to say I can engage with them, get the innovation. But also we've been through the zeros So a lot of the times they're asking how are we doing it? How are we transforming our company? How are we doing it internally? And then if you jut kind of, common sense, walk them through because of the broadness of the portfolio, we don't just have this point solution and every answer is, well you buy this box, right? We're able to have that conversation and when you get that broader IBM together that's where it kind of differentiates and they love it. Now I've been to a lot of, oh I'll say, IBM friendly accounts which is great. But also, some people that have never dealt with us are eyes wide open because it's a new day. People are struggling with this big transfer, right? How do you get from now to where you want to go in Cloud is a big change. >> Those new customers, what are they getting wide-eyed about? What are they focusing on? What's the big focus? >> So we'll talk about, we'll do True Private Cloud, but really what you can do as far as data, and what we're doing around Cognitive is really telling, right? The ability to really show 'em with symbol API calls they get more... So to have a Cognitive conversation that's an industry specific conversation really gets people lit up. In the end it ends up being, okay I see the possible. Then, how do I get from here to there. And typically it doesn't start, well I'm just going to go directly that direction. It's help me with a multi-year plan to get to there, while I'm taking out costs, adding agility over time. But I would say the kind of conversations are especially with an industry lens, which is what IBM brings to it, is really telling. >> So I got to ask you about the Convergent reStructured markup because the hot trend that's in the Cloud native world is server lists. So is there a storage list version? Cause what you're basically saying with the True Private Cloud is, you're essentially doing server lists, storage lists, philosophy. Is that, I mean how do you guys rationalize this server list trend. Cause servers and storage are basically the same things in my mind these days. But, I mean, you might disagree. >> I think in general people aren't looking to the different components. They're looking for a way to operate in their environment that's more efficient. They're looking for use cases. They're also trying to have IT not be in the way of what they're trying to do in development, but actually give the right tools. So that's why, to be honest, go back to True Private Cloud, I've been using it a lot cause it really resonates with people. Is how do you get that same experience but on PRIM, cause there's different reasons to be on PRIM. >> It's like Cloud native on PRIM. You could get all the benefits of what Serverless promotes, which is here's an unlimited pool of resources. The software will just take of that for you. That's DevOps. >> And doing... >> John: On PRIM. >> And doing true DevOps, Chef, Puppet, no compromises is exactly how you do it. So you change nothing for your developers. But now you're running it on PRIM or in a Hybrid Cloud. Cause there's a lot good use cases for Hybrid Cloud even if it's born in the Cloud application. You're making a web application or iPhone application, the fact of the matter is, you might want to test it against the back end. So being able to do a Hybrid Cloud, bring this system record data there, to be able to do DevOps on what production looked like maybe last night, or a week ago is much different than the current DevOps models. >> Well it's a good strategy too. If you think about the True Private Cloud, the way you're looking at it, which I think is the right way, is a lot of the things that we look at on theCUBE, and talk about, is three areas. Product gaps, organizational gaps, and process gaps. The number one thing is organizational gaps. So when you have that True Private Cloud on PRIM, it's not a big leap to go Cloud Native Public. >> It's seamless in fact. >> John: It's totally seamless. >> And on that case that a lot of the stuff we're talking about is, we help people modernize and transform their environment. And the message is all about optimization on the traditional application environment. It's all about freeing up the resources. So... >> John: That's the ovation strategy. That's the creativity, that's the Dev element. >> And if you don't free up the key resources they can't be on the digital transformation. And without the right skill set, because they're kind of trapped in operation. So a lot of the automation things we're doing are things that, to be honest, the storage team, or the admin team will be doing. It's manual error prone, but take it away. But also you free up the team. So it kind of plays to all those. >> That must really resonate with the CIO. I mean, I would imagine CxO goes, okay I could have Cloud on PRIM and then train my organization to then start thinking Hybrid workloads as they start moving Hybrid pretty quickly. >> And here's the thing, is what do you have to change for developers? Tell me what I have to get by the developer or DBA's? And the answer is nothing. Use the exact same tools. So you know, on stage it'll literally show me how Chef or Puppet... They're not doing trouble tickets or spinning things up, down, but... Same thing with deploying applications. It's like Cloud Center application. Set up the stack and deploy either on PRIM, different architectures, both converged and non-converged or in different Clouds. And they allow you to just, one click and deploy it. And they deal with all those differences. But that's how you want to make it, you use it serverless. They don't have to worry about the infrastructure. But also we're freeing up the team. >> So Ed, I got to ask ya, on a sort of personal note, I mean I've followed your career for a long time. John and I call you the Five Tool Star. You've had the start-up experience, you've got technical chops, you did a stint at IBM, you went to MIT and came back with that big MIT brain, brought it to IBM, so pretty awesome career. By no means even close to over. What have you brought to IBM? I think I've known every GM of storage, since the first GM of storage at IBM. What specific changes have you brought and what's the vision and the direction that you want to take this organization? >> It's a great culture, great history of storage. So I guess that I would be the first outsider coming into storage. But I don't think it's any different. I've been in storage my entire career. I understand it. Some of it is optimizing their current model. The portfolio of what we're doing. Some of it is just making sure we have the right things in sales and working with channels, which one of my companies was an actual channel partner. So I think it's just the perspective of maybe a fresher look, but again we are a great team. Great portfolio. We're quietly number two in storage hardware software. Shhhhhhhh. Don't tell anyone. Cause we don't do a good job of getting the news out... But the fact of the matter is... >> Now we'll tell everyone. You say don't tell anyone, we're telling everybody. You tell us to tell everyone, we don't tell anyone. >> Together: (laughing) >> But we still get people, are you guys still doing storage? We're like, literally we're number two by revenue. And this is IDC and Gartner software hardware. So we are a player in the space. We have a lot of technology and I guess what I'm bringing is just maybe a little spice of vision and... >> Well you guys have a strategy that's unique and different but aligned with the mega trend. That, to me I think, is something that's been in the works for a while. It's been cobbled together. Dave always points it out, how the storage groups change. But the game is still the same, right? Ultimately it's about storage. Now the market conditions are changing on the organizational side. That seems to be the thing. >> Ed: Agreed. >> Well all flash is probably the thing. >> But also what you're going to start seeing is bringing Cognitive capabilities. So we're not going to call in Watson for storage, but imagine bringing Watson to storage, right? Think of all the metadata we have. Not only for support but for insight. You're going to all start doing more Cognitive data management, and not only look at metadata, but taking action on them. Using Watson to look at images, so very interesting use cases that I think only IBM can do. >> I can just envision the day where I just voice activate, Watson spin me up more servers. And provision all flash petabyte. Done. >> (giggling) Believe it or not, we can do a chat, but we have that working. >> John: (laughing) >> We're looking for applicability of that, so. >> And then Watson would tell me, well you can't right now. >> You're not authorized. (laughing) >> You got to grab the Watson for storage url. He's been grabbing url's all day on GoDaddy. (laughing) >> Ed, thanks so much for coming on theCUBE. Congratulations on taking names and kicking butt in storage, in the strategy. True Private Cloud, a good one, love that research, again from Wikibomb. >> Yup. >> Kind of new but different, but relevant. >> Ed: Very relevant. >> Thanks so much. >> Ed: (mumbles) So thank you, thank you very much. I appreciate it. >> Okay, live coverage here at Mandalay Bay here at IBM Interconnect 2017. I'm John Furrier, Dave Vellante. Stay with us. More coverage coming up after this short break. (pulsing tech music)

>> Announcer: Live, from Las Vegas, it's theCUBE. Covering Interconnect 2017. Brought to you by IBM. >> Okay, welcome back everyone we're here live in Las Vegas at the Mandalay Bay, theCUBE's exclusive three day coverage of IBM Interconnect 2017, I'm John Furrier. My co-host, Dave Velliante. Our next guest is Harley Davis, who's the VP of decision management at IBM. Welcome to theCUBE. >> Thank you very much, happy to be here. >> Thanks for your time today, you've got a hot topic, you've got a hot area, making decisions in real-time with data being cognitive, enterprise strong, and data first is really, really hard. So, welcome to theCUBE. What's your thoughts? Because we were talking before we came on about data, we all love, we're all data geeks but the value of the data is all contextual. Give us your color on the data landscape and really the important areas we should shine a light on, that customers are actively working to extract those insights. >> So, you know, traditionally, decisions have really been transactional, all about taking decisions on systems of record, but what's happening now is, we have the availability of all this data, streaming it in real-time, coming from systems of record, data about the past, data about the present, and then data about the future as well, so when you take into account predictive analytics models, machine learning, what you get is kind of data from the future if I can put it that way and what's interesting is how you put it all together, look for situations of risk, opportunity, is there a fraud that's happening now? Is there going to be a lack of resources at a hospital when a patient checks in? How do we put all that context together, look into the future and apply business policies to know what to do about it in real-time and that's really the differentiating use cases that people are excited about now and like you say, it's a real challenge to put that together but it's happening. >> It's happening, and that's, I think that's the key thing and there's a couple megatrends going on right now that's really propelling this. One is machine learning, two is the big data ecosystem as we call it, the big data ecosystem has always been, okay, Hadoop was the first wave, then you saw Spark, and then you're seeing that evolving now to a whole nother level moving data at rest and data in motion is a big conversation, how to do that together, not just I'm a batch only, or real-time only, the integration of those two. Then you combine that with the power of cloud and how fast cloud computing, with compute power, is accelerating, those two forces with machine learning, and IOT, it's just amazing. >> It's all coming together and what's interesting is how you bridge the gap, how you bring it all together, how you create a single system that manages in real-time all this information coming in, how you store it, how you look at, you know, history of events, systems of record and then apply situation detection to it to generate events in real-time. So, you know, one of the things that we've been working on in the decision management lab is a system called decision server insights, which is a big real-time platform, you send a stream of events in, it gets information from systems of records, you insert analytics, predictive analytics, machine learning models into it and then you write a series of situation detection rules that look at all that information and can say right now this is what's happening, I link it in with what's likely to happen in the future, for example I can say my predictive analytics model says based on this data, executed right now, this customer, this transaction is likely, 90% likely to be a fraud and then I can take all the customer information, I can apply my rule and I can apply my business policy to say well what do I do about that? Do I let it go through anyway? Because it's okay, do I reject it? Do I send it to a human analyst? We got to put all that together. >> So that use case that you just described, that's happening today, that's state of the art today, so one of the challenges today, and we all know fraud detection's got much, much better in the last several years, it used to take, if you ever found it, it would take six months, right? And it's too late, but still a lot of false positives, that'll negate a transaction, now that's a business rule decision, right? But are we at the point where even that's going to get better and better and better? >> Well, absolutely. I mean the whole, there have been two main ways to do fraud detection in the past. The first one is kind of long scale predictive analytics that you train every few months and requires, you know, lots and lots of history of data but you don't get new use cases that come up in real-time, like you don't have the Ukrainian hacker who decides, you know, if I do a payment from this one website then I can grab a bunch of money right now and then you have the other alternative, which is having a bunch of human analysts who look for cases like that guy and put it in as business rules and what's interesting is to combine the two, to retrain the models in real-time, and still apply the knowledge that the human analysts can get in real-time, and that's happening every day in lots of companies now. >> And that idea of combining transactional data and analytics, you know, has become popularized over the last couple of years, one obvious use case there is ad-tech, right? Making offers to people, marketing, what's the state of that use case? >> Well, let's look at it from the positive perspective. What we are able to do now is take information about consumers from multiple sources, you can look at the interaction that you've had with them, let's say you're a financial services company, you get all sorts of information about a company, about a customer, sorry, from the CRM system, from the series of interactions you've had with them, from what they've looked at on your website, but you can also get additional information about them if you know them by their Twitter handle or other social media feeds, you can take information from their Twitter feeds, for example, apply some cognitive technology to extract information from that do sentiment analysis, do natural language processing, you get some sense of meaning about the tweets and then you can combine that in real-time in a system like the one I talked about to say ah, this is the moment, right here, where this guy's interested in a new car, we think he just got a promotion or a raise because he's now putting more money into the bank and we see tweets saying "oh I love that new Porsche 911, "can't wait to go look at it in the showroom," if we can put those things together in real-time, why not send him a proactive offer for a loan on a new car, or put him in touch with a dealer? >> No and sometimes as a consumer I want that, you know, when I'm looking for say, scarce tickets to a show or a play-off game or something and I want the best offer and I'm going to five or six different websites, and somebody were to make me an offer, "hey, here are better seats for a lower price," I would be thrilled. >> So geographic information is interesting too for that, so let's say, for example, that you're, you're traveling to Napa Valley and let's say that we can detect that you just, you know, took out some money from the bank, from your ATM in Napa, now we know you're in Napa, now we know that you're a good customer of the bank, and we have a deal with a tour operator, a wine tour operator, so let's spontaneously propose a wine tour to you, give you a discount on that to keep you a good customer. >> Yeah, so relevant offers like that, as a consumer I'd be very interested in. All too often, at least lately, I feel like we're in the first and second innings of that type of, you know, system, where many of the offers that you get are just, wow, okay, for three weeks after I buy the dishwasher, I'm getting dishwasher ads, but it's getting better, you can sort of see it and feel it. >> You can see it getting a little better. I think this is where the combination of all these technologies with machine learning and predictive analytics really comes to the fore and where the new tools that we have available to data scientists, things like, you know, the data scientist experience that IBM offers and other tools, can help you produce a lot more segmented and targeted analytics models that can be combined with all the other information so that when you see that ad, you say oh, the bank really understands me. >> Harley, one of the things that people are working on right now and most customers, your customers and potential customers that we talk to is I got the insights coming, and I'm working on that, and we're pedaling as fast as we can, but I need actionable insight, this is a decision making thing, so decisions are now what people want to do, so that's what you do, so there's some stats out there that decision making can be less than 30 minutes based on good data, the life of the data, as short as six seconds, this speaks to the data in motion, humans aside of it, I might be on my mobile phone, I might be looking at some industrial equipment, whatever, I could be a decision maker in the data center, this is a core problem, what are you guys doing in this area, because this is really a core problem. Or an opportunity. >> Well this all about leveraging, you know, event driven architectures, Kafka, Spark and all the tools that work with it so that we can grab the data in real-time as it comes in, we can associate it with the rest of the context that's relevant for making a decision, so basically with action, when we talk about actionable insights, what are we talking about? We're talking about taking data in real-time, structured, unstructured data, having a framework for managing it, Kafka, Spark, something like decision server insights in ODM, whatever, applying cognitive technology to turn some of the unstructured data into structured data, applying machine learning, predictive analytics, tools like SPSS to create a kind of prediction of what happens in the future and then applying business rules, something like operational decision management, ODM, in order to apply business policies to the insights we've garnered from the rest of the cycle so that we can do something about it, that's decision manager, that's-- >> So you were saying earlier on the use case about, I get some event data, I bring it in to systems of record, I apply some rules to it, I mean, that doesn't sound very hard, I mean, it's almost as if that's happening now-- >> It's hard. >> Well it's hard, let me get, this is my whole point, this is not possible years ago so that's one point, I want to get some color from you on that because this is ungettable, most of the systems, we even go back ten, five years ago, we siloed, so now rule based stuff seems trivial, practically, okay, by some rules, but it's now possible to put this package together and I know it's hard but conceptually those are three concepts that some would say oh, why weren't we doing this before? >> It's been possible for a long time and we have, you know, we have plenty of customers who combine, you know, who do something as simple as when you get approved for a loan, that's based on a score, which is essentially a predictive analytics model combined with business rules that say approve, not approve, ask for more documentations and that's been done for years so it's been possible, what's even more enabled now is doing it in real-time, taking into account a much greater degree of information, having-- >> John: More data sources. >> Data sources, things like social media, things like sensors from IoT, connected car applications, all sorts of things like that and then retraining the models more frequently, so getting better information about the future, faster and faster. >> Give an example of some use cases that you're working with customers on because I think that's fascinating and I think I would agree with you that it's been possible before but the concepts are known, but now it's accelerating to a whole nother level. Talk about some of the use cases end-to-end that you guys have done with customers. >> Let's think about something like an airline, that wants to manage its operations and wants to help its passengers manage operational disruptions or changes. So what we want to do now is, take a series of events coming from all sorts of sources, and that can be basic operational data like the airplanes, what's the airplane, is it running late, is it not running late, is the connection running late, combining it with things about the weather, so information that we get about upcoming weather events from weather analytics models, and then turning that into predicting what's going to happen to this passenger through his journey in the future so that we can proactively notify him that he should be either, we can rebook him automatically on a flight, we can provide him, if we know he's going to be delayed, we can automatically provide him amenities, notify the staff at the airport where he's going to be blocked, because he's our platinum customer, we want to give him lounge access, we want to give him his favorite drink, so combine all this information together and that's a use case-- >> When's this going to happen? >> That's life, that's life. >> I want to fly that airline. Okay, so we've been talking a lot about-- >> Mr. American Airlines? I'm not going to put you on the spot there, hold up, that'll get you in trouble. >> Oh yeah, it's a real life use case. >> And said oh hey, you're not going to make your connection, thanks for letting me know. Okay, so, okay we were talking a lot about the way things used to be, the way things are, and the way things are going to be or actually are today, in that last example, and you talked about event driven workloads. One of the things we've been talking about, at SiliconANGLE and on theCUBE is, is workloads, with batch, interactive, Hadoop brought back batch, and now we have what you call, this event driven workloads, we call it the continuous workloads, right? >> All about data immersion, we all call it different things but it's the same thing. >> Right, and when we look at our forecast, we're like wow, this is really going to hit, it hasn't yet, but it's going to hit the steep part of the s-curve, what do you guys expect in terms of adoption for those types of workloads, is it going to be niche, is it going to be predominant? >> I think it should be predominant and I think companies want it to be predominant. What we still need, I think, is a further iteration on the technology and the ability to bring all these different things together. We have the technologies for the different components, we have machine learning technology, predictive analytics technology, business rules technology, event driven architecture technology, but putting it all together in a single framework, right now it's still a real, it's both a technology implementation challenge, and it's an organizational challenge because you have to have data scientists work with IT architects, work with operational people, work with business policy people and just organizationally, bringing everybody-- >> There's organizational gap. That's what you're talking about. >> Yeah, but every company wants it to happen, because they all see a competitive advantage in doing it this way. >> And what's some of the things that are, barriers being removed as you see them, because that is a consistent thing we're hearing, the products are getting better, but the organizational culture. >> The easy thing is the technology barriers, that's the thing, you know? That's kind of the easy thing to work on, how do we have single frameworks that bring together everything, that let you develop both the machine learning model, the business rules model, and optimization, resource optimization model in a single platform and manage it all together, that's, we're working on that, and that's going to be-- >> I'll throw a wrinkle into the conversation, hopefully a spark, pun intended. Open source and microservices and cloud native apps are coming, that are, with open source, it's actually coming in and fueling a lot more activity. This should be a helpful thing to your point about more data sources, how do you guys talk about that? Because that's something you have to be part of, enabling the inbound migration of new stuff. >> Yeah, we have, I mean, everything's part of the environment. It's been the case for a while that open source has been kind of the driver of a lot of innovation and we assimilate that, we can either assimilate it directly, help our customers use it via services, package it up and rebrand open source technology as services that we manage and we control and integrate it for, on behalf of our customers. >> Alright, last question for you. Future prediction, what's five years out? What's going to happen in your mind's eye, I'm not going to hold you, I mean IBM to this, you personally, just as you see some of this stuff unfolding, machine learning, we're expecting that to crank things up pretty quickly, I'm seeing cognitive, and cognitive to the core, really rocking and rolling here, so what's your, how'd you see the next five years playing out for decision making? >> The first thing is, I don't see Skynet ever happening, I think we're so-- >> Mark Benioff made a nice reference in the keynote about Terminator, I'm like no one pick up on that on Twitter. >> I don't think that's really, nearly impossible, as a scenario but of course what is going to happen and what we're seeing accelerating on a daily basis, is applying machine learning, cognitive technology to more and more aspects of our daily life but I see it, it's in a passive way, so when you're doing image recognition, that's passive, you have to tell the computer tell me what's in this image but you, the human, as the developer or the programmer, still has to kick that off and has to say okay, now that you've told me there's a cat in an image, what do I do about that and that's something a human still has to do and that's, you know, that's the thing that would be scary if our systems started saying we're going to do something on behalf of you because we understand humans completely and what they need so we're going to do it on your behalf, but that's not going to happen. >> So the role of the human is critical, paramount in all this. >> It's not going to go away, we decide what our business policies are and-- >> But isn't, well, autonomous vehicles are an example of that, but it's not a business policy, it's the car making a decision for us, cos we can't react fast enough. >> But the car is not going to tell you where you want to go. If it started, if you get in the car and it said I'm taking you to the doctor because you have a fever, maybe that will happen. (all laugh) >> That's kind of Skynet like. I'd be worried about that. It may make a recommendation. (all laugh) >> Hey, you want to go to the doctor, thank you, no I'm good. >> I really don't see Skynet happening but I do think we're going to get more and more intelligent observations from our systems and that's really cool. >> That's very cool. Harley, thanks so much for coming on theCUBE, sharing the insights, really appreciate it. theCUBE, getting the insights here at IBM Interconnect 2017, I'm John Furrier, stay with us for some more great interviews on day three here, in Las Vegas, more after this short break. (upbeat music)

>> Narrator: Live from Las Vegas it's The Cube covering Interconnect 2017. Brought to you by IBM. >> Okay welcome back everyone. We are live at the Mandalay Bay for IBM Interconnect 2017, The Cube's exclusive coverage. I'm John Frower, Dave Vellante, my co-host. Our next guest is Jim Casey and Michael Gilfix. Michael's the VP of process transformation and Jim is offering manager at IBM. Guys, welcome back to The Cube. >> Both: Thank you. >> So you guys had a big announcement on Monday, the digital assistant, so I've been craving a digital assistant since the little Microsoft little, you know, icon would pop up. >> Michael: You're talking about Clip, aren't you? >> The clip man. >> Don't talk about that. >> We don't like that. >> To me that was once called the digital assistant. It was a help button, but this is now, digital assistant is real automation, and you guys got a whole other take on this. It's totally cloud, cloud first. What's the digital assistant product that you announced? Take us through that. >> So here was our vision. What we found was in the modern, digital workplace, everyone is struggling to just keep up pace. Too many sources of information, and the information is buried everywhere. It's buried in emails, in spreadsheets, in documents. Many corporations have undertaken a BI project. In fact, there's an explosion of all these different dashboards that has all kinds of business data that they could go and see, so no one has the time to read all these things. Meanwhile, everyone in the modern world is trying to do 50 things at once and it's hard to figure out what is the best time to progress something and make progress? Our vision, so what we thought is wouldn't it be great if I could program this assistant, programmable by everyday business users, to watch for the things that matter to me and figure out when I should take action or take automated action on my behalf to save me time. >> So it's an interface, so it's software interface, cloud-based SAS, and the back end, does the user have to, what's the persona of the user that's using your product? >> Well, we want them to be used by non-developers, non-technical users, and so we thought really carefully about how you can teach your assistant these notions of skills, really point to tasks that can really make your life easier on a daily basis and they can pick anything that they like working with, that they can connect to, get the information from, and effectively assemble into these point-to tasks. >> Host: And the data sources are whatever I want them to be, explain how that works? >> Yeah, it can connect to common SAS applications. Those could be things like productivity suites, like G-Suite, they can be things like CRM systems, like Sales Force, campaign management systems like Marketo, and that's just in the beta that we just launched. And of course in the future, they'll be able to connect into their on-premise systems as well. >> So is it to replace the dashboards and all the wrangling that goes on? Most business users will have either a department that does all the data science or data prep for them, wrangling data sets, and then they get reports or spreadsheets or some BI dashboard. >> Yeah, we wanted the assistant to push the work to the user instead of the user having to go and spend time watching all these dashboards that really, they just didn't have time to do. And so the assistant takes all the heavy lifting of watching the data for you, figures out when action is needed, and then taps you on the shoulder. >> So Ginny Ramete was talking about that your customers want to own the data. So that's a great purpose, we buy into that mission, but a lot of the data is spread all over the place, so one of the problems that we're seeing in the big data world, now IOT complicates even further, is that data's everywhere, scattered, and the tools might have stacks and data wrangling within tools so you have complexity out there just on the scaffolding of how the data's managed. Is that part of the problem that you guys help solve? Because that seems to be a pain point. >> Yeah, and I think the amount of time that people spend just searching and aggregating and gathering information so they can figure out what to do, it's staggering. And when you think about the, it takes about two the three hours often for people to gather all the information that they need in order to make a real significant decision, every day, daily, you know operations. You're spending time in your email, you're building spreadsheets. Think of all the time you spend building a spreadsheet, wrangling data, you know. It's a productivity killer, and so a lot of the use cases that we look for, we'll ask our clients show me the ugliest spreadsheet that you use on a day-to-day basis for business operations. That's usually a starting point, or show me how many dashboards are you looking at and what are the decision you make off that? That's the stuff that we want to collapse into what the assistant can provide. >> So I got a use case for you, I'm a walking, I'm like everybody, right, so I've got my email, I've got five or six spreadsheets, Google Docs that I'm in every day all day, maybe there's a base camp, maybe there's a slack. I'm in Sales Force, all right, and then I got my social. >> Tool overdose. >> You just described the typical modern environment. All fragmented tools. >> And I'm in there and I'm like which browser is it, oh is it in Firefox, I'll put my Safari stuff I'll put over here, and I'll put my email in Mozilla, okay. It is just awful, it's a bloody nightmare, I get lost. I got to back up, hit the escape key, and go, okay, where am I, how do I find it again? >> Jim: It's connecting the dots. >> Okay, explain now how you can help me. >> So think of the things that you're looking for in all those different data sources. We're seeing the trend now. It's not about how can I just connect with things, it's how can I connect the dots? It's the actual business data inside of there, and how do I put that in a context that's relevant to you, what you're trying to do? You know, and a great example, we're working with one client who, they're moving, and a lot of people are doing this, they're moving from a point in time sale to being as a service, and in that kind of scenario, relationships with your clients really matter. And preventing customer churn is really important. So they have people who are responsible for making sure that people are not going to churn. That's a lot of dots to connect, right? So with the Digital Business Assistant, what we do is we look for those patterns that are really common that predict churn, but those things are scattered across your sales systems, your marketing systems, the website traffic, social media even, and we're able to combine all those things into a really consumable component called a skill. And then that individual person that's responsible for this set of customers can tailor it to their needs. So it's kind of like how you would buy a suit. When you go in and buy a suit, you don't get just the fabric laid out on a table and they cut it, right? You, most people don't anyway. (they laugh) >> I buy what's on the rack. I say "I want that one." >> Yeah, you walk in and you say that. >> I want what that is. >> 42 long, right? And they make a couple adjustments and then it's yours. >> All right, I'll take that suit up there, what's on the mannequin. >> They make a few adjustments and it's yours. Software should be the same way. You should be able to configure software in a few clicks. >> That's the whole thing, I mean, I joke about the mannequin but that's really kind of what hangs the perfect use case so that would be an automated example of an assistant model for you guys. Sometimes you just want everything to hang together for you, and sometimes you might want to go in and go look at the data. >> Yeah, and we see this across a lot of different industries, so things like customer service and sales and marketing, but we also see it in, let's say I'm a field technician, right? And I got to go out to an oil field. How do I know all the different patterns of information that might predict whether or not I need to, what I need to do when I'm out there. >> So you monitor my patterns, my behavior, and then ultimately train the model, or? >> Well you program it. You tell it what to watch for for you. So to give you an example of the kind of use case, to pick a specific use case, and we shared this again in sort of our unveiling on Monday. We shared the idea of a sales rep who is pursuing a given opportunity, and thinking about all the factors that went into their success and, you know, that sales rep has several different things they need to use to really maximize their chance of closing that deal. So one is they need to be responsive do their customer, and you know, like many different corporations out there who sell many different products and services, while you're busy working on the new opportunity, you've got to service the old. So when some issue comes up, you have to be responsive to it. Well, it's really hard while you're busy working on all these opportunities, to make sure that the issue's being resolved, that you're being responsive to your customer. Meanwhile, everybody in the corporation is coming up with new opportunities, new marketing brochures, new values in the product. And so is your rep knowledgeable about the latest and greatest products? So we imagine that you could teach your assistant how to watch some of this stuff for you and really help you to close your opportunity. And a very pointed example of the kinds of things that it should watch for you, I should be able to say something like hey, if I can have an active opportunity and then my customer goes and opens a service support ticket and that service support ticket hasn't been resolved in a week and meanwhile, I got a bunch of email coming from that client, of tone angry, notice the cognitive part there, about this particular product, and meanwhile I'm on the road and I'm not checking my email. Well, I have a catastrophe waiting to happen. So I can program my assistant to watch for these kinds of things. >> Does it do push notifications? >> Exactly, so you can then have it push to you, look, here's all the information about the active service thing, here's how long it was sitting there waiting for resolution, this is what's happened since, and you can immediately take action. >> So you're orchestrating basically signals that the user connects, like a Google alert on search is a trivial example, right? Someone types, a result comes on Google, you get an email. Here, you're kind of doing that-- >> But it's proactive. You tell your assistant to proactively watch it for you, and that's a unique technology that we developed in-house. Because it's watching all these events happening in the enterprise and figuring out when that thing becomes actionable. >> And the user would know where to look, because like Dave's spreadsheet might say "hey, cash balance" or you know, sales trend, this rep and then something happens, and he can get that pushed to him from three different disparate side-load apps, that's pretty much what it is. >> That's right. >> Okay, so give us the status on the beta right now. It's a beta, so it's sign-up required. Okay, and the requirements to implement it, if you get through the beta, is just log in to a portal? It's a SAS model and then do the connectors? >> So the first thing you do, you go to IBM.com/assistant. You can sign up to. >> That, by the way, might be the easiest URL I think we ever came up with. I'm pretty sure that one's going to be memorable. >> Yeah, so you just go to that site, you sign up, you give us a little bit of information, your email, how to contact you and we'll put you on the waiting list, and what we're going to be doing is opening up more seats as we go through over the next couple weeks, and then we plan in the near term here to make it available as an open beta that you could see, and you'll see that inside of Bloomix as a tile inside of Bloomix. >> And here's the thing, we're doing something really different in the marketplace. This is a very different kind of offering, really targeting, again, non-technical people, this proactive situational awareness that your assistant can do, uses your data, built-in intelligence, intelligence that can customize to the way you work, guide you to the next best action. We have an incredible vision for this. The idea behind the beta is to start getting feedback. We worked very closely with early customers in the initial design and development. We want to open that up and get even more feedback and ideas on this kind of technology. >> So how is this different from Watson's discovery services that they have? I can imagine that you're building on Watson. Is it the cognitive piece within IBM, or is this kind of, I mean how would a customer figure that out, or just more of a-- >> Yeah, so I can give you an example. So we have one of our prototypes that we're actually taking some of the components of Watson discovery service and we package that up as a skill inside of your assistant, and it's a specific implementation, so what it allows you to do in this case is it'll look at your email and it'll look for specific entities, like a customer that matters to you, and if I get three emails of negative sentiment from a customer where I also have an open opportunity in the last week, that's a pattern I want to know about, right? Or we can start to correlate with all sorts of different things, so I think what you're going to see is these skills that we make available with the digital business assistant really up, take consumability of these really, really powerful technologies around cognitive and cloud. We take that to the next level. >> That's the key, how do we make Watson tailorable and put in the hands of every knowledge worker in every company? >> Host: So I presume you guys are dog fooding this personally, is that right? >> We have plans to do that, yes. >> Host: Oh, you haven't started yet? >> Sampling our own champagne. >> But we are, yes. >> He always gets called on that. >> We will be using it, yes. >> We created that champagne. >> We're beer drinkers, that's it, beer. >> We're going back to dog food, we eat beer, we should drink our own beer now. We created that with all our boost men, remember? (laughs) >> So get back to the status of the product. So it's got some Watson capability, but this is for the user to use. I don't have to get IT involved? >> Jim: That's right. >> This is where the user takes a personal productivity approach, and you bring in some Watson-- >> A user may not even know that they're using some of these Watson capabilities. To the end user, what do you want it to do for me? Well, I want it to tell me if, uh, if I think a customer might be upset with me. Well, that might be a combination of a lot of different things, but it just makes it really consumable and easy for people. >> So where do you guys sit within IBM? Because now there's like, because this is a really cool user tool, so is this part of Watson? >> Jim: We think so. >> Is it part of the Watson team? >> Well, honestly our organization doesn't really matter, I mean, we're working with teams across IBM as a whole. It's a great opportunity to take this technology and really reach a whole set of new use cases, I think, across the company, and we want to integrate Watson technology to, like we were saying, really make it easy for the end-user to go and access it. >> Any plans around developer outreach? >> Well, we will, I think, later this year, one of the things we envisioned really early on is that people are going to want to have pre-built skill sets, and that's a great opportunity to build an incredibly powerful ecosystem and we've been in discussion with a lot of our partners about how to do that. >> Well you guys are API based, so this is a beautiful thing, right? >> Well we're going to start to open up some SDKs to our partners, to others, and that's going to allow them to extend the assistant and really create even more powerful industry content. >> You know, the business model of reducing the steps it takes to do something and saving people time, making it easy to use is a magical formula of success. >> And not even just less steps, it's less time reading things, less time sifting through information so you can spend time on stuff that matters. >> Just email by itself, I mean, Dave, your example was the best, because I know, we live that. But we have a multitude of tools and sometimes it just organically goes, because the one guy like, you know, this tool set, or now I got-- >> So do you want to do the deal now or? >> Right, that's what I'm saying, they should be signing up. >> So do we get paid? (they laugh) >> We're already both signed up. We have a testimonial. >> If you can't get it, how can we get it? >> We'll kick the tires on it, and uh, but the thing that gets my excitement is potential for API integration. Because if I know I can the automation to a whole other level and the use cases start to patternize in the enterprise, then it can get interesting. All right guys, thanks so much. What's going on here with the show, what else is happening for you guys? Share some stories for the folks that aren't here, that are watching on IBM Go right now. What's the vibe at the show this week? >> Well, it's been a great vibe. We've had a chance to share some incredible success stories, so in addition to the unveiling of this particular product, on Monday we had a chance for one of our marquee clients to share their story, and I'll tell you a little bit about what they did. It was at the National Health Service of the UK. Part of their blood and transplant, and we were fortunate enough to have Aaron Powell, who's the chief digital officer there, share their story of using process technology to improve the speed at which they get organs in the hands of recipients, and they did it on the cloud. And the results they obtained were unbelievable. So the before and after, they had staff at 2am, writing lists of high-risk patients and how to map their donors and he kidded us not, that when someone's priority changes, they would wipe the board and reset things. And these are people's lives that are at stake in the matching process. >> And they're tired, human error is huge. >> Human error, absolutely, and by the way, when you look at the end-to-end process, there was something like 90 steps if I remember, 96 steps I think end-to-end. All of which were very manual and error-prone, and error-prone means risk. And they were able to improve organ allocation by 3x, so 3x faster, they automated something like 58% of the steps, reducing propensity for manual error, and what he shared in his story is, they successfully a few months ago did the first heart transplant on the cloud. >> Host: Wow, that's amazing. >> So it's an amazing, amazing story. >> That's a great story, yeah. Did he say that in the session? >> He did, actually, he said that. >> That's actually a good thing to chase down for a great blog post, that would be phenomenal. It would have been covered yet on the news? >> So we're going to post actually the video of it online so people can also see him live presenting his story, it was unbelievable. >> Make sure you send me the link. The other thing that they could apply there is two-block chain, I mean some of the block chain stuff coming out is going to be really interesting. >> Absolutely, and we're working very closely with that team to really leverage this kind of process technology, take people's business operations and connect that in to this feature network that's going to power businesses. >> CRM is the human supply chain, I mean, but now extend it out to the internet of things. I mean, it's interesting how this could play out. Guys, thanks so much for coming on The Cube. Thanks for sharing the insight, congratulations on the launch. I just signed up for the beta while we were talking. >> Dave: Me too, so let us cut the line. >> Done. >> We need it. Perfect use case, we need help. It's The Cube, of course, no help here, great guests here on The Cube. I'm John Frower, Dave Vellante, more great coverage, stay with us. Day three of Interconnect 2017, we'll be right back. (techno music)

>> Narrator: Live from Las Vegas, it's theCube. Covering Interconnect 2017. brought to you by IBM. >> Hey welcome back everyone. We're live here in Las Vegas for IBM Interconnect 2017. Siliconangle's theCube's Exclusive coverage of IBM Interconnect 2017, I'm John Furrier. My co-host Dave Vellante. Our next two guests, Eric Herzog, Vice President of Marketing for IBM Storage. Nice to see you again, you were on yesterday. And Mark Godard, Manager of Customer Success and Partnership at Sparkcognition, a customer. Guys, welcome to theCube, good to see you again. Welcome for the first time. >> Thank you. >> Thank you. >> Okay, so we're going to talk about some stories we did yesterday, but you've got the customer here. What's the relationship, why are you guys here? >> We provide the storage platform. They use our flash technology. Spark is a professional software company. It's not a custom house, they are a software company. >> And Spark, not related to Spark OpenSource. Just the name Spark, Sparkcognition. Make sure to get that out of the way. Go ahead, continue. >> So they're a hot startup. They have a number of different use case including cybersecurity, real-time IoT, predictive analytics and a whole bunch of other things that they do. When a customer goes on premise 'cause they deliver either through a service model or on premise, when it's in their service model they use our flash and our power servers. When it's on premise they recommend here's the hardware you should use to optimize the software if the customer buys a non-premised version. They offer it both ways, but part of the reason we thought it would be interesting is they're a professional software company. A lot of the people here as you know are regular developers, in-house developers. In this case these guys are a well-funded VC startup that delivers software to the end user base. >> Tell us more about Sparkcognition. Give us the highlights. >> Yeah, appreciate it. Sparkcognition, we're a cognitive algorithms company. We do data science, machine learning, natural language processing. Kind of the whole gambit there. Working, we have three products. SparkPredict is our predictive analytic, our predictive maintenance product. SparkSecure is our network log security product. And Deep Armor is a machine learning endpoint protection product. In that you kind of hear we're in the IoT, the industrial IoT, the IIoT of things. It also, in cybersecurity we've done use cases, other machine learning use cases as well. But the predictive maintenance and cybersecurity are two most, most advanced use cases, industrial areas. So we've been around about three years. We have around 100 people. Appreciate Eric talking about how well-financed we are and how our success really is budding this far. We're happy to be here. >> John: Where are you guys located? >> We're based out of Austin, Texas. >> John: Another Austin. >> Yeah Austin, Texas. >> Dominant with Austin. >> It's always good to have financing. You can't go out of business if you don't run out of money. Talk about the industrial aspect. One of the things that is hot, it's not a mainstream here, is blockchain is the big announcement. But IoT is the big one. But industrial IoT's interesting because now you have the digitization of business as a big factor. And that data is going to be throwing off massive analog digital data now. So analog to digital, what's going on there? What are you guys doing there to help and where does the storage fit in? >> Yeah, I appreciate that. So IIoT, industrial there's obviously there's big clients there. There's value in this information. For us it's predictive maintenance is the big play. A study I read the other day by a Boston consulting group talks about how its services and applications in the industrial internet of things. There's an $80 billion market in the next five years with predictive maintenance leading the way as the most mature application there. So we're happy to be kind of riding on the front of that wave, really pushing the state of the art there. Predictive maintenance is valuable to clients because the idea is to predict failures, do optimization of resources, so to get more energy out of your wind farm, get more gas out of the ground, you name it. Having the software that can provide those solutions efficiently to clients without a lot of start up, but each new iteration. So having a product that can deliver that intellectual property efficiently is important. The whole goal is to be able to reduce maintenance costs and extend the useful life of assets. So that's what SparkPredict is our product, SparkPredict our product, Sparkcognition has been laboring to do. We have a successful deployment of 1,100 turbines with Invenergy, which is the largest wind production company in the United States. We're doing work with Duke, Nexterra, several other large electrical production companies, oil and gas companies as well. In Austin we're near Houston, we have a lot of energy production opportunity there. So predictive maintenance for us is a big play. >> So you guys did a session this week. You hosted a panel, is that right? So I mean no offense, but what we're talking about now is really even more interesting than storage. But it's a storage panel you were hosting, right? So what was the conversation like? >> The conversation around that was we had three software companies, Sparkcognition and two other software companies. Then we had a federal integrator. All of them are doing cloud delivery. So for example, one of the other software companies Medicat, delivers medical record keeping as a service to hospitals. They're doing predictive analytics and predictive maintenance, and also some cybersecurity out. So there were three professional software companies, and integrator. And in each case the issues were A, we need to be up and going all the time and the user doesn't know what storage we're using. But we can never fail because we're real time. In fact, one of the customers is the IRS. So the federal integrator, the IRS cloud runs on IBM storage. The entire IRS runs under IBM cloud. On our storage, but it's their cloud. It's their private cloud that they put together, that the integrator put together. The idea was we've got a cloud deployment. There's two key things your storage has to do. A, it needs to be resilient as heck because these guys and the other two companies on the software side if they cannot serve it as a service then no one's going to buy the software, right? Because software is the service. So for them it's critical in their own infrastructure that it be resilient. Then the second thing, it needs to be fast. You've got to meet the SLAs, right? So when you're thinking the system's integrator at the IRS, what do you think the SLAs are and they've got like 14 petabytes of all flash. >> You forgot dirt cheap. You got resilient as heck, lightning fast, and it's got to be dirt cheap, too. >> Well of course. >> They want all three, right? >> You have this panelist, so what Jenny, what were Jenny's three? Industrial ready, cloud based, and cognitive to the core. So you guys are, I'm on your website. It's cognitive this, cognitive that. You're cognitive to the core. You're presumably you're using industrial ready infrastructure and it's all cloud based, right? Talk about that a little bit, then I've got a follow up. >> To tie into what Eric is saying about the premium hardware, the cloud opportunity, for us to be able to to AI software, to be able to do machine learning models, these are very intensive applications that require massive amounts of CPU, IO, fast storage. To be able to get the value from that data quickly so that it's useful and actionable takes that premium hardware. So that's why we've done testing with flash system, with our cybersecurity product. One of the most innovative things that we did in the previous year was to move from a traditional architecture using X86, 64 where we had a cluster of eight servers there. Brought that down to one flash system array and we're able to get up to 20 times the performance doing things like analyzing, sorting, and ingesting data with our cybersecurity platform. So in that regard we were very much tied closely to the flash system product. That was a very successful use case. We offered a white paper on that. If anyone wants to read more that's available on the IBM website. >> Where do you find that, search it? >> Yeah, it's on IBM.com and it's basically how they used it to deliver software as a service. >> What do I search? >> If you search Sparkcognition IBM you'll find it on Google. >> My other question, my follow up is you talk about these IoT apps which are distributed by their very nature. Can we talk about the data flow? What are you seeing in terms of where the data flows? Everybody wants to instrument the windmill. You've got to connect it then you've got to instrument it. Where's the data going? You're doing analytics locally, you're sending data back. What are you seeing in the client base? >> Yeah, that's a great question. Those in the field use cases for the wind turbines for example, most of our clients they already have a data storage solution. We're not a data storage provider. The reason, and someone asked me this yesterday in a different conversation. They said why are wind turbines so ripe for the picking? It's because they're relatively modern assets. They were built with the sensors onboard. The data, they have been collecting the data since the invention of the modern wind turbine, they've been collecting this data. Generally it's sent in from the field at 10 minute intervals, usually stored in some sort of large data center. For our purposes though, we collect a feed off that data of the important information, run our models, store a small data set a few months, whatever we think we need to train that machine learning model and to retrain and balance that model. That's sort of an example where we're doing the analysis in a data center or in the cloud sort of out of the field. The other approach is sort of an edge analytics approach, you might have heard that term. That's usually for smaller devices where the value of the asset doesn't justify the infrastructure to relay the information and then deploy this large scale solution. So we actually are developing edge analytic solution, a version of our product as well working with a company called Flowserve, their the world's largest pump manufacturing company. To be able to say how can we add some intelligence the to these pumps that may operate near a pipeline or out in the oil field and be able to make those machines smarter even though they don't necessarily justify the robust IT infrastructure of a full wind turbine fleet. >> Is there a best practice that you guys see in terms of the storage? Because you bring out edge and the network. Great point, lot of diversity at the edge now, from industrial to people. But the data's got to be stored somewhere. I mean, is there a best practice? Is there a pattern to developing that you're seeing in terms of how people are approaching the data problem and applying algorithms to it? Just talk, do I move the data? Do I push to compute to the data? Thoughts on what you guys are seeing in terms of best practices. >> One of the other companies that was on the panel also is doing predictive modeling. They take 600 different feeds in real time then munge it for mostly for industrial markets, but mostly for the goods. So the raw goods that they need to make a machine or make a table or make the paper that is used behind us, or make the lights that are used here, they look at all that commodities and then they feed it out to all these consumers, not consumers but the companies that build these products. So for them, they need it real time so they need storage that's incredibly fast because what they're doing is they're putting out on super powerful CPUs loaded with D-ram, but you can only put so much D-ram in a server. They're building these giant clusters to analyze all this data and everything else is sitting on the flash. Then they push that out to their customers. Slightly different model from what Sparkcognition does, but a slightly similar except their taking it from 600 constant data sources in real time, 24 by seven, 365 and then feeding it back out to these manufacturing companies that are looking to buy all these commodities. >> You have "software defined" in your title. That was kind of the big buzzwords a few years ago. Everybody wanted to replicate the public cloud on prem. We think of it as programmable infrastructure, right? Set it and then you can start making API calls and set SLAs and thresholds, etc. Where are we at with software defined? Do you guys, does it resonate with you or is it just an industry buzzword? I'll start with Eric. >> For us we're the largest provider of software defined storage in the world. Hundreds and hundreds and hundreds of millions of dollars every year. We don't sell any infrastructure. We just sell the raw software and they use commodity infrastructure, whatever they want: hard drives, flash drives, CPUs, anything they buy from their local reseller and then create basically high-performance arrays using that software. So they create on their own. Everything is built around automation so we automatically can replicate data, snapshot data, migrate data around from box to box, move it from on-premise to a cloud through what we call transparent cloud tiering. All of that in the software defined storage is done based on automation play. So the software defined storage allows them to if you will, build their own version of our flash system by just buying the raw software and buying flash from someone else, which is okay with us because the real value's in the software, obviously as you know. That allows them to then create infrastructure of their own, but they've got the right kind of software. They're not home brewing the software it's all built around automation. That's what we're seeing in the software defined space across a number of different industries, whether it be cloud providers, banks. We have all kinds of banks that used our software defined storage and don't buy the actual underlying storage from us, just the storage software. >> Do you, you may not have visibility in this, but getting kind of geeky on it. Do you guys adopt that sort of software defined mentality in your approach? >> Yeah, so for us software defined storage is something that we've deployed for our proof of concept evaluations. The nature of the work that we do is the solution is innovative to the point where everyone needs to have some sort of proof point for themselves before the company or the client will invest in a large scale. So software defined storage and embracing that perspective has allowed us to deploy a small scale implementation without having our own dedicated hardware, for example, at different clients. That's enabled us to spin up an instance quickly, to provision that small scale deployment, to be able to prove out results at a low cost to our client. That's where we really leverage that approach. We also have used a similar approach in the cloud where we've used multi-tenant environments to be able to support our cybersecurity product, SparkSecure in a multi-tenant cloud hosted environment which brings down delivery costs as well. It allows us to slice up that data and deliver it at a low cost. As far as our large scale physical deployments for the asset monitoring and such, we really, we generally end up with a piece of a flash system or flash storage, bare metal deployment because that speed is critical whether that's the client wants to have instant monitoring of a critical asset or they have a financial services use case where we're looking for anomalies or looking for threats in the cybersecurity landscape. Having that real-time model building and model result is very critical. So having that bare metal flash system type installation is kind of our preferred route. The only other thing I would say on that is you asked earlier about our approach. For us, the security data is very important. Most of our assets are what are called critical assets. So clients are very sensitive to the security of the data. Some are still uncomfortable with a cloud deployment. Another reason why we have an affinity for the hardware deployment with IBM. >> Why IBM? >> Our company has really deep roots with IBM. My founder Amir Hussein, was actually on the board of directors of the original IBM Watson Project as well as Manoj Saxena was the original GM of the IBM Watson program. We have just a long relationship with IBM. We have a lot of mutual interest and respect for the entity. We've also found that the products are superior in many ways. We are hardware agnostic and we're an independent advisor to our clients when it comes to how to deliver our solutions. But our professional opinion based on the testing that we've done is that IBM is a top-tier option. So we continue to prescribe that to our clients. When they feel that's appropriate they make that purchase through IBM. >> Great testimonial. Eric, excited to hear that nice testimonial for you guys? Congratulations. >> He's done several panels with us and again, part of the reason for here was A, all about IoT which they're all into. All about commo which they're all into. And to show that you can do a software as a service model even in-house. They happen to be a professional software company but if you're a giant global enterprise you may actually do software as a service to your remote branch offices which is very similar to what these guys to do other companies. This gives them an example, the other two software companies the same way, to show in-house developers if you're going to have a private cloud, not go public, you can deliver software as a service internally to your own company through the dev model and do it that way. Or you can use someone like Sparkcognition or Medicat or the other companies that we showed, Z-Power, all of which were using us to deliver their software as a service with IBM flash technology. >> Dave: And you're using Watson or Watson analytics? >> Yes, so we have done integrations with Watson for our cybersecurity product. We've also done integrations with Watson rank and retrieve using the NPL capabilities to advise the analysts both in the Predict space and in the Secure space. Sort of an advisor to say what a client user could see something happening on a turbine and say what does this mean? Using a Watson corpus. I was going to add one thing, we were talking about why IBM? IBM really has been a leader in the space of cognitive computing and they've invested in bringing and nurturing small companies and bringing up entrepreneurs in that space to build that out. So we appreciate that. I think it's important to mention that. >> All right Mark, thanks so much for joining in, the great testimonial, the great insight. Good luck with your business. Congratulations on the success startup taking names and kicking butt. Eric, great to see you again, thanks for the insight and congratulations on great, happy customers and see you again. Okay, we're watching theCube live here at Interconnect 2017. More great coverage, stay with us. There will be more after this short break. (upbeat instrumental music)

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

>> Announcer: Live from Las Vegas, it's theCUBE. Covering InterConnect 2017. Brought to you by, IBM. >> Hey, welcome back everyone. Live in Las Vegas, the Mandalay Bay. We're at the IBM Interconnect 2017. This is CUBE's exclusive coverage of three days of wall to wall. Day three winding down here at the event. Great show about cloud, data, and blockchain. Our next guest is Marie Wieck, who's the general manager of the Blockchain group within IBM, and Greg Wolfond, who's the chairman and CEO of SecureKey Technologies, announced a partnership with IBM. A lot of great success of blockchain. It's now a business unit in IBM. Marie, great to see you. Congratulations on the new role. >> Absolutely, we're really excited. We've seen so much momentum in blockchain that we really are investing heavily, created a new division, part of our Industry Platforms team, and we're off to the races. >> Exciting. >> So six weeks in the role now. >> Six weeks, I guess the business model is keeping running hard, (laughter) 'cause you guys have made great success. We had Ramesh, one of your workers in your division, on early, he came from the labs, or the research team, >> Marie: Right, research. >> and now he's in Solutions. The traction has been pretty amazing, so take us through, from a business standpoint, obviously you're now got the P&L applet running, you're going, engaging customers on use cases. Where'd this progress come from? Was it just, the internal coalesce of IBMers and customers coming together, give us why this is at its point today. >> I mean I think the most important point about blockchain, is that it really is a network effect. The whole idea of a shared distributed ledger, where everybody has visibility to the appropriate parts of data that they want, gives you some really interesting new business models, but you can't have a network effect, you can't have a community and an ecosystem if you don't have a common set of standards, and a way to drive interoperability. So just 15 months ago, we launched with 30 other people, the Hyperledger Project, in the Linux Foundation. It's been the fastest growing open source project since the Linux Foundation started, so really impressive momentum, and, you know if you think back just a year, at InterConnect last year in February, we had this little demo of trading marbles. This year, fast forward a year, we have a new division, we have 400 clients that we're working with on real production level use cases. We have eight networks in production. We've got now version one of the standard, which really brings a lot of the enterprise requirements, and we're seeing all kinds of new use cases. Supply chain, health care, government, financial services, all where we're really talking about being real now and trusted for business. >> And I would add that Ginni Rometty on stage, hammering home the focus, >> Exactly. >> like big time, at a Watsonesque level, >> Marie: Absolutely. >> so that must to mobilizing the IBMers new division. What's the buzz internally? (laughter) People want to come work for your division now, I mean what's happening? >> I do get an awful lot of emails from a lot of people who are very interested, but I always know when there's real momentum, when there are people who are doing it that we didn't tell to do it, you know, so we're starting with a pretty small team internally, my group itself Direct Line, is about 200 people. There's about 600 people in the extended team across the different functions across IBM, but when I do a search on our internal directory and search for blockchain, there's over a thousand people who have that name already in their title or in their description because they're working on it, and they see the power of it. >> Innovative people get intoxicated by blockchain, because they can just see the disruption elements. Greg, I want to ask you, because you're actually doing it, not only is it intoxicating to kind of grok what blockchain can be, this some real use cases right now, really jamming hard on blockchain with the ledger, can you just share quickly how that's playing out in context IBM and in the marketplace. >> Yeah, so SecureKey's a digital ID company. So we started in Canada years ago doing this login service for government. You show up, you want to see your taxes, your unemployment, your pension, any of 80 different departments, we made it easy for citizens to go there. You can redirect into a federated login with your TD login, or your Royal Bank login. We have millions of Canadians who use that, and we had hundreds of thousands a month, but it's really a login service, and it saved the federal government I think eight hundred million dollars to get that done, but we wanted to move to the next step, which is sharing identity, so digital identity and how do I share my attributes from TD Bank or Royal Bank or my data from Equifax or TransUnion in a trusted way with parties I want to, and not share it in other ways. And we couldn't do that without Hyperledger. So we can talk a little bit about why we went to it, but we have a network in Canada, we tested already phase one, we're launching later this year with Royal Bank, TD Bank, Bank of Montreal, Scotia. Where a citizen can show up at a Telco to create a new account. Is it okay to share my name and address and my credit score? Yes, done, account's open in seconds. FINTRAC changed the rules in Canada so you can open a bank account. Can I show up at a bank and share my attributes from the province and from a credit agency, and create my bank account in seconds. And we've all had this problem, right? I talk to my wife... >> I mean we live it everyday, I mean identity theft is I think front and center in mainstream life. Everyone has either someone close to them or themselves get the phone call, the credit score's dropping, or hey, someone's had my identity for a couple weeks, this is brutal, even the credit cards are gettin'... >> It's funny, when I started this business two of my friends had their identity taken over and someone put mortgages on their homes, and I said there had to be a better way to do it. With blockchain if we can take data from different sources, that the bank knows it's me and I can log in right now, that I possess this phone, that the province knows it's me and I can turn on the camera and check it's me, we can raise the ID validation score for everyone in the whole industry. For healthcare, to government, to banking, and we not only raise the ID validation we also raise the AuthScore, because I'm not just logging in with my bank, I must have this phone, with this SIM in it, and if it's canceled it's not me. And normally people would put that through brokers in the middle, but NIST in the U.S. said, we don't want brokers in the middle. They could peek, they could see your data. I have single points of failure. If this is identity for health here's how it goes down. I have honeypots of data. People are collecting all of my stuff in one place, it's encrypted, but the bad guy's going to get that, right? They could go after the person, and say I need the keys, I have a member of your family... >> I mean we're living in a world, in cloud, Marie knows, there's no perimeter anymore. >> Marie: Right right. The security experts that are state of the art right now, are saying, even saying theCUBE in day one here, data is the new perimeter. So there it is, right, this is fundamental, what you're saying, this is the new perimeter, the data, and you distribute it. >> So no broker right, means less of a threat matrix for people to hack. You don't need a trusted third party to arbitrate. >> You shouldn't have to get other credentials and things to go right, if I can login at my bank right now` and prove I've got the mobile device, can I release data from different sources? Ten percent of Americans move every year, if I show up at an apartment, can I share that I'm Greg and my bank says I'm me, that I have this device from my mobile company, can I share a background check to say that it's me? We're going to do that in about eight seconds, compared to the landlord having to go and pay a real estate agent one month's rent to vet you. And then when you do that, imagine the power now right? Would you like to sign up for internet? Share your data, yes, click. Would you like contents insurance, click. Totally taking friction out for consumers, but making sure that the parties who provide that data, whether it's my bank, whether it's my government, they can't track me. I don't want my government or my bank knowing if I go to mental health, or if I go to a cancer clinic. Really important that they don't know, right? >> Yeah, healthcare here, I don't know what it's like in Canada, but certainly in the United States you can't get information about yourself (laughter). >> And it's a perfect connection to blockchain, 'cause the whole notion of blockchain in our mind is about a trusted network, and how do you get trust if you don't know who the people are who are participating. So, we signed an agreement with the Food and Drug Administration in the United States, to focus on leveraging blockchain for exchange of information around patients, privately and securely for clinical drug trials. You know, it's just one example of now, you bring that trust element, that's built on a blockchain already, as a new interoperable component of these new supply chain networks. Whether it's around supply chain in global sourcing, whether it's the providence of food or diamonds, there's some really interesting aspects that you can now add on top. And we're now even connecting, you mentioned Cognitive, you know, now apply Watson on top of that. How do you increase the trust level in our new version one delivery of Hyperledger on the IBM cloud, we actually provide a trust score for the network, scale, a one to a hundred. What if Watson could actually look at your use case and hear the recommendations and suggestions for how to improve the trust level? Improving it means getting more members, so it's more distributed, and there's more sharing of information. But they're not going to want to share that information if there isn't a trust model. >> So give us a glimpse as to, sort of, your business. You got 200 people, but you've got thousands of people within IBM that you can tap, in addition to the huge portfolio of things like Cognitive. So you've got this startup (laughs), >> Marie: Right. >> inside of IBM. >> Marie: A startup in IBM. >> And you said it's inside the Industry Platform's team, so what is that, and what are you actually building out? >> So, we are building, we're taking, and contributing, we're investing really, in the Hyperledger project ourselves. We are one of now 122 members of the open source and open community project, and we're actually developing and contributing content there. >> Dave: Big committer there. >> Big committer, and we provide a support model for anybody who wants to use just Hyperledger, but we take Hyperledger back, and now we're delivering it as a secure platform on our high security network, that is production grade, you know enterprise strong, would be Ginni's word for that, right, and delivering that on our cloud, or letting you take a container and put it on your own enterprise if you really want your own private cloud. But we're also building industry solutions on top of that. So we announced a partnership with Maersk, for global shipping on global trade digitization to provide greater visibility. >> But on that deal, just to interrupt, that Ramesh was put in, that wasn't a solution specifically for them, that was an industry scope solution. >> Correct. So it's really a partnership. So in this case again, it's that network effect, it's that ecosystem, it's not Maersk, the customer, it's Maersk and IBM the partners, who are now bringing forward as the anchor tenants in this new network, the rest of our ecosystems, and we were interested 'cause we have a big supply chain business for all our hardware as well. >> And you're selling a SAS product, is that right? >> Correct. >> So it's a subscription based model? >> Correct. >> And then services on top of that? >> And services both to develop new blockchain applications, we've had a number of our clients here from the 20 thousand at InterConnect, that've come up with new ideas. We're going to help them build that, in a services kind of model, but many of these are going to be essentially SAS networks where either they're going to pay a membership fee or they're going to pay per transaction, a percentage of the price, or they're going to participate in the savings, because this is actually going to streamline the opportunity. In the case of SecureKey, the model we see customers willing to buy, the validation of an identity for an individual if they're participating in a critical transaction. A bank would certainly be willing to pay to increase the confidence that Greg is Greg, if he was applying for a mortgage online. >> And the consumption is through the IBM cloud, correct? >> Yeah, so there's a toolkit, we're big believers in open source. It's open at the ends, really easy using things like Bluemix to connect to the endpoints. And for us, it's just a magnificent coming together, because things like the high security network to turn banks on quickly, where they trust it, and they can put their data in a secure and trusted way, make this all go faster. >> Dave: But that's the only place in the world I can get this, correct? >> Marie: It is certainly the only place that you can get that level of security in a blockchain network. >> But from a competitive standpoint, somebody else has to build this out, and create as a competitive product as IBM has, and run it on somebody else's cloud, for them to compete, correct? >> That is correct. >> The strategy is not to spam the world's clouds, it's to say hey, we've got this solution, here's how you get it, here's how you consume it. >> And we really firmly believe that if this is an interoperable set of standards, there will be other networks, there will be other participants. We want them all to be interoperable. We want a global identity standard for interlocking networks, because that is actually the tide that raises all boats. So if they want to take Hyperledger and put it on their own private cloud or somebody else's cloud, we support that thoroughly. We think that the most enterprise grade cloud though, is with IBM. >> You just got thousands of people doing it, and you say, go for it. >> Exactly. >> Dave: Bring it on baby! >> First of all, you had me at blockchain beginning the interview. I love blockchain, and I think it's very intoxicating from a disruption standpoint. Any entrepreneur, any innovator... This is a bulldozer on existing business models, and of how people do things. So, I'm sure the organic growth that you guys see is proving it, internal IBM and external. How do people get involved? What's your plans on building the ecosystem now, because you got a tiger by the tail here as the GM of this division now. You got to run hard, you got to embrace people, you got to have events, what's your plan, and how do I get involved if I'm someone watching and we want to get involved? >> So, great simple ways to get involved, the developers, we want 'em to be involved directly through the cloud and through developerWorks. You get free access, you can get started quickly. In three clicks you can have a four peer Hyperledger network up and running on Bluemix, and you can start your own services and create. If you are a customer, what we're really suggesting is come and bring us your use case. Bring the participants in your network as well. Come into one of our IBM garages, and we'll work that out for you. And I think it's important that, we think blockchain has a huge potential or I wouldn't be in this new role, but we also think it's not for everything. It's not the panacea for every business problem. We want to make sure the people are using it in the right way for areas where it really makes the most impact, and then we'll help you implement that and develop it. And then we really see the whole ecosystem around our partners, you're going to onboard people into a blockchain network. You're going to have to integrate with your back ends. You're going to extend your mobile devices to provide these new services through apps. So our GSI community is really helping with the integration and the onboarding. Our ISVs are developing new services that run on those blockchain networks, and we just launched our new IBM Cloud for Financial Services, has a blockchain zone, for all those fintech startups to get access and reuse components, so that we can accelerate the effect. >> Alright, well, congratulations Marie, great to see you in the new role, congratulations, >> Marie: Thank you. >> We're super excited for you, and looking forward to getting the update soon at our new studio. We'll try to rope you into our new Palo Alto studio. Greg, great to hear your success. This is the nirvana, I mean, secure ID is like, the big, I mean easily, not like with some either token or engineered identity system, and this is a home run. >> It's privacy, and it's as we talked about before the broadcast. Facebook, would you trust Facebook to go see your medical records? Would you unlock your title using Facebook? You want things that are private, where people aren't tracking you and are more secure than that, so this is really... >> Don Tapscott called Facebook data fracker. (laughing) We provide all our data for Facebook, they've got billionaires on it. Thanks so much for spending the time. >> Thank you. >> Blockchain revolution here inside theCUBE, bringing you really trusted content here on theCUBE. Distribute it out around the world, I'm John Furrier, Dave Vellante, thanks for watching. More great coverage coming up here, stay with us.

>> Announcer: Live, from Las Vegas, it's The Cube covering Interconnect, 2017. Brought to you by, IBM. >> Hey welcome back everybody, live here in Las Vegas at the Mandalay Bay IMB Interconnect 2017, it's The Cube's exclusive coverage, I'm Jon Furrier, my co-host Dave Vellante, our next guest is Ramesh Gopinath who's the VP of Block Chain Solutions and Research, welcome to The Cube. >> Thank you. >> Block chain front and center, super exciting, it's been trending pretty much throughout the conference, really is an amazing story, big props from the CEO and (mumbles) and a variety of the executives. Watching is instrumental in the future of business, we had Don Tapscott on yesterday really talking about the revolution of what this is all about and he's the author of the book, The Blockchain Revolution, but if blockchain is a game changer shift to how the business will be operating in the future, so just to level step, just give us the one on one blochchain, versus bitcoin, and why IBM is going in this direction and where it came from. >> So blockchain is all about increasing a trust in business transactions. This is something we recognize about a couple of years ago when a small team of us started playing around with, you know, the technology behind bitcoin, right. And we look at it and said hey look, here's an opportunity for the first time for companies to share some information in a secure fashion with each other and, in addition, run some workflows or business processes on top. That was an eye opener for us, it immediately told us this could have applications in all industries, right. And so what do we do first? So we said let's play around with this a little bit. We looked at existing technologies out there for blockchain and to pick the platform you tried a few use cases and realize, oh my god, there is a whole lot to be done to get a blockchain for business, right. And that's how we started this journey, almost a year and a half, two years ago. And we decided to explore that. >> And the key distinction Ramesh, and we know from just highlighting it here for the folks, is bitcoin is a currency that has a blockchain, so it's powering bitcoin. You're talking about something more fundamental for business which is using the blockchain technology for businesses and what bitcoin is to blockchain, business is to blockchain from your standpoint. >> That's right, and also I think the blockchain is really, the inspiration for it comes from bitcoin perhaps, that's a good way of thinking about it. But today for example, the hyperledger version one that was announced earlier this week at this conference is dramatically different from the underlying blockchain and bitcoin in other platforms out there, right. Because it's really built primarily based on requirements that we have gathered by working with hundreds of clients in financial services and supply chain, in public sector, et cetera, and realizing what levels of confidentiality, what levels of privacy, what level of permissioning, you know, who participates in the transaction. All of that is what has led to, what we call the (mumbles)- >> John: Okay somebody's got a question. >> John: I got a follow up on that, but go ahead. >> Uh, just one more point on this but you can follow up on my point. Give us the status of blockchain today for IBM. Lay out the solution because you move from research now to the exclusions group, you have customer action going on, sales motions, solutions motions. What is the architecture, what does it look like, what is the solution today from a blockchain standpoint? >> So, just, you asked what are you doing at a high level, essentially we have three broad, big investments. One is everything to do with you know, opensource in a hyperledger project, I mentioned that. Then there is you package that into a platform, IBM blockchain, high security business network, that was also announced earlier this week. And the third layer is again what you asked about solutions. What we have been doing over the last year, year plus is, in fact, it's an interesting journey, we started out with what I call blockchain tourism, there were a whole bunch of POC's if you want to call it that, starting with financial services initially, but in gradually other areas, like supply chain, in healthcare, et cetera. Towards the middle of 2016 we saw a transition, at least on the financial service side people were started to talk about, hey now I understand this technology and what it's capable of, let's talk about production deployments, right now I'll give you a few examples as we go along. >> Dave: So, I want to go back if I can a little bit and just get somewhat didactic for a moment. My understanding is there's three attributes, I'm sure there are many more of blockchain which are really relevant, and especially as it relates to the security if I may, it's distributed obviously, and it's been said it's virtually unhackable unless 50% of the stakeholders agree to collude, and then there's no need for a trusted third party so it reduces the threat space. Are those sort of accurate statements and when somebody says, well it's virtually unhackable, you know you tweet that and somebody says, well everything's hackable, help us understand sort of those fundaments of blockchain and why they're relevant. >> That's right, so the way I think about it is a blockchain is a trusted database. Now why is it trusted? There are three properties, I'll get to it, kind of overlaps with what you mentioned. The first one is, any transaction you do onto the database, anything that goes in it basically is done in a nonreputiable fashion. If I do something I can't say, "I didn't do that," so that helps. What goes in, you know you have that property. The second piece is, whatever goes in goes in through a vetting process, we will call it the consensus. There is some sort of a chat between parties before something goes in. Therefore, I can't unilaterally do something onto the blockchain, right, I can't, somebody else vetted what I did, that increases trust. And the third piece is, once it gets in there it cannot be tampered with. We say it's immutable sometimes, and what is that based on? There's a whole lot of topographic math behind it, but at a high level there are two aspects to it. One is, there are multiple copies. So if I change something, if I hack into mine, I'm inconsistent with what others have, so that's one. The second is, the transactions are chained together, blocks of transactions are chained together where a fingerprint of one block is put into the next. What that means is, if I tamper with the block say 15, a long blockchain, all transactions after that are invalid, I have to do a lot of work to fix it, so it's very very hard to tamper with. Of course, as with security, there's no such thing as nothing that is hackable, right, so collusions et cetera, potentially can happen. But the key is, significant increase in the level of trust is the way I would put it. >> Dave: Great, okay, and so now if we can get into sort of how people are specifically applying this technology, you guys started with the hyperledger, you know, open project, but can we get more specific in terms of how say organizations are actually deploying blockchain? >> Ramesh: So we are still running a blockchain in productions since September 6th, right, so it's been only four months. In fact that blockchain is more than a half a million blocks today, so let me tell you what that solution is so you get a sense of, and it's very prototypical in terms of, you know, all solutions that I've dealt with so far across industries. The use case is a following, so you have a buyer, you have a seller and you have a financer, that's IBM. We basically finance, shotgun financing of, think of it as channel financing or inventory finance. What happens typically is, the buyer basically orders something and the seller essentially gets approval from us to say, okay, yeah we can basically send it to the buyer. A few days go by, IBM has already paid the seller basically, just like credit cards (mumbles) consumers. A month later basically we go in, say hey look, guys, time for you to pay up and they say, look, we didn't even receive the goods. So this entire process, what I just described you can think of as a workflow where these three parties are sending messages back and forth. The way we do it in a blockchain is, this entire workflow is captured as a sequence of transactions that are registered on the blockchain. Now how does this help us? Take the example I gave, proof of delivery. If when the logistics company delivers it at the buyer's site, it's recorded on the blockchain. There is no need for a dispute. And typically disputes, basically puts a lot of capital, you know, it holds up a lot of capital right. Capital inefficiency is the problem we're after. In fact, after six months of deployment I can tell you essentially a significant improvement in terms of the time savings as well as elimination of disputes. >> John: That's a great efficiency. Who's buying, who's actually implementing it customers-wise. Can you name names? >> Ramesh: Yeah, so, examples are the, let me give you a few in financial services. So we are working with Salus Bank which does, you now, five trillion dollars worth of foreign transactions every day. They are building a netting engine called Salusnet a solution called Salusnet, and we're working with them on that. Another example is the work that we are doing with Northern Trust, where basically they have a private equity administration blockchain. In fact, it's a very interesting one because it also involves the regulator as a part of the blockchain, so that's a second example. A third one is the one we announced in January with the Depository, Trading and Clearing Corporation DTCC, and that one is for credit debitors, life cycle management, in fact all the examples if you notice, there is a life cycle like I gave in that example earlier of buying till all your goods are delivered, payment is made, those life cycles, those processes are captured as trusted processes on a trusted data store. That's basically blockchain for you, right, that's financial services. Maybe I'll touch upon two more examples to complete the story. Supply chain. I walk into a store and buy some sliced mangos at Walmart, is it safe to eat? To answer that question you need to know the provinence. Which farm in Mexico did it come from, who all touched it, who washed it, who processed it, et cetera, all the way till it got to the store. That sort of information sharing does not happen today in the supply chain. We believe with the block chain that is possible, that allow us to get a good sense of where things came from, making consumers more comfortable. Similar story can deal with pharma too. I pop a pill, I want to be sure that it's safe to have. In fact, as you know the World Health Organization says in Africa, every year a hundred thousand kids die of counterfeit malaria drugs alone, right, so imagine if you could capture these sorts of supply chain flows on a blockchain you could make dramatic improvements. >> Dave: Diamonds provenience is another one, and it's not just blood diamonds. >> Ramesh: I'm more excited by the providence of food and pharma, but diamonds- >> But there's tons of fraud in the diamond supply chain. >> Ramesh: Absolutely. >> And that's really where they're, you know- >> John: Well this brings up the whole business model disruptions, so, what are you guys seeing for the kids of conversations? Because you're getting at the business model impact significantly one, you're reducing costs of transactional costs for new measurement systems, aka blockchain, and you have all the methodology behind it, but everything from music to art to content, I mean, payments, this is like a game changer. >> Absolutely, and I think from the point of view, you know, in all of the use cases I've seen, the sort of value to the ecosystem is clean and obvious, and so you can immediately say, aha, this is going to happen overnight. But the reality is basically, it's a complex ecosystem play though. So, for example, in the supply chain use case, food safety, you need to have the farmers, the entire value chain involved, participating in some fashion on the blockchain. That is not easy to do. So there is, how do you sort of set up ecosystems is a key part of- >> John: What's your strategy there? I'm going to ask Marie when she comes on, but what's the strategy with ecosystem? Because you want to jump start this, you got to prime the pump big time. >> Ramesh: Absolutely, so there are many ways to solve this, but one approach we have taken so far, and it's obvious in all the sort of partnerships that we're working on. Take for example food safety. One way to start with it is to start with a big retailer, like a Walmart. They bring in the suppliers, and the suppliers bring in the farmers. Take the case of what we are doing in container shipping. So basically, movement of containers from point A to point B, we're trying to completely digitize that process, this is a project that we're doing with Maersk. Why Maersk? They are 20% of the container shipping market, right? But in all of these cases I got to be very clear, we are not building a solution for Maersk or for Walmart. We're really building something for the industry, because food safety, you want to solve it for the industry. Just by helping Walmart along. >> John: That's why the open source thing is critical here. >> That's right. >> John: And the update on that, it's all open source on which components, or is it all open source? >> Ramesh: So the open source is all about at the platform layer. The solution itself, you know not everything in the solution is going to be open source. But the key point I was trying to make is that you go off the sort of significant anchor tenants in the ecosystem that draws others into the picture, but that's still not enough, you need to make sure there are economic incentives for others to join in. >> John: So to put it together, tie it together, the ecosystem strategy is, take an industry scope and try the rising tides floats all boats kind of approach. So adoption's critical. >> Absolutely correct, absolutely correct, and I think again I can use food safety to make that point. Think about it, right? So there is, let's say, a spinach problem, we had it in 2006. So you find a problem, you trace it back to a source. Let's say Walmart is the store in which somebody bought it and it was traced from there. That's not good enough. From the source it went to many other retailers. So you need to be able to track down and pull all of them off the shelves. Therefore you have to go for an industry solution. >> John: I can imagine the healthcare thing would be even more impactful too, I mean, financial services pretty obvious, transactional stuff there, but healthcare, so many different variations of supply chain and transactions. >> Ramesh: Absolutely, so in a way, the way I think about it is in a financial service everybody had a hunch this could be big, but supply chain, we've come a really long way, I think this is going to be the space which will have the most destruction, and its interesting considering when we started my first conversation with folks, whether it be a Walmart or Maersk, first question is, "what is blockchain?" We've come a long way in the last say eight, nine months. >> John: You guys get so excited where you're kind of pinching yourselves because you can get kind of euphoric about some of the disruption impact. It's just mind blowing to think when you're talking about food, the food industry and healthcare. You got to get tampered down a little bit in some realism, is there that IBM excitement internally share some color internally within IBM the excitement, and then you got to be getting realistic, a lot of the clients rolling it out to kind of got to walk before they can run. >> Ramesh: Yeah, so, the way I would state it is if you had asked me a year ago do you expect to be in the shape we are in today, I would have said no way. I've been shocked at the pace at which this has been moving both from the point of view of the technology itself, maturing of the technology, and in fact when we say blockchain is here now, so that's at the technology layer level, but in terms of use cases, think about it, there are a number of financial services institutions that are talking about production deployments late this year, early next year. In fact, when we did our own IBM Institute for Business Values survey, came back with fully 15% of those who were surveyed, there were like 400-odd banks plus capital market institutions are going to be in production by end of this year. When I heard that in September I still didn't believe it, but I am beginning to believe it now. >> Well it's interesting I think, the cultural shift is that technologists from computer scientists to practitioners that are technologists, they get it. They can see what blockchain does, so I think as people get more and more momentum, that's the fly wheel that you guys are open for and it's happening. >> That's right, in fact I'm also a techie at heart, but in terms of conversation (mumbles) I never talk about technology anymore because the thing is, there are only two concepts in blockchain. It's trusted data across companies, trusted business process. Everything else is detail. >> John: Got it, Ramesh, thanks so much for sharing, great conversation, formerly with IBM research, now Vice-President of Blockchain Solutions at IBM, great to interview, great insight, blockchain revolution is here, check out our interview yesterday with Dom Tapscott yesterday on YouTube, The Blockchain Revolution, his book really kind of lays out some of the big disruptive game changers. This is The Cube, doing our share of blockchain right now, bringing content in blocks and chunks, not yet blockchain enabled. I'm John Furrier, Dave Vellante, be back with more after this short break. (synthesized music)

>> Announcer: Live from Las Vegas, it's the Cube, covering InterConnect 2017, brought to you by IBM. >> Okay, welcome back everyone. We are live in Mandalay Bay in Las Vegas for Day Three coverage of IBM InterConnect 2017. This is the Cube's exclusive coverage of IBM's Cloud Show and their Watson Data, IoT and more. I'm John Furrier, my co-host Dave Vellante. Our next two guests are Matt Kalmenson, VP of North American Sales and Cloud Service Providers at Veeam and Andy Vandeveld, VP of Global Strategic Alliances at Veeam. Guys, welcome to the Cube. >> Andy: Thank you. >> Matt: Thank you for having us. >> Andy, I want you to just set the table. We are familiar with Veeam. We're going to do your event. You've got a big event coming up in New Orleans. The Cube will be there. We've been watching you guys for many, many years. The Cube is on its eighth season. I think Season One, 2010 at VMworld. You've been very, very successful. But you're not a public company, but yet you guys act like a public company. You release your revenue and earnings. Set the table about what Veeam is, where you guys are at, and the current status. >> Sure. We're a company that's been around for 10 years, founded by our founders, Andrei Baronov and Ratmir Timashev. The company has grown significantly in the data availability space over the 10 years. We just announced our earnings, or our revenue, for the first time just last quarter. Last year we did $607 million in total revenue. And that's at a 28% growth. So we're a very high-growth company, even though we're at significant run rate of revenue. We've got 2,500 employees worldwide. We'll grow that substantially this year. We've got 240,000 customers worldwide. We're growing 4,000 new customers a month. So we're really a growth company. But we're a privately-held company. We like it that way. It allows us to do things that public companies might not be able to do because of their quarterly reporting requirements. We can make investments where we think investments need to be made for the future, as opposed to having to always watch the profitability. >> Yeah, the 30-day shot clock, as they say, or the quarterly shot clock, 90-day shot clock I mean. So you guys are very successful. Congratulations. And that's, by the way, a great story that you guys kind of act like a public company without being public. So it's like the best of both worlds. You guys are doing well. Congratulations. What's the secret sauce for you guys? Just for the sound bite. We'll get into some of the questions. We have some specific questions about IBM InterConnect. But why is Veeam winning? What's happening? Because you guys are really moving the needle. Quickly explain the secret formula of why Veeam is so successful. >> Well, I think it cuts across a couple of different dimensions. One is, we have a really great culture within the company. And so we have a culture of innovation. People feel like they're invested in the success of the company. And everybody is joining in that. And I think that really helps. We have great technology. We used to have an "It Just Works" tagline. Customers love that, particularly when we talk about their backup and data-protection solutions. They don't want to have to have people monitoring it on a regular basis. It just works. So I think customers love the technology. We have a great employee base, great executive team, and we have great partnerships, like the one here with IBM. And I think those are all key to the success. >> So I want to go back a little bit and sort of set the table on some of the big mega-trends that led to Veeam's ascendancy. When you go back to the early days of virtualization, you had this situation where you had underutilized servers. And then VMware essentially allowed us to consolidate those servers and dramatically increase the utilization, 'cause applications running on these servers, the servers were highly underutilized. The one application that needed all that sort of dedicated server power was backup. So when virtualization went from nothing to whatever, 60, 70% of the market, backup got choked. And it needed an answer. And one of those answers was Veeam. And it shot up and exploded as a company. You've done very, very well. There's more to it than that, distribution channels and so forth. Now we enter the Cloud era. And people now talk beyond backup, about availability. So what can we learn from the virtualization era? What's similar, what's different now? And why is the discussion shifting from one of backup to one of sort of always-on availability? >> So, it's a really good question. And if you think about the trends that we've seen, we've gone through this trend to a completely virtualized world. Yet when we still talk to CIOs, and Veeam's gone out and done studies where we've talked to CIOs, and when we talk to them, we hear that they still have the same challenges that they've had in the past. And that is, over 90% of them are still saying that their most critical needs are application uptime and their access to data. So when we go out and talk to hundreds and thousands of CIOs, they say, "We still have these needs: "access to our applications and access to data." Yet when we talk to them about how those needs are being met, over 80% of them say there's this gap. There's this gap, and while they still have those needs, those needs are not being met. And we call that the availability gap. And Andy and I were talking this morning over a cup of coffee, and he said, "You know what the availability gap is? He said, "Think about it like this." Think about when you're using your cell phone, and that cell phone is going down to 10%, 9%, 8% and 1%. And you get that feeling inside that "I'm about to lose service." And we all know that feeling when you lose connectivity on your cell phone. Now think about that as the CIO or someone who's relying upon that data. That's the availability gap that we see in the marketplace. And that's the gap that Veeam bridges. We bridge that availability gap. So we've addressed that from a virtualization perspective and, now, moving into the physical world too. But now as we move forward, we're seeing another dynamic change in the marketplace, of course. And that's Cloud. Now consumers want to think about different ways to consume technology. They want it on-prem. They want a managed solution. They want in a public cloud. They want it in a private cloud. And the way Veeam addresses that solution is essentially by saying, "However you want to consume your technology, "that's okay by us." If you want to consume your virtualized environment and have it backed up on premises, fantastic. If you want it backed up and managed by a managed service provider, that's okay too. If you want to have that data and information and back it up in a public cloud, great. Or in a private cloud. Or move it between those environments. We'll have the solutions to meet those needs. So we're going to meet this need of having uptime of applications, uptime of data, and availability of data, minimizing that availability gap that these CIOs are facing and allow them to manage and run data and applications and have it available to them no matter what scenario or platform they're running it in. So that's a vision that's more than just selling backup insurance. >> Matt: Absolutely. >> I mean, you just kind of answered it, but I'll ask it generally. How do you guys communicate your vision to CIOs? >> Well, I think we communicate it just like Matt said. When you talk about backup, that is sort of a yesterday story. It's really about making sure that those customers can get access to their data and that they can keep their applications, and, frankly, their businesses up and running. So when we go in and have a conversation with a CIO, we can delineate for them the specific business impacts of not having a robust availability platform. And that takes on different dimensions from a product perspective. So it's not just backup and recovery anymore. It's backup and recovery, but it's availability. It's, how do you orchestrate data across platforms? These are the source of new issues that Veeam has been addressing for the past few years. And I think it's what gives us an advantage in the data protection space. >> Now, it's a very competitive market. A lot of legacy vendors, of which IBM is one of them. But yet you're here at InterConnect as a major IBM partner. Help us understand what the relationship is with IBM, where it fits in the organization. Is it just Cloud? Is it across the entire organization? Fill us in. >> Yeah, so it is a strategic partnership for us. It's not just a single business-unit partnership. We're across the business units inside of IBM. And sure, there's IBM Spectrum Protect, which is a competitive product. But there are so many more opportunities for Veeam and IBM to win together that we're not going to worry about the few areas where there's some overlap. We just announced a few months ago that we're integrating, doing snapshot integration, for IBM Storwize and SAN Volume Controller, which we'll provide in our next version, version 10. It's coming out later this year. And that's a big thing. We don't do storage integration, snapshot integration, with all storage vendors. So when we can make a commitment like that, it's a meaningful commitment to the partnership. And so we have this great relationship on the storage side and other parts, but the genesis of the partnership actually started in the Cloud area with Matt's team and some guys on Matt's team that really drove hard to get a foothold in the relationship. So I'll let Matt talk about the Cloud relationship. >> Thanks Andy, and it's been a great relationship, because, while Andy focuses on the global alliances, I have a little bit more of a narrow focus around the Cloud, which really isn't so narrow. So we tend to team up together very well. And what really got our relationship kicked off was having the VMware Cloud Foundation, which runs on the IBM Cloud, where Veeam is the essential backup product that runs the management components of that platform. So, anything on the VMware Cloud Foundation, which sits on the IBM Cloud platform, is backed up and managed by Veeam. So that's now available. And that was really the genesis of the relationship from a Cloud perspective, so that was very, very exciting. >> And Bluemix, they're in the mix? >> Bluemix is in the mix. And that VMware Cloud Foundation actually leverages the Bluemix platform. And then there's several layers of the Bluemix Cloud platform. And now we're going to be in the Bluemix catalog, what is called the IMS catalog, which will be for everyone who's looking to provision a cloud service, can go ahead and pull down and choose to provision VMware and some infrastructure and other services and have it backed up by Veeam. >> So that deal between IBM and VMware was a real catalyst for your relationship? >> Matt: A real catalyst for us. >> Now, of course, VMware's done other deals. They just did one with Amazon recently. But my understanding is the IBM relationship-- >> Well, Pat's been clear. It's a multi-cloud world. So the thing that's clear from this show is, multicloud is what's happening. So that's-- >> Well, what this has given us the ability to do is say, no matter what your customer looks like, there's an opportunity for us to partner and work together. So if you think about the VCF, the VMware Cloud Foundation, might be some organizations that are enterprise in scope, that have a large, on-premises type of deployment. So we're looking for large automation platforms that are looking to automate moving to the Cloud or maybe move back from the Cloud to on-prem, but nevertheless have these very high-end availability needs and business continuity needs. Now, if you think about the IMS platform in Bluemix, which might be a traditional hit-the-keyboard and looking for some infrastructure that you might spin up in a born-in-the-cloud company, from day one, we'll have some services available there for you as well. So you can go from a small SMB company that might be born in the Cloud to a legacy Fortune 100 company that has some kind of cloud foundation needs. And between the partnerships of our organizations we have solutions to meet those needs. >> One of the interesting things to me about Veeam is when you started out, when you were in your eating glass mode, you were going to VMUGs and doing all that sort of hard work with the hardcore VMware practitioners. Now you're on your way to a billion dollars. And you're striking partnerships with companies like IBM. How have the conversations changed in terms of who you sell to, who you're interacting with. Obviously more CIOs are probably paying attention to the investments that they're making. How has that changed? >> Well, just from the Veeam perspective, these partnerships are extremely important. Companies like IBM have relationships with enterprises that go back decades. And, for us, that's an opportunity for us to leverage their trusted advisor status with those decision makers in the enterprise. Our business started, and we have a very robust small and medium-size business. We have a strong and growing enterprise business. And we're looking for the enterprise as our growth vehicle to get to a billion dollars. So partnering with enterprise-class partners like IBM is really a key force. >> I mean, you guys can bring your value proposition pretty much to any environment. To your cell phone analogy about the battery power, which we've all seen. But, you know, Dave's on Verizon. I'm on AT&T. So this is the same dynamic in the Cloud. This is where you guys are looking for the growth. Am I getting that right? >> Yeah, I think that's a pretty good analogy. And the way I kind of think of it is, we have the best solutions in the marketplace for availability needs, regardless of the size of the organization, the end-user needs, regardless of the go-to-market strategy and regardless of the platform. So by building, and as we continue to move up market and aggressively build partnerships like the ones with IBM, it allows to address the business needs no matter what those business needs are. And partnerships like the ones with IBM allow us to scale to great lengths. >> Matt and Andy, I want to ask you a question for the folks watching, 'cause here at IBM InterConnect, the IBM relationship that you guys outlined, what's the major to-do for Veeam this year? I mean, in terms of, as you accelerate. You've got 600 million in revenue. What's the core message that you're sending the marketplace in terms of where that growth's going to come from? And what's the tag, what's the bumper sticker for Veeam right now? >> I think it's around the Cloud. I think that's an area where we're putting a heavy investment. We're hiring great people. And for us, we see that data protection is going to have to span the Cloud environment. Now, it's going to be on-prem, it's going to be in the Cloud, it's going to be a hybrid. But from our perspective >> Matt: It's everywhere. >> Yeah, becoming much more robust in the Cloud is really going to be a focus area for us this year. >> Yeah, I would agree. I would tack onto that continuing to scale into the enterprises very aggressively. We've built out a large enterprise organization strictly focused on the enterprise. We've had the technology to address the enterprise needs, but now we've dedicated sales teams and organizational structures just to address the enterprise. And continuing to bring out our Cloud sales organizations and make sure that everyone within our organizations also has a benefit by not only understanding the Cloud business, but our sales teams are compensated to sell Cloud solutions. So it's not like we have a stovepipe organization that just goes sell Cloud, and then somebody else who goes out and sells an on-prem solution. We have teams that are focused on compensation that works together so that our teams can go out and send the message of, "consumption's your decision". We want to help you make the right business decision. We want to help make the right technological decisions. But how you consume, that's up to you. And we're here to help you coach, here to help guide, here to help show some maps on how you can do that. We know we have the right availability solution no matter what needs or what consumption model of what path you want to go down. >> And the enterprise has certainly changed. And you guys understand the enterprise readiness. And you've got product leadership. So that seems to me to be the magic. >> And also the relationship with an organization like IBM because that helps us bridge those gaps. >> Well, congratulations guys, for great success and a good relationship with IBM. Great story. Love the story of being private with this kind of transparency. It's rare, and so congratulations Andy, Matt. >> Thank you. >> Thanks for joining the Cube. More live coverage. Stay with us all day, Day Three of exclusive coverage of IBM InterConnect 2017. I'm John Furrier with Dave Vellante. Stay with us. More after this short break.

>> Narrator: Live from Las Vegas, it's the CUBE (light electronic music) covering Interconnect 2017. Brought to you by IBM. >> So, my first question for you is, as we digitize our worlds with business, the value chains and all the processes are changing, there's a new value equation model around digital business. What's your view on the digital business value creation equation? >> Sure, John, thank you for having me here, today, and Dave, as well. Thank you for having me. So, I think that automation in combination with cognitive computing, AI, machine learning, is really going to revolutionize the way we work, the way we interact, and it's going to create new experiences for people, experiences that we don't even know that exist in the future. They're going to be real value, and that value is not just about cost take-up, that value's going to be around innovation, that value's going to be around the combination of block chain, machine learning, ubiquitous computing, and I think that this is going to create new industries, new business models, that we could take really advantage of in many different industries. >> One of the cool things that's happening that I like in the computer science, and how society in general now is seeing cloud computing, which has been around for awhile getting full-steam ahead, big data industry evolving very rapidly, and what's kind of pulling them together in this gravity is machine learning, data, cognitive, iterative things, and AI is kind of the over-arching, you know, sizzle, if you will. So, the sci-fi aspect of AI. Everyone can relate to some sort of mental image of AI. You know, robots taking over the world, to automated things just make us smarter, augmented reality, what-not. But iterative things, and data science, that's connecting the power of the cloud with data is changing the game. So, one little change in a value equation, in a company, could change their business model. >> Absolutely. >> How do you rationalize that with your customers (laughing)? Hey, you know, full steam ahead, or slow down, it depends. What's your perspective on that? >> So, it's interesting you mention about science fiction, right, because science fiction inspired robots and automation for centuries, now. But, the reality, today, is that we are already using automation. You know, it's been used ubiquitously across production lines, manufacturing, logistics. So, we've started this journey, already, for many, many years. I think, quite rightfully, like you described in the cloud world, what we're seeing now, in automation, you're combining Artificial Intelligence, you're combining cognitive computing, and what that will do is it will create new value for companies out there, right. That new value is going to be about creating new industries, creating new data, and in the IOT space, it's going to create a new level of intelligence for us that's really going to change the experience that we could deliver. >> So, I've said this before, the greatest chess player in the world is not a machine, it's not a supercomputer, it's a combination of humans and computers. And, so to the point, we were talking off camera, machines hae always replaced humans. It's now cognitive functions are being augmented. And so, it seems like the scarce resources, the creativity to combine innovations. For decades, we've marched to the cadences of Moore's Law. >> John: Yeah. >> Right. The innovation is not coming from Moore's Law anymore. You know, whether or not it's tapering. We can argue, let's assume it is for a moment. >> Reinventions. >> So, where's the innovation coming from? Clearly the innovation curve's not slowing down. >> Dave: So, what's IBM's point of view on that innovation and where it comes from? >> So, you started by talking about robots and machines and how it's kind of changing jobs and, let's say, taken over jobs. The reality is that only a small percentage of work, five to 10%, will be fully automated in the future, because we've seen this throughout history. Technology advances in the last 20 years has created new professions. You know, 25% of the work type and profession in the last 20 years are new type of work. And John, you were mentioning about the ATM machine just a couple of minutes ago. >> Yep. >> The ATM machine actually has created a new economy. >> John: It was supposed to kill the teller. >> Yeah. >> It kind of did, but it created more jobs because more branches were opening up. >> Exactly, more branches and new ways of interacting, and new, and so on. Now, you have mobile apps, but actually you have to develop applications which you never had to do in the past before, and exactly the same with automation. We're going to have, and robotics and Internet things, combined them together, we'll create a new economy, and the value of that economy is going to be in a couple of areas. One, I think one of the fundamental changes is that our work type, the type of work we do, is going to be automated, about 30% of our work type is going to be automated in certain industries, industries which are highly tasked orientated, highly manual orientated, highly data orientated. They'll all change, that's the reality of it. But, that's also going to create a new type of work, a new profession and people will be up-skilling to that. But, our prediction is that, you know, in the next few years we're going to see between one to one and a half percent GDP increase as a result of cognitive computing and AI. >> Incremental. >> Incremental, incremental, so yes, there'll be some changes of jobs, changes in profession, but incremental, they'll be increasing, and that, for the aging population issue that we know very well, is going to really help to boost a lot of economy out there. >> That scares people, too, this whole notion of job loss and, again, we were talking about before camera. It's not so much controversial, it's more education, both educating people on what the narrative is of the future scenario. >> Exactly. >> But also, education for people to get the new skill. I mean, the stat after the stat, but it's high percentage of jobs are even created yet. So, you know, cross-disciplinary education in higher eds changing, but the skills gap is a huge issue. So, how do you talk to that point because, certainly, that's an area we heard on stage today. Mark Benioff and Ginni Rometty talking about, you know, having a societal impact, and having a mission, education, is a big one. What's your thoughts? >> Absolutely. >> I mean, so I think it starts right from the way we teach, because you can't necessarily always teach the future, but what you can do is you could prepare for the future. So, we need to start teaching our children to our graduates who start in our companies with new skills around creativity, right. High emotional intelligence. I believe that a robot is never going to be able to manage emotional intelligence, right. So, how do use more emotional intelligence? How do we provide more discipline around education? How do we provide them vital skills? >> Critical thinking. >> Critical thinking, absolutely. You know, and science, but also, these Artificial Intelligence going to age human being, you know, it's going to help us discover new remedies for problems that we have today in our society, problems that we have in healthcare, problems that we have in political systems, you know, which we are seeing now and, hopefully, provide more confidence in our system because of the data and intelligence that we see. >> So, now, I've got to throw in the augmented reality because AI is obviously kind of a concept that people are getting. It's not clear, yet, what that is. What really is AI? Well, that chapter will be written, certainly as it evolves. But, augmented reality is happening. So, IoT, you can have googles on that look at meters and get new data, that's not even there. You can do automation around getting predictive analytics around machine, industrial IoT, these kinds of things. You're seeing consumer devices having augmented reality. >> Shamayum: Yep. >> That's here, right. That's here and now. So, how do you advise your clients and customers, the big IBM customers you service, to prepare for augmented reality? Because, is there a playbook? Are they nodding their heads, are they going, "Oh!," face palm. Or, I mean, what's happening? >> So, augmented reality is here and it's here to stay. The difference between augmented reality, now, or if you looked at it, let's say, five years ago when we had Google glasses. One was hype versus reality. One was a use case, now, where actually is transformational, and it's having real impact in ROI. Like the example you gave around manufacturing, or how you use it in logistics, when you are looking at airlines, and how you look at training people. Now you could train people using augmented reality and speed the level of adoption required or the time required to skill people. And then in the past, we never had that. Is there a playbook? I don't think there is a playbook, John, because I think the use cases are so diverse. But I think what we really need to do is go back to fundamental of consulting. What do we look for, you know, in business problem solving? We look for problems. We analyze that problem through design thinking, or whatever methodology we use. We look up what the impact. Is it speed, quality, and cost? And, if we can answer these questions, speed, quality, and cost, and the human impact unto it, those are the factors that's going to determine what are the use case of augmented reality that's really going to transform, and have impact, in industries. >> I find it interesting, too, you mentioned that the old way of doing things, is not going to be there, but the older way of doing software was general purpose, computing, and software. Buy a shrink wrap package, load it, does some function. Now, the composability of APIs and micro services allow for common building blocks. >> Yep. >> Son ow , essentially every solution is custom. >> Shamayum: Yes. >> So, you have a diverse use case. Remember, beauty is in the eye of the beholder. So, that's how it is in the enterprise. So, that's a reality. So, with that as kind of a backdrop, what are some of the cool things that you're working on now that you can point to and say, "These are examples of the kinds of journeys customers are going through." It could be a crazy idea that's implemented or a something, a great idea. Share a story about some of the highlights, some of this new way of building apps, new way of being agile, new way of discovering value creation. >> Sure, so you're absolutely right. You know, we're moving into a world of consumable services, if I could describe it that way, API services, micro-services, pulling data from different sources, augmenting your data source, having functions that you get from your competitors, even, to augment the capability that you want and to create new business processes. And I think we'll see more and more of this, and, you know, I was speaking to a bank, even last week, and in Abu Dhabi where they're saying, "What's the future of a bank? "Do I need a processing bank? "Do I need a back office anymore? "Do I need a branch? "Can it not just be a virtual bank? "Can I not just connect to fin-tech to provide my services, "and I have the customer and own the customer?" So, I think there's an advancement in terms of thinking, now, and that thinking is possible because the possibilities are endless and we have never seen more access to technology at relatively low cost, even, than ever before, and, also, open source is making it more possible, I think. Open source has given power to the people and companies to have world-class technology, you know, combined with IBM technology to provide, you know, real great value. So... >> Oh, go ahead, please carry on. >> Just, in terms of use case. Another example is that I recently sent a use case around, "Know your customer." You know, one example was, you know, opening up accounts for high-worth customers could take months and months to make sure the security checks, and so... You may have an account, but in terms of fully transactional, it takes months. Now, using machine learning, you go and search over a million databases and look for a million different patterns and make a recommendation to your work advisor to see what kind of customer you're going to be. You know, by analyzing movies, watching four movies that you love, we could predict, by 95%, what all the movies that you're going to love in the rest of your life. Those are the use cases I've seen. I just find it fascinating. >> Netflix is doing... They're getting all the data from me. >> Yes, yes. >> An arbitraging out the back door. >> Recommending books, I mean it's getting more and more. >> I want to own my own data. That's what Ginny was saying on stage, we should own our own data. >> Yeah, and there's certainly consumers out there who want to own their data and I think there's going to be this shift where you can have digital ident in the future where you own the data and could like trading your data. So, instead of just giving your data, you could start monetizing your own data, and saying what kind of information do you want, and what kind of experience do you want? You know, how do you want to trade? Who do you want to trade with? Do you want to share the data with your family? With your friends? With your business partner? And you become the owner of data, and that certainly an area that we're seeing a movement to, but, also, it's going to help with the identity. Your identity will be known only to you, not to service providers. >> I think you're on to something, and one of the things we were just talking with Don T was, the block chain, and The Block Chain Revolution, his new book, is when you get the transactional cost of business reduced, you mentioned that virtual bank, makes total sense. Why should I spend all this money to have a company? I can reduce my transactional cost of doing business and still provide great value. >> Well, I don't know. I mean, you talk about the future's hard to predict, sometimes, but the bank in Abu Dhabi, right. I mean, you see banks, we talk to them all the time, re-imagining the banking experience, but not necessarily eliminating the physical. >> Sha: Absolutely. >> And so, you know, to me it's fascinating. Like the list of things that machines can't do, that humans can changes, seemingly, every year, whether it's climbing stairs, or even autonomous vehicles, five years ago nobody thought was... I was and IBM conference, not that long ago, five years ago, they said it's 25 years before you'll see that. Then, wow, just overnight. >> Self-starting cars is another prediction. >> So, do your clients... How much do they try to, you know, skate to the puck, which seems to be a harder endeavor versus saying, you know, "Okay, we can apply this today, "and save money, or tap a new business opportunity." >> So, you make some great points here. The first point I'd just like to elaborate a little bit more which you mentioned about the physical and the digital. >> Yeah, right. >> Which you might, in your example was the branch. What's the role of the branch if you have a fully digital bank in the future? We still need a branch. And, why do we need a branch? Because in the branch, the branch is going to be different in the future. We all hate cueing up in the branch. We all hate going to a generic person that's says, "Can I help you?" >> John: What's your account number? >> "What's your account number?" >> Exactly. >> No, I'm John. >> Come on, you should know me. >> You should know as soon as I walk in, you should know, you know, what are the three things that I'm looking for. You should know how long I've been a customer, what my family is. >> How many Twitter followers you have. If you're an influencer. (laughter) >> Exactly, exactly. And more importantly, you should know that I love speaking to an expert. I don't want to speak to a generic person. So, the future bank is going to be when you walk into your bank, you're going to sit there in a room, in a very nice room, you're going to be in a screen, you're going to talk to someone who's an expert, who knows everything about you, through video conference. You can even order a coffee that someone comes in your room. You don't feel that it's just virtual. You have some emotional connections, as well. You'll have digital printers in there. You can connect. You have a different experience and by the time you go out, your app has already been updated with the loan that you wanted or the mortgages that you wanted. And then, coming back to the point that John and I were talking about, the consumer services, well, actually I might want my loan from one bank, my mortgage from another bank, and my car account from one bank, and I should be able to trade between that. >> Dave: Right. >> So, there's that connection, whether physical or digital, and then different service providers. I think there will be a mash-up if I think of it that way. >> It's that level& of intimacy that has been lacking for so many years in that example, financial services, which it seems like cognitive can help close that gap. >> Yeah, yeah, and cognitive absolutely can because cognitive is now, the technology's here. I think it's advanced, so much is here. The use cases are amazing and you heard about the use cases in healthcare and in customer services and aging assist, which is helping people with self-application repair. So, I think the advancement is here. I mean, the possibilities are huge. We just need to connect those dots together in order to create those new use case. >> And they did model that's come out of that conversation that is domain specific data, and you guys talk about that as verticals. But, you know, that's important because you need to specialism of the data. >> Sha: That's correct. >> But you also want the horizontally scalable cloud, as well. So that's the data challenge right there. >> Absolutely, absolutely. But one thing that's going to be critical, I think, even in the future, is that industry knowledge and how you use that industry knowledge to augment your data. How do you find that, you know... Computers always give you those patterns. How do you interpret that pattern, and how do you create that new experience? That's where the human value is. >> So, you know, we talked yesterday. You're in the consulting side of the business, but 60% of IBM's business remains services. But a key value that you bring to the marketplace is the ability, at least in concept, to codify those services into software. Talk about how you're doing that, and to the degree to which you're succeeding. >> So, we started a conversation in automation. So, if I go back to that. In automation, every client is thinking about automation. Every client is experimenting with automation now, to some level. And, what we have done with our services is that we create frameworks, maturity assessments, business component modeling. So now, what we can do when we go into a bank, we go into an example bank, we could say, "Hey, Mr. Customer, I've done it "with these 30 banks. "I know what does best-in-class bank look like. "You might not, necessarily, and trying to answer your initial question, You know, what's the roadmap look like. "You may want to go over here, "but your level of maturity's here." So, how do you get to that level of maturity, your kind of aspiration, and we could help with those tools and methods and our assessment capability and strategy engagement framework that we bring with the clients. Also, we don't just look at banks. Because, if you're a bank, banks are interesting, but you may want to look at retailers. You might want to look at pharmaceutical companies. You might want to look at Starbucks and all the people that around here, what are they doing, in terms of innovation, so you can bring all the innovation on to this and look at business functions. You know, what does the best-in-class logistic look like? What is the best-in-class back off function look like outside of my industry? And that's the kind of codifying that we have the knack of solving things we can bring to the market. >> Can I even jump industries because digital allows me to actually traverse horizontally, as John was saying. >> And the threat is there. You know, the threat is live today, to be Uber-ized or be a Uber. You know, you decide. So, you are going to jump through these industries because you have now a global platform which allows you to transform your industry, and jump from one to another, and monetize what you have very, very fast, and the barrier to entry is lower than ever before, not just because of technology, but because how industry works on the consumers' demand. Shamayum, than so much for coming on. Great insight. Thanks for sharing. Love that content. Really good insight. >> Pleasure. And the future's here. >> Thank you very much. The future's here, absolutely. Thank you very much. >> The future's here, now. This is the CUBE bringing you all the action, here, live in Las Vegas. Stay with us. We've got a lot more today to come, and all day tomorrow. We'll be right back. I'm John Furrier with Dave Vellante. (light electronic music)

>> Narrator: Live from Las Vegas, it's the Cube covering Interconnect 2017, brought to you by IBM. >> Welcome back to Interconnect 2017 from Las Vegas everybody, this is the Cube the leader in live tech coverage. Bina Halmann is here, she's a Cube alumn and the vice president of offering management for storage and software defined at IBM and she's joined by Tahir Ali, who's the director of Enterprise Architecture at the City of Hope Medical Center. Folks, welcome to the Cube- >> Tahir: Thank you very much. >> Thanks so much for coming on. >> Bina: Thanks for having us. >> So Bina we'll start with you been on the cube a number of times. >> Yes. >> Give us the update on what's happening with IBM and Interconnect. >> Yeah, no it's a great show. Lots of exciting announcements and such. From an IBM perspective storage we've been very busy. Filling out our whole flash portfolio. Adding a complete set of hybrid cloud capabilities to our software defined storage. It's been a great 2016 and we're off to a great start in 2017 as well. >> Yeah [Inaudible] going to be here tomorrow >> That's right. so everbody's looking forward to that. So Tahir, let's get into City of Hope. Tell us about the organization and your role. >> Sure, so City of Hope if one of the forty seven comprehensive cancer centers in the nation. We deal with cancer of course, HIV, diabetes and other life threatening diseases. We are maybe 15 to 17 miles east of Los Angeles. My role in particular, I'm a Director of Enterprise Architecture so all new technologies, all new applications that land on City of Hope, we go through all the background. See how the security is going to be, how it's going to implement in our environment, if it's even possible to implement it. Making sure we talk to our business owners, figure out if there's a disaster recovery requirement if they have a HA requirement, if it's a clinical versus a non-clinical application. So we look at a whole stack and see how a new application fits into the infrastructure of City of Hope. >> So you guys to a lot of research there as well or? >> Absolutely. >> Yeah. >> So we are research, we are the small EDU and we are the medical center so- >> So a lot of data. >> A whole lot of data. Data just keeps coming and keeps coming and it's almost like never ending stream of data. Now with the data it's not only just data- Individual data is also growing. So a lot of imaging that happens for cancer research, or cancer medical center, gets bigger and bigger per patient as the three dimensional imaging is here. We look at resolution that is so much more today than it used to be five years. So every single image itself is so much bigger today than it used to be five years ago. Just a sheer difference in the resolution and the dimensions of the data. >> So what are the big drivers in your industry, and how is it affecting the architecture that you put forward? >> Right, so I think that a couple of huge things that are maybe two or three huge conversion points, or the pivot points that we see today. One of them is just the data stream as I mentioned earlier. The second is because a lot of the PHI and hipaa data that we have today- Security is a huge concern in a lot of the healthcare environment. So those two things, and it's almost like a catch 22. More data is coming in you have to figure out where you're going to put that data. But at the same time you got to make sure every single bit is secured enough. So there's a catch 22 where its going, where you have to make sure that data keeps coming and you keep securing the same data. Right so, those two things that we see pivoting the way we strategize around our infrastructure. >> It's hard, they're in conflict in way, >> Tahir: Absolutely. >> Because you've got to lock the data up but then you want to provide accessibilty... >> Tahir: Absolutely. >> as well. So paint a picture of your infrastructure and the applications that it's supporting. >> Right, so our infrastructure is mainly in-house, and our EMR is currently off-prem. A lot of clinical and non-clinical also stay in-house with us in our data center on-prem. Now we are kind of starting to migrate to cloud technologies more and more, as just things are ballooning. So we are in that middle piece where some of our infrastructure in in-house, slowly we are migrating to cloud. So we are at like at a hybrid currently. And as things progress I think more and more is going to go to the cloud. But for a medical center security is everything. So we have to be very careful where our data sits. >> So Bina when you hear that from a client >> Bina: Mm-hmm (affirmative) >> how do you respond? And you know, what do you propose? >> Bina: Yeah. >> How does it all... >> Yeah well- >> come about. >> You know as we see clients like Tahir, and some of the requirements in these spaces. Security is definitely a key factor. So as we develop our products, as we develop capabilities we ensure that security is a number one focus area for us. Whether it's for the on-prem storage, whether it's for the data that's in motion from moving from the on-prem into the cloud, and secure completely all the way through where the client has the control on the security, the keys et cetera. So a lot goes into making sure as we architect these solutions for our clients, that we focus on security. And of course some of the other requirements, industry specific requirements, are all also very important and we focus in on those as well. Whether it's regulatory or compliance requirements, right. >> So from a sort of portfolio standpoint what do you guys do when there's all kinds of innovations over that last four or five years coming in with flash, we heard about object stores this morning, we got cloud, you got block, you've got file, what are you guys doing? >> So we do a lot of different things, so from having filers in-house to doing block storage from- And the worst thing now these days with big data is, as the data is growing the security needs are growing but the end result with the researchers and our physicians the data availability needs to be fast. So now comes a bigger catch 22, where the data is so huge but at the same time they want that all of that very quickly on their fingertips. So now what do you do? That's where we bring in a lot of the flash to upfront it. 10 to 12 percent of our infrastructure has flash in the front, this way all the rendering, or all the rights that happen or- First land on the flash. So everybody who writes, feels like it's a very quick write. But there's a petabytes and petabytes behind the scene that could be on-prem, it could be on the cloud, but they don't need to know that. Its, everything lands so fast that it looks like it's just local and fast. So there's a lot of crisscross that is happening, and started maybe four five years ago with the speed of data is not going to be slow. The size of data increasing like crazy and then security is becoming a bigger and bigger concern as you know. Maybe every month or month and a half there's a breach somewhere that people have to deal with. So we have to handle all of that in one shot. So you know, it's more than just infrastructure itself. There's policies, there's procedures, there's a lot that goes around. >> So when you think about architecting, obviously you think about workloads and- >> Tahir: Of Course. >> what the workload requirement is, it's no a one size fits all. >> Tahir: Right right. >> So where do you start, do you start with- >> Tahir: Sure. >> Sort of, you know a conversation with the business? >> Sure, sure. >> How much money do you got? >> So we don't really deal with the money at all. We provide the best possible solution for that business requirement. So the conversation happens, "tell us what you're looking for." "We're looking for a very fast XYZ." "Okay tell us what exactly you need." "Here's the application, we want it available all the time, "and this is how it's going to look like, "it can't be down because our patients are depending on it". So on and so forth. We take that, we talk to our vendors. We look at exactly how it's architected. If it's- Let's just say it's three-tiered. There's a web, there's an app and then there's a database. You already know by default that if it's a database it's going to go on a high transactional IO where either it's a flash or a very fast spinning disc with a lot of spindles. From there you get the application. Could be a virtual machine, could not be a virtual machine. From there you get to a web tier. Web tiers are usually always on a virtual infrastructure. Then you realize if you want to put it on a DMZ so people from outside can get to it, or it's only for internal use. Then you draw the entire architecture diagram out. Then you price it out, you said "Okay if you want this to be "always on, maybe you need a database that is always on." Right, or you need a database that replicates 24/7. That has a cost associated to that. If you have an application- If wanted two application maybe it's a costier application it could be HA it could not be HA, so there's a cost to that. Web servers are kind of, you know cheaper tier of virtual machines. And then there's a architecture diagram, all the requirements are met in there. And there's a cost associated to that, saying business unit here is how much it's going to cost and this is what you will have. >> Okay so that's where the economics, >> Exactly >> comes into play. Okay this is what your requirements are >> Yep. >> This is, based on that what we would advise. >> Exactly, yeah. >> And then essentially it's can you afford it. >> Right right. (laughs) If you want to buy a house that is a three bedrooms and three bathrooms in Palo Alto, versus a six bedrooms and then seven bathrooms in Palo Alto it's going to be a financial impact that you might not like. (laughs) So it's one of those, right. So what you want has a financial impact on your end solution and that's what we provide. We don't force somebody to get something. We just give them- Hey how many kids do you have? Four kids, then maybe you need a five bedroom house. Right so we kind of do that. >> Is it common discussion? >> Yeah it is, it is. And that's, as you know, some of the things we do focus on. Right, as we- In addition to the security aspect of it of course, is around the automation, around driving in the efficiencies. Because at the end of the day, you know, whether as capital expands or operational expands you want to optimize for both of those. And that's where as we architect the solutions, develop the offerings, we ensure that we build-in capabilities, whether it's storage efficiency capabilities like virtualization, or de-dupe or compression. But as well as this automated tiering. Tiering off from flash to lower tier, whether it's on-prem lower, slower- >> Tahir: Could be a disc. >> speed disc or tape or even off to the cloud, right. And being able to do that, provide that I think addresses many of our clients' needs. That's a common requirement that we do hear. >> And as mentioned 10 to 12 percent of it if flash. >> Tahir: Right. >> The rest, you know ninety percent or so is something else. That's economics, correct? >> Right so- >> And how do you see that changing? >> So I think the percentage won't really change. I think the data size will change. So you have to just think about things, just in generality. Just what you do today. You know when you take a picture, maybe you look at it the first three days, even if you have a phone. After three days, maybe you look at it maybe once every two months. After three months, guess what? You will always never look at them. They're kind of moved away from even your memory banks in your head. Then you say, "Oh I was looking through it". And then maybe once in awhile you look at it. So you have to look at the behavior. A lot of the applications have the same behavior, where the new data is required right away. The older the data gets, the more archival state it gets. It gets warmer and then it gets colder. Now, as a healthcare institute we have to devise something that is great financially, also has the security, and put away in a way where we can pull it without having pain to put it back. So that's where the tiering comes to play. Doesn't matter how we do it. >> And your planning assumption is that the cost disparity between flash and other forms of storage will remain. That other- >> So- >> forms will remain cheaper. >> Right, so we are hoping, but I think the hybrid model of flash- So once you do a hybrid with flash and disc, then it becomes a little more economically suitable for a lot of the people. They do the same thing, they do tiering, but they make it look like a bigger platform. So it's like, "We can give you a petabyte "but it's going to look like flash." It doesn't work like that. They might have 300 terabyte of flash, 700- but it's so integrated quickly, that they can pull it and push it. Then there's a read-aheads write-aheads that takes that advantage to make it look like it. That will drop your pricing. The special sauce that transfer the data between slower and flash discs. >> Two questions for you. >> Sure. >> What do you look for in a supplier? And what drives you nuts about a supplier, that you don't want a supplier to do? >> Sure. So personally speaking, this is just my personal opinion. A stable environment a tried and true vendor is important. Somebody who has a core competency of doing this for a longer term is what I personally look at. There's a lot of new players who come in, they stay for a couple of years, they explode, somebody takes them over or they just kind of vanish. Or certain people outside of their core competency. So if Toyota started to make- Because they wanted to save money they said, "Hey Toyota from now on will make "the tires that are called Toyota." But Toyota is not a tire company. Other companies, Bridgestone and Michelin's have been making tires for a very long time. So the core competency of Toyota is building the cars and not the tires. So when I see these people, or the vendors saying, "Okay I can give you this this this this and this and that and the security and that. Maybe three out of those five things are not their core competency. So I start to wonder if the whole stack is worth it because there's going to be some weakness because they don't have the core competency. That's what I look at. What drives me crazy is, every single time somebody comes to meet with me they want to sell me everything and the kitchen sink under one umbrella. And the answer is one single pane of glass to manage everything. Life is not that easy, I wish it was but it really is not. (laughs) So those two things are- >> Selling the fantasy right. Now Bina we'll give you the last word. Interconnect, give us your final thoughts. What should we know about what's going on in software-defined and IBM storage. >> Yeah you know lots of announcements at Interconnect. You heard, as you talked about, cloud optic storage we've got great new pricing models and capabilities and overall software-defined storage. We're continuing to innovate, continue add capabilities like analytics and you'll see us doing more and more on cognitive. Cognitive storage management to get more out of the data, help clients get more and more information and value out of their data. >> What's the gist of the new pricing models, just um- >> Flexible pricing model depending on how the both hybrid as well as the three tiered on-prem and in between. But really cold as well as a flexible pricing model where depending on how you use the data you know you get consistent pricing so between on-prem and in the cloud. >> So more cloud-like pricing >> Yes, exactly. >> Great. >> Yep. >> Easier consumption, excellent. Well Bina Tahir thanks very much for coming to the cube. >> Yes yes thank you. >> Dave: Pleasure having you. >> Thank you. >> Thank you for having us. >> Dave: You're welcome. Alright keep it right there everybody we'll be back with our next guest and a wrap, right after this short break. Right back. (upbeat music)

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