Jim Whitehurst, IBM | IBM Think 2021
>> Narrator: From around the globe, it's theCUBE with digital coverage of IBM Think 2021 brought to you by IBM. >> Hello everybody, welcome back to IBM Think 2021, the virtual edition. My name is Dave Vellante and I'm pleased to welcome back a long time Cube alum, Jim Whitehurst, who's the president of IBM. And I'll call him chief cultural evangelist, welcome Jim. Great to see you again. >> Great to see you, Dave. Thanks so much for having me. >> Yeah, it's really our pleasure. And I want to start off, it's just over a year as president of IBM. And I wonder, you know, when you're a little kid or, you know, early in your career, computer science class, did you ever think you'd be president of a company that was founded in 1911? I mean, amazing. I wonder if you could share what's the most important thing you've learned in your first year? >> Well, look, I mean, as you said, I would've never thought it. Yeah, I was the first kid to have an IBM PC on the block and was always into technology but never saw myself as like, you know, running a big tech company. So it is humbling. I would say that there are tons of lessons in the first year. I guess the two that strike me most is one is just related to strategy and that's, you know, Red Hat and most technology companies, we're very customer focused. But it's around whatever technology we're bringing to market where IBM has fundamentally transitioned. And kind of transformed itself over time to make sure it can meet customer needs. So it's sold off businesses, it's bought other businesses, it's created new businesses. So it really shows the kind of the focus and value on serving our customers and doing whatever it takes to do it. And that's been a fundamental kind of different strategy than most companies have had. I think one of the reasons that we've been around for over a 100 years. The second is I'm deeply into culture and I've talked a lot about the difference of running Red Hat, it's all about innovation versus Delta Airlines where I was before, which is driving efficiency. IBM is both and so really trying to think through how you run an organization that needs to run the financial systems of the world, that extraordinary reliability and drive roadmaps on things like quantum computing. At the same time be able to innovate iteratively with our customers and in open source communities. And kind of getting that balance right as a leader. It's, you're kind of doing what we did at Red Hat and what we did at Delta but kind of doing it together. And I think that stretched me as a leader and kind of taught me a lot about how we're thinking about continuing to evolve the culture at IBM. >> Now, of course, you do this leadership series, you put out things out on LinkedIn and words matter. And that's what I take away from a lot of the little short hits that you do, which I really appreciate. My stuff that I put Jim on LinkedIn, it's just, you got to invest like 15, 20 minutes. So I really appreciate the short hits. But you do that regular series and I'm curious do you do that to reach more IBM people? Are you an open source culture? You're trying to help others. And I'm curious as to sort of why that platform as opposed to sending around an internal thing an IBM. And I'm wondering if your principles and how they've evolved kind of post pandemic. >> Well, so first off, maybe that comes from Red Hat but I think IBM shares that it's if you have something really, really valuable, you want to share it. And look, when I am out talking to our customers, CEOs and some of the biggest companies in the world, honestly we rarely talk about technology 'cause other people are more detailed or deep in that. We primarily do talk about culture. And how you think about again, how do you take an organization that's been built to drive efficiency and scale on a global basis and make it able to be more nimble and more innovative? And so, and obviously, hopefully that's all with IBM and Red Hat technologies. But ultimately most of my conversations at a senior leadership level are about culture and leadership style to drive that. And so if that's valuable for CEOs of some of the world's largest companies, it's valuable to leaders kind of across all spectrums, all sizes. And so I think LinkedIn is a good way to kind of take some of those messages and make sure we were able to share those much more broadly. So certainly I spend more time talking about it inside of IBM and I spend a lot of time with our clients talking about it. But I think many of the lessons are applicable more broadly. And so why not share them? And LinkedIn's a great platform to be able to do that. >> How about you, how have your principles, how have your principles sort of changed and how have they evolved post pandemic? >> Well, I think a couple things, so one is the pandemic kind of forces you to get more precise about it. And what I mean by that is so much of leadership is about building credibility and trust and influence. And when you're seeing someone in 3D live, visual cues can kind of mean a lot in the water cooler conversations. Or who you run into in the hall can all help kind of create that level of trust. But you can't do that in 2D. As great as Zoom and other platforms are, you just can't quite do it. And so you have to be much more thoughtful in how you're creating opportunities to kind of create trust. So I'd say I've gotten more surgical in thinking about kind of what those elements of leadership are that do that. I think the second thing I've really learned at IBM again is back to this. We have to be able to do both, drive a future state in a known world as well as, I call it seek a future state in an unknown world. So driving a roadmap for quantum computing takes a number of different technologies coming together in one year, in two years, in five years. And that really does have to be pre-planned, which is very very different, that I'll call the iterative innovation approach that we use at Red Hat and open source communities and working with our clients. And we have to do both. And so as a leader you really have to understand the problem you're trying to solve and apply slightly different kind of leadership tactics against that. So when you're executing a known versus you are trying to create something in an unknown, does require different approaches and we have to do both in IBM. And I think that's the struggle a lot of companies have, every company needs to do that. If you're Delta Airlines, you don't want anybody innovating on the safety procedures before your flight. Yet you want a lot of innovation happening on your website and your mobile app. So how do you bring those together? And as a leader you can have a common set of values, but recognize you have to bring different tools to the table, depending on the context in which you're leading. And so I learned a lot more and gotten a lot crisper with that since being at IBM. >> Interesting, I mean, the pandemic, we all know it's been terrible but one of the upshots has been we had a glimpse of the future sort of shoved into a forced march of digital in 2020. And so obviously the next 10 years ain't going to be like the last 10 years. And one of the things we've been talking about is ecosystems and partnerships and the power and leverage that you can get from those. And Arvin has said, laid it out, we are returning to growth company. And so I wonder if you could talk to how partnerships and ecosystems play into that return to growth for IBM. >> Well, first off a key part of our strategy we talk about hybrid cloud and AI. It's not just about, hey, a platform that runs across all the different deployment models is convenient. It's also because innovation is coming from so many sources today. It's coming from a by-product from the web 2.0 companies, it's coming from open source. It's coming from an explosion of startups because of the amount of capital in venture capital. It's coming from traditional software companies. It's coming from our clients who are participating in open source. And so you have so many sources of innovation. Much of what we're doing is landing a platform that allows you to consume innovation safely and reliably from wherever it's coming from. So a core part of a platform by definition is the ecosystem around it. Having a platform that runs everywhere is great but if you don't have any applications that run on it who cares. And so ecosystem and partners have always been important to IBM, but for this strategy of this horizontal platform oriented strategy, it is critical to our success because much of the platform is the ecosystem. And so we've already talked about investing a billion dollars in that ecosystem to get ISVs and other partners on our platform, again, to ultimately kind of create that kind of horizontal layer where I can run anything that I want to on it and I can run that anywhere I want to. And so the two sides of that so all the innovation happening on top and making sure it runs everywhere is what really unlocks the freedom of choice. That reduces friction to innovation, which allows everybody in the ecosystem from our clients to ISVs to hardware partners to innovate more quickly. And that's what we really see as the benefit of our platform. It's not a horizontal stove pipe, come innovate in this one place. It's recognizing innovation's happening in so many places. And the only way we're going to be able to allow people to ingest that is to have a horizontal platform that everyone's participating in. Which is why partners and ecosystem are so important, not only to the success of our platform, but to the, I'd say, as a success of this next generation of computing. These horizontal fabrics that require an ecosystem kind of built around them. >> I think that's an important nuance that maybe people don't understand that yes, you have a platform. Obviously, OpenShift is a linchpin but it's an enabler for people to build other platforms. It's not the be all, end all platform that's sort of ultimately becomes another Island. And so that is a key part of the growth strategy and presumably expand your total available market. >> Oh, absolutely and so this is the key is we can talk about great IBM technologies. We're doing amazing things in security and AI and natural language processing and all these other areas. But the platform is a recognition that we're not going to do everything for everybody anymore. There's just the democratization of technology means that there is so many sources of innovation. And so first and foremost, we have to land a platform so you can consume anything from anywhere. And then of course, we'll drive our own pace of innovation both in hardware and software around that platform. But we are just a player on that platform, which we're really instantiating for really anybody to be able to reach customers or customers to reach sources of innovation. >> I know sustainability is a passion of yours, that it's obviously a hot topic right now. Oftentimes I joke tongue in cheek, Milton Friedman's rolling over in his grave with all this ESG talk. And I know you just posted recently on LinkedIn. And of course I went right down to Kavanaugh because my premise is not only is sustainability the right thing to do, it's also good business. But I wonder if you could give us your perspectives on this. >> Yeah, well, so first off, I mean, as a large global citizen as IDM I think this is an important role that we play and look, this isn't new to IBM. We came out with our first statements around environment in 1970. We put out our first report that's become our environmental impact report in 1990. We've been talking about climate since the early two thousands. So we've been involved in this for a long, long time because I do think it's important broadly. But there's also a specific role I think IBM can play beyond just our own individual actions to reduce our own footprint. Because of some of the extraordinary technologies that IBM has worked on in the years especially around semiconductors, we have just an amazing amount of technology, expertise, intellectual property around material science. And so just a couple of examples of those that relate to the environment. We in doing some other work realized that we had a way to be able to recycle PET plastic, which is a real problem because so many clothes and other things are now made out of PET. And it's really hard to recycle but a by-product of other work we're doing realized we could do that. And so we've formed a JV and we're funding that to not profit from it but to make sure that much more of the world's PET is recycled. Or the work that we're doing on batteries, where using ocean water instead of rare earth minerals to make batteries that not only are cleaner but last longer. Those are kind of byproducts of our kind of core business. The areas that we can see the benefits of innovation and material science being able to impact the world. I am hopeful that we'll be able to play a role with all of that in clear air carbon capture. I mean, that's still far further away but I do think IBM has a unique role that we can play because of our deep expertise in, again, material science, quantum computing, and modeling that put us in a unique position to have a major impact on the world. >> I wonder if we could talk a little bit about sort of IBM and its technology bets. And I've made the point a number of times in my writing that IBM's R and D spend has been about pretty constant, about $6 billion a year. But as IBM is jettison certain businesses got out of the x86 server business and it got out of the Foundry business with micro electronics. Now it's spinning out NewCo. What happens, the effect is that R and D as a percent of revenue goes way, way up. And my premise has always been that allows IBM to be more focused. So whether it's hybrid cloud, AI, quantum, Edge where are you placing your technology bets and maybe give us a sense of how you ranked them, some of your favorites. >> Yeah, so, look, that's exactly right. I mean, we are one of the few places that still invest a massive amount in R and D, especially in fundamental research. And so I'll kind of break down kind of the core areas. So first off, what I'd say is part of the hybrid cloud platform is recognizing we don't need to do everything for everyone. There is great open source technology. There are great other vendors that are doing things that we can enable our customers to access via the platform. So we're not trying to do everything for everybody in the way maybe 40 years ago we did. Because we understand there's so much great other technology out there that we're going to make sure that we expose. So we're investing in areas where we think we can uniquely add value that need to happen that others aren't doing. So AI, let me take that as an example. There's tremendous work happening in machine learning that we see every day because of Facebook and people trying to identify cats. And so I don't mean to trivialize it, there's a phenomenal work happening there. There's a lot less work being done on in AI on things where you have a lot less data. Or areas where you need explainable unbiased AI and the problem with machine learning engines is they're not auditable by definition. That's kind of a black box. And so we do a lot of work in areas like that. We do a lot of work in natural language processing. So we've had more of a as a kind of publicity kind of push the technology something called Project Debater. Where Watson can debate kind of champion debaters. That was mainly to make sure we can understand language in context, which allows for being able to better handle call centers in areas like that. Allows us to understand source code, which also is thinking about how you migrate applications from on-premise to the cloud. So we have a bunch of AI things that we are doing and is a core focus of what we're doing. But specifically we're investing in areas like anti-biased auditability, natural language processing, areas where others aren't. Which is unique and we can bring those capabilities together with what others are doing. Security, obviously, a huge, huge area where we've invested in quantum safe encryption. We've invested in confidential computing. In other words, even in compute mode your data is encrypted. So you can keep your own keys, so not even we on our cloud can see your data. So a lot of investments happening around security and that's going to continue to be an area as we know that's going to get more and more and more scrutiny. So heavy, heavy focus there. Heavily focused on technologies that help you kind of modernize your infrastructure. So automation tools, integration tools and areas around that. So on the software side, those are kind of the main areas. When you look on the hardware side, obviously quantum is a significant area where we have a leadership position we continue to drive. But even semiconductor research in kind of process technology. So we announced something with Intel to work with them to bring some of our process technologies. As we kind of go from 7 nanometers to 5 to 2 to ultimately 1. That set of technologies is an area where we have a real leadership position and we'll continue to work with now Intel. We continue to work with others to drive that forward. So whole bunch of areas both on the hardware and the software side that we continue to make progress on. >> Yeah, the Silicon piece is interesting. And when we saw that Arvin as part of the Intel announcements that we thought originally, oh, maybe it's just about quantum but it's really much more than that. You mentioned the process. We dug into it and we realized, wow, we said Power10 actually has the highest performance. And because of the way in which you are not to geek out but you're you dis-aggregate memory. And Pat Gelsinger talked about system on a package. It turns out folks that IBM is actually the leader in that type of capability. And also the way that systems on chips use memory is very inefficient but IBM has actually invented some techniques to make that much more efficient. That's sort of the future of semiconductors. And the reason why we spend so much time thinking about it is because it's of national interest. There's a huge chip shortage, which doesn't look like it's going away anytime soon. So that's a critical part of national competitiveness and technology competitiveness going forward. >> Well, and the other interesting part about that, and you talked about Power10, going back to the hybrid cloud platform that we talked about. It's not just about running applications across wherever you want to run them. It also abstracts the chip architecture. So all of a sudden whether it's on the mainframe, it's on power, it's on ARM, it's on x86 and a whole bunch of other technologies that might get developed. We're making it much easier to kind of consume that specialization or variety at the hardware level. Recognize as Moore's law runs its course there's no longer this inevitability of everything's just going to go to x86. I think we are going to see more variety because we're going to have needs in the factory floor or in the automobile or with massive container as applications. Where you're going to need, whether it's kind of shared memory or different architectures all the way out to kind of low battery consumption. And that whole kind of breadth and our hybrid cloud platform enables that variability. And then IBM obviously has great technology to enable kind of building unique capability in hardware. So we kind of play on both sides of it, both kind of developing great technologies but then making it really easy for developers to consume and use those specialized features. >> I'm glad you brought that up, Jim. We mentioned Moore's law because we're all talking about how Moore's law is waning and it's quote, unquote dead. But the reality is, is the outcome of Moore's law which is the doubling of performance every two years is actually accelerating because of the common actuarial factors of CPU's and GPU's and NPUs and accelerators and DSPs. If you add all those up and actually, we're actually quadrupling every two years. So we have more processing power at much lower costs because of the volumes that you're seeing on things like ARM. So it's actually a very exciting time. We're entering an era that really, it's hard to get your mind around sometimes. So my question is how should we think about the future state of IBM? What does that look like? >> Well, so first off, the thing that I've found extraordinary about IBM kind of having been there now just a little over a year as an employee, a couple of years, I guess, when Red Hat was acquired. Is it is unique in fundamentally changing, again, who we are to kind of meet the needs going forward. And if you think about the needs in technology, recognize it was only like 20 years ago that Nicholas Carr wrote his famous article, IT Doesn't Matter, it's about back office. And in that world, IBM was really, really effective at building and running IT systems for our clients. We would come in, we would just kind of do everything for them. Today, technology is the forefront of developing or building competitive advantage for almost any business. And so nobody wants to kind of hand the keys, so we no longer are necessarily doing things for our clients. We're doing things with our clients. So there's a whole set of work, and we talked about how we engage with our clients, how we're much more collaborative and co-creative and our whole garage model to help build the capability to innovate with our clients is a key part of what we're doing. We'll continue to drive core technologies forward like quantum in key areas that require billions of dollars of research that frankly no one else is willing to do. And then we bring it all together with this hybrid cloud platform where we recognize it's no longer about us doing it all for you anymore. We're going to do the things where we can uniquely add value but then provide it all on a platform which allows you to consume from wherever, however you want to in a safe, secure, reliable way. So as we watch this next generation of computing unfold, cloud shouldn't end up being a bunch of vertical stove pipes. It truly needs to be kind of a horizontal platform that allows you to run any application anywhere in a safe, secure, reliable way and our architecture helps do that. So it's no longer able to do everything for you. It's we can do things uniquely on a platform and work with you to be able to help you kind of create your own pace of innovation, your own sources of advantage. And so that's the broad kind of direction that we're going, again, as enterprises move from consuming technology to be more efficient, to driving advantage with it. They need partners who understand that focused on their success and can innovate with them. And that's really where we're going with our technology, with our services capability and kind of our approach to how we work with our clients. >> Yeah, Jim, you just laid out the Holy grail of computing in the coming decade and with IBM's acquisition of Red Hat. And it really enables that vision and clearly the company is one of the top few that are in a position to do that. Jim Whitehurst, thanks so much for coming back on theCUBE. Really appreciate your time. >> Thanks for having me, it's great to chat. >> All right and thank you for watching. Keep it right there for more content of theCUBE's coverage of IBM Think 2021, the virtual edition, be right back. (gentle music)
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of IBM Think 2021 brought to you by IBM. Great to see you again. Great to see you, Dave. of a company that was founded in 1911? And kind of getting that of the little short hits that you do, and make it able to be more And so you have to be much And so obviously the next 10 years in the ecosystem from our clients to ISVs of the growth strategy to be able to reach customers the right thing to do, And it's really hard to of the x86 server are kind of the main areas. And because of the way in of everything's just going to go to x86. of the volumes that you're And so that's the broad kind of direction that are in a position to do that. me, it's great to chat. the virtual edition, be right back.
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Jim Whitehurst, IBM | IBM Think 2021
(bright music) >> From around the globe, it's theCUBE with digital coverage of IBM Think 2021 brought to you by IBM. >> Hello everybody, welcome back to IBM Think 2021, the virtual edition. My name is Dave Vellante and I'm pleased to welcome back a long time Cube alum, Jim Whitehurst, who's the president of IBM. And I'll call him chief cultural evangelist, welcome Jim. Great to see you again. >> Great to see you, Dave. Thanks so much for having me. >> Yeah, it's really our pleasure. And I want to start off, it's just over a year as president of IBM. And I wonder, you know, when you're a little kid or, you know, early in your career, computer science class, did you ever think you'd be president of a company that was founded in 1911? I mean, amazing. I wonder if you could share what's the most important thing you've learned in your first year? >> Well, look, I mean, as you said, I would've never thought it. Yeah, I was the first kid to have an IBM PC on the block and was always into technology but never saw myself as like, you know, running a big tech company. So it is humbling. I would say that there are tons of lessons in the first year. I guess the two that strike me most is one is just related to strategy and that's, you know, Red Hat and most technology companies, we're very customer focused. But it's around whatever technology we're bringing to market where IBM has fundamentally transitioned. And kind of transformed itself over time to make sure it can meet customer needs. So it's sold off businesses, it's bought other businesses, it's created new businesses. So it really shows the kind of the focus and value on serving our customers and doing whatever it takes to do it. And that's been a fundamental kind of different strategy than most companies have had. I think one of the reasons that we've been around for over a 100 years. The second is I'm deeply into culture and I've talked a lot about the difference of running Red Hat, it's all about innovation versus Delta Airlines where I was before, which is driving efficiency. IBM is both and so really trying to think through how you run an organization that needs to run the financial systems of the world, that extraordinary reliability and drive roadmaps on things like quantum computing. At the same time be able to innovate iteratively with our customers and in open source communities. And kind of getting that balance right as a leader. It's, you're kind of doing what we did at Red Hat and what we did at Delta but kind of doing it together. And I think that stretched me as a leader and kind of taught me a lot about how we're thinking about continuing to evolve the culture at IBM. >> Now, of course, you do this leadership series, you put out things out on LinkedIn and words matter. And that's what I take away from a lot of the little short hits that you do, which I really appreciate. My stuff that I put Jim on LinkedIn, it's just, you got to invest like 15, 20 minutes. So I really appreciate the short hits. But you do that regular series and I'm curious do you do that to reach more IBM people? Are you an open source culture? You're trying to help others. And I'm curious as to sort of why that platform as opposed to sending around an internal thing an IBM. And I'm wondering if your principles and how they've evolved kind of post pandemic. >> Well, so first off, maybe that comes from Red Hat but I think IBM shares that it's if you have something really, really valuable, you want to share it. And look, when I am out talking to our customers, CEOs and some of the biggest companies in the world, honestly we rarely talk about technology 'cause other people are more detailed or deep in that. We primarily do talk about culture. And how you think about again, how do you take an organization that's been built to drive efficiency and scale on a global basis and make it able to be more nimble and more innovative? And so, and obviously, hopefully that's all with IBM and Red Hat technologies. But ultimately most of my conversations at a senior leadership level are about culture and leadership style to drive that. And so if that's valuable for CEOs of some of the world's largest companies, it's valuable to leaders kind of across all spectrums, all sizes. And so I think LinkedIn is a good way to kind of take some of those messages and make sure we were able to share those much more broadly. So certainly I spend more time talking about it inside of IBM and I spend a lot of time with our clients talking about it. But I think many of the lessons are applicable more broadly. And so why not share them? And LinkedIn's a great platform to be able to do that. >> How about you, how have your principles, how have your principles sort of changed and how have they evolved post pandemic? >> Well, I think a couple things, so one is the pandemic kind of forces you to get more precise about it. And what I mean by that is so much of leadership is about building credibility and trust and influence. And when you're seeing someone in 3D live, visual cues can kind of mean a lot in the water cooler conversations. Or who you run into in the hall can all help kind of create that level of trust. But you can't do that in 2D. As great as Zoom and other platforms are, you just can't quite do it. And so you have to be much more thoughtful in how you're creating opportunities to kind of create trust. So I'd say I've gotten more surgical in thinking about kind of what those elements of leadership are that do that. I think the second thing I've really learned at IBM again is back to this. We have to be able to do both, drive a future state in a known world as well as, I call it seek a future state in an unknown world. So driving a roadmap for quantum computing takes a number of different technologies coming together in one year, in two years, in five years. And that really does have to be pre-planned, which is very very different, that I'll call the iterative innovation approach that we use at Red Hat and open source communities and working with our clients. And we have to do both. And so as a leader you really have to understand the problem you're trying to solve and apply slightly different kind of leadership tactics against that. So when you're executing a known versus you are trying to create something in an unknown, does require different approaches and we have to do both in IBM. And I think that's the struggle a lot of companies have, every company needs to do that. If you're Delta Airlines, you don't want anybody innovating on the safety procedures before your flight. Yet you want a lot of innovation happening on your website and your mobile app. So how do you bring those together? And as a leader you can have a common set of values, but recognize you have to bring different tools to the table, depending on the context in which you're leading. And so I learned a lot more and gotten a lot crisper with that since being at IBM. >> Interesting, I mean, the pandemic, we all know it's been terrible but one of the upshots has been we had a glimpse of the future sort of shoved into a forced march of digital in 2020. And so obviously the next 10 years ain't going to be like the last 10 years. And one of the things we've been talking about is ecosystems and partnerships and the power and leverage that you can get from those. And Arvin has said, laid it out, we are returning to growth company. And so I wonder if you could talk to how partnerships and ecosystems play into that return to growth for IBM. >> Well, first off a key part of our strategy we talk about hybrid cloud and AI. It's not just about, hey, a platform that runs across all the different deployment models is convenient. It's also because innovation is coming from so many sources today. It's coming from a by-product from the web 2.0 companies, it's coming from open source. It's coming from an explosion of startups because of the amount of capital in venture capital. It's coming from traditional software companies. It's coming from our clients who are participating in open source. And so you have so many sources of innovation. Much of what we're doing is landing a platform that allows you to consume innovation safely and reliably from wherever it's coming from. So a core part of a platform by definition is the ecosystem around it. Having a platform that runs everywhere is great but if you don't have any applications that run on it who cares. And so ecosystem and partners have always been important to IBM, but for this strategy of this horizontal platform oriented strategy, it is critical to our success because much of the platform is the ecosystem. And so we've already talked about investing a billion dollars in that ecosystem to get ISBS and other partners on our platform, again, to ultimately kind of create that kind of horizontal layer where I can run anything that I want to on it and I can run that anywhere I want to. And so the two sides of that so all the innovation happening on top and making sure it runs everywhere is what really unlocks the freedom of choice. That reduces friction to innovation, which allows everybody in the ecosystem from our clients to ISVs to hardware partners to innovate more quickly. And that's what we really see as the benefit of our platform. It's not a horizontal stove pipe, come innovate in this one place. It's recognizing innovation's happening in so many places. And the only way we're going to be able to allow people to ingest that is to have a horizontal platform that everyone's participating in. Which is why partners and ecosystem are so important, not only to the success of our platform, but to the, I'd say, as a success of this next generation of computing. These horizontal fabrics that require an ecosystem kind of built around them. >> I think that's an important nuance that maybe people don't understand that yes, you have a platform. Obviously, OpenShift is a linchpin but it's an enabler for people to build other platforms. It's not the be all, end all platform that's sort of ultimately becomes another Island. And so that is a key part of the growth strategy and presumably expand your total available market. >> Oh, absolutely and so this is the key is we can talk about great IBM technologies. We're doing amazing things in security and AI and natural language processing and all these other areas. But the platform is a recognition that we're not going to do everything for everybody anymore. There's just the democratization of technology means that there is so many sources of innovation. And so first and foremost, we have to land a platform so you can consume anything from anywhere. And then of course, we'll drive our own pace of innovation both in hardware and software around that platform. But we are just a player on that platform, which we're really instantiating for really anybody to be able to reach customers or customers to reach sources of innovation. >> I know sustainability is a passion of yours, that it's obviously a hot topic right now. Oftentimes I joke tongue in cheek, Milton Friedman's rolling over in his grave with all this ESG talk. And I know you just posted recently on LinkedIn. And of course I went right down to Kavanaugh because my premise is not only is sustainability the right thing to do, it's also good business. But I wonder if you could give us your perspectives on this. >> Yeah, well, so first off, I mean, as a large global citizen as IDM I think this is an important role that we play and look, this isn't new to IBM. We came out with our first statements around environment in 1970. We put out our first report that's become our environmental impact report in 1990. We've been talking about climate since the early two thousands. So we've been involved in this for a long, long time because I do think it's important broadly. But there's also a specific role I think IBM can play beyond just our own individual actions to reduce our own footprint. Because of some of the extraordinary technologies that IBM has worked on in the years especially around semiconductors, we have just an amazing amount of technology, expertise, intellectual property around material science. And so just a couple of examples of those that relate to the environment. We in doing some other work realized that we had a way to be able to recycle PET plastic, which is a real problem because so many clothes and other things are now made out of PET. And it's really hard to recycle but a by-product of other work we're doing realized we could do that. And so we've formed a JV and we're funding that to not profit from it but to make sure that much more of the world's PET is recycled. Or the work that we're doing on batteries, where using ocean water instead of rare earth minerals to make batteries that not only are cleaner but last longer. Those are kind of byproducts of our kind of core business. The areas that we can see the benefits of innovation and material science being able to impact the world. I am hopeful that we'll be able to play a role with all of that in clear air carbon capture. I mean, that's still far further away but I do think IBM has a unique role that we can play because of our deep expertise in, again, material science, quantum computing, and modeling that put us in a unique position to have a major impact on the world. >> I wonder if we could talk a little bit about sort of IBM and its technology bets. And I've made the point a number of times in my writing that IBM's R and D spend has been about pretty constant, about $6 billion a year. But as IBM is jettison certain businesses got out of the x86 server business and it got out of the Foundry business with micro electronics. Now it's spinning out NewCo. What happens, the effect is that R and D as a percent of revenue goes way, way up. And my premise has always been that allows IBM to be more focused. So whether it's hybrid cloud, AI, quantum, Edge where are you placing your technology bets and maybe give us a sense of how you ranked them, some of your favorites. >> Yeah, so, look, that's exactly right. I mean, we are one of the few places that still invest a massive amount in R and D, especially in fundamental research. And so I'll kind of break down kind of the core areas. So first off, what I'd say is part of the hybrid cloud platform is recognizing we don't need to do everything for everyone. There is great open source technology. There are great other vendors that are doing things that we can enable our customers to access via the platform. So we're not trying to do everything for everybody in the way maybe 40 years ago we did. Because we understand there's so much great other technology out there that we're going to make sure that we expose. So we're investing in areas where we think we can uniquely add value that need to happen that others aren't doing. So AI, let me take that as an example. There's tremendous work happening in machine learning that we see every day because of Facebook and people trying to identify cats. And so I don't mean to trivialize it, there's a phenomenal work happening there. There's a lot less work being done on in AI on things where you have a lot less data. Or areas where you need explainable unbiased AI and the problem with machine learning engines is they're not auditable by definition. That's kind of a black box. And so we do a lot of work in areas like that. We do a lot of work in natural language processing. So we've had more of a as a kind of publicity kind of push the technology something called Project Debater. Where Watson can debate kind of champion debaters. That was mainly to make sure we can understand language in context, which allows for being able to better handle call centers in areas like that. Allows us to understand source code, which also is thinking about how you migrate applications from on-premise to the cloud. So we have a bunch of AI things that we are doing and is a core focus of what we're doing. But in specifically we're investing in areas like anti-biased auditability, natural language processing, areas where others aren't. Which is unique and we can bring those capabilities together with what others are doing. Security, obviously, a huge, huge area where we've invested in quantum safe encryption. We've invested in confidential computing. In other words, even in compute mode your data is encrypted. So you can keep your own keys, so not even we on our cloud can see your data. So a lot of investments happening around security and that's going to continue to be an area as we know that's going to get more and more and more scrutiny. So heavy, heavy focus there. Heavily focused on technologies that help you kind of modernize your infrastructure. So automation tools, integration tools and areas around that. So on the software side, those are kind of the main areas. When you look on the hardware side, obviously quantum is a significant area where we have a leadership position we continue to drive. But even semiconductor research in kind of process technology. So we announced something with Intel to work with them to bring some of our process technologies. As we kind of go from 7 nanometers to 5 to 2 to ultimately 1. That set of technologies is an area where we have a real leadership position and we'll continue to work with now Intel. We continue to work with others to drive that forward. So whole bunch of areas both on the hardware and the software side that we continue to make progress on. >> Yeah, the Silicon piece is interesting. And when we saw that Arvin as part of the Intel announcements that we thought originally, oh, maybe it's just about quantum but it's really much more than that. You mentioned the process. We dug into it and we realized, wow, we said Power10 actually has the highest performance. And because of the way in which you are not to geek out but you're you dis-aggregate memory. And Pat Gelsinger talked about system on a package. It turns out folks that IBM is actually the leader in that type of capability. And also the way that systems on chips use memory is very inefficient but IBM has actually invented some techniques to make that much more efficient. That's sort of the future of semiconductors. And the reason why we spend so much time thinking about it is because it's of national interest. There's a huge chip shortage, which doesn't look like it's going away anytime soon. So that's a critical part of national competitiveness and technology competitiveness going forward. >> Well, and the other interesting part about that, and you talked about Power10, going back to the hybrid cloud platform that we talked about. It's not just about running applications across wherever you want to run them. It also abstracts the chip architecture. So all of a sudden whether it's on the mainframe, it's on power, it's on ARM, it's on x86 and a whole bunch of other technologies that might get developed. We're making it much easier to kind of consume that specialization or variety at the hardware level. Recognize as Moore's law runs its course there's no longer this inevitability of everything's just going to go to x86. I think we are going to see more variety because we're going to have needs in the factory floor or in the automobile or with massive container as applications. Where you're going to need, whether it's kind of shared memory or different architectures all the way out to kind of low battery consumption. And that whole kind of breadth and our hybrid cloud platform enables that variability. And then IBM obviously has great technology to enable kind of building unique capability in hardware. So we kind of play on both sides of it, both kind of developing great technologies but then making it really easy for developers to consume and use those specialized features. >> I'm glad you brought that up, Jim. We mentioned Moore's law because we're all talking about how Moore's law is waning and it's quote, unquote dead. But the reality is, is the outcome of Moore's law which is the doubling of performance every two years is actually accelerating because of the common actuarial factors of CPU's and GPU's and NPUs and accelerators and DSPs. If you add all those up and actually, we're actually quadrupling every two years. So we have more processing power at much lower costs because of the volumes that you're seeing on things like ARM. So it's actually a very exciting time. We're entering an era that really, it's hard to get your mind around sometimes. So my question is how should we think about the future state of IBM? What does that look like? >> Well, so first off, the thing that I've found extraordinary about IBM kind of having been there now just a little over a year as an employee, a couple of years, I guess, when Red Hat was acquired. Is it is unique in fundamentally changing, again, who we are to kind of meet the needs going forward. And if you think about the needs in technology, recognize it was only like 20 years ago that Nicholas Carr wrote his famous article, IT Doesn't Matter, it's about back office. And in that world, IBM was really, really effective at building and running IT systems for our clients. We would come in, we would just kind of do everything for them. Today, technology is the forefront of developing or building competitive advantage for almost any business. And so nobody wants to kind of hand the keys, so we no longer are necessarily doing things for our clients. We're doing things with our clients. So there's a whole set of work, and we talked about how we engage with our clients, how we're much more collaborative and co-creative and our whole garage model to help build the capability to innovate with our clients is a key part of what we're doing. We'll continue to drive core technologies forward like quantum in key areas that require billions of dollars of research that frankly no one else is willing to do. And then we bring it all together with this hybrid cloud platform where we recognize it's no longer about us doing it all for you anymore. We're going to do the things where we can uniquely add value but then provide it all on a platform which allows you to consume from wherever, however you want to in a safe, secure, reliable way. So as we watch this next generation of computing unfold, cloud shouldn't end up being a bunch of vertical stove pipes. It truly needs to be kind of a horizontal platform that allows you to run any application anywhere in a safe, secure, reliable way and our architecture helps do that. So it's no longer able to do everything for you. It's we can do things uniquely on a platform and work with you to be able to help you kind of create your own pace of innovation, your own sources of advantage. And so that's the broad kind of direction that we're going, again, as enterprises move from consuming technology to be more efficient, to driving advantage with it. They need partners who understand that focused on their success and can innovate with them. And that's really where we're going with our technology, with our services capability and kind of our approach to how we work with our clients. >> Yeah, Jim, you just laid out the Holy grail of computing in the coming decade and with IBM's acquisition of Red Hat. And it really enables that vision and clearly the company is one of the top few that are in a position to do that. Jim Whitehurst, thanks so much for coming back on theCUBE. Really appreciate your time. >> Thanks for having me, it's great to chat. >> All right and thank you for watching. Keep it right there for more content of theCUBE's coverage of IBM Think 2021, the virtual edition, be right back. (gentle music)
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Tom Deane, Cloudera and Abhinav Joshi, Red Hat | KubeCon + CloudNativeCon NA 2020
from around the globe it's thecube with coverage of kubecon and cloudnativecon north america 2020 virtual brought to you by red hat the cloud native computing foundation and ecosystem partners hello and welcome back to the cube's coverage of kubecon plus cloud nativecon 2020 the virtual edition abinav joshi is here he's the senior product marketing manager for openshift at red hat and tom dean is the senior director of pro product management at cloudera gentlemen thanks for coming on thecube good to see you thank you very much for having us here hey guys i know you would be here it was great to have you and guys i know you're excited about the partnership and i definitely want to get in and talk about that but before we do i wonder if we could just set the tone you know what are you seeing in the market tom let's let's start with you i had a great deep dive a couple of weeks back with anupam singh and he brought me up to speed on what's new with cloudera but but one of the things we discussed was the accelerated importance of data putting data at the core of your digital business tom what are you seeing in the marketplace right now yeah absolutely so um overall we're still seeing a growing demand for uh storing and and processing massive massive amounts of data even in the past few months um where perhaps we see a little bit more variety is on by industry sector is on the propensity to adopt some of the latest and greatest uh technologies that are out there or that we we deliver to the market um so whether perhaps in the retail hospitality sector you may see a little bit more risk aversion around some of the latest tools then you you go to the healthcare industry as an example and you see we see a strong demand for our latest technologies uh with with everything that is that is going on um so overall um still a lot lots of demand around this space so abnormal i mean we just saw in ibm's earnings though the momentum of red hat you know growing in the mid teens and the explosion that we're seeing around containers and and obviously openshift is at the heart of that how the last nine months affected your customers priorities and what are you seeing yeah we've been a lot more busier like in the last few months because there's like a lot of use cases and if you look at the like a lot of the research and so on and we are seeing that from our customers as well that now the customers are actually speeding up the digital transformation right people say that okay kovac 19 has actually uh speeded up the digital transformation for a lot of our customers for the right reasons to be able to help the customers and so on so we are seeing a lot of attraction on like number of verticals and number of use cases beyond the traditional lab dev data analytics aiml messaging streaming edge and so on like lots of use cases in like a lot of different like industry verticals so there's a lot of momentum going on on openshift and the broader that portfolio as well yeah it's ironic the the timing of the pandemic but it sure underscores that this next 10 years is going to be a lot different than the last 10 years okay let's talk about some of the things that are new around data tom cloudera you guys have made a number of moves since acquiring hortonworks a little over two years ago what's new with uh with the cloudera data platform cdp sure so yes our latest therap uh platform is called cbp clara data platform last year we announced the public cloud version of cdp running on aws and then azure and what's new is just two months ago we announced the release of the version of this platform targeted at the data center and that's called cvp private cloud and really the focus of this platform this new version has been around solving some of the pain points that we see around agility or time to value and the ease of use of the platform and to give you some specific examples with our previous technology it could take a customer three months to provision a data warehouse if you include everything from obtaining the infrastructure to provisioning the warehouse loading the data setting security policies uh and fine-tuning the the software now with cbp private cloud we've been able to take those uh three months and turn it into three minutes so significant uh speed up in in that onboarding time and in time to valley and a key piece of this uh that enabled this this speed up was a revamping of the entire stack specifically the infrastructure and service services management layer and this is where the containerization of the platform comes in specifically kubernetes and red hat open shift that is a key piece of the puzzle that enables this uh order of magnitude uh improvement in time right uh now abner you think about uh red hat you think about cloudera of course hortonworks the stalwarts of of of open source you got kind of like birds of a feather how are red hat and cloudera partnering with each other you know what are the critical aspects of that relationship that people should be aware of yeah absolutely that's a very good question yeah so on the openshift side we've had a lot of momentum in the market and we have well over 2000 customers in terms of a lot of different verticals and the use cases that i talked about at the beginning of our conversation in terms of traditional and cloud native app dev databases data analytics like ai messaging and so on right and the value that you have with openshift and the containers kubernetes and devops like part of the solution being able to provide the agility flexibility scalability the cross cloud consistency like so all that that you see in a typical app dev world is directly applicable to fast track the data analytics and the ai projects as well and we've seen like a lot of customers and some of the ones that we can talk about in a public way like iix rbc bank hca healthcare boston children's bmw exxon mobil so all these organizations are being are able to leverage openshift to kind of speed up the ai projects and and help with the needs of the data engineers data scientists and uh and the app dev folks now from our perspective providing the best in class uh you say like experience for the customers at the platform level is key and we have to make sure that the tooling that the customers run on top of it uh gets the best in class the experience in terms of the day zero to day two uh management right and it's uh and and it's an ecosystem play for us and and and that's the way cloudera is the top isv in the space right when it comes to data analytics and ai and that was our key motivation to partner with cloudera in terms of bringing this joint solution to market and making sure that our customers are successful so the partnership is at all the different levels in the organization say both up and down as well as in the the engineering level the product management level the marketing level the sales level and at the support and services level as well so that way if you look at the customer journey in terms of selecting a solution uh putting it in place and then getting the value out of it so the partnership it actually spans across the entire spectrum yeah and tom you know i wonder if you could add anything there i mean it's not just about the public cloud with containers you're seeing obviously the acceleration of of cloud native principles on-prem in a hybrid you know across clouds it's sort of the linchpin containers really and kubernetes specifically linchpin to enable that what would you add to that discussion yeah as part of the partnership when we were looking for a vendor who could provide us that kubernetes layer we looked at our customer base and if you think about who clara is focused on we really go after that global the global 2000 firms out there these customers have very strict uh security requirements and they're often in these highly regulated uh industries and so when we looked at a customer's base uh we saw a lot of overlap and there was a natural good fit for us there but beyond that just our own technical evaluation of the solutions and also talking to uh to our own customers about who they do they see as a trusted platform that can provide enterprise grade uh features on on a kubernetes layer red hat had a clear leadership in in that front and that combined with our own uh long-standing relationship with our parent company ibm uh it made this partnership a natural good thing for us right and cloudera's always had a good relationship with ibm tom i want to stay with you if i can for a minute and talk about the specific joint solutions that you're providing with with red hat what are you guys bringing to customers in in terms of those solutions what's the business impact where's the value absolutely so the solution is called cbd or color data platform private cloud on red hat openshift and i'll describe three uh the three pillars that make up cbp uh first what we have is the five data analytic experiences and that is meant to cover the end to end data lifecycle in the first release we just came out two months ago we announced the availability of two of those five experiences we have data warehousing for bi analytics as well as machine learning and ai where we offer a collaborative data science data science tools for data scientists to come together do exploratory data analytics but also develop predictive models and push them to production going forward we'll be adding the remaining three uh experiences they include data engineering or transformations on uh on your data uh data flow for streaming analytics and ingest uh as well as operational database for uh real-time surveying of both structure and unstructured data so these five experiences have been re-banked right compared to our prior platform to target these specific use cases and simplify uh these data disciplines the second pillar that i'll talk about is the sdx or uh what what we call the shared data experience and what this is is the ability for these five experiences to have one global data set that they can all access with shared metadata security including fine grain permissions and a suite of governance tools that provide lineage provide auditing and business metadata so by having these shared data experiences our developers our users can build these multi-disciplinary workflows in a very straightforward way without having to create all this custom code and i can stitch you can stitch them together and the last pillar that i'll mention uh is the containerization of of the platform and because of containers because of kubernetes we're now able to offer that next level of agility isolation uh and infrastructure efficiency on the platform so give you a little bit more specific examples on the agility i mentioned going from three months to three minutes in terms of the speed up with i uh with uh containers we can now also give our users the ability to bring their own versions of their libraries and engines without colliding with another user who's sharing the platform that has been a big ask from our customers and last i'll mention infrastructure efficiency by re-architecting our services to running a microservices architecture we can now impact those servers in a much more efficient way we can also auto scale auto suspend bring all this as you mentioned bring all these cloud native concepts on premises and the end result of that is better infrastructure efficiency now our customers can do more with the same amount of hard work which overall uh reduces their their total spend on the solution so that's what we call cbp private cloud great thanks for that i mean wow we've seen really the evolution from the the wild west days of you know the early days of so-called big data ungoverned a lot of shadow data science uh maybe maybe not as efficient as as we'd like and but certainly today taking advantage of some of those capabilities dealing with the noisy neighbor problem enough i wonder if you could comment another question that i have is you know one of the things that jim whitehurst talked about when ibm acquired red hat was the scale that ibm could bring and what i always looked at in that context was ibm's deep expertise in vertical industries so i wonder what are some of the key industry verticals that you guys are targeting and succeeding in i mean yes there's the pandemic has some effects we talked about hospitality obviously airlines have to have to be careful and conserving cash but what are some of the interesting uh tailwinds that you're seeing by industry and some of the the more interesting and popular use cases yeah that's a very good question now in terms of the industry vertical so we are seeing the traction in like a number of verticals right and the top ones being the financial services like healthcare telco the automotive industry as well as the federal government are some of the key ones right and at the end of the day what what all the customers are looking at doing is be able to improve the experience of their customers with the digital services that they roll out right as part of the pandemic and so on as well and then being able to gain competitive edge right if you can have the services in your platform and make them kind of fresh and relevant and be able to update them on a regular basis that's kind of that's your differentiator these days right and then the next one is yeah if you do all this so you should be able to increase your revenue be able to save cost as well that's kind of a key one that you mentioned right that that a lot of the industries like the hospitality the airlines and so on are kind of working on saving cash right so if you can help them save the cost that's kind of key and then the last one is is being able to automate the business processes right because there's not like a lot of the manual processes so yeah if you can add in like a lot of automation that's all uh good for your business and then now if you look at the individual use cases in these different industry verticals what we're seeing that the use cases cannot vary from the industry to industry like if you look at the financial services the use cases like fraud detection being able to do the risk analysis and compliance being able to improve the customer support and so on are some of the key use cases the cyber security is coming up a lot as well because uh yeah nobody wants to be hacked and so and and so on yeah especially like in these times right and then moving on to healthcare and the life sciences right what we're seeing the use cases on being able to do the data-driven diagnostics and care and being able to do the discovery of drugs being able to say track kobit 19 and be able to tell that okay uh which of my like hospital is going to be full when and what kind of ppe am i going to need at my uh the the sites and so on so that way i can yeah and mobilize like as needed are some of the key ones that we are seeing on the healthcare side uh and then in terms of the automotive industry right that's where being able to speed up the autonomous driving initiatives uh being able to do uh the auto warranty pricing based on the history of the drivers and so on and then being able to save on the insurance cost is a big one that we are seeing as well for the insurance industries and then but more like manufacturing right being able to do the quality assurance uh at the shop floor being able to do the predictive maintenance on machinery and also be able to do the robotics process automation so like lots of use cases that customers are prioritizing but it's very verticalized it kind of varies from the vertical to a vertical but at the end of the day yeah it's all about like improving the customer experience the revenue saving cost and and being able to automate the business processes yeah that's great thank you for that i mean we we heard a lot about automation we were covering ansible fest i mean just think about fraud how much you know fraud detection has changed in the last 10 years it used to be you know so slow you'd have to go go through your financial statements to find fraud and now it's instantaneous cyber security is critical because the adversaries are very capable healthcare is a space where you know it's ripe for change and now of course with the pandemic things are changing very rapidly automotive another one an industry that really hasn't hadn't seen much disruption and now you're seeing with a number of things autonomous vehicles and you know basically software on wheels and insurance great example even manufacturing you're seeing you know a real sea change there so thank you for that description you know very often in the cube we like to look at joint engineering solutions that's a gauge of the substance of a partnership you know sometimes you see these barney deals you know there's a press release i love you you love me okay see you but but so i wonder if you guys could talk about specific engineering that you're doing tom maybe you could start sure yeah so on the on the engineering and product side um we've um for cbp private cloud we've we've changed our uh internal development and testing to run all on uh openshift uh internally uh and as part of that we we have a direct line to red hat engineering to help us solve any issues that that uh we run into so in the initial release we start with support of openshift43 we're just wrapping up uh testing of and we'll begin with openshift46 very soon on another aspect of their partnership is on being able to update our images to account for any security vulnerabilities that are coming up so with the guidance and help from red hat we've been we've standardized our docker images on ubi or the universal based image and that allows us to automatically get many of these security fixes uh into our into our software um the last point that i mentioned here is that it's not just about providing kubernetes uh red hat helps us with the end to end uh solution so there is also the for example bringing a docker registry into the picture or providing a secure vault for storing uh all the secrets so all these uh all these pieces combined make up the uh a strong complete solution actually the last thing i'll mention is is a support aspect which is critical to our customers in this model our customers can bring support tickets to cluberra but as soon as we determine that it may be an issue that uh related to red hat or openshift where we can use their help we have that direct line of communication uh and automated systems in the back end to resolve those support tickets uh quickly for our customers so those are some of the examples of what we're doing on the technical side great thank you uh enough we're out of time but i wonder if we could just close here i mean when we look at our survey data with our data partner etr we see containers container orchestration container management generally and again kubernetes specifically is the the number one area of investment for companies that has the most momentum in terms of where they're putting their efforts it's it's it's right up there and even ahead of ai and machine learning and even ahead of cloud which is obviously larger maybe more mature but i wonder if you can add anything and bring us home with this segment yeah absolutely and i think uh so uh one thing i want to add is like in terms of the engineering level right we also have like between cloudera and red hat the partnership and the sales and the go to market levels as well because once you build the uh the integration it yeah it has to be built out in the customer environments as well right so that's where we have the alignment um at the marketing level as well as the sales level so that way we can like jointly go in and do the customer workshops and make sure the solutions are getting deployed the right way right uh and also we have a partnership at the professional services level as well right where um the experts from both the orgs are kind of hand in hand to help the customers right and then at the end of the day if you need help with support and that's what tom talked about that we have the experts on the support side as well yeah and then so to wrap things up right uh so all the industry research and the customer conversation that we are having are kind of indicating that the organizations are actually increasing the focus on digital uh transformation with the data and ai being a key part of it and that's where this strategic partnership between cloudera and and red hat is going to play a big role to help our mutual customers uh through that our transition and be able to achieve the key goals that they set for their business great well guys thanks so much for taking us through the partnership and the integration work that you guys are doing with customers a great discussion really appreciate your time yeah thanks a lot dave really appreciate it really enjoyed the conversation all right keep it right there everybody you're watching thecube's coverage of cubecon plus cloud nativecon north america the virtual edition keep it right there we'll be right back
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CloudLive Great Cloud Debate with Corey Quinn and Stu Miniman
(upbeat music) >> Hello, and welcome to The Great Cloud Debate. I'm your moderator Rachel Dines. I'm joined by two debaters today Corey Quinn, Cloud Economist at the Duckbill Group and Stu Miniman, Senior Analyst and Host of theCube. Welcome Corey and Stu, this when you can say hello. >> Hey Rachel, great to talk to you. >> And it's better to talk to me. It's always a pleasure to talk to the fine folks over at CloudHealth at by VMware and less of the pleasure to talk to Stu. >> Smack talk is scheduled for later in the agenda gentlemen, so please keep it to a minimum now to keep us on schedule. So here's how today is going to work. I'm going to introduce a debate topic and assign Corey and Stu each to a side. Remember, their assignments are what I decide and they might not actually match their true feelings about a topic, and it definitely does not represent the feelings of their employer or my employer, importantly. Each debater is going to have two minutes to state their opening arguments, then we'll have rebuttals. And each round you the audience gets to vote of who you think is winning. And at the end of the debate, I'll announce the winner. The prize is bragging rights of course, but then also we're having each debater play to win lunch for their local hospital, which is really exciting. So Stu, which hospital are you playing for? >> Yeah, so Rachel, I'm choosing Brigham Women's Hospital. I get a little bit of a home vote for the Boston audience here and was actually my wife's first job out of school. >> Great hospital. Very, very good. All right, Corey, what about you? >> My neighbor winds up being as specialist in infectious diseases as a doctor, and that was always one of those weird things you learn over a cocktail party until this year became incredibly relevant. So I will absolutely be sending the lunch to his department. >> Wonderful! All right. Well, is everyone ready? Any last words? This is your moment for smack talk. >> I think I'll say that for once we can apply it to a specific technology area. Otherwise, it was insulting his appearance and that's too easy. >> All right, let's get going. The first topic is multicloud. Corey, you'll be arguing that companies are better off standardizing on a single cloud. While Stu, you're going to argue the companies are better off with a multicloud strategy. Corey, you're up first, two minutes on the clock and go. >> All right. As a general rule, picking a single provider and going all in leads to the better outcome. Otherwise, you're trying to build every workload to run seamlessly on other providers on a moment's notice. You don't ever actually do it and all you're giving up in return is the ability to leverage whatever your primary cloud provider is letting you build. Now you're suddenly trying to make two differently behaving load balancers work together in the same way, you're using terraform or as I like to call it multicloud formation in the worst of all possible ways. Because now you're having to only really build on one provider, but all the work you're putting in to make that scale to other providers, you might theoretically want to go to at some point, it slows you down, you're never going to be able to move as quickly trying to build for everyone as you are for one particular provider. And I don't care which provider you pick, you probably care which one you pick, I don't care which one. The point is, you've got to pick what's right for your business. And in almost every case, that means start on a single platform. And if you need to migrate down the road years from now, great, that means A you've survived that long, and B you now have the longevity as a business to understand what migrating looks like. Otherwise you're not able to take care of any of the higher level offerings these providers offer that are even slightly differentiated from each other. And even managed database services behave differently. You've got to become a master of all the different ways these things can fail and unfortunate and displeasing ways. It just leaves you in a position where you're not able to specialize, and of course, makes hiring that much harder. Stu, fight me! >> Tough words there. All right, Stu, your turn. Why are companies better off if they go with a multicloud strategy? Got two minutes? >> Yeah, well first of all Corey, I'm really glad that I didn't have to whip out the AWS guidelines, you were not sticking strictly to it and saying that you could not use the words multicloud, cross-cloud, any cloud or every cloud so thank you for saving me that argument. But I want you to kind of come into the real world a little bit. We want access to innovation, we want flexibility, and well, we used to say I would have loved to have a single provider, in the real world we understand that people end up using multiple solutions. If you look at the AI world today, there's not a provider that is a clear leader in every environment that I have. So there's a reason why I might want to use a lot of clouds. Most companies I talked to, Corey, they still have some of their own servers. They're working in a data center, we've seen huge explosion in the service provider world connecting to multiple clouds. So well, a couple of years ago, multicloud was a complete mess. Now, it's only a little bit of a mess, Corey. So absolutely, there's work that we need to do as an industry to make these solutions better. I've been pining for a couple years to say that multicloud needs to be stronger than the sum of its pieces. And we might not yet be there but limiting yourself to a single cloud is reducing your access to innovation, it's reducing your flexibility. And when you start looking at things like edge computing and AI, I'm going to need to access services from multiple providers. So single cloud is a lovely ideal, but in the real world, we understand that teams come with certain skill sets. We end up in many industries, we have mergers and acquisitions. And it's not as easy to just rip out all of your cloud, like you would have 20 years ago, if you said, "Oh, well, they have a phone system or a router "that didn't match what our corporate guidelines is." Cloud is what we're doing. There's lots of solutions out there. And therefore, multicloud is the reality today, and will be the reality going forward for many years to come. >> Strong words from you, Stu. Corey, you've got 60 seconds for rebuttal. I mostly agree with what you just said. I think that having different workloads in different clouds makes an awful lot of sense. Data gravity becomes a bit of a bear. But if you acquire a company that's running on a different cloud than the one that you've picked, you'd be ridiculous to view migrating as anything approaching a strategic priority. Now, this also gets into the question of what is cloud? Our G Suite stuff counts as cloud, but no one really views it in that way. Similarly, when you have an AI specific workload, that's great. As long as it isn't you seriously expensive to move data between providers. That workload doesn't need to live in the same place as your marketing website does. I think that the idea of having a specific cloud provider that you go all in on for every use case, well, at some point that leads to ridiculous things like pretending that Amazon WorkDocs has customers, it does not. But for things that matter to your business and looking at specific workloads, I think that you're going to find a primary provider with secondary workloads here and they're scattered elsewhere to be the strategy that people are getting at when they use the word multicloud badly. >> Time's up for you Corey, Stu we've got time for rebuttal and remember, for those of you in the audience, you can vote at any time and who you think is winning this round. Stu, 60 seconds for a rebuttal. >> Yeah, absolutely Corey. Look, you just gave the Andy Jassy of what multicloud should be 70 to 80% goes to a single provider. And it does make sense we know nobody ever said multicloud equals the same amount in multiple environments but you made a clear case as to why multicloud leveraging multi providers is likely what most companies are going to do. So thank you so much for making a clear case as to why multicloud not equal cloud, across multiple providers is the way to go. So thank you for conceding the victory. >> Last Words, Corey. >> If that's what you took from it Stu, I can't get any closer to it than you have. >> All right, let's move on to the next topic then. The next topic is serverless versus containers which technology is going to be used in, let's say, five to 10 years time? And as a reminder, I'm going to assign each of the debaters these topics, their assignments may or may not match their true feelings about this topic, and they definitely don't represent the topics of my employer, CloudHealth by VMware. Stu, you're going to argue for containers. Corey you're going to argue for start serverless. Stu, you're up first. Two minutes on the clock and go. >> All right, so with all respect to my friends in the serverless community, We need to have a reality check as to how things work. We all know that serverless is a ridiculous name because underneath we do need to worry about all of the infrastructure underneath. So containers today are the de facto building block for cloud native architectures, just as the VM defined the ecosystem for an entire generation of solutions. Containers are the way we build things today. It is the way Google has architected their entire solution and underneath it is often something that's used with serverless. So yes, if you're, building an Alexa service, serverless make what's good for you. But for the vast majority of solutions, I need to have flexibility, I need to understand how things work underneath it. We know in IT that it's great when things work, but we need to understand how to fix them when they break. So containerization gets us to that atomic level, really close to having the same thing as the application. And therefore, we saw the millions of users that deploy Docker, we saw the huge wave of container orchestration led by Kubernetes. And the entire ecosystem and millions of customers are now on board with this way of designing and architecting and breaking down the silos between the infrastructure world and the application developer world. So containers, here to stay growing fast. >> All right, Corey, what do you think? Why is serverless the future? >> I think that you're right in that containers are the way you get from where you were to something that runs effectively in a cloud environment. That is why Google is so strongly behind Kubernetes it helps get the entire industry to write code the way that Google might write code. And that's great. But if you're looking at effectively rewriting something from scratch, or building something that new, the idea of not having to think about infrastructure in the traditional sense of being able to just here, take this code and run it in a given provider that takes whatever it is that you need to do and could loose all these other services together, saves an awful lot of time. As that continues to move up the stack towards the idea of no code or low code. And suddenly, you're now able to build these applications in ways that require just a little bit of code that tie together everything else. We're closer than ever to that old trope of the only code you write is business logic. Serverless gives a much clearer shot of getting there, if you can divorce yourself from the past of legacy workloads. Legacy, of course meaning older than 18 months and makes money. >> Stu, do you have a rebuttal, 60 seconds? >> Yeah. So Corey, we've been talking about this Nirvana in many ways. It's the discussion that we had for paths for over a decade now. I want to be able to write my code once not worry about where it lives, and do all this. But sometimes, there's a reason why we keep trying the same thing over and over again, but never reaching it. So serverless is great for some application If you talked about, okay, if you're some brand new webby thing there and I don't want to have to do this team, that's awesome. I've talked to some wonderful people that don't know anything about coding that have built some cool stuff with serverless. But cool stuff isn't what most business runs on, and therefore containerization is, as you said, it's a bridge to where I need to go, it lives in these cloud environments, and it is the present and it is the future. >> Corey, your response. >> I agree that it's the present, I doubt that it's the future in quite the same way. Right now Kubernetes is really scratching a major itch, which is how all of these companies who are moving to public cloud still I can have their infrastructure teams be able to cosplay as cloud providers themselves. And over time, that becomes simpler and I think on some level, you might even see a convergence of things that are container workloads begin to look a lot more like serverless workloads. Remember, we're aiming at something that is five years away in the context of this question. I think that the serverless and container landscape will look very different. The serverless landscape will be bright and exciting and new, whereas unfortunately the container landscape is going to be represented by people like you Stu. >> Hoarse words from Corey. Stu, any last words or rebuttals? >> Yeah, and look Corey absolutely just like we don't really think about the underlying server or VM, we won't think about the containers you won't think about Kubernetes in the future, but, the question is, which technology will be used in five to 10 years, it'll still be there. It will be the fabric of our lives underneath there for containerization. So, that is what we were talking about. Serverless I think will be useful in pockets of places but will not be the predominant technology, five years from now. >> All right, tough to say who won that one? I'm glad I don't have to decide. I hope everyone out there is voting, last chance to vote on this question before we move on to the next. Next topic is cloud wars. I'm going to give a statement and then I'm going to assign each of you a pro or a con, Google will never be an actual contender in the cloud wars always a far third, we're going to have Corey arguing that Google is never going to be an actual contender. And Stu, you're going to argue that Google is eventually going to overtake the top two AWS and Azure. As a constant reminder, I'm assigning these topics, it's my decision and also they don't match the opinions of me, my employer, or likely Stu or Corey. This is all just for fun and games. But I really want to hear what everyone has to say. So Corey, you're up first two minutes. Why is Google never going to be an actual contender and go. >> The biggest problem Google has in the time of cloud is their ability to forecast longer term on anything that isn't their advertising business, and their ability to talk to human beings long enough to meet people where they are. We're replacing their entire culture is what it's going to take to succeed in the time of cloud and with respect, Thomas Kurian is a spectacular leader internally but look at where he's come from. He spent 22 years at Oracle and now has been transplanted into Google. If we take a look at Satya Nadella's cloud transformation at Microsoft, he was able to pull that off as an insider, after having known intimately every aspect of that company, and he grew organically with it and was perfectly positioned to make that change. You can't instill that kind of culture change by dropping someone externally, on top of an organization and expecting anything to go with this magic one day wake up and everything's going to work out super well. Google has a tremendous amount of strengths, and I don't see that providing common denominator cloud computing services to a number of workloads that from a Google perspective are horrifying, is necessarily in their wheelhouse. It feels like their entire focus on this is well, there's money over there. We should go get some of that too. It comes down to the traditional Google lack of focus. >> Stu, rebuttal? Why do you think Google has a shaft? >> Yeah, so first of all, Corey, I think we'd agree Google is a powerhouse in the world today. My background is networking, when they first came out with with Google Cloud, I said, Google has the best network, second to none in the world. They are ubiquitous today. If you talk about the impact they have on the world, Android phones, you mentioned Kubernetes, everybody uses G Suite maps, YouTube, and the like. That does not mean that they are necessarily going to become the clear leader in cloud but, Corey, they've got really, really smart people. If you're not familiar with that talk to them. They'll tell you how smart they are. And they have built phenomenal solutions, who's going to be able to solve, the challenge every day of, true distributed systems, that a global database that can handle the clock down to the atomic level, Google's the one that does that we've all read the white papers on that. They've set the tone for Hadoop, and various solutions that are all over the place, and their secret weapon is not the advertising, of course, that is a big concern for them, but is that if you talk about, the consumer adoption, everyone uses Google. My kids have all had Chromebooks growing up. It isn't their favorite thing, but they get, indoctrinated with Google technology. And as they go out and leverage technologies in the world, Google is one that is known. Google has the strength of technology and a lot of positioning and partnerships to move them forward. Everybody wants a strong ecosystem in cloud, we don't want a single provider. We already discussed this before, but just from a competitive nature standpoint, if there is a clear counterbalance to AWS, I would say that it is Google, not Microsoft, that is positioned to be that clear and opportune. >> Interesting, very interesting Stu. So your argument is the Gen Zers will of ultimately when they come of age become the big Google proponents. Some strong words that as well but they're the better foil to AWS, Corey rebuttal? >> I think that Stu is one t-shirt change away from a pitch perfect reenactment of Charlie Brown. In this case with Google playing the part of Lucy yanking the football away every time. We've seen it with inbox, Google Reader, Google Maps, API pricing, GKE's pricing for control plane. And when your argument comes down to a suddenly Google is going to change their entire nature and become something that it is as proven as constitutionally incapable of being, namely supporting something that its customers want that it doesn't itself enjoy working on. And to the exclusion of being able to get distracted and focused on other things. Even their own conferences called Next because Google is more interested in what they're shipping than what they're building, than what they're currently shipping. I think that it is a fantasy to pretend that that is somehow going to change without a complete cultural transformation, which again, I don't see the seeds being planted for. >> Some sick burns in there Stu, rebuttal? >> Yeah. So the final word that I'll give you on this is, one of the most important pieces of what we need today. And we need to tomorrow is our data. Now, there are some concerns when we talk about Google and data, but Google also has strong strength in data, understanding data, helping customers leverage data. So while I agree to your points about the cultural shift, they have the opportunity to take the services that they have, and enable customers to be able to take their data to move forward to the wonderful world of AI, cloud, edge computing, and all of those pieces and solve the solution with data. >> Strong words there. All right, that's a tough one. Again, I hope you're all out there voting for who you think won that round. Let's move on to the last round before we start hitting the lightning questions. I put a call out on several channels and social media for people to have questions that they want you to debate. And this one comes from Og-AWS Slack member, Angelo. Angelo asks, "What about IBM Cloud?" Stu you're pro, Corey you're con. Let's have Stu you're up first. The question is, what about IBM Cloud? >> All right, so great question, Angelo. I think when you look at the cloud providers, first of all, you have to understand that they're not all playing the same game. We talked about AWS and they are the elephant in the room that moves nimbly as a cheetah. Every other provider plays a little bit of a different game. Google has strength in data. Microsoft, of course, has their, business productivity applications. IBM has a strong legacy. Now, Corey is going to say that they are just legacy and you need to think about them but IBM has strong innovation. They are a player in really what we call chapter two of the cloud. So when we start talking about multicloud, when we start talking about living in many environments, IBM was the first one to partner with VMware for VMware cloud before the mega VMware AWS announcement, there was IBM up on stage and if I remember right, they actually have more VMware customers on IBM Cloud than they do in the AWS cloud. So over my shoulder here, there's of course, the Red Hat $34 billion to bet on that multicloud solution. So as we talk about containerization, and Kubernetes, Red Hat is strongly positioned in open-source, and flexibility. So you really need a company that understands both the infrastructure side and the application side. IBM has database, IBM has infrastructure, IBM has long been the leader in middleware, and therefore IBM has a real chance to be a strong player in this next generation of platforms. Doesn't mean that they're necessarily going to go attack Amazon, they're partnering across the board. So I think you will see a kinder, gentler IBM and they are leveraging open source and Red Hat and I think we've let the dogs out on the IBM solution. >> Indeed. >> So before Corey goes, I feel the need to remind everyone that the views expressed here are not the views of my employer nor myself, nor necessarily of Corey or Stu. I have Corey. >> I haven't even said anything yet. And you're disclaiming what I'm about to say. >> I'm just warning the audience, 'cause I can't wait to hear what you're going to say next. >> Sounds like I have to go for the high score. All right. IBM's best days are behind it. And that is pretty clear. They like to get angry when people talk about how making the jokes about a homogenous looking group of guys in blue suits as being all IBM has to offer. They say that hasn't been true since the '80s. But that was the last time people cared about IBM in any meaningful sense and no one has bothered to update the relevance since then. Now, credit where due, I am seeing an awful lot of promoted tweets from IBM into my timeline, all talking about how amazing their IBM blockchain technology is. And yes, that is absolutely the phrasing of someone who's about to turn it all around and win the game. I don't see it happening. >> Stu, rebuttal? >> Look, Corey, IBM was the company that brought us the UPC code. They understand Mac manufacturing and blockchain actually shows strong presence in supply chain management. So maybe you're not quite aware of some of the industries that IBM is an expert in. So that is one of the big strengths of IBM, they really understand verticals quite well. And, at the IBM things show, I saw a lot in the healthcare world, had very large customers that were leveraging those solutions. So while you might dismiss things when they say, Oh, well, one of the largest telecom providers in India are leveraging OpenStack and you kind of go with them, well, they've got 300 million customers, and they're thrilled with the solution that they're doing with IBM, so it is easy to scoff at them, but IBM is a reliable, trusted provider out there and still very strong financially and by the way, really excited with the new leadership in place there, Arvind Krishna knows product, Jim Whitehurst came from the Red Hat side. So don't be sleeping on IBM. >> Corey, any last words? >> I think that they're subject to massive disruption as soon as they release the AWS 400 mainframe in the cloud. And I think that before we, it's easy to forget this, but before Google was turning off Reader, IBM stopped making the model M buckling spring keyboards. Those things were masterpieces and that was one of the original disappointments that we learned that we can't fall in love with companies, because companies in turn will not love us back. IBM has demonstrated that. Lastly, I think I'm thrilled to be working with IBM is exactly the kind of statement one makes only at gunpoint. >> Hey, Corey, by the way, I think you're spending too much time looking at all titles of AWS services, 'cause you don't know the difference between your mainframe Z series and the AS/400 which of course is heavily pending. >> Also the i series. Oh yes. >> The i series. So you're conflating your system, which still do billions of dollars a year, by the way. >> Oh, absolutely. But that's not we're not seeing new banks launching and then building on top of IBM mainframe technology. I'm not disputing that mainframes were phenomenal. They were, I just don't see them as the future and I don't see a cloud story. >> Only a cloud live your mainframe related smack talk. That's the important thing that we're getting to here. All right, we move-- >> I'm hoping there's an announcement from CloudHealth by VMware that they also will now support mainframe analytics as well as traditional cloud. >> I'll look into that. >> Excellent. >> We're moving on to the lightning rounds. Each debater in this round is only going to get 60 seconds for their opening argument and then 30 seconds for a rebuttal. We're going to hit some really, really big important questions here like this first one, which is who deserves to sit on the Iron Throne at the end of "Game of Thrones?" I've been told that Corey has never seen this TV show so I'm very interested to hear him argue for Sansa. But let's Sansa Stark, let's hear Stu go first with his argument for Jon Snow. Stu one minute on the clock, go. >> All right audience let's hear it from the king of the north first of all. Nothing better than Jon Snow. He made the ultimate sacrifice. He killed his love to save Westeros from clear destruction because Khaleesi had gone mad. So Corey is going to say something like it's time for the women to do this but it was a woman she went mad. She started burning the place down and Jon Snow saved it so it only makes sense that he should have done it. Everyone knows it was a travesty that he was sent back to the Wall, and to just wander the wild. So absolutely Jon Snow vote for King of the North. >> Compelling arguments. Corey, why should Sansa Stark sit on the throne? Never having seen the show I've just heard bits and pieces about it and all involves things like bloody slaughters, for example, the AWS partner Expo right before the keynote is best known as AWS red wedding. We take a look at that across the board and not having seen it, I don't know the answer to this question, but how many of the folks who are in positions of power we're in fact mediocre white dudes and here we have Stu advocating for yet another one. Sure, this is a lightning round of a fun event but yes, we should continue to wind up selecting this mediocre white person has many parallels in terms of power, et cetera, politics, current tech industry as a whole. I think she's right we absolutely should give someone with a look like this a potential opportunity to see what they can do instead. >> Ouch, Stu 30 seconds rebuttal. >> Look, I would just give a call out to the women in the audience and say, don't you want Jon Snow to be king? >> I also think it's quite bold of Corey to say that he looks like Kit Harington. Corey, any last words? >> I think that it sad you think Stu was running for office at this point because he's become everyone's least favorite animal, a panda bear. >> Fire. All right, so on to the next question. This one also very important near and dear to my heart personally, is a hot dog a sandwich. Corey you'll be arguing no, Stu will be arguing yes. I must also add this important disclaimer that these assignments are made by me and might not reflect the actual views of the debaters here so Corey, you're up first. Why is a hot dog not a sandwich? >> Because you'll get punched in the face if you go to a deli of any renown and order a hot dog. That is not what they serve there. They wind up having these famous delicatessen in New York they have different sandwiches named after different celebrities. I shudder to think of the deadly insult that naming a hot dog after a celebrity would be to that not only celebrity in some cases also the hot dog too. If you take a look and you want to get sandwiches for lunch? Sure. What are we having catered for this event? Sandwiches. You show up and you see a hot dog, you're looking around the hot dog to find the rest of the sandwich. Now while it may check all of the boxes for a technical definition of what a sandwich is, as I'm sure Stu will boringly get into, it's not what people expect, there's a matter of checking the actual boxes, and then delivering what customers actually want. It's why you can let your product roadmap be guided by cart by customers or by Gartner but rarely both. >> Wow, that one hurts. Stu, why is the hot dog a sandwich? >> Yeah so like Corey, I'm sorry that you must not have done some decent traveling 'cause I'm glad you brought up the definition because I'm not going to bore you with yes, there's bread and there's meat and there's toppings and everything else like that but there are some phenomenal hot dogs out there. I traveled to Iceland a few years ago, and there's a little hot dog stand out there that's been there for over 40 or 50 years. And it's one of the top 10 culinary experience I put in. And I've been to Michelin star restaurants. You go to Chicago and any local will be absolutely have to try our creation. There are regional hot dogs. There are lots of solutions there and so yeah, of course you don't go to a deli. Of course if you're going to the deli for takeout and you're buying meats, they do sell hot dogs, Corey, it's just not the first thing that you're going to order on the menu. So I think you're underselling the hot dog. Whether you are a child and grew up and like eating nothing more than the mustard or ketchup, wherever you ate on it, or if you're a world traveler, and have tried some of the worst options out there. There are a lot of options for hot dogs so hot dog, sandwich, culinary delight. >> Stu, don't think we didn't hear that pun. I'm not sure if that counts for or against you, but Corey 30 seconds rebuttal. >> In the last question, you were agitating for putting a white guy back in power. Now you're sitting here arguing that, "Oh some of my best friend slash meals or hot dogs." Yeah, I think we see what you're putting down Stu and it's not pretty, it's really not pretty and I think people are just going to start having to ask some very pointed, delicate questions. >> Tough words to hear Stu. Close this out or rebuttal. >> I'm going to take the high road, Rachel and leave that where it stands. >> I think that is smart. All right, next question. Tabs versus spaces. Stu, you're going to argue for tabs, Corey, you're going to argue for spaces just to make this fun. Stu, 60 seconds on the clock, you're up first. Why are tabs the correct approach? >> First of all, my competitor here really isn't into pop culture. So he's probably not familiar with the epic Silicon Valley argument over this discussion. So, Corey, if you could explain the middle of algorithm, we will be quite impressed but since you don't, we'll just have to go with some of the technology first. Looks, developers, we want to make things simple on you. Tabs, they're faster to do they take up less memory. Yes, they aren't quite as particular as using spaces but absolutely, they get the job done and it is important to just, focus on productivity, I believe that the conversation as always, the less code you can write, the better and therefore, if you don't have to focus on exactly how many spaces and you can just simplify with the tabs, you're gona get close enough for most of the job. And it is easier to move forward and focus on the real work rather than some pedantic discussion as to whether one thing is slightly more efficient than the other. >> Great points Stu. Corey, why is your pedantic approach better? >> No one is suggesting you sit there and whack the spacebar four times or eight times you hit the Tab key, but your editor should be reasonably intelligent enough to expand that. At that point, you have now set up a precedent where in other cases, other parts of your codebase you're using spaces because everyone always does. And that winds up in turn, causing a weird dissonance you'll see a bunch of linters throwing issues if you use tabs as a direct result. Now the wrong answer is, of course, and I think Steve will agree with me both in the same line. No one is ever in favor of that. But I also want to argue with Stu over his argument about "Oh, it saves a little bit of space "is the reason one should go with tabs instead." Sorry, that argument said bye bye a long time ago, and that time was the introduction of JavaScript, where it takes many hundreds of Meg's of data to wind up building hello world. Yeah, at that point optimization around small character changes are completely irrelevant. >> Stu, rebuttal? >> Yeah, I didn't know that Corey did not try to defend that he had any idea what Silicon Valley was, or any of the references in there. So Rachel, we might have to avoid any other pop culture references. We know Corey just looks at very specific cloud services and can't have fun with some of the broader themes there. >> You're right my mistake Stu. Corey, any last words? >> It's been suggested that whole middle out seen on the whiteboard was came from a number of conversations I used to have with my co-workers as in people who were sitting in the room with me watching that episode said, Oh my God, I've been in the room while you had this debate with your friend and I will not name here because they at least still strive to remain employable. Yeah, it's, I understand the value in the picking these fights, we could have gone just as easily with vi versus Emacs, AWS versus Azure, or anything else that you really care to pick a fight with. But yeah, this is exactly the kind of pedantic fight that everyone loves to get involved with, which is why I walked a different path and pick other ridiculous arguments. >> Speaking of those ridiculous arguments that brings us to our last debate topic of the day, Corey you are probably best known for your strong feelings about the pronunciation of the acronym for Amazon Machine Image. I will not be saying how I think it is pronounced. We're going to have you argue each. Stu, you're going to argue that the acronym Amazon Machine Image should be pronounced to rhyme with butterfly. Corey, you'll be arguing that it rhymes with mommy. Stu, rhymes with butterfly. Let's hear it, 60 seconds on the clock. >> All right, well, Rachel, first of all, I wish I could go to the videotape because I have clear video evidence from a certain Corey Quinn many times arguing why AMI is the proper way to pronounce this, but it is one of these pedantic arguments, is it GIF or GIF? Sometimes you go back and you say, Okay, well, there's the way that the community did it. And the way that oh wait, the founder said it was a certain way. So the only argument against AMI, Jeff Barr, when he wrote about the history of all of the blogging that he's done from AWS said, I wish when I had launched the service that I pointed out the correct pronunciation, which I won't even deem to talk it because the community has agreed by and large that AMI is the proper way to pronounce it. And boy, the tech industry is rific on this kind of thing. Is it SQL and no SQL and you there's various ways that we butcher these constantly. So AMI, almost everyone agrees and the lead champion for this argument, of course is none other than Corey Quinn. >> Well, unfortunately today Corey needs to argue the opposite. So Corey, why does Amazon Machine Image when pronounce as an acronym rhyme with mommy? >> Because the people who built it at Amazon say that it is and an appeal to authorities generally correct when the folks built this. AWS has said repeatedly that they're willing to be misunderstood for long periods of time. And this is one of those areas in which they have been misunderstood by virtually the entire industry, but they are sticking to their guns and continuing to wind up advocating for AMI as the correct pronunciation. But I'll take it a step further. Let's take a look at the ecosystem companies. Whenever Erica Brescia, who is now the COO and GitHub, but before she wound up there, she was the founder of Bitnami. And whenever I call it Bitn AMI she looks like she is barely successfully restraining herself from punching me right in the mouth for that pronunciation of the company. Clearly, it's Bitnami named after the original source AMI, which is what the proper term pronunciation of the three letter acronym becomes. Fight me Stu. >> Interesting. Interesting argument, Stu 30 seconds, rebuttal. >> Oh, the only thing he can come up with is that, you take the word Bitnami and because it has that we know that things sound very different if you put a prefix or a suffix, if you talk to the Kubernetes founders, Kubernetes should be coop con but the people that run the conference, say it cube con so there are lots of debates between the people that create it and the community. I in general, I'm going to vote with the community most of the time. Corey, last words on this topic 'cause I know you have very strong feelings about it. >> I'm sorry, did Stu just say Kubernetes and its community as bastions of truth when it comes to pronouncing anything correctly? Half of that entire conference is correcting people's pronunciation of Kubernetes, Kubernetes, Kubernetes, Kubernetes and 15 other mispronunciations that they will of course yell at you for but somehow they're right on this one. All right. >> All right, everyone, I hope you've been voting all along for who you think is winning each round, 'cause this has been a tough call. But I would like to say that's a wrap for today. big thank you to our debaters. You've been very good sports, even when I've made you argue for against things that clearly are hurting you deep down inside, we're going to take a quick break and tally all the votes. And we're going to announce a winner up on the Zoom Q and A. So go to the top of your screen, Click on Zoom Q and A to join us and hear the winner announced and also get a couple minutes to chat live with Corey and Stu. Thanks again for attending this session. And thank you again, Corey and Stu. It's been The Great Cloud Debate. All right, so each round I will announce the winner and then we're going to announce the overall winner. Remember that Corey and Stu are playing not just for bragging rights and ownership of all of the internet for the next 24 hours, but also for lunch to be donated to their local hospital. Corey is having lunch donated to the California Pacific Medical Centre. And Stu is having lunch donated to Boston Medical Centre. All right, first up round one multicloud versus monocloud. Stu, you were arguing for multicloud, Corey, you were arguing for one cloud. Stu won that one by 64% of the vote. >> The vendor fix was in. >> Yeah, well, look, CloudHealth started all in AWS by supporting customers across those environments. So and Corey you basically conceded it because we said multicloud does not mean we evenly split things up. So you got to work on those two skills, buddy, 'cause, absolutely you just handed the victory my way. So thank you so much and thank you to the audience for understanding multicloud is where we are today, and unfortunately, it's where we're gonnao be in the future. So as a whole, we're going to try to make it better 'cause it is, as Corey and I both agree, a bit of a mess right now. >> Don't get too cocky. >> One of those days the world is going to catch up with me and realize that ad hominem is not a logical fallacy so much as it is an excellent debating skill. >> Well, yeah, I was going to say, Stu, don't get too cocky because round two serverless versus containers. Stu you argued for containers, Corey you argued for serverless. Corey you won that one with 65, 66 or most percent of the vote. >> You can't fight the future. >> Yeah, and as you know Rachel I'm a big fan of serverless. I've been to the serverless comp, I actually just published an excellent interview with Liberty Mutual and what they're doing with serverless. So love the future, it's got a lot of maturity to deliver on the promise that it has today but containers isn't going anyway or either so. >> So, you're not sad that you lost that one. Got it, good concession speech. Next one up was cloud wars specifically Google. is Google a real contender in the clouds? Stu, you were arguing yes they are. Corey, you were arguing no they aren't. Corey also won this round was 72% of the votes. >> Yeah, it's one of those things where at some point, it's sort of embarrassing if you miss a six inch pot. So it's nice that that didn't happen in this case. >> Yeah, so Corey, is this the last week that we have any competitors to AWS? Is that what we're saying? And we all accept our new overlords. Thank you so much, Corey. >> Well I hope not, my God, I don't know what to be an Amazonian monoculture anymore than I do anyone else. Competition makes all of us better. But again, we're seeing a lot of anti competitive behaviour. For example, took until this year for Microsoft to finally make calculator uninstallable and I trust concerned took a long time to work its way of course. >> Yeah, and Corey, I think everyone is listening to what you've been saying about what Google's doing with Google Meet and forcing that us when we make our pieces there. So definitely there's some things that Google culture, we'd love them to clean up. And that's one of the things that's really held back Google's enterprise budget is that advertised advertising driven culture. So we will see. We are working hand-- >> That was already opted out of Hangouts, how do we fix it? We call it something else that they haven't opted out of yet. >> Hey, but Corey, I know you're looking forward to at least two months of weekly Google live stuff starting this summer. So we'll have a lot of time to talk about google. >> Let's not kid ourselves they're going to cancel it halfway through. (Stu laughs) >> Boys, I thought we didn't have any more smack talk left in you but clearly you do. So, all right, moving on. Next slide. This is the last question that we did in the main part of the debate. IBM Cloud. What about IBM Cloud was the question, Stu, you were pro, Corey you were con. Corey, you won this one again with 62% of the vote and for the main. >> It wasn't just me, IBM Cloud also won. The problem is that competition was oxymoron of the day. >> I don't know Rachel, I thought this one had a real shot as to putting where IBM fits. I thought we had a good discussion there. It seemed like some of the early voting was going my way but it just went otherwise. >> It did. We had some last minute swings in these polls. They were going one direction they rapidly swung another it's a fickle crowd today. So right now we've got Corey with three points Stu with one but really the lightning round anyone's game. They got very close here. The next question, lightning round question one, was "Game of Thrones" who deserves to sit on the Iron Throne? Stu was arguing for Jon Snow, Corey was arguing for Sansa Stark also Corey has never seen Game of Thrones. This was shockingly close with Stu at 51.5% of the vote took the crown on this King of the North Stu. >> Well, I'm thrilled and excited that King of the North pulled things out because it would have been just a complete embarrassment if I lost to Corey on this question. >> It would. >> It was the right answer, and as you said, he had no idea what he's talking about, which, unfortunately is how he is on most of the rest of it. You just don't realize that he doesn't know what he's talking about. 'Cause he uses all those fast words and discussion points. >> Well, thank you for saying the quiet part out loud. Now, I am completely crestfallen as to the results of this question about a thing I've never seen and could not possibly care less about not going in my favor. I will someday managed to get over this. >> I'm glad you can really pull yourself together and keep on going with life, Corey it's inspiring. All right, next question. Was the lightning round question two is a hot dog a sandwich? Stu, you were arguing yes. Corey, you were arguing no. Corey landslide, you won this 75% of the vote. >> It all comes down to customer expectations. >> Yeah. >> Just disappointment. Disappointment. >> All right, next question tabs versus spaces. Another very close one. Stu, what were you arguing for Stu? >> I was voting tabs. >> Tabs, yeah. And Corey, you were arguing spaces. This did not turn out the way I expected. So Stu you lost this by slim margin Corey 53% of the vote. You won with spaces. >> Yep. And I use spaces in my day to day life. So that's a position I can actually believe in. >> See, I thought I was giving you the opposite point of view there. I mistook you for the correct answer, in my opinion, which is tabs. >> Well, it is funnier to stalk me on Twitter and look what I have to there than on GitHub where I just completely commit different kinds of atrocities. So I don't blame you. >> Caught that pun there. All right, the last rounds. Speaking of atrocities, AMI, Amazon Machine Image is it pronounced AMI or AMI? >> I better not have won this one. >> So Stu you were arguing that this is pronounced AMI rhymes with butterfly. Corey, you were arguing that it's pronounced AMI like mommy. Any guesses under who won this? >> It better be Stu. >> It was a 50, 50 split complete tie. So no points to anyone. >> For your complete and utterly failed on this because I should have won in a landslide. My entire argument was based on every discussion you've had on this. So, Corey I think they're just voting for you. So I'm really surprised-- >> I think at this point it shows I'm such a skilled debater that I could have also probably brought you to a standstill taking the position that gravity doesn't exist. >> You're a master of few things, Corey. Usually it's when you were dressed up nicely and I think they like the t-shirt. It's a nice t-shirt but not how we're usually hiding behind the attire. >> Truly >> Well. >> Clothes don't always make a demand. >> Gentlemen, I would like to say overall our winner today with five points is Corey. Congratulations, Corey. >> Thank you very much. It's always a pleasure to mop the floor with you Stu. >> Actually I was going to ask Stu to give the acceptance speech for you, Corey and, Corey, if you could give a few words of concession, >> Oh, that's a different direction. Stu, we'll start with you, I suppose. >> Yeah, well, thank you to the audience. Obviously, you voted for me without really understanding that I don't know what I'm talking about. I'm a loudmouth on Twitter. I just create a bunch of arguments out there. I'm influential for reasons I don't really understand. But once again, thank you for your votes so much. >> Yeah, it's always unfortunate to wind up losing a discussion with someone and you wouldn't consider it losing 'cause most of the time, my entire shtick is that I sit around and talk to people who know what they're talking about. And I look smart just by osmosis sitting next to them. Video has been rough on me. So I was sort of hoping that I'd be able to parlay that into something approaching a victory. But sadly, that hasn't worked out quite so well. This is just yet another production brought to you by theCube which shut down my original idea of calling it a bunch of squares. (Rachael laughs) >> All right, well, on that note, I would like to say thank you both Stu and Corey. I think we can close out officially the debate, but we can all stick around for a couple more minutes in case any fans have questions for either of them or want to get them-- >> Find us a real life? Yeah. >> Yeah, have a quick Zoom fight. So thanks, everyone, for attending. And thank you Stu, thank you Corey. This has been The Great Cloud Debate.
SUMMARY :
Cloud Economist at the Duckbill Group and less of the pleasure to talk to Stu. to vote of who you think is winning. for the Boston audience All right, Corey, what about you? the lunch to his department. This is your moment for smack talk. to a specific technology area. minutes on the clock and go. is the ability to leverage whatever All right, Stu, your turn. and saying that you that leads to ridiculous of you in the audience, is the way to go. to it than you have. each of the debaters these topics, and breaking down the silos of the only code you and it is the future. I agree that it's the present, I doubt Stu, any last words or rebuttals? about Kubernetes in the future, to assign each of you a pro or a con, and their ability to talk but is that if you talk about, to AWS, Corey rebuttal? that that is somehow going to change and solve the solution with data. that they want you to debate. the Red Hat $34 billion to bet So before Corey goes, I feel the need And you're disclaiming what you're going to say next. and no one has bothered to update So that is one of the and that was one of the and the AS/400 which of course Also the i series. So you're conflating your system, I'm not disputing that That's the important thing that they also will now to sit on the Iron Throne at So Corey is going to say something like We take a look at that across the board to say that he looks like Kit Harington. you think Stu was running and might not reflect the actual views of checking the actual boxes, Wow, that one hurts. I'm not going to bore you I'm not sure if that just going to start having Close this out or rebuttal. I'm going to take the high road, Rachel Stu, 60 seconds on the I believe that the conversation as always, Corey, why is your and that time was the any of the references in there. Corey, any last words? that everyone loves to get involved with, We're going to have you argue each. and large that AMI is the to argue the opposite. that it is and an appeal to Stu 30 seconds, rebuttal. I in general, I'm going to vote that they will of course yell at you for So go to the top of your screen, So and Corey you basically realize that ad hominem or most percent of the vote. Yeah, and as you know Rachel is Google a real contender in the clouds? So it's nice that that that we have any competitors to AWS? to be an Amazonian monoculture anymore And that's one of the things that they haven't opted out of yet. to at least two months they're going to cancel and for the main. The problem is that competition a real shot as to putting where IBM fits. of the vote took the crown that King of the North is on most of the rest of it. to the results of this Was the lightning round question two It all comes down to Stu, what were you arguing for Stu? margin Corey 53% of the vote. And I use spaces in my day to day life. I mistook you for the correct answer, to stalk me on Twitter All right, the last rounds. So Stu you were arguing that this So no points to anyone. and utterly failed on this to a standstill taking the position Usually it's when you to say overall our winner It's always a pleasure to mop the floor Stu, we'll start with you, I suppose. Yeah, well, thank you to the audience. to you by theCube which officially the debate, Find us a real life? And thank you Stu, thank you Corey.
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David La Rose, IBM Partner Ecosystem | IBM Think 2020
>>Yeah, >>from The Cube Studios in Palo Alto and Boston. It's the Cube covering IBM. Think brought to you by IBM. >>Hi, everybody. We're back. And you're watching the Cube's coverage of the IBM think digital event for 2020. This is that he's socially distant and socially responsible. You? My name is Dave a lot. David Larose. Who's the general manager of the IBM partner ecosystem? David, Good to see you. >>Likewise. Great to be here. >>Yes, it is. Your first year in running the the ecosystem. You probably don't expect to be managing through the this world crisis this novel Corona virus. But what was your first move? Your outreach to partners? How are you communicating to them? Maybe you could share with us how that's all going. >>It certainly wasn't in the break. So when I took this job, you're right. But, you know, we have a very strong relationship with with our partners, and what we have is we have a global advisory board. So about 25 or 30 of our largest customers across the world, we engaged with them very, very quickly. That's all of the CIOs presidents, vice presidents of styles, um, and we engage with them on a survey and said, How are you thinking about it's what are the what are your big concerns and, you know, not unusually. They came back with a couple of key things. Number one was, and their primary concern is how do they support their clients? That was probably number one on their list of things followed very closely. By enabling their firms that have a financial stability that was number two and then probably number three. I would say it was, you know, managing their work. But they're moving to a digital only type of environment, similar to what IBM has done ever kind of the three, the three big concerns. And then we spent some time talking to them about how we could help, then really deal with that and address some of those problems. And earlier this week, we we announced so therefore very key things around. How do we help them? One. How do we adapt our programs and our incentives and, uh, really looking at providing them with, you know, extension of things like loyalty program. So don't worry about you know, your ability to re validate and recertify. We gotta protect your loyalty for 2020. We added a lot of incentives in the hardware systems program in the second quarter, so we've increased by half a percent off their based incentive from the first dollar that a lot of areas around programs in terms. Then we sort of really tried to address that point of view around digital. Um, some companies were digitally ready, but there are many companies that weren't actually know a digital platform, but also we very quickly rolled out what we call it my digital marketing platform, where partners can come in and download content and curate content from IBM and then wrap their own campaigns around that and get that out and continue to engage with their clients and their partners. Um, and we funding all of that 100% from an IBM perspective on using our car marketing goals. We used to have a 50 50 funding model without with their partners. But in this particular scenario, that's a digital program that they're running with funding at 100%. And then we're also opening up to provide consultancy on how to optimize digital. So I think you know the thing that we've done here is just their programs in terms quickly, um, or money back into the into the program during the second quarter and protect the ability for our partners and then really trying to help them and enable them to get Teoh Digital our workforce and the digital program. >>Yeah, a couple things there. I mean, we were talking earlier to the the folks from IBM Global Finance, and that's a key part that you mentioned liquidity. You know, certainly these partners air obviously very much concerned about the uncertainty ahead. So having a partner like IBM that can, whether it's, you know, pass on, you know, lease terms, etcetera and provide that sort of blacking is this key? I think the other thing, too we've heard from a lot of executives, is you've got to stay close to your clients during we always do, but especially during times like this, And that's where partners are so crucial in IBM huge company, you know, massive direct sales force, but you can't cover everything. And so having the partner who's got intimate relationships, I mean, I was on a call earlier this week with a partner in Minneapolis I mean, he knows everybody in that region. And so you just that level of intimacy, I think becomes very, very important in times like this, doesn't it? >>Absolutely. And stay connected with with that. So we have about, you know, just a lot of, Ah, 21,000 active planners across across the world and staying close to the senior members of our largest partners is is really important to us. We had a We hosted a call earlier this week actually, with with their advisory council to test the programs that we've gotten in the market, Are they getting where they need, where they need the help the most? We take a lot of feedback with adjusted our programs. We're looking at this on a literally a daily basis right now on don't envisage that we would we would update pretty agile in terms of how we move that. But you know, to your point, having a partner network that we do have around by the hardware and software only on and is right, so learn what were wrong. You know what they're hearing from their pot from their clients and, you know, it allows us to more easily and quickly address needs across all of the IBM client set. >>So we interview a lot of partners, and, you know, when you talk to the familiar, they've got to make money. They have. The margin is very important to them, but it's almost it's table stakes. I mean, again, they can make money a lot of different ways. So what differentiates the suppliers is all these other things that you're talking about? Um, So I want to ask you when you came in to this this role, what you're doing priorities in terms of, you know, partner outreach, retaining that, that loyalty And what do you see changing a za result of this pandemic? >>Yeah, it's a great question. So look, four key priorities that we declared very early on and, by the way, you know, took over from John Touched at the time. And John has spent the last two years really transforming, um, your channel and the way we engage with channel. And so there was a lot of hard lifting that was already done, but it was sort of four. Things that we focused in on one was obviously, how do we continue? Accelerate IBM drive into the hybrid multi cloud market, particularly now with the integration of Red Hat into the organization. That's a very different, you know, sales motion that Wei had so accelerating that was one of the key parties, the 2nd 1 waas. And how do we continue to differentiate on the value and so ensuring that that our programs are staying up to speed and that they're being modernized? You know, the IBM possible program is being a program predominantly built on Recile over the last 10 years. Now the microchip that we're now talking about platforms not talking about consumption. And this week during Partner World, we're gonna talk about how we are going to evolve the part of the program to move into the rest partners who are building on platforms. And how about they're moving to consumption again, all around hybrid, multi, multi cloud. That's kind of the second thing skills, skills and expertise for out for a channel. We kind of have declared that we want our channel to be the most skilled channel in the industry, and it's really interesting, Dave, during this period of the pandemic, it's one of these times where we seem to have more recent and more time, and the partners have been giving us a lot of feedback to say during this time around. Workforce is home and is connected digitally. Why don't we? Wasn't IBM help with in enhancing the enablement programme certification? And so we're doing a lot around that. We see a Z great opportunity to CIO to really develop certifications and skills and expertise during this period. Um, and then the full thing is around winning in what we call out selective segments. And so we want our partners to operate across the IBM portfolio and across our client set. But where we really need the help and where we're putting the money in the programs is around the mid size organizations where they can bring the portfolio into places that it doesn't have this today, new clients or existing clients with with IBM. But the Jason like server was that kind of the four priorities and what we're seeing is and this situation that we're going through this pandemic going through, it's actually accelerating the areas around moving. My partner multi cloud cloud is becoming a differentiator for us and accelerating. I need to get a program that is relevant beyond just resell. But you know this, this concept of platforms and building. But as they build with their own light beyond platform and consumption, So I think it's it's actually accelerating what we've seen and have it moving forward. >>It's interesting what you're saying about resale. We've talked many, many years now on the Cube about the partner ecosystem. It really used to be about resale. You know, we have a majority of his box selling, and you could make a lot of money doing that, you know, a decade or two ago. But when Cloud came, partners really started to underst and that that there was a sea change happening in I T. For a while there, they thought, Wow, you know, this is really going to be challenging. Cloud's going to kill us. But what they realized after a while is with five exactly complex hybrid Cloud is it's not simple to cure and create a seamless experience across clouds on prime etcetera. So the huge opportunities open up, add value. So there's been a massive change in the mindset. Uh, and it sounds like particularly with digital, that the pandemic is going to accelerate that on. People are going to come out of this, um, almost having done some exercises, maybe in a little bit better shape than they came into it. You buy that premise? >>My question is no question about it. I mean, if you think about, you know, IBM portfolio for a minute. Um, and over the last really 6 to 9 months, we have containerized out our software portfolio. It's based on the, you know, the kubernetes container ization and an open ship. So we're ready from a portfolio perspective. And, you know, now we're catching up from a program perspective we're introducing this week and out in the world this concept of a build program and a service program, and so that is their will preserve and continue to evolve the cell program that resell. But you know this concept of the build program and the service programs and only extend the reach that we have to the data and the ecosystem that we're operating in new sets of partners. But is that one of transition, that business from recent consumption? We're going to support that. But then you have to your point around this whole digital everything from digital capabilities around, generating amount of opportunity and a little bit about that earlier with my program and the funding that we've got behind that the experience that we're we're offering as consultants, but also this concept of digital selling. You know, there's not all about partners are savvy around digital selling. So we've been doing that for many, many years. And, uh and so we're opening up digital selling Enablement sessions, Webinars consultancy and a bunch of assets that that IBM has and has invested in for many, many years and opening that up to you want to add channel? >>Yes, There was some great opportunities there for our partners. I mean, we The Cube has been covering the Red Hat Summit we had Jim Whitehurst on. We're in the process of scheduling Arvin so great to see, you know, kind of connect the dots between those franchises and identify the opportunities, and they're significant. I mean, Red Hat has a lot of momentum in the market. IBM has a huge presence, great opportunity to modernize applications, And then your point about the hardware side we just saw on IBM s latest earnings, released at the Fisher running in hardware right now on, uh, you know, obviously tailwind of the Z cycle, but other parts of the portfolio storage from 19%. So so some exciting times for partners, even though there's so much uncertainty in the market again, staying close to customers, you know, doing doing right by your employees, leveraging the IBM relationship where you're obviously providing a lot of backdrop in support. David, I wonder if you could just sort of wrap a bow around. You know, think 2020 is the virtual trucks are pulling away away from the virtual digital Mosconi. What's the take? Aways will give us the bumper sticker. >>Look, the bumper sticker is that it's never been a better time to be an idea. We've got a leading portfolio that is now ready for the new world. Will the consumption and the world building on um, we are, you know, we're modernizing our programs to ensure that you can make money here. There's a lot of money to be made as we as we get into this thing, this new world and we are behind you right now to support you financially and to get you develop digitally enabled guy. So never been a time to be an IBM partner right now. >>David. Great message. Thank you very much for coming on the Cube. And best of luck to you. Stay safe and ah, again, really appreciate your time. >>You too, Dave. Thanks very much. Bye. Site. >>You know, uh, and you're watching the Cube here at IBM? Think 2020. Our digital coverage. We'll be right back right after this short break. I'm Dave Volante, and you're watching the Cube? >>Yeah, yeah, yeah.
SUMMARY :
Think brought to you by IBM. Who's the general manager of the IBM Great to be here. How are you communicating to them? So don't worry about you know, whether it's, you know, pass on, you know, lease terms, etcetera and provide But you know, to your point, having a partner network that we do have around So we interview a lot of partners, and, you know, when you talk to the familiar, they've got to make money. on and, by the way, you know, took over from John Touched at the time. You know, we have a majority of his box selling, and you could make a lot of money doing that, Um, and over the last really 6 to 9 months, in the market again, staying close to customers, you know, doing doing right by your employees, There's a lot of money to be made as we as we get into this thing, this new world and we are And best of luck to you. You know, uh, and you're watching the Cube here at IBM?
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Jim Whitehurst, IBM | IBM Think 2020
[Music] from the cube studios in Palo Alto in Boston it's the cube covering the IBM thing brought to you by IBM hi I'm Stu Minuteman and this is the cubes coverage of IBM think 2020 the digital experience we talked to IBM executives their partners and their customers really thrilled to welcome back one of our cube alumni he has a new role since the last time he was on the cube at an event Jim white Hersey is now the president of IBM of course former CEO of Red Hat Jim pleasure to see you thanks so much for joining us hey it's great to be back hope you're doing well we are all trying to stay safe we miss seeing you and the team in person had a great digital event with the Red Hat team last week for summit of course I love you know either going to San Francisco or my backyard here in Boston from it but the thing we've been saying is we are now together even when we're apart so so many changes going on of course the global pandemic impacting everyone and the keynote you and the other IBM executive talking about you know really how it's helping IBM solidify what they believe their their decisions are and the technology direction so you know not a big vivid or change but Jim really want to get your feedback as to what advice you have for your customers where should they be investing worst they be slowing down how should they be thinking about their IP spend in today's world yeah so first off you know our hybrid cloud strategy which IBM and you know Red Hat now combined have been on for quite a long time has been all about flexibility resilience in an unknown future I think there were ever a time where having flexibility is important it's now so you know we have had clients saying hey I can use the cloud because all of a sudden with work at home I have huge increases in demand we find others that say wow I was using the cloud but I have a reduction in absolute demand so I want to pull those workloads back I'm gonna run premises say the marginal dollars so you have people kind of doing very different things than we thought we would be doing this month and going forward through the year and so having an architecture that's built for change it's certainly hybrid cloud architectures a part of that is I think being born out here as people are trying to understand new ways of working and certainly with IBM you know with some of the technologies we have around AI with helping various industries as they're all volumes increased as people are you know changing tickets or have more questions and our ability to help people scale up AI to address those so they're not trying to add people in a very difficult time you know just broadly you know our platforms run some of the most mission critical systems so keeping those systems up going and being resilient and with thousands of things CEOs and CIOs have to worry about you know knowing that you have a partner that's gonna keep your most important systems up and running are all things that we do every day and I think that value shows through even more right now yeah absolutely we've been hearing plenty of reports customers as they you know might have been thinking about how fast they move or how do they leverage cloud pods an important piece of what they need to be doing how does the combination of IBM and Red Hat differentiate from some of the other cloud offerings both cloud Nai across the industry today yeah sure well let me start off with cloud and then I'll talk about how AI complements and accelerates that that strategy so what's different about what IBM is doing is we have a vision that the best architecture is a choice full horizontal architecture where you can run your application anywhere but it's not just about running it now you know clouds are now becoming internet themselves a source of innovation via various api's with functionality behind those so in order to consume innovation learn ever it might come from you have to have flexibility to be able to move your work and so IBM is unique in saying hey we're not just a cloud provider we're actually providing a platform that runs across any of the major cloud providers and so we make that real by having the Red Hat platform OpenShift is a core part of what we do I think secondly as having the platform's great but it's all about having the platform so you can consume innovation to deliver business value and iBM has injected that with a whole series of capabilities whether that's being able to pull data and information out of you know existing workloads to the whole AI portfolio to help people really build a cognitive Enterprise and inject intelligence and AI into business processes so they can build you know a different intelligent kind of AI infused set of business processes or in our new businesses so the combination of a horizontal platform going to run anywhere with the ability whether it's with software or with services capability to add on top we can now help you leverage that we can help you take that Ferrari he built out for a drive to help you build new sources of value right one of the big discussion points this week has been edge computing a lot of discussion it's you know much earlier in the adoption and maturation of the ecosystems compared to what we were talking about for cloud so what's important with edge how our BM and RedHat going to extend what they've been doing to edge type of deployment well edge becomes an extension of the data center you know I think there was a period of time when we thought about computers as individual things and now we've had this idea of a data center is where computing happens and then they're you know thin devices like phones or whatever kind of out in the ether the tether back but you know as the Internet of Things continues to expand as the ability of computing technology towards the edge you know continues to grow with technology advances as 5g continues to expand out and you know abroad the ability to have use cases of computing at the edge just increase it increases so whether that's autonomous driving is an obvious major use case where they'll be massive amounts of you that you can't handle the latency of taking all that compute back to the data center to you know how you're making sure the paint finish that a factory is putting on a you know a piece of metal is being done you know correctly and optimally and environmentally efficiently all those things are far sensing at the edge and computing at the edge to be economic but here's the issue you don't want to have to develop a whole new infrastructure of software and you'll be able to do that a whole different set of developers with different skill sets and different rules on different infrastructure so what we're doing with this platform I talked about when I said this platform runs everywhere it's not just that it runs on the major public clouds or in your data center or bare metal or virtualized it runs all the way out to the edge now as soon as you get out to the edge you have a whole new set of management challenges because the types of applications are different how they temper hether back are different so we are working with large enterprises and with telcos not only on Bhaiji rollout but also edge infrastructure and the management tooling to be able to have an application run in the factory in an effective efficient safe way but then be able to be tethered all the way back to bringing data back for analytics in the data center so we've made some really exciting announcements on what we're doing with both industrial enterprise customers on edge computing and then how we're working with telcos to bring that to life because a lot of that obviously gets integrated back into the core telco infrastructure so this idea of edge computing and mobile edge computing are critical to the future of you know of computing but importantly they're critical to the future of how enterprises are going to operate that value going forward and so you know we've taken a real leadership position around that given that we have the core infrastructure but we also understand you know our clients and you know industry verticals and business processes so we could kind of come at it from both angles and really bring that value quickly to our all right and Jim what's the role of open source there you know one of the bigger points that was talked about at Summit last week was the I believe it's the advanced cluster management for cloud and it was some IBM people and some IBM technology came in to Red Hat and they've opened forced it we're just talking about edge computing and telecommunications service providers I remember talking with you and the team you know back at OpenStack summits with network functions fertilization open source was a big piece of it so where does open play in these ecosystem discussions well I should say this is one of the really exciting things about the the marriage of Red Hat and IBM is in Red Hat has deep capability and open source and delivering open source platforms and has been doing that for two decades now in IBM's always been a large participant in open source but has never really delivered platforms right it's always infused open source components in other kind of solutions and so by bringing the two together we can truly leverage the power of open source to help enterprises and telcos consume open source at scale to really be able to take advantage of this massive innovation is happening and so in particular you know we're seeing in telco exactly what we saw happened in the data center which is people did have these vertical stacks and the data center it was the unix's you know of the past where applications were tied to the operating systems tied to the hardware the same thing exists in telco infrastructure now and the telcos understand this idea the value of a horizontal platform so how do you have a commodity yet infrastructure underneath so hardware with an open source infrastructure so people can feel confident they're not locked into one vendor so also can feel confident that they can drive feature set that they need into these platforms and so the idea that open kind of almost think of it as Oh Linux but for data centers are now Linux for a 5g which is a combination of OpenStack on the virtualized side OpenShift brunetti ECM containers from a container of perspective be able to bring that to telcos and 5g rollouts allows them to separate the in functionality which sits in an application whether that's a virtualized application or a container and be able to confidently be able to run that on open infrastructure is something that open-source is doing today in telco and the same way it disrupted you know traditional data center infrastructure over the last couple decades and then IBM can both bring that with services capability as well as a whole set of value-added services kind of further up the stack which makes the open source infrastructure usable you know in a manageable cost-effective way today and so that's why we're so excited about especially what we could do with edge because we're bringing the same disruption we brought to the data center 20 years ago and we can do it in a safe secure reliable and manageable way all right well Jim thank you so much for the updates congratulations on all the accomplishments of the Red Hat team last week and the IBM team this week great thank you it's great to be back and I look forward to seeing you again live in the not-too-distant future absolutely until we're back in person the cube bringing you IBM think the digital experience on Stu minimun and as always thank you for watching the queue [Music] you
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IBM Think 2020 Keynote Analysis | IBM THINK 2020
from the cube studios in Palo Alto in Boston connecting with thought leaders all around the world this is a cube conversation hello everybody welcome to the cubes exclusive coverage of IBM thanks 2020 digital event experience the cube covering wall-to-wall we've got a number of interviews planned for you going deep my name is Dave Volante I'm here with stoom in ament's - how you doing doing great Dave so we're socially distant as you can see in the studio and mohab row everybody's you know six feet apart got our masks on took them off for this for this segment so Stu let's get into it so a very interesting time obviously for IBM Arvind Krishna doing the big keynote Jim Whitehurst new president so you got a new leadership a lot of talk about resilience agility and flexibility you know which is kind of interesting obviously a lot of their clients are thinking about kovat 19 in that context iBM is trying to provide solutions and capabilities we're going to get into it but really the linchpin of all this is open shift and RedHat and we're gonna talk about what that means for the vision that Arvind Krishna laid out and let's get into it your your thoughts on think 2020 yeah so Dave of course you know last week we had Red Hat summit so Red Hat is still Red Hat you and I had a nice discussion going into Red Hat summit yes thirty four billion dollar acquisition there now under IBM Jim white her slides over in that new role as president but you know one of the questions we've had fundamentally Dave is does an acquisition like this will it change IBM will it change the cloud landscape openshift and Red Hat are doing quite well we definitely have seen some some of the financials and every audience that hasn't seen your analysis segment of IBM should really go in and see that because the Red Hat of course is one of the bright spots in the financials they're you know good growth rate on the number of customers and what they're doing in cloud and underneath a lot of those announcements you dig down and oh yeah there's openshift and there's Red Hat Enterprise Linux rel so you know I long partner for decades between IBM and Red Hat but is you know how will the IBM scale really help the Red Hat pieces there's a number of announcements underneath you know not just you know how does the entire world work on you know Z and power and all of the IBM platforms but you know I believe it's arvind says one of the enduring platforms needs to be the hybrid cloud and you heard a Red Hat summit the entire week it was the open hybrid cloud was the discussion well yes so that actually is interesting you brought up Arvin's sort of pillars there were three enduring platforms that he cited then the fourth of course is I guess open hybrid cloud but the first was mainframes the second was and I'm not sure this is the right order the second was services and then the third was middleware so basically saying excuse me we have to win the day for the architecture of hybrid cloud what's that mean to you then I'd like to chime in yeah so so Dave first of all you know when when we did our analysis when IBM bought red Hatton says you know my TL DR was does this change the cloud landscape my answer is no if I'm a Amazon I'm not sitting there saying oh geez you know the combination of IBM and Red Hat well they're partners and they're they're gonna be involved in it does IBM have huge opportunities in hybrid cloud multi cloud and edge computing absolutely one of the questions is you know how will I be M services really be transformed you know Dave we've watched over the last decade some of the big service organizations have really shrunk down cloud changed the marginal economics you've done so much discussion of this over the last handful of years that you need to measure yourself against the hyper scalars you need to you know see where you can add value and the question is Dave you know when and where do we think of IBM in the new era well so coming back to sort of your point about RedHat and services is it about cloud is a developer's near-term I've said it's it's more about services than it is about cloud longer-term I think it is about cloud but but IBM's definition of cloud is maybe a little different than 10 hours but when Jeannie when on the roadshow - after the redhead acquisitions you said this is gonna be a creative - free cash flow within one year and the reason why I always believe that is because they were gonna plug Red Hat and we've talked about this an open shift right into their services business and start modernizing applications right away they've actually achieved that so I think they had pretty good visibility and that was kind of a mandate so IBM's huge services organization is in a good position to do that they've got deep industry expertise we heard Arvind Krishna on his keynote talking about that Jim Whitehurst talking more about services you really didn't hear Jim you know previously in his previous roles talk a lot about services other than as part of the ecosystem so it's an interesting balancing act that that iBM has to do the real thing I want to dig into Stu is winning the day with the with with the architecture of hybrid cloud so let's start with with cloud talk about how IBM defines cloud IBM on its earning earnings call we talked about this on our Red Hat Summit analysis the cloud was you know 23 billion you know growing it whatever 20 20 plus percent when my eyes have been bleeding reading IBM financial statements in ten case for the last couple of weeks but when you go in there and you look at what's in that cloud and I shared this on my braking analysis this week a very small portion of that cloud revenue that what last year 21 billion very small portion is actually what they call cloud cloud and cognitive software it's only about 20 percent of the pie it's really services it's about 2/3 services so that is a bit of a concern but at the same time it's their greatest opportunity because they have such depth and services if IBM can increase the percentage of its business that's coming from higher margin software a business which was really the strategy go back 20 years ago it's just as services became this so big it's so pervasive that that software percentage you know maybe it grew maybe it didn't but but that's IBM's opportunities to really drive that that that software based revenues so let's talk about what that looks like how does OpenShift play in that IBM definition of cloud which includes on Prem the IBM public law everybody else's public cloud multi-cloud and the edge yeah well first of all Dave right the question is where does IBM technologies where do they live so you know look even before the Red Hat piece if we looked at IBM systems there's a number of times that you're seeing IBM software living on various public clouds and that it's goodness you know one of the things we've talked about for a number of years is you know how can you become more of a software company how can you move to more of the you know cloud consumption models you go in more op X and capex so IBM had done some of that and Red Hat should be able to help supercharge that when we look at some of the announcements the one that of course caught my other most Dave is the you know IBM cloud satellite would would say the shorthand of it it's IBM's version of outposts and underneath that what is it oh it's open shift underneath there and you know how can I take those pieces and we know open ship can live across you know almost any of the clouds and you know cannot live on the IB cloud IBM cloud absolutely can it be open ship be in the data center and on virtualization whether it be open source or VMware absolutely so satellite being a fundamental component underneath of open ship makes a lot of sense and of course Linux yeah Linux underneath if you look at the the one that we've heard IBM talking about for a while now is cloud packs is really how are they helping customers simplify and build that cloud native stack you start with Red Hat Enterprise Linux you put openshift on top of that and then cloud packs are that simple toolset for whether you're doing data or AI or integration that middleware that you talked about in the past iBM has way the ways that they've done middleware for decades and now they have the wonderful open source to help enable that yeah I mean WebSphere bluemix IBM cloud now but but OpenShift is really that pass layer that that IBM had coveted right and I was talking to some of IBM's partners getting ready for this event and they say if you dig through the 10k cloud packs is one of those that you know there are thousands of customers that are using this so it's good traction not just hey we have this cloud stuff and it's wonderful and we took all of these acquisitions everything from SoftLayer to software pieces but you know cloud packs is you know a nice starter for companies to help really move forward on some of their cloud native application journey yes so what whatever we talked about this past week in the braking analysis and certainly David floor has been on this as well as this notion of being able to run a Red Hat based let's call it a stack everywhere and Jim White has talked about that essentially really whether it's on Prem at the edge in the clouds but the key there stew is being able to do so natively so every layer of you know it began call it the stack IT services the data plane the control plane the management plane all the planes being able to the networking the transport etc being natively able to run wherever it is so that you can take fine-grain advantage and leverage the primitives on respective clouds the advantage that IBM has in my view would love your thoughts on this is that Red Hat based platforms it's open source and so I mean it's somebody gonna trust Amazon to be the the cloud native anybody's cloud yeah you know solution well if you're part of the Amazon stack I mean I Amazon frankly an Oracle have similar kind of mindset you know redstack Amazon stack make it all homogeneous and it'll run just fine IBM's coming at it from an open source perspective so they they in some ways will have more credibility but it's gonna take a lot of investment to really Shepherd those standards they're gonna have to put a lot of commitments in committers and they're gonna have to incent people to actually adhere to those standards yeah I mean David's the idea of pass the platform as a service that we've been chasing as an industry for more than a decade what's interesting if you listen to IBM what's underneath this well it's you know taking advantage of the container based architecture with kubernetes underneath so can I run kubernetes anywhere yeah pretty much every cloud has their own service OpenShift can live everywhere the question is what David floors rightly putting out okay if I bake to a single type of solution can i really take advantage of the native offerings so the discussion we've always had for a long time as dua virtualize something in which case I'm really abstract away I get to you know I can't take advantage of the all various pieces do I do multi cloud in which case I have some least common denominator way of looking at cloud because I what I want to be able to do is get the value in differentiation out of each cloud I use but not be stuck on any cloud and yes Dave Red Hat with openshift and based with kubernetes and the open source community is definitely a leading way to do that what you worry about is saying okay how much is this stuck on containerization will it be able to take advantage of things like serverless you talk to IBM and say okay underneath it's going to have all this wonderful components Dave when I talked to Andy Jesse and he says if I was rebuilding AWS today it would all be service underneath so what is that underlying construct you know is it flexible and can it be updated Red Hat and IBM are going to bridge between the container world and the serverless world with things like a native but absolutely we are not yet at the Nirvana that developers can just build their apps and know that it can run anywhere and take advantage of anything so you know some things we know we need to keep working so a couple other things there so Jim Weider has talked about ingesting innovation that the nature of innovation is such that it comes from a lot of different places open source obviously is a you know fundamental you know component of that he talked about the telco edge he gave an example of Vodafone Arvind Krishna talked about anthem kind of redefining healthcare post kovat so you're seeing some examples of course that's good that IBM puts forth some really you know proof points it's not just you know slide where which is good I think the the interesting thing you know you can't just put you know containers out there and expect the innovation to find its way into those containers it's gonna take a lot of work to make sure that as those different layers of the stack that we were talking about before are actually going to come to fruition so there's there's the there's some other announcements in this regard to these Edgecumbe edge computing application manager let's say the telco edge a lot of automation focused you mentioned IBM satellite there's the financial services cloud so we're seeing IBM actually you know sprinkle around some investments there as I said in my breaking in houses I'd like to see them dial up those investments a little bit more maybe dial down the return of cash at least for the next several years to shareholders yeah I mean Dave the concern you would talk to most customers and you say well if you try to even optimize your own data center and turn it into a cloud how can you take advantage of the innovation that the Amazon Microsoft Google's and IBM's are Tait are putting out there in the world you want to be able to plug into that you want to be able to leverage those those new services so that is where it's definitely a shift Dave you think about IBM over a hundred years usually they're talking about their patent portfolio I I think they've actually opened up a lot of their patent portfolio to help attack you know the kovat 19 so it is definitely a very different message and tenor that I hear under Arvind Krishna you know in very early days than what I was used to for the last decade or two from IBM yeah well at the risk of being a little bit repetitive one of the things that I talked about in my breaking the analysis I highlighted that arvind said he wants to lead with a technical story which I really like Arvin's a technical visionary his predecessors his three predecessors were not considered technical visionaries and so I think that's one of the things that's been lacking inside of IBM I think it's one of the reason why why Services has been such a dominant component so look Lou Gerstner too hard to argue with the performance of the company but when he made the decision and IBM made the decision to go all-in on services something's got to give and what gave and I've said this many many times in the cube was was product leadership so I'd like to see IBM get back to that product leadership and I think Red Hat gives them an opportunity to do that obviously Red Hat Linux you know open source is a leader the leader and this is jump all as we've talked about many times in this multi hybrid cloud edge you know throwing all the buzzwords but there's some interesting horses on the track you got you got VMware we throw in AWS just because they're there you can talk about cloud without talking about AWS certainly Microsoft has designs there Cisco Google everybody wants a piece of that pie and I would say that you know Red Hat with with with OpenShift is in a good position if in fact they can make the investments necessary to build out those stacks yeah it's funny Dave because IBM for the history the size that they are often can get overlooked you talk about you know we've probably spent more air time talking about the VMware Amazon relationship than almost any in the last few years well we forget we were sitting at vmworld and two months before VMware announced the Amazon partnership who was it that was up on the main stage with Pat Gelson der it was IBM because IBM was the first partner I I believe that I saw numbers that IBM was saying that they have more hosted VMware environments than anyone out there I'd love to see the data on it to understand there because you know IBM plays in so many different places they just often are not you know aggregated and counted together you know when you get outside of some of the you know middleware mainframe some of the pieces that you talked about earlier Dave so IBM does have a strong position they just haven't been the front center leader too often but they have a broad portfolio and very much services led so they they kind of get forgotten you know off on the sides so IBM stated strategy is to bring those mission critical workloads into the cloud they've said that 80% of the workloads remain on Prem only 20% have been been clarified you know when you when you peel the onions on that there's just is so much growth and cloud native workloads so you know there's there is a somewhat of a so what in that but I will say this so where are the mission critical workloads where do they live today they live on Prem we can but but but whose stacks are running those it's IBM and it's Oracle and and David floor has done some research that suggests that if you're gonna put stuff into the cloud that's mission-critical you're probably better off staying with those those stacks that are going to allow you to a lower risk move not have to necessarily rip and replace and so you know migrating mission-critical Oracle database into AWS or db2 you know infrastructure into AWS is is gonna be much more challenging than than going same-same into the IBM cloud or the respective Oracle cloud so I guess my question to you Stu is why do people want to move those mission critical workloads into the cloud do they well first of all it's unlocking innovation that you talked about Dave so you know we've looked at from a VMware standpoint versus a red hat standpoint if you talk about building new apps doing containerization having that cloud native mindset do I have a bimodal configuration not so not a word that we talk about as much anymore because I want to be able to modernize it modernizing those applications doing any of those migrations we know or super challenging you know heck David Flair has talked about it for a long long time so you bring up some great points here that you know Microsoft might be the best at meeting customers where they are and giving people a lot of options IBM lines up in many ways in a similar ways my biggest critique about VMware is they don't have tight ties to the application it's mostly you know virtual eyes it or now we have some cloud native pieces but other than the pivotal group they didn't do a lot with modernization on applications IBM with their middleware history Red Hat with everything that they do with the developer communities are well positioned to help customers along those digital journeys and going through those transformations so it's you know applications need to be updated you know if anybody that's used applications that are long in the tooth know that they don't have the features that I want they don't react the way they want heck today Dave everybody needs to be able to access things where they are on the go you know it's not a discussion anymore about you know virtual desktop it's about you know work anywhere have access to the data where I need it and be much more flexible and agile and those are some of the configurations that you know iBM has history and their services arm can help customers move along those journeys yeah so you know I think one of the big challenges iBM has it's got a it's got a its fingers in a lot of pies AI you know they talk a lot about blockchain they're about quantum quantum is not gonna be here for a while it's very cool we have an interview coming up with with Jamie Thomas and you know she's all over the quantum we've talked to her in the past about it but I think you know if you think about IBM's business in terms of services and product you know it's whatever it is a 75 you know billion dollar organization 2/3 or and maybe not quite 2/3 maybe 60 Plus percent is services services are not an R&D intensive business you look at a company like Accenture Stu I think Accenture spent last year 800 million on R&D they're a forty five billion dollar forty six billion dollar company so if you really isolate the IBM you know company to two products whatever its call it 25 30 billion they spend a large portion of that that revenue on R&D to get to the six billion but my argument is it's it's not enough to really drive the type of innovation that they need just another again Accenture data point because they're kind of a gold standard along with IBM you.why and others and and a couple of others in services they return seventy six percent of their cash to shareholders iBM has returned consistently 50 to 60 percent to its shareholders so arvind stated he wants to return IBM to growth you know every every IBM CEO says that Ginni I used to talk about has to shrink to grow as I said unfortunately so you should run out of time and now it's up to Arvind to show that but to me growth has got to come from fueling Rd whether it's organic or inorganic I'd like to see you know organic as the real driver for obvious reasons and I don't think just open source in and of itself obviously is going to attract that it'll attract innovation but whether or not IBM will be able to harness it to his advantage is the real challenge unless they're making huge huge commitments to that open source and in a microcosm you know it's a kind of a proxy we saw what happened to Hortonworks and cloud era because they had to had to fund that open source commitment you know IBM we're talking about much much with the hybrid multi-cloud edge much much bigger opportunity but but requirement and we haven't even talked about AI you know bringing you know I think I think you have a quote on you know data is the fuel what was that quote yes it was Jim Whitehurst he said data is the fuel cloud is the platform AI is accelerant and then security my paraphrase is the mission control there so sounds a lot like your innovation cocktail that you've been talking about for the last year or so Dave but iCloud but so okay but AI is the accelerant and I agree by the way applying AI to all this data that we have you know over the years automating it and scaling it in the cloud it's critical and if IBM wants to define cloud as you know the cloud experience anywhere I'm fine with that I'm not a fan of the way they break down their cloud business I think it's bogus and I've called them on that but okay fine so maybe we'll get by that I'll get over it but but but really that is the opportunity it's just it's got to be funded yeah no Dave absolutely iBM has a lot of really good assets there they've got strong leadership as you said can Arvind do another Satya Nadella transformation there's the culture there's the people and there's the product so you know IBM you know absolutely has a lot of great resources and you know smart people and some really good products out there as well as really good ecosystem partnerships it's you know Amazon is not the enemy to IBM Microsoft is a partner for what they're doing and even Google is somebody that they can work with so you know I always say back in the ten years I've been working for you Dave I think the first time I heard the word coopertition I thought it was like an IBM trademark name because they were the ones that really you know lead as to have a broad portfolio and work with everybody in the ecosystem even though you don't necessarily agree or partner on every piece of what you're doing so in a multi cloud AI you know open ecosystem IBM's got a real shot yeah I mean a Satya Nadella like move would be awesome of course Satya had a much much larger you know of cash hoard to play with but but I guess the similarity stew are you you're notwithstanding that now we have three prominent companies run by Indian native born leaders which is pretty astounding when you think about it but notwithstanding that there are some similarities just in terms of culture and emphasis and getting back to sort of the the technical roots the technical visionaries so I'm encouraged but I'm watching very closely stew as I'm sure you are kind of where those investments go how how it plays in the marketplace but but I think you're right I think people underestimate IBM and and but the combination of IBM Red Hat could be very dangerous yeah Dave how many times do we write the article you know has the sleeping giant of IBM been awoken so I think it's a different era now and absolutely there's IBM has the right cards to be able to play at some of these new tables and it's a different IBM for a different era somebody said to me the other day that and probably you've probably heard this you have to but it was first I heard of it is that within five years IBM had better be a division of Red Hat versus the other way around so all right Stu thanks for for helping to set up the IBM think 2020 digital event experience what coming at you wall-to-wall coverage I think we've got over 40 interviews lined up Stu you you have been doing a great job both last week with the Red Hat summit and helping out with IBM thanks so thanks for that Dave no no rainy week at the new Moscone like we had last year a really good content from the comfort of our remote settings yeah so keep it right there buddy this is Dave a lot a force to Minutemen go to Silicon angle calm you'll check out all the news the the cube net we'll have all of our videos will be running wall-to-wall wiki bong calm has some some of the research action this day Volante force too many we'll be right back right after this short break [Music]
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Mike Ferris, Red Hat | IBM Think 2020
>>From the cube studios in Palo Alto in Boston. It's the cube covering IBM thing brought to you by IBM. >>Welcome back. I'm Stu Miniman and we're here with the cubes coverage of IBM. Thank you. 2020. The global experience reaching all of the participants of the event where they are. I'm happy to welcome back one of our cube alumni, Mike Farris, who is the vice president of corporate development and strategy at red hat. Mike, it's great to see you. Likewise too. Happy to be here. All right, so what Mike, uh, you know, lots of things to talk about a few weeks back. Uh, of course the management changes happened. Uh, we're fresh off of a red hat summit. Uh, I, I had a pleasure really talking to a lot of your peers, uh, your new boss, uh, and uh, you know, many of the customers. Uh, but for our, I think audience, right? Bring us up to speed. Uh, you know, back in 2019, it, uh, the, the largest software acquisition ever, uh, completed with IBM buying red hat and there've been some management changes, uh, some people, uh, switching roles. >>And, and you've got a new title, so, uh, bring her audience speed. Sure. Absolutely. So it's, it's been an exciting several, several months as we've gone through this. Of course. Um, we knew things were going to happen, things were announced clearly with Jenny's retirement quite a while ago. Um, but certainly, you know, the Arvin announcement and then as well as having both Jim Whitehurst become president. Okay. Oh, Cormier becoming CEO of red hat. You know, it's been an exciting several months trying to try to go through this and understand, you know, what would change and frankly, what would not change. Um, I'll say from red hats perspective, having been with red hat for coming up, you're on 20 years, uh, not a lot is really changed. We're still focused on our mission of being the owner leading enterprise open source software company, uh, focusing on both taking our, our platforms, both red hat enterprise Linux and now OpenShift a Ford in the market, partnering around middleware components, hardening around our management, uh, as well as our storage elements. >>So, you know, our mission hasn't changed and that's kind of one of the key aspects of this. I'll say that certainly, you know, with Arvind now as CEO of IBM and Jim Whitehurst is president of IBM along with Oh for me or being, you know, CEO of red hat and we've got a really strong leadership group in place at IBM that understands what red hat is, what we mean to the customer and just as importantly what we mean to the open source community. Uh, and, and that type of action and, and, and drive is certainly something that, that we think, you know, that leadership in place will help to ensure that the value we've delivered to customers, frankly from day one back when we launched red hat enterprise Linux or red hat advanced server, frankly, uh, it's something that, that we'll be able to continue to do and drive in the community and with the customers as we move forward. >>Yeah. Mike, it's interesting when we look out, uh, on the, the ecosystems and happening out there, we understand for customers sometimes it might be challenging to say, Hey, I listened to 10 different vendors and they all say the same words. I've got multi hybrid cloud, digital modernization, things like that. Well, with our hat as a, as an analyst firm, we kind of say, okay, everybody does things a little bit different. Do you know if you look at the big cloud players, they are all playing different games. When we looked at the IBM strategy pre acquisition of red hat and red hat, they line up pretty well, you know, red hat. Yeah, very much. At summit it was open hybrid cloud. Uh, when I look at IBM, maybe a little bit more talk of multicloud than hybrid. Well, but hybrid is long bend a piece of it. >>So yeah. Okay. Give us a little bit of the inside, you know, with your strategy hat on it. How much had it been okay. Strong alignment, obviously IBM and red hat decades. Um, but you know, there are some places where, uh, you need to make sure that people understand that, you know, red sat still please markers with all the clouds. And of course IBM has services that span many places, but they also have, you know, products and services that are, uh, it was particular to IBM thing. Absolutely. And I think, you know, it's important to note, and this is well established that, you know, one of the core, uh, justifications and reasons for the acquisition was really around red hats. A physician, not just an open source, but in the hybrid cloud. Um, we've been talking about that for sure many years in fact, before most of the vendor's name has predicted up. >>Um, uh, but just as importantly, I think if you look back at Marvin Krishna's announcements on frankly the day that he was named CEO, uh, you know, he starts talking about things like IBM's focus being hybrid. Yeah. AI. And how did those things come together and who were the participants in that value being delivered? Certainly from red hat's perspective is, as we've said, we've been talking about hybrid and delivering on hybrid for many years now. Now that's being, being pushed as part of the IBM overall message. Um, and so certainly being able to leverage that value and extend it throughout the ecosystem that IBM brings throughout the software that IBM has and their services. You know, certainly we think we've got a, a good opportunity to really take that message broader in the market. Um, you know, with again, with, with both Paul and Jim, president and CEO of red hat working together and we'll be able to take that and leverage that capability throughout all of IBM generally. >>Yeah. I'm glad you brought up the AI piece because one of the things that really struck me, thumb it often we're talking about plot worms and we're talking about infrastructure. And while that is my background, we understand that the reason infrastructure exists is because my Apple, that application and one of the most important piece of applications or data. So, you know, red hat of course has a strong history with hi guys, uh, to applications and data. You, you've got an operating system as you know, one of the core pieces of what you're doing. And when I think about IBM and its strengths, well the first thing I probably think of is services. But the second thing I think of was all of the businesses productivity, uh, the databases, you know, all these applications that IBM has. I read it over the years, uh, wondering if we can just click down one notch and you talk about, uh, you know, hybrid cloud and AI and everything. >>How are IBM and red hat helping customers build all of those new applications go through those transformations, uh, to really be modern enterprises? Yeah, so certainly if you look at red hat's history where we focused very much on building the platforms and again, whether that was red hat, enterprise, Linux open shift or J boss, you know, our focus has been how can we make a standardized platform, it will work across the industry regardless of use case or industry verdict. IBM, you know, has both platforms as well as a lot of investment in capabilities in the higher level value services as well as the specializations. And use of these applications and platforms for specific vertical industries. And a lot of what they've been able to bring to the table with your investments in Watson and AI as well as a lot of their data services has certainly start to come to fruition. >>And when we start taking these two in combination and applying, for example, a focus on developers, developer tools, being able to bring a value to not just uh, the operations folks, but also the developer side and really put a lot of the AI capabilities cross that we're starting to see, you know, accelerated value, accelerated use. And then if you layer that on top of a hybrid approach, you know, we've got a very strong message that crosses everything from, you know, existing applications to net new applications before developing from their DevOps cycle all the way through their operation cycle at the bottom end where they're, they're actually trying to do boy cross multiple platforms, multiple infrastructures, and keep everything consistently managed, secured and operated. And that's, that's really the overall message that we're seeing as we talk about this together with IBM. All right. So, Mike, you touched on some of the products that that red hat, uh, offers in the portfolio. >>Uh, it was, it was a real focus at summit, not really to talk about the announcements, you know, a week before a summit two came out. Yeah. Uh, OpenShift bar dog four wasn't a big w blob. Uh, you know, give us the update on really the red hat portfolio and you know, where are those points? You know, IBM is helping red hat scale. Yeah. So certainly you've touched on some of the big ones, right? Well, OpenShift itself with the four dot. Four release brings a lot of new capabilities, uh, that are being brought forward to those customers. I have a better management, better capabilities and what they can do from monitoring service, et cetera. Um, but certainly also things like what we're doing with OpenShift virtualization, which was another announcement. There were, we're actually doing, you know, bringing a game, changing capability to the market, uh, and enabling customers that have both existing, uh, virtual virtualized environments and also new or, or migrated or transformed a container, native environments and running those on the same platform. >>With the same management infrastructure, we see that as huge to be able to simplify the management capabilities, understand cost and be able to control those environments in a much more consistent way. Uh, secondly, uh, you know, one of the big things that's been happening is really around advanced container management. What we're calling an ACM. Uh, this is, this is a good example of how red hat and IBM have worked together, uh, to bring existing IBM capabilities and what they had called a multi cluster management or MCM and bring those not just into red hat yes. Part of our platforms, but also have red hat take the step of open sourcing that and making it part of the industry standard through open source community. So being able to take that type of value that IBM had matured, take it through red hat into the open source community, but simultaneously deliver it to our customers. >>Yeah. Open shift and make it part of the platform. It's something we really see as, as a huge value add. Mmm. We're also doing a lot more with hyperscalers, especially in the space of OpenShift managed services. Uh, you saw some of those last week and I would encourage everyone to go out and, and look at the Paul Cormier and Scott Guthrie announcements that we did. There was a keynote, a video that you can go review. Uh, but, but certainly, uh, certainly the focus on how do we work with these hyperscalers inclusive of IBM, uh, to make open shift and much more fluid deployment option, have it more, more service oriented, a both on premise and off premise so the customers can actually, uh, work together better in it. Yeah. A red hat I think has always done a really good job of highlighting those partnerships. It's way easy on the outside to talk about the competitive nature of the industry. >>And I remember a few years ago, a red hat made, you know, a strong partnership with AWS. You mentioned, you know, Scott Guthrie from Microsoft. Well, okay. Not Satya Nadella. Okay. Love it last year, but Microsoft long partner. Oh, okay. Of course, with IBM back to the earliest days, uh, and with red hat or, uh, you know, in the much more recent days, uh, there was those partnerships. So critically important. ACM definitely an area, uh, we want to watch it. It was really question we had had, if you look at last year, Microsoft announced Azure, uh, there are lots of solutions announced as to how am I going to manage in this multicloud world. Um, because it's not, my piece is everywhere. It's now I need to manage a lot of things that are out of my control from different vendors and hopefully we learned a lot of the lessons from the multi-vendor era that will be fixed in the multi cloud era. >>Oh, absolutely. And you know, arc was part of our discussion with Scott Guthrie last week or Paul's discussion and you'll see a demo of that. But I would also expect that you'll see more things coming from us markers as well. Right. You know, this is about building a platform, a hybrid platform that works in a multicloud world and being able to describe that in a very consistent way. Manage it. You were at entitled it in a very consistent way of across all the vendors, inclusive of both self and managed services, only one option. And so we're very focused on doing that. Um, IBM, certainly AXA assisting in that, helping grow it. But overall this focus is really about red has perspective about making that hybrid, right? the leading hybrid platform, the leading Coobernetti's. Okay. uh, in the industry. And that's, that's really where starting from with OpenShift. >>All right. So, so Mike, we started out the discussion talking about some of the changes and you know, where red hat stays, red hat and where the company is working together. Obviously the leadership changes. Oh, we're a big piece. Uh, congratulations you, you got, you know, a new role. I've seen quite a few people, uh, with some new titles. Uh, you know, w which is always nice to see. Uh, the, the people that have been working for a long time. The other area where seems from the outside there coordinated effort is around the covert response. So, you know, I've seen the, the public letters from, from Arvin Krishna of course. red hat and Paul Cormier's letter. Well, he is there. Uh, IBM was one of the first companies that we had heard from, uh, that said, Hey, you know, we're not going to RSA conference this year. >>We're moving digital, uh, with the events. So no real focus on them boys. And then of course boarding customers. Yeah. How does that covert response happen? And am I right from the outside that it looks like there, there is a bit of United right attack, this global pandemic response. It is a, you know, I think there's two levels to this. Certainly between red hat and IBM were well coordinated. Um, within, within red hat we have, uh, we have teams that are specifically dedicated to making sure, yeah, our associates and more importantly, uh, our customers and the overall communities are well-served through this. As you said earlier in the interview, uh, certainly we hold back on any significant product announcements at summit, including with some of our partners merely because we wanted to maintain this focus on how can we help everyone through this very unfortunate experience. >>Um, and so, you know, as obviously a lot of us, all of us are sitting at home now globally. Uh, the focus is very much how do we stay connected or we keep the business flowing as much as possible through this and, and, and keep people safe and secure in their environments and make sure that we serve both the customers and the associates. Yes. Awesome away. So there's a lot of sensitivity and we want to make sure that, you know, the industry and the overall world knows, uh, that we're very focused on keeping people healthy and moving forward as we, as we work through this together as a world. Yeah. Well, Mike Ferris, thank you so much for the update. It's been been a pleasure catching up. Great. Thanks dude. Appreciate it. All right. Stay tuned for lots more coverage from IBM. Think 20, 20. The global digital experience. Okay. To a minimum. And thank you. We're watching. Thank you.
SUMMARY :
IBM thing brought to you by IBM. uh, and uh, you know, many of the customers. Um, but certainly, you know, the Arvin announcement and then as well as having both Jim Whitehurst become president. is president of IBM along with Oh for me or being, you know, CEO of red hat and we've got a really hat and red hat, they line up pretty well, you know, red hat. And I think, you know, it's important to note, and this is well established frankly the day that he was named CEO, uh, you know, he starts talking about things like IBM's uh, the databases, you know, all these applications that IBM has. IBM, you know, has both platforms as well as cross that we're starting to see, you know, accelerated value, accelerated use. on really the red hat portfolio and you know, where are those points? Uh, secondly, uh, you know, one of the big things that's been happening is really around advanced container Uh, you saw some of those last week and I would encourage everyone to go out and, and with red hat or, uh, you know, in the much more recent days, uh, there was those partnerships. And you know, arc was part of our discussion with Scott Guthrie last week or Paul's discussion and you'll see a demo So, so Mike, we started out the discussion talking about some of the changes and you know, It is a, you know, I think there's two levels to this. and we want to make sure that, you know, the industry and the overall world knows,
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Red Hat Summit Keynote Analysis | Red Hat Summit 2020
from around the globe it's the cube with digital coverage of Red Hat summit 2020 brought to you by Red Hat last year in 2019 IBM made the biggest M&A move of the year with a 34 billion dollar acquisition of red hat it positioned IBM for the next decade after what was a very tumultuous tenure by CEO Ginni Rometty who had to shrink in order to grow unfortunately she didn't have enough time to do the grille part that has now gone toward Arvind Krishna the new CEO of IBM this is Dave Volante and I'm here with Stu minimun and this is our Red Hat keynote analysis is our 7th year doing the Red Hat summit and we're very excited to be here this is our first year doing Stu the Red Hat summit post IVM acquisition we've also got IBM think next week so what we want to do for you today is review what's going on at the Red Hat summits do you've been wall-to-wall with the interviews we're gonna break down the announcements IBM had just announced its quarter so we get some glimpse as to what's happening in the business and then we're gonna talk about going forward what the prognosis is for both IBM and Red Hat well and Dave of course our audience understands there's a reason why we're sitting farther apart than normal in our studio and you know why we're not in San Francisco where the show is supposed to be this year last year it's in Boston Red Hat summit goes coast-to-coast every year it's our seventh year doing the show first year doing it all digital of course our community is always online but you know real focus you know we're gonna talk about Dave you know you listen to the keynote speeches it's not the as we sit in our preview it's not the hoopla we had a preview with pork or mayor ahead of the event where they're not making big announcements most of the product pieces we're all out front it's open source anyway we know when it's coming for the most part some big partnership news of course strong customer momentum but a different tenor and the customers that Red Hat's lined up for me their interview all talking you know essential services like medical your your energy services your communication services so you know real focus I think Dave both IBM and right making sure that they are setting the appropriate tone in these challenging times yeah I mean everybody who we talked to says look at the employees and safety comes first once we get them working from home and we know that they're safe and healthy we want to get productive and so you've seen as we've reported that that shift to the work from home infrastructure and investments in that and so now it's all about how do we get closer to clients how do we stay close to clients and be there for them and I actually have you know business going forward you know the good news for IBM is it's got strong cash flow it's got a strong balance sheet despite you know the acquisition I mean it's just you know raise some more you know low low cost debt which you know gives them some dry powder going forward so I think IBM is gonna be fine it's just there's a lot of uncertainty but let's go back to your takeaways from the Red Hat Summit you've done you know dozens of interviews you got a good take on the company what are you top three takeaways - yeah so first of all Dave you know the focus everybody has is you know what does Red Hat do for the cloud story for IBM OpenShift especially is absolutely a highlight over 2,000 customers now from some really large ones you know last year I interviewed you know Delta you've got you know forward and Verizon up on stage for the keynote strong partnership with Microsoft talking about what they're doing so OpenShift has really strong momentum if you talk about you know where is the leadership in this whole kubernetes space Red Hat absolutely needs to be in that discussion not only are they you know other than Google the top contributor really there but from a customer standpoint the experience what they've built there but what I really liked from Red Hat standpoint is it's not just an infrastructure discussion it's not OPM's and containers and there's things we want to talk about about VMs and containers and even server lists from Red Hat standpoint but Red Hat at its core what it is it they started out as an operating system company rel Red Hat Enterprise Linux what's the tie between the OS and the application oh my god they've got decades of experience how do you build applications everything from how they're modernizing Java with a project called Korkis through how their really helping customers through this digital transformation I hear a similar message from Red Hat and their customers that I hear from Satya Nadella at Microsoft is we're building lots of applications we need to modernize what they're doing in Red Hat well positioned across the stack to not only be the platform for it but to help all of the pieces to help me modernize my applications build new ones modernize some of the existing ones so OpenShift a big piece of it you know automation has been a critical thing for a while we did the cube last year at ansible fest for the first time from Red Hat took that acquisition has helped accelerate that community in growth and they're really Dave pulling all the pieces together so it's what you hear from Stephanie shirasu ironically enough came over from IBM to run that business inside a Red Hat well you know now she's running it inside Red Hat and there's places that this product proliferate into the IBM portfolio next week when we get where it I didn't think I'm sure we'll hear a lot about IBM cloud packs and look at what's underneath IBM cloud packs there's open shift there's rel all those pieces so you know I know one of the things we want to talk about Davis you know what does that dynamic of Red Hat and IBM mean so you know open shift automation the full integration both of the Red Hat portfolio and how it ties in with IBM would be my top three well red hat is now IBM I mean it's a clearly part of the company it's there's a company strategy going forward the CEO Arvind Krishna is the architect of the Red Hat acquisition and so you know that it's all in on Red Hat Dave I mean just the nuance there of course is the the thing you hear over and over from the Red Hatters is Red Hat remains Red Hat that cultural shift is something I'd love to discuss because you know Jim Whitehurst now he's no longer a Red Hat employee he's an IBM employee so you've got Red Hat employees IBM employees they are keeping that you know separation wall but obviously there's flowing in technology and come on so come on in tech you look at it's not even close to what VMware is VMware is a separate public company has separate reporting Red Hat doesn't I mean yes I hear you yo you got the Red Hat culture and that's good but it's a far cry from you know a separate entity with full transparency the financials and and so I I hear you but I'm not fully buying it but let's let's get into it let's take a look at at the quarter because that I think will give us an indication as to how much we actually can understand about RedHat and and again my belief is it's really about IBM and RedHat together I think that is their opportunity so Alex if you wouldn't mind pulling up the first slide these are highlights from IBM's q1 and you know we won't spend much time on the the the IBM side of the business although we wanted to bring some of that in but hit the key here as you see red hat at 20% revenue growth so still solid revenue growth you know maybe a little less robust than it was you know sequentially last quarter but still very very strong and that really is IBM's opportunity here 2,200 clients using red hat and an IBM container platforms the key here is when Ginni Rometty announced this acquisition along with Arvind Krishna and Jim Whitehurst she said this is going to be this is going to be cash flow free cash flow accretive in year one they've already achieved that they said it's gonna be EPS accretive by year two they are well on their way to achieving that why we talked about this do it's because iBM has a huge services organization that it can plug open shift right into and begin to modernize applications that are out there I think they cited on the call that they had a hundred ongoing projects and that is driving immediate revenue and allows IBM to from a financial standpoint to get an immediate return so the numbers are pretty solid yeah absolutely Dave and you know talking about that there is a little bit of the blurring a line between the companies one of the product pieces that came out at the show is IBM has had for a couple of years think you know MCM multi cloud management there was announced that there were actually some of the personnel and some of the products from IBM has cut have come into Retta of course Red Hat doing what they always do they're making it open source and they're it's advanced cluster management really from my viewpoint this is an answer to what we've seen in the kubernetes community for the last year there is not one kubernetes distribution to rule them all I'm going to use what my platforms have and therefore how do I manage across my various cloud environments so Red Hat for years is OpenShift lives everywhere it sits on top of VMware virtualization environments it's on top of AWS Azure in Google or it just lives in your Linux farms but ACM now is how do I manage my kubernetes environment of course you know super optimized to work with OpenShift and the roadmap as to how it can manage with Azure kubernetes and some of the other environments so you know you now have some former IBM RS that are there and as you said Dave some good acceleration in the growth from the Red Hat numbers we'd seen like right around the time that the acquisition happened Red Hat had a little bit of a down quarter so you know absolutely the services and the the scale that IBM can bring should help to bring new logos of course right now Dave with the current global situation it's a little bit tough to go and be going after new business yeah and we'll talk about that a little bit but but I want to come back to sort of when I was pressing you before on the trip the true independence of Red Hat by the way I don't think that's necessarily a wrong thing I'll give an example look at Dell right now why is Dell relevant and cloud well okay but if Dell goes to market says we're relevant in cloud because of VMware well then why am I talking to you why don't I talk to VMware and so so my point is that that in some regards you know having that integration is there is a real advantage no you know you were that you know EMC and the time when they were sort of flip-flopping back and forth between integrated and not and separate and not it's obviously worked out for them but it's not necessarily clear-cut and I would say in the case of IBM I think it's the right move why is that every Krista talked about three enduring platforms that IBM has developed one is mainframe that's you know gonna here to stay the second was middleware and the third is services and he's saying that hybrid cloud is now the fourth and during platform that they want to build well how do they gonna build that what are they gonna build that on they're gonna build that an open shift they they're there other challenges to kind of retool their entire middleware portfolio around OpenShift not unlike what Oracle did with with Fusion when it when it bought Sun part of the reason - pod Sun was for Java so these are these are key levers not necessarily in and of themselves you know huge revenue drivers but they lead to awesome revenue opportunities so that's why I actually think it's the right move that what IBM is doing keep the Red Hat to the brand and culture but integrate as fast as possible to get cash flow or creative we've achieved that and get EPS accretive that to me makes a lot of sense yeah Dave I've heard you talk often you know if you're not a leader in a position or you know here John Chambers from Cisco when he was running it you know if I'm not number one or number two why am I in it how many places did IBM have a leadership position Red Hat's a really interesting company because they have a leadership position in Linux obviously they have a leadership position now in kubernetes Red Hat culturally of course isn't one to jump up and down and talk about you know how they're number one in all of these spaces because it's about open source it's about community and you know that does require a little bit of a cultural shift as IBM works with them but interesting times and yeah Red Hat is quietly an important piece of the ecosystem let me let me bring in some meteor data Alex if you pull up that that's that second slide well and I've shown this before in braking analysis and what this slide shows in the vertical axis shows net score net score is a measure of spending momentum spending velocity the the horizontal axis is is is called market share it's really not market share it's it's really a measure of pervasiveness the the mentions in the data set we're talking about 899 responses here out of over 1200 in the April survey and this is a multi cloud landscape so what I did here Stu I pulled on containers container platforms of container management and cloud and we positioned the companies on this sort of XY axis and you can see here you obviously have in the upper right you've got Azure in AWS why do I include AWS and the multi cloud landscape you answered that question before but yesterday because Dave even though Amazon might not allow you to even use the word multi cloud you can't have a discussion of multi cloud without having Amazon in that discussion and they've shifted on hybrid expect them to adjust their position on multi-cloud in the future yeah now coming back to this this this data you see kubernetes is on the kubernetes I know is another company but ETR actually tracks kubernetes you can see how hot it is in terms of its net score and spending momentum yeah I mean Dave do you know the thing the the obvious thing to look at there is if you see how strong kubernetes is if IBM plus red hat can keep that leadership in kubernetes they should do much better in that space than they would have on with just their products alone and that's really the lead of this chart that really cuts to the chase do is you see you see red Red Hat openshift has really strong spending momentum although I will say if you back up back up to say April July October 18 19 it actually was a little higher so it's been pushed down remember this is the April survey that what's ran from mid-march to mid April so we're talking right in the middle of the pandemic okay so everybody's down but nonetheless you can see the opportunity is for IBM and Red Hat to kind of meet in the middle leverage IBM's massive install base in its in its services presence in its market presence its pervasiveness so AKA market share in this rubric and then use Red Hat's momentum and kind of meet in the middle and that's the kind of point that we have here with IBM's opportunity and that really is why IBM is a leader in at least a favorite in my view in multi cloud well Dave if you'd look two years ago and you said what was the competitive landscape Red Hat was an early leader in the kubernetes you know multi-cloud discussion today if you ask everybody well who's doing great and kubernetes you have to talk about all the different options that amazon has Amazon still has their own container management with ACS of course IKS is doing strong and well and Amazon whatever they do they we know they're going to be competitive Microsoft's there but it's not all about competition in this space Dave because you know we see Red Hat partnering across these environments they do have a partnership with AWS they do have you know partnership with you know Microsoft up on stage there so where it was really interesting Dave you know one of the things I was coming into this show looking is what is Red Hat's answer to what VMware is really starting to do in this space so vSphere 7 rolled out and that is the ga of project Pacific so taking virtualization in containers and putting them together Red Hat of course has had virtualization for a long time with KVM they have a different answer of how they're doing openshift virtualization and it rather than saying here's my virtual environment and i can also do kubernetes on it they're saying containers are the future and where you want to go and we can bring your VMs into containers really shift them the way you have really kind of a lift and shift but then modernize them Dave customers are good you know you want to meet customers where they are you want to help them move forward virtualization in general has been a you don't want to touch your applications you want to just you know let it ride forever but the real the real driver for companies today is I've got to build new apps I need to modernize on my environment and you know Red Hat is positioning and you know I like what I'm hearing from them I like what I'm hearing from my dad's customers on how they're helping take both the physical the virtual the containers in the cloud and bring them all into this modern era yeah and and you know IBM made an early bet on on kubernetes and obviously around Red Hat you could see actually on that earlier slide we showed you IBM we didn't really talk about it they said they had 23% growth in cloud which is that they're a twenty two billion dollar business for IBM you're smiling yeah look good for IBM they're gonna redefine cloud you know let AWS you know kick and scream they're gonna say hey here's how we define cloud we include our own pram we include Cano portions of our consulting business I mean I honestly have no idea what's in the 22 billion and how if they're growing 22 billion at 23% wow that's pretty awesome I'm not sure I think they're kind of mixing apples and oranges there but it makes for a good slide yeah you would say wait shouldn't that be four billion you added he only added two or three billion you know numbers can tell a story but you can also manipulate but the point is the point is I've always said this near term the to get you know return on this deal it's about plugging OpenShift into services and modernizing applications long term it's about maintaining IBM and red-hats relevance in the hybrid cloud world which is I don't know how big it is it's a probably a trillion-dollar opportunity that really is critical from a strategy standpoint do I want to ask you about the announcements what about any announcements that you saw coming from Red Hat are relevant what do we need to know there yeah so you know one of the bigger ones we already talked about that you know multi cloud manager what Red Hat has the advanced cluster management or ACM absolutely is an era an area we should look VMware Tong's ooh Azure Ark Google anthos and now ACM from Red Hat in partnership with IBM is an area still really early Dave I talked to some of the executives in the space and say you know are we going to learn from the mistakes of multi vendor management Dave you know you think about the CA and BMC you know exactly of the past will we have learned for those is this the right way to do it it is early but Red Hat obviously has a position here and they're doing it um did hear plenty about how Red Hat is plugging into all the IBM environments Dave Z power you know the cloud solutions and of course you know IBM solutions across the board my point of getting a little blue wash but hey it's got to happen I think that's a smart move right you know we talked about you know really modernizing the applications in the environments I talked a bit about the virtualization piece the other one if you say okay how do I pull the virtualization forward what about the future so openshift serverless is the other one it's really a tech preview at this point it's built off of the K native project which is part of the CNC F which is basically how do I still have you know containers and kubernetes underneath can that plug into server list order server let's get it rid of it everything so IBM Oracle Red Hat and others really been pushing hard on this Kay native solution it is matured a lot there's an ecosystem growing as how it can connect to Asher how it can connect to AWS so definitely something from that appdev piece to watch and Dave that's where I had some really good discussions with customers as well as the the Red Hat execs and their partners that boundary between the infrastructure team and the app dev team they're hoping to pull them together and some of the tooling actually helps ansible is a great example of that in the past but you know others in the portfolio and lastly if you want to talk a huge opportunity for Red Hat IBM and it's a jump ball for everyone is edge computing so Red Hat I've talked to them for years about what they were doing in the opened stack community with network function virtualization or NFV Verizon was up on stage I've got an interview for Red Hat summit with Vodafone idea which has 300 million subscribers in India and you know the Red Hat portfolio really helping a lot of the customers there so it's the telco edge is where we see a strong push there it's definitely something we've been watching from the you know the big cloud players and those partnerships Dave so you know last year Satya Nadella was up on the main stage with Red Hat this year Scott Guthrie you know there he's at every Microsoft show and he's not the red head show so it is still ironic for those of us that have watched this industry and you say okay where are some of the important partnerships for Red Hat its Microsoft I mean you know we all remember when you know open-source was the you know evil enemy for from Microsoft and of course Satya Nadella has changed things a lot it's interesting to watch I'm sure we'll talk more at think Dave you know Arvind Krishna the culture he will bring in with the support of Jim Whitehurst comes over from IBM compared to what Satya has successfully done at Microsoft well let's talk about that let's let's talk about let's bring it home with the sort of near-term midterm and really I want to talk about the long term strategic aspects of IBM and Red Hat's future so near-term IBM is suspended guidance like everybody okay they don't have great visibility some some some things to watch by the way a lot of people are saying no just you know kind of draw draw a red line through this quarter you just generally ignore it I disagree look at cash flow look balance sheets look at what companies are doing and how they're positioning that's very important right now and will give us some clues and so there's a couple of things that we're watching with IBM one is their software business crashed in March and software deals usually come in big deals come in at the end of the quarter people were too distracted they they stopped spending so that's a concern Jim Cavanaugh on the call talked about how they're really paying attention to those services contracts to see how they're going are they continuing what's the average price of those so that's something that you got to watch you know near-term okay fine again as I said I think IBM will get through this what really I want to talk about to do is the the prospects going forward I'm really excited about the choice that IBM made the board putting Arvind Krishna in charge and the move that he made in terms of promoting you know Jim Whitehurst to IBM so let's talk about that for a minute Arvind is a technical visionary and it's it's high time that I VM got back to it being a technology company first because that's what IBM is and and I mean Lou Gerstner you know arguably save the company they pivoted to services Sam Palmisano continue that when Ginny came in you know she had a services heritage she did the PWC deal and IBM really became a services company first in my view Arvind is saying explicitly we want to lead with technology and I think that's the right move of course iBM is going to deliver outcomes that's what high-beams heritage has been for the last 20 years but they are a technology company and having a technology visionary at the lead is very important why because IBM essentially is the leader prior to Red Hat and one thing mainframes IBM used to lead in database that used to lead in storage they used to lead in the semiconductors on and on and on servers now they lead in mainframes and and now switch to look at Red Hat Red Hat's a leader you know they got the best product out there so I want you to talk about how you see that shift to more of a sort of technical and and product focus preserving obviously but your thoughts on the move the culture you're putting Jim as the president I love it I think it was actually absolutely brilliant yeah did Dave absolutely I know we were excited because we you know personally we know both of those leaders they are strong leaders they are strong technically Dave when I think about all the companies we look at I challenge anybody to find a more consistent and reliable pair of companies than IBM and Red Hat you know for years it was you know red hat being an open-source company and you know the way their business model said it it's not the you know Evan flow of product releases we know what the product is going to be the roadmaps are all online and they're gonna consistently grow what we've seen Red Hat go from kind of traditional software models to the subscription model and there are some of the product things we didn't get into too much as to things that they have built into you know Red Hat Enterprise Linux and expanding really their cloud and SAS offerings to enhance those environments and that that's where IBM is pushing to so you know there's been some retooling for the modern era they are well positioned to help customers through that you know digital transformation and as you said Dave you and I we both read the open organization by Jim lighters you know he came in to Red Hat you know really gave some strong leadership the culture is strong they they have maintained you know really strong morale and I talked to people inside you know was their concern inside when IBM was making the acquisition of course there was we've all seen some acquisitions that have gone great when IBM has blue washed them they're trying to make really strong that Red Hat stays Red Hat to your point you know Dave we've already seen some IBM people go in and some of the leadership now is on the IBM side so you know can they improve the product include though improve those customer outcomes and can Red Hat's culture actually help move IBM forward you know company with over a hundred years and over 200,000 employees you'd normally look and say can a 12,000 person company change that well with a new CEO with his wing and you know being whitehurst driving that there's a possibility so it's an interesting one to watch you know absolutely current situations are challenging you know red hats growth is really about adding new logos and that will be challenged in the short term yeah Dave I I love you shouldn't let people off the hook for q2 maybe they need to go like our kids this semester is a pass/fail rather than a grid then and then a letter grade yeah yeah and I guess my point is that there's information and you got to squint through it and I think that look at to me you know this is like Arvin's timing couldn't be better not that he orchestrated it but I mean you know when Ginny took over I mean was over a hundred million a hundred billion I said many times that I beams got a shrink to grow she just ran out of time for the Gro part that's now on Arvind and I think that so he's got the cove in mulligan first of all you know the stocks been been pressured down so you know his tenure he's got a great opportunity to do with IBM in a way what such an adela did is doing at Microsoft you think about it they're both deep technologists you know Arvind hardcore you know computer scientist Indian Institute of Technology Indian Institute of Technology different school than Satya went to but still steeped in in a technical understanding a technical visionary who can really Drive you know product greatness you know in a I would with with Watson we've talked a lot about hybrid cloud quantum is something that IBM is really investing heavily in and that's a super exciting area things like blockchain some of these new areas that I think IBM can lead and it's all running on the cloud you know look IBM generally has been pretty good with acquisitions they yes they fumbled a few but I've always made the point they are in the cloud game IBM and Oracle yeah they're behind from a you know market share standpoint but they're in the game and they have their software estate in their pass a state to insulate them from the race to the bottom so I really like their prospects and I like the the organizational structure that they put in place in it by the way it's not just Arvind Jim you mentioned Paul Cormier you know Rob Thomas has been been elevated to senior VP really important in the data analytic space so a lot of good things going on there yeah and Dave one of the questions you've been asking and we've been all talking to leaders in the industry you know what changes permanently after the this current situation you know automation you know more adoption of cloud the importance of developers are there's even more of a spotlight on those environments and Red Hat has strong positioning in that space a lot of experience that they help their customers and being open source you know very transparent there I both IBM and Red Hat are doing a lot to try to help the community they've got contests going online to you know help get you know open source and hackers and people working on things and you know strong leadership to help lead through these stormy weathers so Stuart's gonna be really interesting decade and the cube will be here to cover it hopefully hopefully events will come back until they do will be socially responsible and and socially distant but Stu thanks for helping us break down the the red hat and sort of tipping our toe into IBM more coverage and IBM think and next week this is Dave alotta for Stu minimun you're watching the cube and our continuous coverage of the Red Hat summit keep it right there be back after this short break you [Music]
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Jim Whitehurst, IBM | CUBE Conversation, April 2020
>> From theCUBE studios in Palo Alto and Boston connecting with thought leaders all around the world. This is a Cube conversation. >> Hi, I'm Stu Miniman and welcome to a special CUBE conversation. We've been doing a CXO series talking to leaders around the industry how they are dealing with the global pandemic. Really happy to welcome to the program Jim Whitehurst. He is the former CEO of Red Hat. He is now the president of IBM. Jim, pleasure to see you, thanks so much for joining on. >> Hey, it's great to be on, thanks for having me. >> All right, so Jim, we talk about change in this industry an awful lot. You of course, went through a lot of professional change recently. You've got the plaque behind you for the largest software acquisition in industry history. Of course, Red Hat getting bought by IBM. In the midst of everything happening in the globe you got a new title. Yeah as I said, you just moved from Red Hat you are now an IBM-er, wearing the corporate blue, nice job. But still no tie. Oh, of course we know your style there. But Jim, want to ask you when the pandemic rolled out what was your first move as a leader? >> Well, first move was to get the team together and bond as a team. So much of traditional management is about grooving a set of routines and then driving those to drive efficiency in them. Got to take variance out because that's what drives efficiency. But this is a whole new thing, it's a whole new change. And so, first off you want to recognize the human elements and the stress related to it. But you also want to open it up saying, okay well what are we going to do? How are we going to work? And so that's no something that you'd go hire a consultant to do in two weeks. So, bringing the team together and really saying okay what do we all think? How do we actually go about running this? Really was the first thing we did at Red Hat and we did the same thing at IBM. I think this is, we talked so much about the traditional management structures really weren't built for rapid change and resilience. Well guess what, we're right in the middle of rapid change uncertainty and resilience right now. So, if there's ever a time to change how we lead now is the time to do it. >> Yeah, I would often quote Clay Christensen and I believe he said, strategy is something that you don't write it in stone. It's something that you must look at a certain point in time and make changes. And when we talked about cloud adopting it's like okay let me make a strategy but let's revisit it every quarter? These days it's, let's get the team together a couple times a week because what we did a week or a month ago is not the same as today. So, how do you make decisions today? And how do you continue to iterate and communicate with the team to deal with what's happening in the field? >> Well right now we're having multiple meetings with teams a week, with my team and then kind of rippling it out from there. We've asked everyone to commit to having well face to face video conference, so not just phone calls with their teams multiple times a week and ripple that out. We've actually and hopefully you'll soon hear in the next week or two, see it on GitHub. We've created a, I'm going to think of it as contract. What we expect, our expectations around working home including it's okay to have bad hair days and... We've got a whole set of kind of ways of working that we really crowd sourced inside of IBM in a very kind of open source type way. It wasn't something we dictated from the top and all the entire senior team is now committed to that. And we are planning on putting it out on GitHub as well, so if others find value in it. But a lot it really does start to recognize it's hard to know the stresses that people are under. Or what they need to do to be effective. And so it's the perfect time to backup and say, hey you have to figure some of this out and tell us what you need to do to be successful. >> Yeah. What you just talked about with GitHub is some the silver linings, if you will of what's been happening here. The communities we live have always been collaborative in nature. Open source is something that you expect people to be able to come together, but it really is something that we've seen highlighted some of the good cases with, whether it is 3D printing items leveraging open source projects to the like. I'm curious and we know it is early days but are there any things that you're seeing from a cultural standpoint, from a... That you believe will be permanent after we're through the immediate threat? >> Yeah, yeah we've talked about this a lot at open source is this idea of reciprocity. That transactions in an economy don't have to be so quid pro quo. I give you this, you give me that. Things like goodwill matter. Things like reputation matter. And certainly that's true in open source communities. And I do think we went through a period of time in large corporate organizations around the world where it became a little more nameless, faceless and so we're in business to make a profit. And--Milton Freidman--if you do that, that's good for society. And I think we've all already started and the business round table actually did this a few months ago. But I think this is causing all businesses to back up and say what role do we play in society? And what can we do more than what we do everyday to serve out customers? What else can we do to add value? And I think that's something certainly I don't think just senior leaders are doing. I've gotten dozens of emails from IBM-ers with the ideas of how to go do this. And I think it does really cause you, in a good way to back up and say, why do we exist as a firm, right? And I hope everyone's doing that. Or why do we exist beyond purely a for profit mechanism? And I know that theory around, well if we profit maximize society is better off. But I do think rounding that out with a little bit more of a since that weaken having direct purpose beyond profit is something that certainly great companies have always talked about, IBM's always talked about it. But this is a time it feels real, it feels personal it feels like right now, what do we do this week and next week? I don't know if you saw this, but how quickly, within a matter of days the weather channel app, which is an IBM app has a COVID button on it so you can see down to your county level the number of people infected and that bubbled up, that went to top down Arvind or me saying, let's go do that. And so, I do think that having broadly people in corporations think about well what role do I play in society is a really, really helpful thing. >> Yeah, so I'm glad you actually brought up weather because we want to talk for a second about climate. You wrote a very thoughtful piece for Earth Day. It's been really interesting to see how the planet is doing without as many humans around. I've heard things from cities in Italy that are talking about city centers will never let cars back in. There are landscapes that are more beautiful than ever. There are wild animals going places that they hadn't been before. So, I'm wondering if there's any lessons learned or things that we can do from a global climate standpoint that we've learned as a part of what has happened. >> Well, my view is that there are two major benefits in this crisis associated with environment. Not even need to say benefits. There are two lessons learned that I think could be durable. First off, I think it is inspirational to see how quickly the environment can bounce back. So if you kind of get this like, oh well what can I do? Does it really matter? Aren't we too far gone? I've heard often, well there's nothing we can do we're just down a irreversible path. I think this shows how quickly change can happen and I hope in that, people derive inspiration. Because I do think that's important to realize our actions can have benefits. I think that's important. And then I think, secondly, again back to this point of as organizations reflect on their role beyond just profit making, I'm hoping those two things can link up and we will come out of this with fundamental changes. I think we're all learning that we can work in different ways and we can still get work done. And so, we bring those things together. I'm really hopeful that as a society and as individual companies we'll back up and say hey we can impact the environment. We know we can work in some ways differently. How do we bring that together to bring about a sustainable change and outcomes in the environment. >> Well, Jim Whitehurst, always a pleasure to get an update from you. Thank you so much for sharing how you, your peers and the community are handling these challenging time. >> Hey I always enjoy our conversations. Thanks so much for having me and I look forward to seeing you soon. >> All right, thank you for watching this CUBE conversation. I'm Stu Miniman. Check out theCUBE.net for all the events upcoming interviews and archives, including lots with Jim Whitehurst in the past. Thank you for watching. (calm music)
SUMMARY :
leaders all around the world. Jim, pleasure to see you, Hey, it's great to be You've got the plaque behind you for the and the stress related to it. And how do you continue And so it's the perfect some the silver linings, if you will And I do think we went It's been really interesting to see learning that we can work and the community are handling and I look forward to seeing you soon. All right, thank you for
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Breaking Analysis: IBM Completes $34B Red Hat Acquisition
from the silicon angle media office in Boston Massachusetts it's the queue now here's your host David on tape hi everybody Dave Volante here with Stu minumum we have some breaking analysis we're gonna break down the acquisition of IBM Red Hat by IBM was announced today that it closed Stu was originally announced in October a 34 billion dollar acquisition so not a surprise surprise that it closed a little bit earlier than people thought people would thinkin you know well into the second half closed in July they got through all the all the issues in Europe what does this mean in your view to the industry yeah so Dave we did a lot of analysis when the deal was announced absolutely the the cloud and the ripples of change that are happening because of cloud are the impetus for this and you know the the question we've been having for years Dave is you know how many companies can stay kind of independent in you know their swimlane to what they're doing or are we going to see more massive consolidations we're not that far off of the 67 billion dollar acquisition of Dell buying EMC to go heavily into the enterprise market and of course there are cloud implications what happened there and you know we're watching the growth of cloud what's happening in the developer world you know we've watched Red Hat for a long time and you know Red Hat has a nice position in the world and it carved themselves out a nice role into what has been emerging as hybrid and multi cloud and in my opinion that's you know the number one reason why arvind and the IBM team you know when to take that 20-year partnership and turn it into you know now just part of the IBM portfolio Arvind Krishna executive at IBM a longtime player there so the the the deal is so you talked about Dells acquisition we've talked a lot about the VMware model keeping the company separate and of course Red Hat is not going to be a separately traded public company it is going to be a distinct unit inside of IBM's cloud and cognitive software group as I understand it is that right so the question is will it be reported separately or is it going to be oh we're gonna throw everything into our cloud number yeah so Dave this is where all of us that have watched and known IBM you know for our entire careers because they've been around over a hundred years on ask what's going to happen so from a reporting structure Jim Whitehurst reports to Ginny from a Wall Street standpoint it sounds like it's gonna be just thrown into the cloud piece you know Dave isn't it that the the the standard practice today that you throw lots of stuff in there so we can't figure out what your cloud business really is I mean let's look at Oracle or even Microsoft and what they had you know Amazon's probably the only one that clearly differentiates you know this is revenue that we all understand is cloud and can you know touch and feel it so sure I IBM you know you've got all of the the piece that used to be soft layer it's now the IBM cloud piece there are lots of software pieces in that mix the cloud and cognitive is a big umbrella and you know Red Hat adds a few billion dollars worth of revenue into that stream so IBM's assumptions here juni talks a lot about chapter two chapter one was a lot of front-end systems that sort of the growth was everybody thought everything was going into the cloud that's really not the way it is 80% of the workloads are still on Prem and in Chapter two was all about you know connecting those to any cloud multi-cloud heard her words the IBM cloud or the Amazon Google or Microsoft cloud etc etc she made the statement that that we are the only hybrid multi-cloud open source company okay I guess that's true does it matter that they're the only hybrid multi-cloud open source company and are they yeah so I mean Dave anytime a vendor tries to paint themselves as the number one or you know leader in the space it's you know that's how they're defining it that's not how customers think of it customers you know don't think is much about whether it's multi cloud or hybrid cloud they're doing cloud and they're working with you know more than one supplier it is very rare that you find somebody I'm all-in and then you dig in oh yeah wait I'm using office 365 and Salesforce and oh wait there was that cool new thing that Google announced that somebody off on the sides doing so we understand that today it's a multi cloud world tomorrow to be a multi cloud we're absolutely open source is growing you know at great leaps and bounds Red Hat is you know the you know best example we've had of that that trend something I've been watching for the last 20 years and you know it is impressive to see it but you know even when you talk to customers of you know most customers are not you know flag-waving I must do everything open-source you know that they have a little bit more nuanced view of it sure lots of companies are participating in contributing to open source but you know I've yet to talk to too many companies that were like well when I'm making this decision you know this is absolutely what it is am i concerned about my overall costs and I'm concerned about transparency am i concerned about you know security and how fast I can get things resolved and by the way open-source can help with a lot of those things that's what they need to think about but look IBM you know had a longtime partnership with Red Hat Red Hat has a strong position in the marketplace but they're not the only ones there you know you mentioned VMware Dave VMware cross has a strong play across multi cloud environments you know we see Red Hat at all of the cloud shows you see yeah IBM at many of the cloud shows but you've got Cisco out there with their play it is still you know this this chapter - if you agree with Ginny's terminology we are relatively early in that but you know IBM I believe is strengthened in their positioning I don't think it radically changes the landscape just because you know Red Hat is still going to stay you know working with the Amazons and Microsoft and Google's and and and other players out there so it doesn't dramatically change the landscape it just consolidates two players that already worked closely let me ask a question so I mean was clearly positioning this as a cloud play you know generally and you know in a multi cloud specifically is this a cloud play okay um so I'll say yes but Dave so absolutely the future and where the growth for Red Hat and where IBM and for this thirty four billion dollars to be successful the tip of the spear is open shift and therefore you know how does that new cloud native multi cloud environment you know where do they play but at its core you know red heads still Linux Red Hat Enterprise Linux you know is it stills you know that is the primary driver of revenue and Linux isn't going away as a matter of fact Linux is growing Microsoft you know just revealed that there are more Linux workloads sitting in Azure than there are windows we already knew that there were you know strong Linux out there and Microsoft is embrace Linux we saw Satya Nadella at Red Hat summit and you know we've seen that proliferation of linux out there so linux is still you know growing in it where it's being used out there and in the cloud you know linux is what most people are using so the reason why I think this acquisition is interesting Jim Whitehurst today said publicly that it was a great deal that IBM was getting but then he couched he said of course it's a great deal for our shareholders too so and Ginni chimed in and said yes it was a fair deal okay fine 34 billion you know we'll see the reason why I think IBM likes this deal and IBM you know generally has been been good over in history with acquisitions you know clearly some mega acquisitions like PwC which was transformative me we have time to talk about that Cognos and some of the other software acquisitions done quite well not a hundred percent but the reason why I think IBM likes this deal is because it's a good cash flow deal so I think in many ways and they don't talk about this because it's not sexy marketing but iBM is a services company over 60% of the company's revenue comes from professional services IBM loves complexity because they can bring in services throw the big blue blanket around you and do a lot of integration work and the reason is that I think this is an interesting acquisition from from a financial standpoint and Ginny says this all the time this is not about cost synergies this is about revenue opportunities when you try to put everything in the cloud you always run into the back-end systems and her point is that those back-end systems need to be modernized how do you modernize those back-end systems openshift it's not trivial to do that you need services and so iBM has a large install base probably by my estimate you know certainly tens of billions of dollars of opportunity there to modernize back-end systems using Red Hat technology and that means that it's a front-loaded deal from a cash flow standpoint that they will find automatically revenue Cyn to plug in to IBM's captive install base what are your thoughts yeah Dave III think that your analysis is spot-on so RedHat has been one of these most consistent you know revenue companies out there you steadily when they went from a billion dollars to now they're right around three billion dollars they had the March to five billion dollars they had a couple of minor blips in their quarterly earnings but if you plug in that IBM services organization you really have the opportunity to supercharge this is not the opportunity is to have that that huge IBM services organization really helped you know grow those engagements do more openshift you know get more Linux help ansible you know really become the standard for you know automation in the modern workplace the challenge is that too many IBM people get involved because the the thing that everybody's a little worried about is IBM's done well with a lot of those acquisitions but they don't leave them stand alone even you know VMware for many years was a standalone company today VMware in Dell they're one company they're in lockstep from a management standpoint and they're working closely together what differentiates RedHat is you know iBM has groups that are much larger than RedHat that do some of the same things but RedHat with their open-source mission and and where they're driving things and the innovation they drive they move a little bit faster than IBM traditionally does so can will the Red Hat brand the Red Hat people and Red Hat still stay independent enough so that they can till you know hop on that next wave you know they they jumped early into kubernetes and that was the wave that really helped them drive for what they're doing the open shift you know even Dave you know Red Hat ahead bought core OS which was a smaller company moving even faster than Red Hat and while they've done a really good job of integrating those people absolutely from what I've heard it is slowed things down a little bit just because Red Hat compared to core OS was a much bigger company and of course IBM is a be a myth compared to Red Hat so will they throw these groups together and you know who will be making the decisions and can they you know maintain that that culture and that growth mindset well the point is structure we bring up VMware a lot as the model and of course when EMC bought VMware for paltry six hundred million six thirty five million dollars it folded it in and then spun it back out which was the right move certainly allowed the ecosystem to blossom I don't think IBM is gonna take that same approach blue wash is the term they'll probably blue wash that now cuz no Dave they said iBM has said they will not blue eyes there's no purple red stay separate absolutely there's concerns you know so to get those revenue synergies there's there's you're gonna have to plug into IBM systems and that requires some some work and IBM generally good at that so we'll see we'll keep our eyes on that it's but but I would predict that IBM is not going to do a VMware like well it's going to be some kind of hybrid Dave one of the other things is you talked about so Jim Whitehurst you know executive respective had him on the cube a lot he's reporting to Ginny you know the question is is this Ginny's last big move and who replaces her yeah let's talk about succession planning so a lot of a lot of rumors that Whitehurst is is next he's 52 years old I've said I don't I don't think they would do that but but let's talk about it first of all just you know Jim white her side sort of interviewed him the number of times but but you know I'm quite well you think even watch the job so you know I talked with Jim a little bit at red hat summit you know he kind of makes light of it he said you know knowing IBM the way we all know IBM IBM has always taken somebody from inside to do that he feels that he has a strong mission still to drive Red Hat he is super passionate about Red Hat he wrote a book book about the open source culture and is still driving that so I think from everything I see from him that's still the job that he loves and wants to do and you know it's a very different challenge to run IBM I'm not saying he would turn it down if that was the direction that it went if it went down to it but I did not see him angling and positioning like that would be where he wants to go well and of course you know Jim is from North Carolina he's got that kind of southern folksy demeanor you know comes across as the so the nicest guy in the room he's also the smartest guy in the room but oh we'll see we'll see what happens there I've said that I think Martin Schroder is going to be the next CEO of IBM Martin Schroder did three years of combat duty as the CFO in in what was a tough time for IBM to be a CFO they were going through those big transitions talking about you know they had to had to do the the SoftLayer acquisition they had to put together those strategic initiatives and so he's has he has CFO chops so he understands finance deeply he ran you know when IBM's big services business he's now responsible for IBM's revenue generation he's a spokesperson you know in many ways for the company he's like the prototypical choice he would not be surprising at all to see IBM plug him right in a little bit of history as you know still him a bit of a history historian of the industry have been around for a while John Akers back in the early 1990s when IBM's mainframe business was was tanking and the whole company was was tanking and it was at the risk of actually believe it or not running out of money they were gonna split up the company because the industry was breaking apart Intel and microprocessors Microsoft and software C gated disk drives you know Oracle and databases and to be more competitive from a product standpoint they were gonna split the company up into pieces Gerstner came in and said no way Gerson it was you know CEO of American Express said no that's not how customers want to buy he bought PwC for a song compared to what Carly Fiorina at HP a Carly Fiorina at HP wanted to pay I think 15 billion for it I want to say IBM paid five billion or maybe even less for PwC it completely transformed the company it transformed IBM into a services company and that's where what IBM is today they don't like when you say that but that's where the revenue was coming from what that did now and they also started to buy software companies IBM was restricted from getting into applications for years and years and years because of the DOJ because they owned the mainframe they had a monopoly while Microsoft and Intel changed all that IBM started to buy software companies and bought lots of them so they became a services company with a collection of software assets and the main mainframe and you know the power they have a storage business and you know Finance I'd be a global finance business etc etc so my my point is I'm not sure Jim Whitehurst would want to run that you know it's it's kind of messy now what you need run that is somebody who really understands finance knows how to turn the knobs and that's why I think you know Martin Schroeder is actually an excellent pick for that to keep the cash flow going to keep the dividend going to keep the stock buybacks going it's still in my view not a growth play I think there's certainly near-term growth that can be had by modernizing applications but I don't look at IBM as a growth company I look at IBM as a portfolio company that throws off a lot of cash and if and when the market stops rewarding growth and profit list growth a company like IBM will become more favorable to investors yeah and the question at the end of the day is after spending thirty four billion dollars for red hat does IBM help weather the storm of what is happening with the phenomenal growth of AWS the changes happening in Microsoft build more of a relationship than they've already had with Google and help position themselves for this next wave of IT there's IBM helped create a lot of the waves that you know happen in IT well the pure play cloud players are in it for the long game you know you know Amazon's philosophy is give tools to builders and allow them to disrupt the you know traditional old guard whether it's old guard technology companies or old guard industry players and you've seen the stat of how many Fortune 1000 companies or you know have gone out of business in the last 20 or 30 years or whatever it is that's going to continue and Amazon and and certainly Google and Microsoft want to support that disruption by providing cloud tooling and put the data in the hands of people that allows them to create new business models now that doesn't mean everybody's gonna throw up there mainframes it's it's not gonna happen it's certainly not gonna happen overnight and probably will never happen but I just don't see how IBM becomes a growth company in that scenario the growth is going to be continue to be with the cloud well but Dave we had seen IBM I'd say struggle a little bit when it comes to the the developers these days and the Red Hat acquisition is definitely going to be a boon to them in this space because Red Hat all about the developers that that's what you know that their customers are so you know that that's such a huge community that they've already tapped into so Ginny has said this hybrid multi-cloud is a chapter two with a trillion dollar opportunity so who else is going after that trillion dollar opportunity let's let's lay it out there who are the multi cloud players VMware obviously IBM Red Hat with open shift is in there Google with anthos Cisco is coming at it from a network perspective so they have coming at it from their position of strength even though you know you know they're relatively new entrants well ever everybody wants to be the new management layer in this multi cloud environment what VMware had done is had you know vCenter became you know the console for everyone as they were consolidating all of their silos and when I go to a multi cloud environment right where do I live you know Microsoft has a strong play there that's the other you know VMware IBM Red Hat anthos Google Mentos Cisco and Microsoft yeah and of course the one that while they won't say that they are multi cloud you can't talk about multi cloud without talking about Amazon because Amazon is a piece of everyone's cloud environment we were seeing what they're doing with outpost there so they are the kind of Spectre looming over this entire multi-cloud discuss yeah right on I think you got to put Amazon into that mix they will be an entrance into this multi cloud play and it's not gonna be a winner-take-all deal I could say cisco is coming at it from a position of networking strength Microsoft has its software estate and it's gonna do very well there IBM Red Hat coming at it from a standpoint of modernizing applications and there's a services could play and services component there and VMware of course coming at it from the the infrastructure operating system I don't see Oracle as interested in that market there may be some smaller players like turbo anomic you know who probably get gobbled up by one of these guys that we just mentioned but that really is the landscape and this is you know five six companies a trillion dollars there's plenty to go around all right Stu final thoughts on on the the Red Hat news the IBM news that they've finalized the Red Hat acquisition yes so you know what you want to look for is you know first of all you know what's happening organizationally you know if open shift is the primary you know the the tip of the sphere what we're talking about here for this you know cloud native multi-cloud world you know what does you know the IBM Cloud messaging looked like they're gonna have an analyst event here in a couple of weeks that you know that they've invited all the analysts to going into what does that cloud portfolio looks like how do they sort through all of the kubernetes options that they've had today do they try to elevate IBM cloud to be a stronger player or will they let Red Hat continue to play across all of the cloud environments that they have so you know organization and product positioning of the two things that I'm looking at the most Tom Siebel said publicly yesterday that IBM is a great company national international treasure but they miss cloud and they missed a I I wouldn't agree totally they didn't miss cloud they were late to cloud they had to buy software they're in cloud just like Oracle's in cloud not as competitive as the AWS cloud but they're they've got a cloud yeah HP doesn't have a cloud Dell doesn't have a cloud these these two companies that I just mentioned do AI yeah they're not sound of generalized AI like what Google and Amazon and Facebook and Microsoft are doing IBM's trying to solve you know big chewy problems iBM is a services company as they said so you know Watson you see a lot of negative stories about Watson but Watson requires a lot of services to make it work and it's as they say solving different problems so they're a player in AI multi cloud is new and this move the acquisition of red hat yes thirty four billion dollars expensive it's not gonna be pretty on the balance sheet but they get good cash flow so they'll deal with that over time it puts them right in the mix as a leader in multi cloud so thanks to for breaking down the the acquisition and thank you for watching this is Dave Volante what's do min and then we'll see you next time
**Summary and Sentiment Analysis are not been shown because of improper transcript**
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theCUBE Insights | Red Hat Summit 2019
>> Announcer: Live from Boston, Massachusetts, it's theCUBE, covering Red Hat Summit 2019. Brought to you by Red Hat. >> Welcome back here on theCUBE, joined by Stu Miniman, I'm John Walls, as we wrap up our coverage here of the Red Hat Summit here in 2019. We've been here in Boston all week, three days, Stu, of really fascinating programming on one hand, the keynotes showing quite a diverse ecosystem that Red Hat has certainly built, and we've seen that array of guests reflected as well here, on theCUBE. And you leave with a pretty distinct impression about the vast reach, you might say, of Red Hat, and how they diversified their offerings and their services. >> Yeah, so, John, as we've talked about, this is the sixth year we've had theCUBE here. It's my fifth year doing it and I'll be honest, I've worked with Red Hat for 19 years, but the first year I came, it was like, all right, you know, I know lots of Linux people, I've worked with Linux people, but, you know, I'm not in there in the terminal and doing all this stuff, so it took me a little while to get used to. Today, I know not only a lot more people in Red Hat and the ecosystem, but where the ecosystem is matured and where the portfolio is grown. There's been some acquisitions on the Red Hat side. There's a certain pending acquisition that is kind of a big deal that we talked about this week. But Red Hat's position in this IT marketplace, especially in the hybrid and multi-cloud world, has been fun to watch and really enjoyed digging in it with you this week and, John Walls, I'll turn the camera to you because- >> I don't like this. (laughing) >> It was your first time on the program. Yeah, you know- >> I like asking you the questions. >> But we have to do this, you know, three days of Walls to Miniman coverage. So let's get the Walls perspective. >> John: All right. >> On your take. You've been to many shows. >> John: Yeah, no, I think that what's interesting about what I've seen here at Red Hat is this willingness to adapt to the marketplace, at least that's the impression I got, is that there are a lot of command and control models about this is the way it's going to be, and this is what we're going to give you, and you're gonna have to take it and like it. And Red Hat's just on the other end of that spectrum, right? It's very much a company that's built on an open source philosophy. And it's been more of what has the marketplace wanted? What have you needed? And now how can we work with you to build it and make it functional? And now we're gonna just offer it to a lot of people, and we're gonna make a lot of money doing that. And so, I think to me, that's at least what I got talking to Jim Whitehurst, you know about his philosophy and where he's taken this company, and has made it obviously a very attractive entity, IBM certainly thinks so to the tune of 34 billion. But you see that. >> Yeah, it's, you know, some companies say, oh well, you know, it's the leadership from the top. Well, Jim's philosophy though, it is The Open Organization. Highly recommend the book, it was a great read. We've talked to him about the program, but very much it's 12, 13 thousand people at the company. They're very much opinionated, they go in there, they have discussions. It's not like, well okay, one person pass this down. It's we're gonna debate and argue and fight. Doesn't mean we come to a full consensus, but open source at the core is what they do, and therefore, the community drives a lot of it. They contribute it all back up-stream, but, you know, we know what Red Hat's doing. It's fascinating to talk to Jim about, yeah you know, on the days where I'm thinking half glass empty, it's, you know, wow, we're not yet quite four billion dollars of the company, and look what an impact they had. They did a study with IDC and said, ten trillion dollars of the economy that they touch through RHEL, but on the half empty, on the half full days, they're having a huge impact outside. He said 34 billion dollars that IBM's paying is actually a bargain- >> It's a great deal! (laughing) >> for where they're going. But big announcements. RHEL 8, which had been almost five years in the works there. Some good advancements there. But the highlight for me this week really was OpenShift. We've been watching OpenShift since the early days, really pre-Kubernetes. It had a good vision and gained adoption in the marketplace, and was the open source choice for what we called Paths back then. But, when Kubernetes came around, it really helped solidify where OpenShift was going. It is the delivery mechanism for containerization and that container cluster management and Red Hat has a leadership position in that space. I think that almost every customer that we talked to this week, John, OpenShift was the underpinning. >> John: Absolutely. >> You would expect that RHEL's underneath there, but OpenShift as the lever for digital transformation. And that was something that I really enjoyed talking to. DBS Bank from Singapore, and Delta, and UPS. It was, we talked about their actual transformation journeys, both the technology and the organizational standpoint, and OpenShift really was the lever to give them that push. >> You know, another thing, I know you've been looking at this and watching this for many many years. There's certainly the evolution of open source, but we talked to Chris Wright earlier, and he was talking about the pace of change and how it really is incremental. And yet, if you're on the outside looking in, and you think, gosh, technology is just changing so fast, it's so crazy, it's so disruptive, but to hear it from Chris, not so. You don't go A to Z, you go A to B to C to D to D point one. (laughing) It takes time. And there's a patience almost and a cadence that has this slow revolution that I'm a little surprised at. I sense they, or got a sense of, you know, a much more rapid change of pace and that's not how the people on the inside see it. >> Yeah. Couple of comment back at that. Number one is we know how much rapid change there is going because if you looked at the Linux kernel or what's happening with Kubernetes and the open source, there's so much change going on there. There's the data point thrown out there that, you know, I forget, that 75% or 95% of all the data in the world was created in the last two years. Yet, only 2% of that is really usable and searchable and things like that. That's a lot of change. And the code base of Linux in the last two years, a third of the code is completely overhauled. This is technology that has been around for decades. But if you look at it, if you think about a company, one of the challenges that we had is if they're making those incremental change, and slowly looking at them, a lot of people from the outside would be like, oh, Red Hat, yeah that's that little Linux company, you know, that I'm familiar with and it runs on lots of places there. When we came in six years ago, there was a big push by Red Hat to say, "We're much more than Linux." They have their three pillars that we spent a lot of time through from the infrastructure layer to the cloud native to automation and management. Lots of shows I go to, AnsiballZ all over the place. We talked about OpenShift 4 is something that seems to be resonating. Red Hat takes a leadership position, not just in the communities and the foundations, but working with their customers to be a more trusted and deeper partner in what they're doing with digital transformation. There might have been little changes, but, you know, this is not the Red Hat that people would think of two years or five years ago because a large percentage of Red Hat has changed. One last nugget from Chris Wright there, is, you know, he spent a lot of time talking about AI. And some of these companies go buzzwords in these environments, but, you know, but he hit a nice cogent message with the punchline is machines enhance human intelligence because these are really complex systems, distributed architectures, and we know that the people just can't keep up with all of the change, and the scope, and the scale that they need to handle. So software should be able to be helping me get my arms around it, as well as where it can automate and even take actions, as long as we're careful about how we do it. >> John: Sure. There's another, point at least, I want to pick your brain about, is really the power of presence. The fact that we have the Microsoft CEO on the stage. Everybody thought, well (mumbles) But we heard it from guest after guest after guest this week, saying how cool was that? How impressive was that? How monumental was that? And, you know, it's great to have that kind of opportunity, but the power of Nadella's presence here, it's unmistakable in the message that has sent to this community. >> Yeah, you know, John, you could probably do a case study talking about culture and the power of culture because, I talked about Red Hat's not the Red Hat that you know. Well, the Satya Nadella led Microsoft is a very different Microsoft than before he was on board. Not only are they making great strides in, you know, we talk about SaaS and public cloud and the like, but from a partnership standpoint, Microsoft of old, you know, Linux and Red Hat were the enemy and you know, Windows was the solution and they were gonna bake everything into it. Well, Microsoft partnered with many more companies. Partnerships and ecosystem, a key message this week. We talked about Microsoft with Red Hat, but, you know, announcement today was, surprised me a little bit, but when we think about it, not too much. OpenShift supported on VMware environments, so, you know, VMware has in that family of Dell, there's competitive solutions against OpenShift and, you know, so, and virtualization. You know, Red Hat has, you know, RHV, the Red Hat Virtualization. >> John: Right, right, right. >> The old day of the lines in the swim lanes, as one of our guests talked about, really are there. Customers are living in a heterogeneous, multi-cloud world and the customers are gonna go and say, "You need to work together, before you're not gonna be there." >> Azure. Right, also we have Azure compatibility going on here. >> Stu: Yeah, deep, not just some tested, but deep integration. I can go to Azure and buy OpenShift. I mean that, the, to say it's in the, you know, not just in the marketplace, but a deep integration. And yeah, there was a little poke, if our audience caught it, from Paul Cormier. And said, you know, Microsoft really understands enterprise. That's why they're working tightly with us. Uh, there's a certain other large cloud provider that created Kubernetes, that has their own solution, that maybe doesn't understand enterprise as much and aren't working as closely with Red Hat as they might. So we'll see what response there is from them out there. Always, you know, we always love on theCUBE to, you know, the horse is on the track and where they're racing, but, you know, more and more all of our worlds are cross-pollinating. You know, the AI and AI Ops stuff. The software ecosystems because software does have this unifying factor that the API economy, and having all these things work together, more and more. If you don't, customers will go look for solutions that do provide the full end to end solution stuff they're looking for. >> All right, so we're, I've got a couple in mind as far as guests we've had on the show. And we saw them in action on the keynotes stage too. Anybody that jumps out at you, just like, wow, that was cool, that was, not that we, we love all of our children, right? (laughing) But every once in awhile, there's a story or two that does stand out. >> Yeah, so, it is so tough, you know. I loved, you know, the stories. John, I'm sure I'm going to ask you, you know, Mr. B and what he's doing with the children. >> John: Right, Franklin Middle School. >> And the hospitals with Dr. Ellen and the end of the brains. You know, those tech for good are phenomenal. For me, you know, the CIOs that we had on our first day of program. Delta was great and going through transformation, but, you know, our first guest that we had on, was DBS Bank in Singapore and- >> John: David Gledhill. >> He was so articulate and has such a good story about, I took outsourced environments. I didn't just bring it into my environment, say okay, IT can do it a little bit better, and I'll respond to business. No, no, we're going to total restructure the company. Not we're a software company. We're a technology company, and we're gonna learn from the Googles of the world and the like. And he said, We want to be considered there, you know, what was his term there? It was like, you know, bank less, uh, live more and bank less. I mean, what- >> Joyful banking, that was another of his. >> Joyful banking. You don't think of a financial institution as, you know, we want you to think less of the bank. You know, that's just a powerful statement. Total reorganization and, as we mentioned, of course, OpenShift, one of those levers underneath helping them to do that. >> Yeah, you mentioned Dr. Ellen Grant, Boston Children's Hospital, I think about that. She's in fetal neuroimaging and a Professor of Radiology at Harvard Medical School. The work they're doing in terms of diagnostics through imaging is spectacular. I thought about Robin Goldstone at the Livermore Laboratory, about our nuclear weapon monitoring and efficacy of our monitoring. >> Lawrence Livermore. So good. And John, talk about the diversity of our guests. We had expats from four different countries, phenomenal accents. A wonderful slate of brilliant women on the program. From the customer side, some of the award winners that you interviewed. The executives on the program. You know, Stefanie Chiras, always great, and Denise who were up on the keynotes stage. Denise with her 3D printed, new Red Hat logo earrings. Yeah, it was an, um- >> And a couple of old Yanks (laughing). Well, I enjoyed it, Stu. As always, great working with you, and we thank you for being with us as well. For now, we're gonna say so long. We're gonna see you at the next Red Hat Summit, I'm sure, 2020 in San Francisco. Might be a, I guess a slightly different company, but it might be the same old Red Hat too, but they're going to have 34 billion dollars behind them at that point and probably riding pretty high. That will do it for our CUBE coverage here from Boston. Thanks for much for joining us. For Stu Miniman, and our entire crew, have a good day. (funky music)
SUMMARY :
Brought to you by Red Hat. about the vast reach, you might say, of Red Hat, but the first year I came, it was like, all right, you know, I don't like this. Yeah, you know- But we have to do this, you know, You've been to many shows. And Red Hat's just on the other end of that spectrum, right? It's fascinating to talk to Jim about, yeah you know, and Red Hat has a leadership position in that space. and OpenShift really was the lever to give them that push. I sense they, or got a sense of, you know, and the scale that they need to handle. And, you know, it's great to have that kind of opportunity, I talked about Red Hat's not the Red Hat that you know. The old day of the lines in the swim lanes, Right, also we have Azure compatibility going on here. I mean that, the, to say it's in the, you know, And we saw them in action on the keynotes stage too. I loved, you know, the stories. and the end of the brains. And he said, We want to be considered there, you know, you know, we want you to think less of the bank. Yeah, you mentioned Dr. Ellen Grant, that you interviewed. and we thank you for being with us as well.
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Niall Fitzgerald, Spark NZ | Red Hat Summit 2019
>> Man: Live from Boston, Massachusetts, it's theCUBE, covering Red Hat Summit 2019. Brought to you by Red Hat. >> And we are back live in Boston as we continue our coverage here on theCUBE of Red Hat Summit 2019. It is our sixth year here at the show and this year obviously some huge announcements. A significant moment it's been for Red Hat, we heard from Jim Whitehurst a little bit ago. Stu Miniman, John Walls, we're now joined as well by Niall Fitzgerald, who is the GM of IT Application Architecture and Design at Spark NZ. Niall, good afternoon, or I guess good morning still we're in an Eastern time zone. >> Yeah it's the middle of the night in New Zealand I'd say. >> Yeah, so Spark NZ New Zealand. Tell us a little bit first off about Spark NZ. What the folks back home are doing right now, work-wise, and your role with the company. >> Yeah, so Spark is the largest provider of telecommunication services in New Zealand. All the traditional type of services you'd expect, mobile, broadband, et cetera. We came out of the traditional kind of post office, so we've a lot of heritage, and about four years ago we rebranded from Telecom New Zealand into Spark. To represent that we were changing from being a telco into much broader range of digital services. Our purpose is to help all New Zealanders win big in the digital world. >> Niall, step back for a second. Talk to our audience that might not know the telecom industry as well as you, I've been an observer and participator in the industry but you know back in the dot com boom it was like limitless bandwidth and we're gonna do all these wonderful things, and cloud and digitization, have put some new opportunities as well as stresses and strains on your industry so, you know what's going on and you said you rebranded? >> Yeah, look, I think it's well-known it's been a tough last few years for most telcos in the world. I was listening to Red Hat talking yesterday about 60 consecutive quarters or more of growth, I don't think there's any telco in the world that probably has the same story. Like most, we're facing kinda decline in all the traditional revenues like voice and text and things like that, so we're all having to kinda rebrand ourselves and deliver much higher levels of customer service. People expect the same levels of service from us that they do from Amazon, Google, and everyone else. In Spark what that means to us is we've moved into lots of new things as you said, things like ICT, we're now very big in cloud, we've recently launched a Spark Sports brand and we've got streaming right to the key events like Formula 1. We're going to stream the Rugby World Cup, which is a massive event for New Zealanders, so looking forward to seeing that and Ireland on the all blacks in the final in September this year. So yeah, lot going on. Tough times but forcing us to keep changing every year. >> And so, about these changes that you're making whether technologically based, let's just deal with that. What is that ultimately going to do for you in terms of better customer service delivery? So, you've got inherent challenges, you've talked about them at all, that the world's changing, how we use this medium, this communication opportunity is changing, and you've been just a little behind the wave, hard to keep up with it, so rapidly changing. How much of a challenge is that? And then how are you going to address this going forward? How do you stay relevant? >> Yeah I think we're lucky in one regard because if I look back about five, seven years ago we were like most traditional telcos. We had a spaghetti for want of a better description of systems, and then we had all was multiples of everything, at the time we had 19 integration layers and 10 billing systems and it wasn't uncommon. But way back in 2012 we actually embarked on a massive transformation program, and we spent five years consolidating all of that infrastructure so going into about 2017 we were very lucky in that we had a massive foundation laid already, so what that then enabled us to do was to actually push away calls from our contact centers into mobile apps, into digital adoption. We've been a big embracer of things like big data and robotic process automation as well to try and take cost out of our industry. So, I think we're quite well placed. Now that allows us to do things like innovate new products for our customers so we bundle things like Spotify and Netflix. It allows to introduce things like Spark Sports brand, which we couldn't have done five years ago before the transformation We just wouldn't have been able to enable these things with our existing kind of legacy IT estate. >> So how's open-source play into all this for you? >> Yeah open-source, I suppose our first foray into open-source was when we went to start embracing big data and automation. So we started using things like Hadoop and various other things and our entire platform is based around open-source. We changed to an IMS network recently and we started embracing things like OpenStack, and then it really took us to a new level recently when we started working on Red Hat's Fuse, and OpenShift we started implementing that. >> Okay, so the OpenStack show for many years, the last few years we saw the telcos coming in specifically for network function virtualization or NFV. Is that what you're using in that space? >> Yeah, we are. Interestingly, at this conference I've heard a lot of people talk about OpenShift and OpenStack, obviously, particularly in the telco game. We actually came out a bit differently from the application space. So we had an integration platform that we had put in through this transformation phase which had served us well, and was connecting all of our 40, 50 systems together. But it was coming up to a life cycle event, and we decided we'd look externally and see had we options beyond just upgrading it. So we started looking around, and we effectively found Fuse, and in bringing in Fuse we then brought OpenShift in, which is quite different to what I've seen from a number of other people, they're bringing in things like OpenShift and building on top of it. We did it the other way around, you know? And we did it primarily for cost reasons, you know? >> Yeah, so talk a little bit about that impact of Fuse and OpenShift, what that means. Were you already down the containerization journey, or did that help drive >> Niall: No, no some of that modernization? >> That's exactly what happened. If I'm honest we hadn't really explored containerization too much because we had come to the end of our kind of transformation journey. Open-source and containerization wasn't around when we went through that. So we kinda needed some really core reasons to move on, so, yeah effectively what happened was we looked at Fuse, I was gonna say primarily for cost, but we were looking for something that we could migrate to where it makes sense. We were looking for something that wasn't a massive lift for the people who worked in our integration already, so they could be rescaled into it, and interestingly we turned agile recently which has changed the way we look at the needs of our systems. So our old integration platform, if we needed to deploy a change we had to take an outage, which was fine when we had a centralized IT department who deployed once a month and took a two hour outage, but when you have 20 tribes all developing features in isolation and they wanna go straight through to production, if everybody took an outage then our systems wouldn't really be up very often. So one of the key things that we were looking at for our new integration platform was can we deploy hot and can we scale? So that's basically where Fuse came into us. >> Okay, so can you? >> We can and we do. Still a little bit nervous about pressing the button mid-day and doing stuff >> Right, simultaneously and thinking this has really gotta work, right? >> Yeah then normally, >> We saw it today though on the demo stage, on the keynote. You know, simultaneous operations going on. >> No, we do it, and they normally don't tell me when they're doing it they just do it and tell me it worked afterwards, but no it's actually been really successful and you can imagine connection 40 or 50 systems together is effectively the equivalent of about 2,000 API's and we managed to migrate, we're about 70% of the way through. But we've managed to migrate those without actually impacting the systems that use them and that's probably been one of our most successful IT projects that I've seen. >> It's funny, you said we were towards the end of our transformation journey, and of course I think we all understand, it is just, I might've reached a marker in my journey, but it needs to be a continuous process. And you went through an agile transformation. So bring us in a little bit. Organizationally, what happened there. Some of the good, the bad, and the ugly of agile, 'cause I mean agile's always an ongoing thing. >> It is, yeah. So about the start of last year we started to think about agile and the need to change our ways of working. And we looked at a number of models overseas, and companies like Spotify and various banks, and we settled on a model of chapter and tribes. And we took about six months in looking at what that meant for us as an organization and all of the things that we needed to change. Everything from, people's contracts to people's titles. We got rid of all complex titles and moved down to simple things like Developer, Tester, et cetera. We had to train our people in agile so we ran boot camps for over 2,000 people. We had one with 500 people attend. We had to review all of our processes and see where we had centralized things like IT governance or procurement. How do you actually manage this when you have up to 20 different people effectively, or tribes doing their own developments, so over a period of about six months we went through all of these. We started with a concept of some forerunner tribes so we could figure out how this thing actually works, you know? And get some lessons. And then on the first of July last year, about a 2,000 people in various buildings packed up their stuff in their desks and moved into a new world, into their tribes with different working spaces and different collaboration areas and all the tools that we need. So, yeah we're about nine months down that journey now and it's been good. >> How many total employees? >> We have about 5,000 in total. >> 5,000, so you had 500 at one time. 10% of your workforce in training at one time. >> That's right, yeah. Absolutely. >> How do you keep the wheels on the bus rolling? Because I mean you're asking people not only to learn new skills, but learn them in a new environment, and learn them literally in a new place. I mean that's just massive change and I think, we're human beings. We're creatures of habit to a certain extent. You had to hit a lot of bumps along the way. >> Yeah, so one of the key things we did upfront was we said the operate part of our business, which is effectively things like our contact center, our sales staff, our service desks, we will not go agile with those on the first day, because they operate in a slightly different way of working. The people in our stores, et cetera. So we had a concept of agile light and agile heavy. So we kinda parked them for a minute so that we wouldn't do exactly what you say and let the wheels fall off the trolley. And we took to people that were the IT developers, the product development staff, and all of that, which came to just over about 2,000 people, and we firstly flipped those 2,000 people and put those through bootcamp. But even as you say, scheduling the boot camps, we made sure that we always had the right people on the ground and we would schedule smaller boot camps for them later if we needed to do it, but yeah. >> So nine months in now. You talking to your peers, if they're gonna go through. Any key learnings, what were some of the most challenging things that you ran into? >> I think probably the major one is that agile at its heart is a way of working, and despite the name it's actually quite prescriptive in how you should work, you know? When you pick up the agile book it tells you all the ceremonies you need to run and the processes that you need to run as well. And I think you need to be pragmatic in how you implement it because there are so many different flavors of agile. The one flavor, even with an organization of Spark size, it doesn't work. So the tribes and squads that are building out new products compared to the tribes that are doing things like upgrading systems, they will work in different ways. So I think the first thing is be pragmatic, take the goodness and the intent of agile, but implement it in how it works for you. And there's some other practical considerations, like prior to being agile we had quite a large number of our technology partners were based offshore in India, and you know it's quite difficult to run a 10 AM stand up in New Zealand setting the priorities for the day and the sprint plans, when, you know, four members of your team are asleep in India. You know, they're missing out on all of the goodness and the collocation and the sharing, so one of the things we had anticipated that, so luckily enough we had moved a lot of those people onshore in advance of agile, you know? But it is a big cultural change for everyone in the organization, not least the leadership teams as well. >> John: Well you got through it. >> We got through it, but there's no going back. >> Absolutely, no you're in the deep end now. Well, Niall, thanks for being with us, we appreciate the time joining us here on theCUBE, and I think that an Irishman is always welcomed in Boston. >> Thank you very much! We've been enjoying the hospitality. >> Yeah the door's always open. >> Thank you very much. >> Thank you very much. Niall Fitzgerald, joing us from Spark NZ. Back with more here on theCUBE, you're watching this live at the Red Hat Summit 2019.
SUMMARY :
Brought to you by Red Hat. And we are back live in Boston and your role with the company. To represent that we were changing from being a telco in the industry but you know back in the dot com boom and Ireland on the all blacks in the final that the world's changing, how we use this medium, at the time we had 19 integration layers and we started embracing things like OpenStack, Okay, so the OpenStack show for many years, Fuse, and in bringing in Fuse we then brought OpenShift in, Yeah, so talk a little bit about that impact So one of the key things that we were looking at We can and we do. We saw it today though on the demo stage, on the keynote. and we managed to migrate, and of course I think we all understand, and all of the things that we needed to change. 5,000, so you had 500 at one time. That's right, yeah. and I think, we're human beings. Yeah, so one of the key things we did upfront things that you ran into? so one of the things we had anticipated that, we appreciate the time joining us here on theCUBE, We've been enjoying the hospitality. Thank you very much.
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Arvind Krishna, IBM | Red Hat Summit 2019
>> Announcer: Live from Boston, Massachusetts. It's theCUBE, covering Red Hat Summit 2019. Brought to you by Red Hat. >> And welcome back to Boston. Here on theCUBE we continue our coverage of Red Hat Summit 2019. We just had Jim Whitehurst on, President and CEO, along with Stu Miniman, I'm John Walls. And now, we turn to the IBM side of the equation. Arvind Krishna is with us, the SVP of Cloud and Cognitive Software at IBM. Arvind, good to see you this morning. >> My pleasure to be here, what a great show. >> Yeah, absolutely, it has been. I was telling Jim he couldn't have a better week, right? Monday had good news, Tuesday great kick off, today again following through great key notes. We were talking briefly, a year ago you were with us on theCUBE and talking about IBM and its forward plans, so on and so forth. What a difference a year makes, right? (laughs) >> We couldn't predict that you'd be in the position that you are in now, so just if you can summarize the last year and maybe the last six months for you. >> Sure, and I think it's more building on what I talked to you about a year ago, I remember last May, May of 2018, in San Francisco. So I was exposing very heavily, look the world's going to move towards containers, the world has already embraced Linux, this is the time to have a new architecture that enables hybrid, much along the lines that Jim and all of the clients as well as Ginni and Satya were talking about on stage yesterday. So you put all that together and you say that is what we mentioned last year and we were clear, that is where the world is gonna go. Now you step forward a few months from there into October of 2018 and on the 29th October we announced that IBM intends to acquire Red Hat, so then you say wow, we put actually our money where our mouth was. We were talking about the strategy, we were talking about Linux containers, OpenShift, the partnership we announced last May was IBM software products together with OpenShift. We already believed in that. But now this allows us coming together, it's more like a marriage than sort of loose partners passing each other in the middle of the night. >> Right. >> And that then goes forward, you mention the news on Monday so for our viewers that don't know it, that's the news that the United States Department of Justice approved merger with no conditions. So now we've got to wait on a few other jurisdictions and then hopefully we can get together really soon. >> John: Right, right. >> So, I think back to looking at IBM over my career. I think the first time I heard the word coopetition it was related to IBM because IBM, big ego system, lots of innovation over its long history but as we know the bigger you get, the more chance that your partners are also going to overlap with you. Seeing Ginni up on stage and a little bit later seeing Satya up on stage is really interesting. You look at the public, multicloud environment, everybody doesn't need to work together, you talk to your customers, and I'm sure you find today it's not the future is hybrid and multicloud, that's where they are today even if they're trying to get their arms around all of it. So I'd love to hear your, with the mega trend of Cloud, what you're seeing that competitive but partnering dynamic. >> Look, I want to step back to just give it a little bit of context. So when you talk about companies, let's go back to the beginning of computing, of PC. The PC came from IBM operating system, DOS came from Microsoft. Then you had Windows setting up the IBM PC. So that's coopetition or is that pure partnership? Right, I mean you can take your pick of those words. Our value has always been that we, IBM, come to clients and we try to service problems that actually help them in their business outcomes. Then whoever they have inside their IT shops, that they depend upon, has to be a part of that answer. You cannot say oh, so and so is bad, they're out. So it always had to be coopetition from the lengths that we came to with our clients. We always build originally computers, other people's software are on those computers, other people provided services around it. As we went into certain software space, ISVs and so on came together. So now that you come to the world of Cloud, we hold a very fundamental belief and I think we heard a number of the clients talk about this. They are going to be on multiple public Clouds. If they are going to be on multiple public Clouds, they are also going to have traditional IT and they are also going to have private Clouds. That's the world to live in if I look at it from the viewpoint of that infrastructure. To now come to your direct question, so if that's the world they're going to live in hopefully one of those public Clouds is ours but the others are from other people. The private Cloud, we believe the standard for that should be OpenShift and should be containers. So as we go down that path, then you say if you want to take that environment and also run it on the other publics. That's good for the client, that's good for the publics, that's good for us. It's really a win, win, win. And so I think the ability to go do this and to make that play out, it really goes back to my thesis from more than a year ago where we talk about this is a new set of standards and a new set of technical protocols emerging. >> I want you to take us inside the conversations you're having with CIOs when you talk about Cloud because when Cloud first came out, it was well, the sins of IT is this heterogeneous mess and it's complex and expensive. Cloud's going to be simple, homogeneous and cheap. I look at Cloud of 2019 and I don't think I would use any of those adjectives to define what most people have for Cloud. Where are they today? Where do we need to go as an industry? >> Glass house computing, all centralized, all homogeneous, not all at heterogeneous. Oops, 15 flavors of Unix, all different, none of them really talk to each other. Oops let's go to desktop computing, we begin with a pure architecture, maybe Novell which doesn't exist, maybe it does, I don't even know. Oops, back to this complete sprawl of client server. Okay let's go to Cloud back to centralized glass house. >> You're making me dizzy. >> Oops, let's go to-- (laughing) >> Let's go to lots of public, lots of SaaS, lots of private, back to this thing. So, in each of these a different answer came on how to unite them. I think when we look at that Unix and client server sprawl, I think TCP/IP and the internet came together so that you could have all these islands talk to each other and be able to communicate. All right, great, we've got 20 years of victory on that. Now you're getting these things, how do you begin to workload across because that becomes the next level of values. Not enough to communicate. Can I really take a workload? A workload is not just a VM or just one container, it's a collection of these things integrated together in a pretty tight and complex way. And can we take it from one place and move it to the other? Because that goes to the write once, run anywhere mantra which by the way also we come to about every 20 years. I think that's the magic of this moment and if we succeed in making that happen, which I have complete conviction we will, especially together, then I think we give a huge value back and we give freedom to every CTO and every CIO. >> You paint this really interesting whoops picture, I love that, it's really a back and forth, right, we're swinging and almost there's a cyclical nature to this is what you're I think implying. What's to say in your mind that this isn't just another whoops as opposed to this being a permanent shift in the paradigm? >> I think it's, the reason I think that it's going to be cyclical is we tend to, you know whether you go to construction and real estate, you talk about capacity and factories. You see an opportunity and people tend to go one way. The only way to correct culture if you're sitting in one place is to sort of over-correct the other way, now you're over-corrected. Now you have to come back. And always when you over-correct one way, then suddenly all those other benefits you've lost, so then you've got to come back to get those benefits. After about 10 years, probably, you can debate 10 or 15, you're done. You've exploited all those benefits, now you need to go get those benefits. Because the technologies have changed, it's not just that you're going back to what was. We're going very conceptually from centralized to distributed, to centralized to distributed. And by the way, another one that's getting out from pure centralized is also Edge. Edge in effect is another distributed, so you put those together and you say I went there, but then I lost all this stuff, now I need to get back to that stuff. If you've got too much there, you'll say, no, no, no, I need to get some of this back. So it's going to go that way I think for every, if you look at it, the big arcs are back, the pendulum, what do you call it, the pendulum swing, is I think about 20 years it looks like, right? 1960, centralized, 1980, PC, 2000, you could say was the peak of the internet. Hey, 2020, we're in Cloud. So looks like about 20 years, looks like. >> All right, so, I like what you were saying when you talk about that multicloud environment, the application is really central there. IBM, of course, has a strong history, not just in middleware but in applications. What do you think will differentiate this kind of next wave of multicloud, how will the leaders emerge? >> Right, so if you look at it today, you run infrastructure. I think OpenShift has done a great job of how you help run their infrastructure. The value in our eyes in putting the services on top, both coming from open source as well as other companies that are running like an integrated package. This is all about taking the cost out of how do you deploy and develop. And if we can take the cost out of that, you're not talking about that five to 10 X as we heard a couple of the clients up on stage yesterday with Jim talk about. If we give that to everybody, you can sort of say that 70% which goes into managing your current and only 30% on innovation. Can you shift that paradigm completely? That's the big business outcome that you get. As you begin to deliver these towers of function on top of the base. You need to start at base, without one base, you don't know how to say, I can't deal with these towers of function on thirty different things underneath. That engineering answer is a terrible one. >> In terms of the infrastructure market, things keep changing, right? Consolidating, EMC doing what they're, you know what happened there. How do you see your play in that market? First off, how do you see infrastructure evolving? And then how do you see your play in that going forward? >> Infrastructure has always been big, in the end all the stuff you talk about has to run on infrastructure. I'd say the consumption model of how you get infrastructure is changing. So it used to be that many years ago, people bought all their own infrastructures. They bought boxes, they put in boxes, they did all the integration. And what came from the vendor was just a box. Then you went to, all right you can get it as a managed service or you can get it in Cloud which is also a pay by the drink but you can now turn it up and down also. So it's not a either or, people want all of these models. And so our role in infrastructure, certain things we will provide. When it comes to running really high mission critical workloads, think mainframe, think big Unix, think storage, of that ilk; we'll keep providing that. We believe there's a lot of value in that. We see the value, our clients appreciate that value. That workload turns up, but it's the mission critical part of the workload. Then in turn we also provide the more commodity infrastructure but as a service. We supply a large amount of it to our clients. It comes sometimes wrapped in a managed service, it sometimes comes wrapped as a Cloud. And we will also consume infrastructure from other Cloud providers because if people are providing base computer, network and storage, there is no reason to presume that our capabilities wouldn't run on top. If I go back to just February, we announced that Watson will now run. We said we used the moniker Watson Anywhere to make the assertion that we will run Watson anywhere that we can run the correct containerized infrastructure. >> So, Arvind, what's the single most pressing issue that you hear from organizations with respect to their technology strategy and how's IBM helping there? >> I think modernizing applications is the biggest one. So people have, typically a large enterprise will have anywhere from 3,000 to 15,000 applications. That's what runs the enterprise. We talk about everyone's becoming a software company, right, I mean that was one of the quotes and everybody is becoming a tech company that was I think what one of the clients said, hey, we think you're a bank, you're actually a tech company. What that says is that you're capturing the essence of all the business processes. You're capturing the essence of the experiences. The essence of what regulators need, the essence of how you maintain customer and customer of our clients, trust, back to them. It's maintained through this collection of applications. Now if you say I want to go change, I want to become even more client centric, I want to insert AI into the middle of my business process, I want to become more digital. All of that is modernizing applications. The big pinpoint they all have is how do I modernize them? What becomes that fabric in which I modernize? How do I know I'm not locked into yet another spaghetti mess if I go down this path? Because we've seen that movie also. So they're interested in, hey, I want to be clean at the end of this. I want freedom to be able to move it. And that is why I'm so passionate about, the fabric is based on open source, the fabric's got to be based on open standards. If you go there, there is no lock-in, and it's not a spaghetti mess, it is actually clean. Much cleaner than any other option that we can dream of is going to be. And so if we go down this path, now you can open yourself up to a much faster velocity of how you deliver innovation and value back to the business. >> Okay, so, I'd agree first of all when you talk about modernization, the applications that they have, that's the long pole in the tent. We understand compared to all the other digitization, modernization, this is the toughest challenge here. I'm a little surprised though that I didn't hear the word data because they don't necessarily articulate it but the biggest opportunity that they have has to be tied to data. >> Well to me, when I use the word application here, and you heard me use the word AI, can I insert AI in the context of an application? Now, why is it not being done today? To get the value out of AI, the data that powers the AI is stuck in all the silos, all over the place. So you've got to have, as you do this modernization, it's imperative to put the correct data architecture so that now you can do the governance, so that you can choose to unlock the appropriate parts of the data. It's really important to say the appropriate parts because neither do you want data sort of free floating around the globe, because that is the value of a company at the end of the day. And so that unlocking of that value is a huge part of this. So you're absolutely right to ask me to express it more strongly when I use the word application, I'm inclusive of not just runtime but always of the data that powers that application. >> Arvind, it was again a year ago that we were talking to you out in San Francisco and you made some rather strong thematic predictions that turned out well. I'm not going to put you on the spot here, but I can't wait to see next year. And see how this turns out. >> I can't let him go before, we had the CIO of Delta who we had on our program. >> Oh, right, right. >> In the key note, made a question about licensing, of course Jim Whitehurst said we don't have licensing but what's your answer? >> I'm willing to offer a deal to Samant. So I think that both IBM and Red Hat do a fair amount of air travel. We'll give him a common license if he can just include Red Hat for whatever IBM pays, just include all the Red Hat travel that is needed on Delta. (laughing) You know just so that the business models become clear and we can go have a robust discussion. >> Out of Raleigh that's a good deal. >> For us. >> That's what I'm saying. That is a good deal. All right, the ball is in your court, or on your runway. Whatever the case may be. Arvind, thanks for being with us. >> My pleasure. >> We appreciate it. And we'll let you know if we hear back from Rahul on that good deal. TheCUBE continues live from Boston right after this. (upbeat music)
SUMMARY :
Brought to you by Red Hat. Arvind, good to see you this morning. you were with us on theCUBE and talking about IBM that you are in now, so just if you can summarize that IBM intends to acquire Red Hat, so then you say that's the news that the United States Department of Justice the bigger you get, the more chance that your partners So as we go down that path, then you say if you want to take I want you to take us inside the conversations none of them really talk to each other. so that you could have all these islands What's to say in your mind that this isn't the pendulum, what do you call it, the pendulum swing, All right, so, I like what you were saying That's the big business outcome that you get. And then how do you see your play in that going forward? to make the assertion that we will run Watson anywhere And so if we go down this path, now you can open yourself up that I didn't hear the word data so that now you can do the governance, so that you can that we were talking to you out in San Francisco I can't let him go before, we had the CIO of Delta who we You know just so that the business models become clear All right, the ball is in your court, or on your runway. And we'll let you know if we hear back
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Jim Whitehurst, Red Hat | Red Hat Summit 2019
>> live from Boston, Massachusetts. It's the queue covering your red. Have some twenty nineteen. You buy bread. >> Oh, good morning. Welcome back to our live coverage here on the Cube of Red Hat Summit twenty nineteen, along with two men. Timon, I'm John Walls were in Boston. A delightful day here in Beantown. Even made more so by the presidents of Jim White, her's president, CEO, Red hat. Jim, Thanks for joining us. Number one. Number two. What else could go right for you here this week? This has just been a great show. Great keynotes. You had great regulatory news on Monday. I mean, you've got a four leaf clover in that pocket there. I think for him >> to tell you what the weather is holding up well, for us, you're right with great partnership announcements. Amazing product launches. You have been a red hat, but eleven years now and this is only my third rail launch, right? When we deliver it, we commit to long lives. And so But it's awesome to be a part of that. And we had all the engineers on stage. I can't imagine how it could get any better. >> You >> win the lottery >> Oh, yeah? Well, yes. This one step at a time here. Relate and open share for we'LL get to those just a little bit. Let's go back to the keynote last night. First life, you have CEOs of IBM and Microsoft. Very big statements, right? We know about the IBM situation. I think a lot of people got a charge out of that a little bit. You know, Jenny commenting about have a death wish for this company. And I have thirty four billion reasons why I wanted to succeed. But a very good message. I think about this. This linkage that's about to occur, most likely. And the thought going forward from the IBM side of the fence? >> Yeah. I thought it was really good toe have her there. Not only to say that, you know, we're obviously bought it toe to make it grow, but also really making a statement about how important open source is to the future of IBM, right? Yeah. What became clear to me early on when we were talking is this is a major major. I would say that the company might be too strong a word, but it is a major kind of largest possible initiative around open source than you can imagine. And so I can't imagine, uh, imagine a better kind of validation of open source with one large technology companies the world basically going all in with us on it >> to talk about validation of open source, such a nadella up on stage. If you had told me five years ago that within a week I would see Satya Nadella up on stage with the CEO of'Em wear and then a week later up on stage with the CEO, right hat, I'm like, Are we talking about the same Microsoft? This is not the Microsoft that I grew up with on and worked with soap. We're talking your team and walking around. It wasn't just, you know, he flew in from Seattle. I did. The casino left. He was meeting with customers. There's a lot of product pieces that are going together, explain a little bit, that kind of the depth of the partnership and >> what we've made. Just tremendous progress over the last several years with Microsoft, you know, started back in two thousand fifteen. Where were you across certified hyper visors, And that's kind of a basic you know, let's work together. Over the last couple of years, it's truly blossomed into a really good partnership where, you know, I think they've and we both gotten over this, you know, Lennox versus Windows thing. And you know, I say, we've gotten over. I think we both recognized, you know, we need to serve our customers in the best possible way on that clearly means is two of the largest infrastructure software providers working closely together and what's been interesting. As we've gone forward, we find more and more common ground about how we could better serve our customers. Whether that's you know what might sound mundane. That's a big deal sequel server on Realm and setting benchmarks around that or dot net running on our platforms. Now all the way to really be able to deliver a hybrid cloud with a seamless experience with open shift from, you know, on premise to to Azure and having Deutsche Bank on State's twenty five a thousand containers running in production, moving back and forth to your >> you know what getting customers to change is challenging. You know, it's a little surprising even after that this morning to be like Oh, yeah. Let me pull up windows and log in and do all this stuff. We've talked to you a lot over the years about culture, you know, loved your book. We've talked a lot about it, but I really enjoyed. Last night is I mean, you had some powerful customers stories talking about how red hats helping them through the transformation. And like the Lockheed one for me was like And here's how we failed at first because we tried to go from waterfall to scrum Fall on. Do you know he definitely had the audience you're after? >> Yeah, I really wanted to make Mikey No talking about it called How we have so many great What's to talk about your rela a open ship for bringing all those capabilities from for OS. But I really wanted Teo talk about the hell, because that actually is the hardest part for customers. And so having kind of customers back in back to back to back, talking about success stories and failures to get there, and it really is about culture. And so that's where we called the open source way, which we kind of coin, which is, you know, beyond the code. It's, you know, meritocracy and how you get people to work together and collaboration. That's what more and more our customers want to talk about. In fact, I'd say ninety percent of the customer meetings I'm in, which are, you know, more CIA level meetings they're all about. Tell me about culture. Tell me how you go about doing that. Yeah, We trust the technology's gonna work. We don't have that issue with open source anymore. Everybody assumes you're gonna have open source. It's really how do you actually make that effective? And so that's what I really wanted to tow highlight over the course of the evening. >> You know, there was a lot of conversation, too. And you have your talking to Jenny about culture last night that you have multiple discussions over the course of the negotiation or of the conversations. So it wasn't just some cursory attention This I mean, the both of you had a really strong realization that this has to work in terms of this, you know, merging basically of philosophies and whatever. But you've had great success, right with your approach. So if you can share a little bit about how those cops is ations How you went through what transpired? Kind of how we got to where we are Now that you know, we're on the cusp of successful moment for you. Yeah, >> sure. So, yeah. I mean, from day one, that was the center of the discussion, I think early on. So year Agos, um, IBM announced, contain arising their software on open shift. And I think that's when the technical light went off about Hey. Having the same bits running across multiple clouds is really, really valuable in open shifts. The only real way to do that. And yes. Oh, Arvind was here from IBM on stage talking about that. And so I think technically, it was like, OK, ding, this makes sense. Nobody else could do it. And IBM, with their capabilities and services integration center. Just lot of strategic logic, I think the difficult part. Even before they approached this. Now, kind of looking back on it, having all these discussions with him now it's okay. Well, culturally, how do we bring it together? Because, you know, we both have strong cultures, mean IBM has a famous culture. We do that air very, very, very different. And so from the moment Jenny first approached me literally, you know, Hey, we're instant this, But let's talk about cultural, how we're going to make this work because, you know, it is a lot of money to spend on a company with No I p. And so you know, I think as we started to work through it, I think what we recognized is we can celebrate the strength of each other's cultures, and you know the key. And this is to not assume that there's one culture that's right for everything. We have a culture hyper optimized for collaboration and co creation, whether that's upstream with our source communities or downstream with our customers or with our employees and how that works. And that's great. Let's celebrate that for what it is. And, you know, IBM kind of run some of those big, most mission critical systems in the world, you know, on mainframes and how you do that looks and feels different. And that's okay. And it's okay to be kind of different. But together, if we can share the same values if we can, you know, share the same desire to serve our customers and put them first how we go about doing it. It's okay if those aren't exact. And as we got more comfortable with that, um, that's when I got more comfortable with it. And then, most importantly for me is we talk about culture. But a lot of our culture comes from the fact that we're truly a mission kind of purpose driven company, right? We're all about making open source the default choice in the world. And you know, to some extent remember, have these conversations with senior teams like, Hey, we were going to think we're going to change the world. You know? How better can we propel this for? This is such a huge platform to do it, and yet it's going to be hard. But aren't we here to do hard things? >> So it talked about it, You know, it's it's always been difficult selling when you don't have the. There's been a lot of discussions in the ecosystem today, as companies that build I p with open source and some of the models have been changing and some of the interactions with some of the hyper scale companies and just curious when you look at that, it's you know, related to what you're doing, what feedback you have and what you're seeing. >> Yeah. Look, first, I'LL say, I can't talk about that as an interested observer because our model is different than a lot of open source software companies. You know, Paul talked about in his keynote today, and we talked a lot about you know, our models one hundred percent open source, where we take open source code, typically getting involved in existing communities in creating life cycles, et cetera, et cetera, et cetera. And so that model's worked well for us. Other open source companies where I think this is more of a challenge with the hyper scale er's right more of the software themselves. And obviously they therefore need to monetize that in a more direct way. You know, our sins are businessmen always say it's a really bad business model the right software and give it away. You know, that's not what we do where hundreds and open source, but you know, if you look at our big communities were, you know, ten to twenty percent of the contribution, because we want to rely on communities. The issue for those companies that are doing Maur. The code contribution themselves is there's a leakage in the open source license, which is, you know, the open source, like the viral licenses. You know, if you make changes and you redistribute, you have toe also, you know, redistribute your code as well. And redistribution now is to find in a hyper scale is just different. So there's kind of a leakage in the model. I think that ultimately gets fixed by tweaks to the licenses. I know it's really controversial, and companies do it, but, you know, Mongo has done it. I think you'LL see continuing tweaks to the length the licenses would still allow broad use, but kind of close that loophole if you want to call that a loophole. >> Yeah, well, it's something that you know as observers. We've always watched this space and you know, when you talk about Lennox, you know, you've created over three billion dollar company, But the ripple effects of Lennox has been huge. And I know you've got some research that we want to hear about when we've looked at like the soup space. When you look at the impact of big data and now where is going you know, the hoodoo distribution was a very, very small piece of that. So, you know, talk a little bit about the ripples. Is some new research that >> way? Had some research that was that we commission to say, What is the impact of Lenin's right hand and press linens? And then we were all blown away. Ten trillion dollars. I mean, so this isn't our numbers or we had really experts do this and e. I mean, it really blew us away. But I think what happens is if you think about how pervasive it is in the economy, it's ultimately hard to have any transaction done that doesn't somehow ripple into technology and technology. Days primarily built around Lynn IQ. So in red headed President X is the leader, so it just pervades and pervades. When you look at the size in the aperture and you make a really good point around, whether it's a duper lennox, I mean, we could look a red hat, the leader and Lennox and we're, you know, less than four billion dollars of revenue. But we've created this massive ecosystem the same thing with the Duke. You think about how big an impactful. Big data and the analytics and built on it are massive. The company's doing are only a couple hundred million dollars, and I will say I've become comfortable with I'd say, five years ago, I used to say in my glass half empty day I'd be like we're creating all of this value yet we're just only getting this little tiny sliver. Um, I've now flip that around and say My glass Half full days I look and say Wow, with this lever we have with this little bit of investment were fundamentally changing the world. And so everybody's benefiting in a much larger scale around that. And when you think about it, that aperture is something really, really, really excited >> about. Well, you talk about, you know where the impact will be. Talk about Cloud, that the wave of container ization, you know, Where do you see that ending up? You know, I look, you know, Cooper Netease is one of those things. There's a lot of excitement and rightfully so. It was going to change the market, but it's not about a Cuban aunties distribution. It's going to be baked into every platform out there. Yeah, gunships doing quite well. And you know all the cloud providers, your partner with them and working with them. It's less fighting to see who leads and Maura's toe. How do we all work together on this? >> Well, you know, I think that's >> the great thing about ah well functioning, mature, open source projects is it behooves everybody to share. Now we'LL compete ultimately, you know, kind of downstream. But it who's everybody to share and build on this kind of common kind of component. And, you know, like any good open source project, it has a defined set of things that it does. I think you hit on a really important point. Cooper Netease is such an important layer. Doesn't work without Lennox, right? I mean, lyrics is, you know, containers or Lennox. And so how do you think about putting those pieces to gather manageability and automation thinks like answerable. And so, you know, at least from our perspective, it's How do you take these incredible technologies that are cadence ng, you know, at their own pace and are fundamentally different but can't work unless you put them all together? Which to us, you know, that creates a big opportunity to say, How do I take this incredible technology that thousands of, of really technically Swiss cave people are working on and make it consumable? Archer Traditional model has been like linnet, simply saying We're going to snap shot. We're going created to find life we're going back for, you know, do patching for what? And we still do that. But there's now an added sir sort of value, something like open shift, where you can say, Okay, we could put these pieces together in life cycle and together. And, you know, we see instances all the time where an issue with Cooper Netease requires, you know, a change analytics. And so being able to life cycle in together, I think we can really put out a platform where we literally now we're saying in the platform you're getting the benefits of millions of people working on overtime on Lenox with tens of thousands people working on Cooper, Netease and the Learnings are all been kind of wrapping back into a platform. So our ability to do that is it kind of open source continues to move up. The stack is really, really exciting. >> Now. You were talking about transformative technologies on DH. How great it is to be a part of that right now. You alluded to that last night in the keynote. So you're talking about this, You know your history lessons. You know how much you love doing that? Your ki notes and you know, the scientific method Industrial Revolution open source. Just without asking you to re can you are a recount. All that. Just give us an idea about how those air philosophically aligned it. How you think those air open source follows that lineage, if you will, where it is fundamentally changing the world. It is a true global game change. Yeah, And >> so the point last night was a really kind of illustrate how a change in thinking can fundamentally change the world we live in. And so what I talked about just kind of quickly is so the scientific method developed and kind of the fifteen hundreds ish time frame was a different way to discover knowledge. So it goes from kind of dictates coming down from, you know, on high, too. Very simple hypothesis, experiment, observation of the results of the things that go through that process and stand the test of time and become what we consider knowledge right? And that change lead immediately to an explosion of innovation, whether that with the underpinnings of the industrial revolution or enlightenment, what we've done in medicine, whole bunch of areas. And yeah, the analogy I came to was around well, the old way we just try to innovate constrains us in a more open approach is a fundamentally better way to innovate. But what I found so interesting in and I think you picked up on it if it didn't emphasize this much, wanted to excite and having a lot of time, its many of the same characteristics of scientific discovery. So the idea of you know, independence anybody could actually do this pinpoints the importance of experimentation and learning those Air Corps components of, you know, tef ops and agile and open source, right? It's very, uh, in the end, the characteristics are actually quite similar as well. I think that's just fascinating to see happen. >> So e think about that. And if you could bring it back to the customers you're talking to, you have a lot of executive conversation, said You focus a lot on the how is really challenging. We understand. You know, the organizational structure of most companies goes back over a hundred years to military. So you know, what you see is some of the one of the biggest challenges that, you know, executive thieves we're facing these days. And, you know, how are they getting past that? Stuck? >> Yeah. And so, you know, I think the simple is way to state. The problem, which I hear over and over again, is we tried an agile transformation, and it failed because our culture was already and cultures Mohr of, ah always tell the executor when they said to me, It's like, Okay, but recognized cultures and output, not an input. And it's an output of leadership behaviors, beliefs, values what's been rewarded over time. So if you want your culture to change, actually to think about changing the way that you lied and manage and broadly, the structures, the hierarchies, the bureaucratic systems that we have in place today are really good at driving efficiency in a static environment. So if you're trying to slightly take a little bit of cost out building a car, you start with what you did last year. You get a bunch of scientists are consultants to look at it, and then you direct some fairly small changes. So the structure were in places other wrong with them. When value creation was about standardization of economies of scale. The hierarchies work really, really well to distribute tasks and allow specialization and optimization. The problem is now most value creation. It's requiring innovation. It's how doe I innovate and how I engage with my customer. You know the example I used a couple years ago? Its summit was, you know, the average cars use ninety minutes today. So if you think about how to reduce the cost of transfer port ation, is it taking two percent out of the cost of building a car? Or is it figuring out whether it's ride sharing or other ways? Teo. A fractional ownership. Whether it is to increase the average utilization of the car, it's clearly the ladder. But you can't do that in about bureaucratic hierarchical system that requires creativity and innovation, and the model to do that requires injecting variants in. That's what allows innovation to happen. So as leaders, you have to show up and say, all right, how do I encourage descent, you know, how do I accept failure? Right. So this idea of somebody tries something and it fails. If you fire him, nobody's gonna try anything again. But experimentation by definition requires a lot of failures and how you learn from it. So how do you build that into the culture where as executives you say holding people accountable doesn't mean, you know, firing him or beating him up. If they make a mistake, it's how do I encourage the right level of risk taking in mistakes, you know, even down to the soft side. So you know, how do you hold somebody accountable in an agile scrum, right. Your leaders have to be mature enough to sit down, have a conversation. Not around here. The five things you were supposed to do and you did forum. So you get in eighty right now, you can't say exactly what they need to do because it's a little blurry. So you have to have leaders mature enough to sit down and have a conversation with somebody is I think you got an eighty. Thank you. Got an eighty because here's what you did well, and here's what you didn't. But it's subjective. And how do you build that skill and leaders? They oughta have those subjective conversations, right? That sounds really, really soft, but it's not gonna work if you don't have leaders who can do that right? And so that's why it's hard. Because, you know, changing peep people is hard. And so that's why I think so. Many CEOs and executives want to talk about it. But that's what I mean by it's a soft side. And how do you get that type of change to happen? Because if you do that, pick ours honestly, pick somebody else's, you know, agile Davis with methodologies. They'LL work if you have a culture, this accepting of it >> before they let you go. There were two things to our quick observations about last night. Number one rule Samant hitch up on the licensing, so I know you've got your hands full on that. Good luck with that. You mentioned licensing a little bit ago, and I learned that thirty four billion dollars is a good deal. Well, right, that's what you said I heard it from are absolutely well. Things >> were a separate entity. We don't have licenses. So I don't know how we would go into an l A >> given. We don't have a license to sell. So got some expectations setting >> we need to do with our customers and then, you know, but separately, You know, I think people do forget that Red Hat is a not only a really fast growing company were also really profitable company. Most of the other software companies that are growing at our pace on a gap basis makes little to no money. We have because we get the leverage of open source, we actually generate a very large amount of free cash flow. And if you actually not to get the details of the financials. But we look at our free cash flow generation in our growth, I would argue, was a smoking good deal. That thirty four. I was asking for a lot more than that. >> You could had smoking good the last night that was gonna work to give thanks for the time. >> It's great to be here. >> Thank you. Thank you for hosting us here. Great opportunities on this show for I know that's exciting to see two but continued success. We wish you all >> thanks. So much. Thank you for being here. It's great to have you, >> Jim. White House joining us back with more live coverage here on the Cube. You are watching our coverage here in Boston of Red Hat Some twenty nineteen. Well,
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It's the queue covering right for you here this week? to tell you what the weather is holding up well, for us, you're right with great partnership announcements. First life, you have CEOs of IBM and Not only to say that, you know, It wasn't just, you know, he flew in from Seattle. I think we both recognized, you know, we need to serve our customers in the best possible over the years about culture, you know, loved your book. I'd say ninety percent of the customer meetings I'm in, which are, you know, more CIA level meetings they're Kind of how we got to where we are Now that you know, we're on the cusp of successful And you know, to some extent remember, have these conversations with senior teams like, Hey, we were and some of the interactions with some of the hyper scale companies and just curious when you look at that, You know, that's not what we do where hundreds and open source, but you know, if you look at our big communities were, So, you know, talk a little bit about the the leader and Lennox and we're, you know, less than four billion dollars of revenue. that the wave of container ization, you know, Where do you see that ending up? And so, you know, at least from our perspective, it's How do you take these incredible technologies that Your ki notes and you know, the scientific method Industrial Revolution open source. So the idea of you know, independence anybody could actually do this pinpoints So you know, what you see is some of the one of the biggest challenges that, you know, So you know, how do you hold somebody accountable in an agile scrum, that's what you said I heard it from are absolutely well. So I don't know how we would go into an l A We don't have a license to sell. we need to do with our customers and then, you know, but separately, We wish you all Thank you for being here. You are watching our coverage here in Boston
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Michael St-Jean, Red Hat Storage | Dell Technologies World 2019
(funky music) >> Live from Las Vegas, its theCUBE, covering Dell Technologies World 2019, brought to you by Dell Technologies and its ecosystem partners. >> Welcome to theCUBE. Day three of our live coverage from Dell Technologies World 2019 continues. Lisa Martin with my co-host Stu Miniman and we're welcoming to theCUBE for the first time Michael St-Jean, Principal Marketing Manager for Red Hat Storage. Michael welcome. >> Thanks Lisa. Hi Stu. >> So day three this event is still pretty loud around us. This has about we're hearing upwards of fifteen thousand people. A lot of partners. Give us your perspective on Dell Technologies World 2019. >> I got to tell you this is an awesome show. I got to tell you the energy, and not just in the sessions but out on the show floor as well. It's amazing. And some of the conversations that we've been having out there around things like emerging technologies, emerging workflows around artificial intelligence, machine learning things like that. And the whole adoption around hybrid cloud, it really speaks to all of the things that we're doing, the initiatives that we're leading at Red Hat. So it's a great validation of all of the things that we've been working on for the past 10, 15, 20 years. >> And you had a long-standing relationship with Dell. >> Oh yeah, absolutely. >> 18 years or so? >> Yeah, yeah we've had not just a long relationship but very collaborative relationship with Dell over the past 18 years. It's something like If you take a look at some of the initiatives that we've been working on, we have ready architectures around open stack, around open shift. We have just, we have highlighting a few things here around Microsoft sequel server, around SAP HANA. And actually, we're really talking a lot around open shift and a ready architecture that we've developed, that we have architecture guides, deployment guides all around open shift and open shift container storage for Dell hardware. And actually, next week at our Red Hat Summit event, you should really take a look on Wednesday morning our keynote, our EVP Paul Cormier will be talking about some great, new, very interesting initiatives that we've been working with Dell on. >> Alright well Michael I'm excited we're going to have theCUBE at Red Hat Summit in Boston. It's our sixth year there. I'll be one of the hosts there. John Walls will be there with me. We're going to have Paul Cormier on the program. (laughs) Jim Whitehurst hacking the keynote. It's actually not a secret Satya Nadella and Ginni Rometty will both be up on the main stage there. And just my perspective you were talking about hybrid cloud. As you said, Red Hat Summit, I've been for many years. That hybrid cloud, that adoption. They're both open stack at the infrastructure layer and up to the application with open chip. Something we've been hearing for years and you're right. The general themes seem to echo and resonate here as to what I've been hearing at Red Hat. Can you help expand a little bit those conversations you're having here? I love you talking about some of that app modernization analytics that are going on there. How does that fit into the ready architectures that Dell's offering? >> Sure. Well I represent our storage business unit. So a lot of times, the conversations I'm having over there at the booth are kind of revolving around storage and storage growth. How data is expanding, how do we deal with the scalability of that? How do we deal with persistence of storage and containers for staple applications, things of that nature. But really, at the end of the day as I'm listening to some of the other conversations that my colleagues are having over there, it's really about how do we get work done? How do we now move into these areas where we need that cloud like experience not just in a public cloud or even in a private cloud but everywhere that we touch infrastructure. We need to have that simplified cloud-like experience. >> So just point on your subject area. Talk about the containerization and what's happening with storage pieces. Give us that layer between the infrastructure layer because let me say I believe the t shirt I saw was Linux is container, containers are Linux. So Linux has lived on Dell hardware for a long time. But anything that users should understand about the differentiation between whether they were bare metal or virtualized in the past and containerized environments today? >> Yeah well I like to say that you can't spell Red Hat without storage. (laughs) I don't know that that's particularly true but (laughing) >> It sells good. >> It sells good. Yeah so storage is near and dear to my heart but really at the end of the day, you can't have storage sitting in an island, it has to integrate and be collaborative with the rest of the portfolio that we're expanding out for our customers solving real issues, real problems. And so we've been watching industry trends and certainly these are things like that from an industry we've been looking at over the past five, 10 years so nothing new but we see the evolution of certain things like for example developers and data analysts, data scientists, these people are really charged with going out there and making dramatic differences, transforming their companies, their organizations. And as that transformational application, service development or bringing back insights on data is really integral to a company's ability to transform or differentiate in the industry. They have to be much, much more agile. And it seems that they are more and more taking over a lot of the role that we would normally see traditional I.T. managers making a lot of the purchasing decisions. A lot of the industry trends show that these folks, developers, data analysts are actually making some of those I.T. decisions now. And of course, everything is really being developed as cloud native. So we see cloud native as being more of the new norm. And if you kind of look at the expansion of data, Lisa Spellman a couple of days ago said "Hey look. "We've seen data double in the past two years "but we're only using two percent of that data." >> Two percent? >> Two percent. >> Wow, it's not very much. >> Yeah. And if you look at IDC mentioned that the data sphere has now grown to over 33 Zettabytes. A zettabyte is a billion gigabytes. So put that into perspective. Alright. 33 Zettabytes. By 2025, they project that we're going to grow to 175 Zetabytes. How can we make better use of that data? A lot of that data is coming from IOT type applications. You look at trends, traffic trends and how that might be correlated to weather activities or other events that are going on or archeological digs or all sorts of just information that is brought back. How do we make best use of that information? And so the need for scalability in a hybrid cloud environment, has become more and more of a key industry trend as the data sphere continues to grow. And I think across all three of those, that's really driving this need for hyper convergence and not just hyper convergence in the traditional sense. we've seen hyper convergence in the field for probably about five, 10 years now. But initially it was kind of a niche play and it was based on appliances. Well the past two years, you've seen the Gardner reports on hyper convergence really talking about how it is moving and evolving to more of a software defined nature. And in fact, in the past Magic Quadrant around hyper convergence, you see Red Hat show up. Something that is probably not known that Red Hat has hyper converged offerings. It's something that actually we didn't get into it just because the analysts were suggesting it. We had customers come to us and they were trying to put together Red Hat Enterprise Linux, Red Hat virtualization, storage, et cetera et cetera with varying degrees of success with that because they were doing it more or less as a project. And so we took upon ourselves to develop that, put it into a product and start to develop it with things like Ansible for deployment management. We have dedupe and compression with our virtual data optimization products, virtual GPUs, et cetera. So we're really in that space now too. >> Yeah Michael I mean it really from our standpoint it was a natural extension of what happens if you look at what hyper converged was, it was simplification and it had to be tight integration down at the OS level or the virtualization level. As a matter of fact, when we first wrote our research on it, we called it server SAN because it was the benefits of storage area network but built at the server level. So we said those OS manufacturers. Now I have to admit, I called out VMware and Microsoft are the ones that I considered the biggest ones. But as a natural fit that Red Hat would look out of that environment and if you look at the leaders in the marketplace today, we're here, VMware is here, their softwares piece. Techtonic has transitioned to be a software company. So yeah, welcome to the party. It's been a fun ride to watch that over the last five years. >> Yeah absolutely. >> So let's talk about customers and this spirit of collaboration. You just mentioned sort of the entrance into HCIs being really driven by the voice and the actions and the needs of Red Hat customers. You guys have three major pillars, themes that you have been delivering at Dell Technologies World. Talk to us a little bit about this and how your customers are helping to drive what you're delivering here and what you'll be delivering in the future. >> Yes certainly. I mean that's the whole open source model. And we don't we don't just contribute to the open source community but we develop enterprise grade infrastructure solutions for customers based on the open source way. And so essentially, as I think of it these market trends that I was talking about. It's not that we're leading them or that we're following them. It's we're tightly integrated with them because all of these industry trends are being formulated as we're in progress. It's a great opportunity for Red Hat to really express what we can do with our customers, with our partners, our developers, the folks that we have on our staff that are working directly in the community. Most products that we work on, we're the number one contributor for. So it's all very special opportunity for us. I would say from a storage perspective, what we've really focused on this year is around three main pillars. One is around data portability for those application portability projects that we see in open shift. So being able to offer an enterprise grade persistent storage for stateful applications that are running in these containerized environments. Another area is around that hybrid cloud scalable storage. And this is something that being able to scale that storage to hundreds of petabytes is kind of a big deal (laughs) and especially as we see a lot of the workloads that we've been working with customers on around data analytics and now artificial intelligence, machine learning. Those types of data lakes type projects where we're able to, by using open stack or open shift, we're able to do multi-tenant workforce workload isolation of the work that all of these people are doing while having a shared data context underneath with Red Hat storage. And then the third is around hyper convergence. I think we've touched on that already. >> Yeah so Michael before letting you go I have to touch on the hot thing that everybody needs to understand what's going. The ripple that will be felt throughout the industry. And I'm not talking about a certain 34 billion dollar pending acquisition. (laughs) Constant in the last, most of my career there has been a certain logo that I would see at every conference and that Red Hat that I got my first one, I don't know, 15, 16 years ago. So the shadow man has been deprecated. There's a new Red Hat logo. >> Oh yeah yeah. And we just brought out the new logo today. So a great segue into actually, it was last night, they pulled down the old logos, they put the new logos on the buildings, pretty much around the world. I think it's May Day in Europe. So maybe some of that will happen tomorrow or. Trying to think of what time it is, probably tonight. So yeah it's a great new logo and it's, our old logo has been over, it was around for 19 years since 2000. And it came back from a lot of feedback from customers but also from people who didn't know Red Hat, didn't know what we did. And quite honestly, some of them said that shadow man looked a little sneaky. (laughing) >> I guess on the rise of all those cyber challenges, maybe they're right. >> (laughs) so we have a new logo just launched today. Very proud of it, we're looking forward to working with everybody in the industry and go forward with all these new, wonderful opportunities that we have. >> I look forward to pointing out to all the vendors that they're now using the old Red Hat logo just like they do for every other vendor in this space when it changes. >> As of how many hours ago. (laughing) >> Well it'll be interesting to see and hear what Stu and team uncover at the summit next week in terms of the impact of this brand. We thank you so much for your time Michael, >> Absolutely. >> joining Stu and me on theCUBE. I guess it is just after day of day three. It's hard to tell right it's all blending in together. (laughs) Well we thank you for your time and your insight. >> Thank you very much and see you next week Stu. >> Exactly. For Stu Miniman, I am Lisa Martin, you're watching theCUBE live from day three of our coverage of Dell technologies world 2019. Thanks for watching. (light music)
SUMMARY :
brought to you by Dell Technologies for the first time Michael St-Jean, A lot of partners. And some of the conversations at some of the initiatives that we've been working on, How does that fit into the ready architectures but everywhere that we touch infrastructure. because let me say I believe the t shirt I saw was that you can't spell Red Hat without storage. And it seems that they are more and more that the data sphere has now grown that I considered the biggest ones. and the actions and the needs of Red Hat customers. the folks that we have on our staff that everybody needs to understand what's going. So maybe some of that will happen tomorrow or. I guess on the rise of all those cyber challenges, (laughs) so we have a new logo just launched today. I look forward to pointing out As of how many hours ago. in terms of the impact of this brand. Well we thank you for your time and your insight. of Dell technologies world 2019.
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Ray Wang, Constellation Research | IBM Think 2019
>> Live, from San Francisco. It's theCUBE. Covering IBM Think 2019. Brought to you by IBM. >> Welcome back to theCUBE's coverage of IBM Think 2019. Here in Moscone, we're talking so much multi clouds. It's been raining all day, really windy. To help us wrap up our third day, what we call theCUBE Insights, I have our co-CEO, Dave Vellante. I'm Stu Miniman and happy to welcome back to the program. It's been at least 15 times on the program, I think our counter is breaking as to how many you've been on, Ray Wang, who is the founder, chairman and analyst with Constellation Research, also the host of dDsrupTV who was gracious enough to have me on the podcast earlier this year, Ray. >> Little reciprocity there, Stu. >> Hey, we got to get you back on, this is awesome! Day three is wrap-up and this is going to be fun. >> Ray, as we say, theCUBE is everywhere, except it's really a subset of what you and the Constellation Research team do, we see you all over the place so thanks for taking time to join us. Alright, so tell us what's going on in your world, Ray. >> So what we're seeing here is actually really interesting, we've got a set of data-driven business models that are being lit up, and you see IBM everywhere in that network. And it's not about Cloud, it's not about AI, it's not about security, it's not about Blockchain. It's really about companies are actually building these digital networks, these business models, and they're lighting them up. IBM-Maersk, we saw things with insurance companies, you see it with food trust, you see it with healthcare. It's happening, and it's the top customers that are doing this. And so it's like we see a flicker of hope here at IBM that they're turning around, they're not just selling services, they're not just selling software, they're actually delivering these business models to executives and companies, and the early adopters are getting it. >> Ray that was one of the questions we had, is what's the theme of the show and-- >> There is no theme! >> You're giving us the theme here of what it should be because we talk digital, we talk cognitive, we talk all these other big thought-y words because we need to think while we're here, right? >> We need to think, we need to think! No, but the thing is this is a theme-less show, people can't figure it out but the main thing is, look, I've got a problem, this digital disruption is happening, my business models are changing. Help me be part of that shift, or I may go away! And people realize that and that's what they're starting to get, and you see that in all the reference customers the people that were on stage. The science slams were also really great. I don't know if you had a chance to catch those but the science slams were kind of a flicker into research, IBM research which is the heart of IBM, is coming up. They're going from concept to commercialization so much faster than they used to be, used to be research would do a project people are like, that's kind of cool, maybe I'll adopt it. They're now saying hey, let's get this into the market, let's get into academia, let's get early adopters on board. >> So Ray, what do you make of the Red Hat deal? What does it say about IBM's strategy? Do you like the deal? What does it say about the industry at large? >> It's a great question. The Red Hat deal to me was overpaid, however, at 20x multiples, that's what PE firms are paying. So every vendor is now competing with PE firms for assets. Red Hat, at about 9x, 10x? Makes a lot of sense, at 20x? It's kind of like, okay, is this the Hail Mary or is this the future strategy or is this basically what the new company is? I would have rather taken that money and put it into venture funds to continue what they're doing with these network models. That would have been a better strategy to me but Red Hat's a great company, you get a great team, you get great COs you get great tooling. >> So you would've rather seen tuck-ins to actually build that network effect that you've been alluding to. Of course that would have taken longer you know, wouldn't have solidified Ginni's legacy. So, it's a big move, a big move on the chessboard. >> Well the legacy's interesting, last year the stock was down some 20-some percent, it's up 20% since January so we're going to see what happens, but it's a doubt component. >> Well I've always said she inherited a bag of rocks from Palmisano at the peak of 2012 and then it got hit hard and she had to architect the transformation. It took, I don't know, five years plus, so, you know, she was dealt a tough hand, in my opinion. >> She had a bad hand, but we've had seven years to play this. I think that's what the market's saying. >> So it's on her, is what you're saying. >> It's now on her. She's got to turn this around, finish the legacy, but you've got a great CEO in waiting with the Red Hat guy. >> Jim Whitehurst you're saying? >> Yeah, he's good >> So she's what, Ginni is 60, 61? Is that about right? >> She's past the retirement age. Normally IBM CEOs would have gone through. >> 61 to 63 I think, is that range maybe, hey, women live longer so maybe they live longer as the CEO of IBM, I don't know. >> She did get a bad hand, but I think when you execute the strategy that money, here's the tough part. Investors are saying, hey, we'd rather take your money, back away from you through stock buybacks, dividends and mergers and acquisitions, and we don't trust you to do the innovation. That's happening to every company, including all of IBM's customers. The problem is if you do that, they're hedging against those companies too. The same investors are taking 50, 100 million, giving it to three kids in a start-up anywhere in the world and saying, hey, go disrupt these guys, so they're betting against their own investments and hedging. So that's the challenge she's up against. >> We talked about in our open for the show here. It's developers, though, that's the business model. We saw IBM struggle for years to get any real traction there, there's little pockets there, they've got great legacy in open source, but Red Hat's got developers. Ray, you go and see a lot of shows, who's doing well with developers out there? >> Microsoft redid their developer network by going younger with GitHub, whole bunch of other acquisitions, this is a great developer buy in that percent. But the other piece that we noticed here was it's the partner developers that are coming in in force. It's not your average developer. I'm going to build a coding and do a mobile app, it's people that work for large system integrators, large networks, small midsize VARs, those are where the developers are coming from and now they have a reason, right? Now they have a reason to build and I think that's been a good turnaround. >> How about Salesforce with the developer angle, what's your radar say there? >> It's not about the developer angle on the Salesforce side, what's interesting about the Salesforce side is Trailhead. This is, like, learning management meets gamification meets a whole LinkedIn training program in the back end. This is the way to actually take out LinkedIn without going after LinkedIn, by giving everyone a badge. There's a couple of million people actually on this thing. Think about this, all getting badges, all training each other, all doing customer support and experience, that's amazing! They crowd-source customer experience and learning right there. And they're building a community and they're building a movement. That's the thing, Salesforce is about a movement. >> Couple of others, SAP and Oracle, give us your update there. >> I think SAP's in the middle of trying to figure out what they have to do to make those investments. We see a lot of partnerships with Microsoft and IBM as they're doing the Cloud upgrades, that's an area. The acquisition of Qualtrics is another great example, 20x. 20x is the number people are now paying for for acquisitions and for assets on that end. And Oracle's going to be interesting to watch, post-Kurian to see how they come at it. They have a lot of the assets, they've got to put them together to get there, and then we've got all these interesting things like ServiceNow and Adobe on the other end. Like, ServiceNow is like, great platform! Awesome, people are building and extending the Cloud in ServiceNow, but no leadership! Right? I mean, you've got a consumer CEO trying to figure out enterprise, a consumer CMO trying to figure out enterprise, and they don't know if am I a platform or am I an app? You've got to figure that out now! People want to work with you! >> Well it is a company in transition at the top, for sure. >> But they can do nothing and still make a ton of money on the way out. >> And they've kicked butt since Donahoe came on, I mean just from a performance standpoint, amazing. >> Oh yeah, performance? You can do nothing and I think it's still going to coast but the thing is at some point it's going to come bite you, you got to figure that out. >> How do you think that Kurian will fit at Google, what's your take there? >> You know, early reactions on Kurian at Google is good, right? The developers are embracing him, he understands what the problems are. Let's be honest, I've said this many times to you guys in private and also in public, you know. It was a mess, it was a cluster before. I mean, you had three years, and you lost traction in the market, right? And it's because you didn't get enterprise, you couldn't figure out partners and, I mean, you paid sales people on consumption! Who does that? You're a sales rep, you're like, I'm not going to do this on consumption! Makes no sense! >> Ray, Kurian had been quoted that no acquisition is off the table, you know, they didn't buy GitHub, they didn't buy Red Hat, do you see them making a 10, 20 million dollar acquisition to get them into the enterprise space? >> Billion. >> Yeah, sorry, 20 billion. >> I think there's a lot that they go after. I know there's rumors about ServiceNow, there's a couple of other things. I think the first acquisition, if I were to make it would be Looker. I mean I love that thing that's on there and buy Snowflake too while you're at it. But we'll see what they do. I think the strategy is they've got to win back the trust of enterprises. People need to know, I'm buying your relationship, I have a relationship, I can count on you to be successful as opposed to, hey, you know, you can get this feature for less and if you do this on a sustained unit or, I want to know I can trust you and build that relationship and I think that's what they're going to focus on. >> Well, come on, isn't Google's business still ads? I mean, that's still where all their revenue is. >> It is, but the other category is $10 billion. That other category of devices and Cloud and all that? That's still a big category and that's where all the growth is. I mean look at this, it's a full frontal assault between Amazon and Google, Amazon Alexa versus Google Home, right? Amazon in ads, $10 billion in ads, going after Google's ad business. Amazon doing an AWS versus Google Cloud. Google's under assault right now! >> Give us the update on Constellation, your conference is really taking off, you've got great buzz in the industry, and congratulations on getting that off the ground. >> And the Tech for Good stuff, loved it. >> Thank you. We had great event, December 10th, talking about the future of the Internet. What it means in terms of, you know, digital rights, human rights in a digital age, was really that conference. Our big flagship conference is November 4th through 7th, it's at Half Moon Bay. We get about 250 CXOs together, about 100 vendors and tech folks that are visionaries and bring them together, that's doing well, and we do our healthcare summits. We brought on a new analyst, David Chou. David Chou, and if you've seen him before, he's like one of the top analysts for CIOs and chief data officers in the healthcare space, he's at HIMSS right now. >> He's awesome, we know him from Twitter. He's been on, he's great. >> Yeah, so we do healthcare summits twice a year and that's been picking up, some of the top thinkers in healthcare. We bring them in to Las Vegas, we do a brainstorming session, we work with them. They think about ideas and then we meet again, so. >> Alright, Ray, we want to give you the final word. We're halfway through IBM Think, what have you been thinking about this and any final musings on the industry? >> So I was very upset last year at how it was run. And I think this has run much better than last year. I think they did a good job. February in San Francisco? Never again, don't do that. I know it's May next year, is when this event's going to be. But I think the main thing is IBM's got to do more events than once a year. If you get enterprise marketing you realize it's at the beginning of the year, it's still sales kick-off and partners. March? March is like closing the quarter, so you do an event in April or May, and you do it in April or May but you have multiple events that are more targeted. This theme-less approach is not working. Right, partners are a little confused but they're here because it's once a year. But more importantly, build that pipeline over the quarters, don't just stop at a certain set of events, and I think they'll get very successful if they do that. >> Alright well, Ray, next time you come on the program, can you please bring a little bit of energy? We'll try to get you on early in the show when you're not so worn down. >> I know. >> Thanks as always. >> Appreciate you coming back on, man. >> Hey thanks, man, it's theCUBE! I love being on this thing.. >> Always a pleasure. >> Alright and, yeah, we always love helping you extract the signal from the noise. We're Dave Vellante, John Furrier, Lisa Martin. I'm Stu Miniman. Thanks for watching day three of theCUBE at IBM Think. Join us tomorrow, thanks for watching. (light music)
SUMMARY :
Brought to you by IBM. I'm Stu Miniman and happy to Hey, we got to get you except it's really a subset of what you and you see IBM everywhere and you see that in all to continue what they're doing move on the chessboard. Well the legacy's interesting, from Palmisano at the I think that's what the market's saying. around, finish the legacy, She's past the retirement age. as the CEO of IBM, I don't know. and we don't trust you that's the business model. But the other piece that we noticed here It's not about the developer angle Couple of others, SAP and Oracle, They have a lot of the assets, Well it is a company in money on the way out. I mean just from a performance but the thing is at some point to you guys in private and I can count on you to be I mean, that's still where It is, but the other getting that off the ground. What it means in terms of, you know, He's awesome, we know him from Twitter. some of the top thinkers in healthcare. and any final musings on the industry? and you do it in April or May time you come on the program, I love being on this thing.. extract the signal from the noise.
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Stefanie Chiras, Red Hat | IBM Think 2019
>> Live from San Francisco. It's the cube covering IBM thing twenty nineteen brought to you by IBM. >> Welcome back to Mosconi North here in San Francisco. I'm student like co host David Dante. You're watching four days of live wall to wall coverage here at IBM. Think twenty nineteen. Happy to welcome back to the program first time in her new role. And she's also moved back to David, my home area of the Boston Massachusetts F area. Stephanie Sherice, who's now the vice president and general manager of Red Hat Enterprise. Lennox Business Unit. That red hat Stephanie. Thanks so much for joining. >> What's my pleasures to It's great to be back with you both. >> All right, Stephanie, be back. You know, I happen to notice quite a few IBM. Er's obviously know you. We've had you on our program and many of the IBM shows in the past. So tell us, what's it like being back at one of the Big Blue shows? >> No, it's great. It's great. As you know, I somewhat grew up at IBM might. I had seventeen years. I know so many people in the thing you miss most is in the network. So it's been it's a great opportunity to be here. Catch up with old friends, Talked to new colleagues. Great. What brought >> you to Red hat? I mean, like, you say, long career at IBM, and it was obviously prior to the acquisition, so you didn't know that was coming? What was the lore? >> So I'd say a couple of things clearly, as you know, I became a student of the Lenox Space while I was in while I was at I B M in the Power Systems unit. So fascinated for what Lennox has taught the industry about. I always say Lennox Lennox taught the world how development is meant to be done through open source in the innovation of a community. So that was a thrilling aspect for me to join. Also, I think I truly believe in the open hybrid, multi cloud strategy that Red Hat has had actually for years. Now. I think open source is all about choice and flexibility. It's what Lennox provides and moving forward their strategy around having a management portfolio, having a Cooper Netease platform all built upon being able to consume Lennox wherever and however you want it, I believe in the strategy. So it's been really exciting, and having the rail aspect is fantastic. >> So, Stephanie, you're right. You own that. Really? The core of red hats business. You know, Red Hat Enterprise Lennox, You know, we've been covering this space heavily for years, and everything that redheads doing comes back to, you know, that Lennox Colonel and there Ah, lot of people don't really understand that. The business model say it's like, Oh, well, you know, red hat cells free and, oh, that's a service model and things like that bring us inside your business and what's exciting and dynamic and happening in that space. >> It's It's such an incredible time. I couldn't ask for a better job, but I love the linen space for a couple of things. As you look at all the things that are changing in the industry today, I always say to customers, you may not know the applications. You'll run next year in three years, in five years, you may not know where you'll want to run them. What you do know it's they'll run on Lennox, right? It's the fastest growing operating system in the industry today. It's number one choice of developers. So, as you look to see, what can you do to prepare for the innovation Its pick your Lennox and Red hat has done an incredible job of making a consumable. If you look at the hundreds of thousands of packages out there, an open source, you take that you pull it into. Really, I feel what well delivers bread had. Enterprise Lennox delivers is an ecosystem. It's a trusted ecosystem. We test the team does an incredible job of testing a breadth of hardware, everything from, you know, X eighty six systems to power systems. Dizzy, too, you know, in video G, D G X. So way test all of that and then all the way up to the applications. We pull that ecosystem with us now, our goal is to be able to provide that anywhere. So you take that capability whether you do it. Bare metal, virtual machine, public cloud, private cloud. Now you move into containers. You know, everything we do in rail translates overto open shift. Whether you consume it as a private cloud and open stack or containerized in open shift, all of that ecosystem follows through. So it really is. When I look at is the bedrock of the of the entire portfolio for red hat, and we really are at Enterprise software company Today we pull in management with things like answerable and satellite. You pull all that together. Automation of the storage portfolio. It's just such an exciting time. It's a real transition from going from a no s company and building >> upon that. >> I mean truly an enterprise software company from multiple clouds. >> So I was talking about more about that because open shift gets all the buzz. Ostensibly, it was a key linchpin of the acquisition that I being made. Well, What's the connection between between rail and the rest of red hats? Portfolio. Maybe you could connect those dogs. >> That would be so, as you look at, and I'm an infrastructure person for a long time, as you know, and coming from the infrastructure up space, most was purchased from an infrastructure of you for many years. Now. It's all about how you consume the applications and the infrastructure comes in and feeds it from an application. Space containers are amazing, right? They bring that incredible flexibility started. Stop it, move it lifted, shifted Everything. Thing is, from an application perspective, it's simple. From a Lennox perspective, it's actually much more complicated, you know, in the days of bare metal or even V EMS. Quite clean cut between your systems, your operating system. You're hyper visor in your application. Once you move into containerized worlds, you've split up your Lennox. You have user space in your container. You have Cooper netease making ten times the number of calls to the colonel space that the hyper visor ever did. Much more complicated. So as you move into that space of Kou Burnett ease and containers and orchestration, you know, you really want someone who knows Lennox because the clinic space is more complicated, bringing simplicity from a container and application >> performance management, security changes >> Absolutely automation. So really is as we look at the portfolio, we have a You know, we believe strongly in the customer experience, we deploy with rail that trusted ecosystem. In order to be able to take that into a container world, we need to be able to get access into the user space into the coup. Burnett ease and into the colonel because they're so intimately twine entwined. So as we transition that open shift is the way we delivered, we build upon the same rail. Colonel, we used the user space. >> So, Stephanie, like you, I'm an infrastructure person. And, you know, my background is in, you know, the OS. And, you know, down that environment, there's been a wave of, you know, just enough operating system. How do we slice these up? I look of Cora West, which read, Had acquired was originally a We're going to slim down, you know, the colonel and make things easily. Where's the innovation still happening? Lenox And, well, you know why is still Lin It's going to be relevant going forward. You talked about, you know, containers, things like server list all threatened to say, Oh, well, you know, my application development person shouldn't have to think about it. But why is it still important? >> Yeah. So you know whether things I love about my role is with the position that red hat has in the industry with rail. And, you know, we have Ah, we have a approximately fifty thousand set of that fifty thousand customers who use rail and trust us. So as we look at how we drive innovation, I love the ability to kind of help redefine what an operating system is. And you know, certainly we bring added value did in real seven and now we have the relic beta out. So we're continuously adding things. We added in a few things about consumption base. We added app streams which separates out the ability to update your user space at a different rate in pace than your core. A court sort of based level which allows you to do faster updates in your user space. Continue on your core. Run multiple versions of your user space. It's a fantastic way to pull an innovation faster. We've also done a number of things with our capabilities around taking that first step into container ization, including tools like Build a pod man scope EOE so that within the operating system itself you conduced those based kind of capabilities for container ization. That first step. And then when you need orchestration, you can move over to open ship. So there's a ton of innovation left in the operating system. Security is core to everything we do. S o the innovation around security remains a constant were in the typical open source fashion. We've released the Beta here in November. We're gathering great feedback. We have about one hundred and forty high touch beta customers who were working hand in hand with to get feedback. And we're looking forward to bringing rally to market >> What? One of the big pieces of feedback you're getting a lot of people excited about in terms of Really. >> Certainly everyone looks to us for their security. So that's been that's been a great place for us. We had work to do on making it easier to consume as we continue to drive things with developers. And we have a new portal that's allowing sort of a single user space view those kinds of consumption. Things are very important today because, as you said, you want skills to be easily transferrable. Easily updated s o A lot of the consumption based things we've been >> working on, >> um, as well as thie tooling? >> Yeah. You talk about that skill set that's one of the biggest challenges in a multi cloud world is if I'm going to live in all these iron mint, what's the same and what's different communities is only a small piece. But Lennox is, you know something that's transferrable. What are you seeing? What are you hearing from customers in that regard? >> Yeah, I think, and that's one thing. We're working hard to try and make sure that you know, I think like when you when you buy a house, right, you can buy a house. You could buy an apartment building in Pine Office building. What doesn't change is the land underneath. You need that land to be stable, and you know you can build whatever you want on it. And that's how we view our lennox consuming anywhere you want. It's always secure. It's always stable in multiple public clouds. I think really it's the flexibility when I look at that pull open hybrid cloud space, customers aren't looking to buy a product. They're looking to establish a relationship with someone who's going to provide them what they need to do today on their mission critical applications but have the flexibility going forward to take them where they want to go. They may pick Ascent one public cloud today. They want to move it in two years and three years to a different public cloud. It's establishing that relationship to be able to consume that Lennox, preserve those skills but have the flexibility. And tomorrow >> Red has made a number of storage acquisitions recently. Obviously, the tight relationship between the operating system and the I O how do you look at that space? The opportunity, You know, the TAM talk a little bit about the storage moments >> we have so clearly we have our storage division. We've been working very closely with them to build up capabilities. Largely, you'll see it with open shift. The container ization and storage management within containers is tricky business. So as we pulled together the collaboration between our storage unit as well as our container unit, that's providing real capabilities for that ease of consumption. How do you bring the storage with the container deploys. My team has worked very closely with the management team as you pull in the management aspect with things like automation and management satellite capabilities, answerable is an amazing tool. Amazing tool. In fact, we've pulled in things like system rolls directly into the operating system so that you can set up things like networking. You. Khun, set up storage with answerable playbooks in a much simpler way. That's allowing us to get that ease of consumption. It is about, you know, David's fully about being able for us Tow leverage the portfolio. How do we allow clients to take the journey using Lennox from everything from bare metal and VM out to container ization, Pull in multiple clouds, get the storage features and functions and get the automation and management. >> So, Stephanie, you would looked at and partnered with Red had quite a bit before you had joined the company. What surprised you coming inside the company? Is there anything but being on the inside now that you look back here like, Wow, I didn't expect that or was different than what I had seen from the outside. >> You know, I think what I think, what I love and surprise me a bit was the passion of open source. You know, you look at any company from the outside and and certainly as a student from the outside, you look at the business and how the business is doing and how it's growing in his study. All of that, Well, you don't get to see from the outside is the open source passion of the developers who I get to work with every day. I mean, they just they understand the market. They do it as a hobby on the weekends. It's it's It's just unbelievable, right? I love being I'm up in Westford is, you know, with all the developers, it's great. >> So I'm gonna ask you a lot of talk about the culture, you know, between Red Hat and IBM. You you've been in both camps. Now what do you thoughts in the culture >> s O? You know, I think when I look at the culture, I love the culture at Red Hat. As you know, I've been in many places at IBM and multiple divisions and multiple units. There's a lot of autonomy between the business units at IBM from my own experience. And there's so many people I miss working with colleagues at IBM that, you know I worked in and head with, and WeII brought amazing things to mark it. So I look forward to working with them again. You know, I always look for those groups that are passionate, and there's a lot of passionate IBM is I miss working with. So I look forward to bringing that back >> seventy one to give you the final word. We know. You know Jim Whitehurst has got a president and he's doing later today. I believe Red Hat has a has a good presence there, tells Red Hat here it think. What should be people be looking >> for? Yeah, I think so. Clearly, there's a lot of buzz and excitement about what both Red Hat and IBM Khun do together for the open hybrid cloud. I come at it now from a full Lennox perspective, and I couldn't be more excited about what Lennox is going to deliver for innovation and for customers to consume an innovation as we pull in and look, look to all these discussion that will happen with Jim and Jeannie on stage today, it's it's great. We'll be able to take what Red Hat has done and scale it now with the help of IBM, so very excited about the future. All right, >> Well, Stephanie, we really appreciate your sharing. Congratulations. You're going >> to see about thanks for the time. >> So we still have, you know, about three more days left here at IBM Thinking, of course, the Cube will be at Red Hat Summit twenty nineteen, which is back in Boston, Massachusetts, for Dave A lotta arms to minimum. Thanks for watching the cue
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theCUBE Insights Day 1 | IBM Think 2019
(cheerful music) >> Live from San Francisco. It's theCUBE. Covering IBM Think 2019. Brought to you by IBM. >> Welcome to theCUBE, I'm Lisa Martin. We are at day one of IBM Think 2019, I'm with Dave Vellante. Hey Dave! Hey Lisa, good to see you. The new improved Moscone. >> Exactly, and Stu Miniman, yeah. >> Shiny. >> Yeah, this is the new, it is shiny, The carpets smells new. This is the second annual IBM Think, gentleman where there's this conglomeration of five to six previous events. Doesn't really kick off yet today. I think Partner World starts today but here we are in San Francisco. Moscone North, I think south, and west they have here expecting about 25,000 people. No news yet today, Dave, so let's kind of talk about where IBM is right now with the early part of Q1 of 2019. Red Hat acquisition just approved by shareholders last month. What are your thoughts on the status of Big Blue? >> Well, I think you're right, Lisa, that the Red Hat news is the big news for IBM. We're now entering the next chapter but if you look back for the last five years IBM had to go out and pay two billion dollars for a soft layer to get into the cloud business. That was precipitated by the big, high profile loss of the CIA deal against Amazon. So that was a wake up call for IBM. So they got into the public cloud game. So that's the good news. The bad news is the public cloud's not easy when you're going up against the likes of Google and Microsoft and of course, Amazon. But the linchpin of IBM's cloud strategy is it's SAS portfolio. Over the last 20 years Steve Mills and his organization built a very large software business which they now have migrated into their cloud and so they've got that advantage much like Oracle. They're not a big, dominant cloud infrastructure as a service player but they have a platform where they can put things like Cognitive Solutions and Watson and offer those SAS services to clients. So you'll check on that but when you'll peel through the numbers IBM beat it's numbers last quarter. Stock was up. You know, when it announced the Red Hat acquisition the stock actually got crushed because when you spend 34 billion dollars on a company, you know the shareholders don't necessarily love that but we'll talk about the merits of that move. But they beat in the fourth quarter. They beat on the strength of services. So IBM remains largely a services company, about 60% plus of it's revenues comes from services. It's a somewhat lower margin business, even though IBM margins have been ticking up. As I say, you go back the last five, six years IBM Genesys did Mike's it's microelectronics business, which was a, you know, lost business. It got rid of it's x86 business which is a x86 server business, which is a low margin business. So again, like Oracle, it's focusing on high margin software and services and now we enter the era, Stu, of hybrid cloud with the Red Hat acquisition. A lot of money to pay, but it gets IBM into the next generation of multi cloud. >> Yeah, Dave, the knock I've had against IBM is in many ways they always try to be all things to all people and of course we know you can be good at some things but, you know, it's really tough to be great at everything. And, you know, you talked about cloud, Dave, you know, the SoftLayer acquisition to kind of get into public cloud but, you know, IBM is not one of the big players in public cloud. It's easy. It's Amazon and then followed by you know, Azure, Google, and let's talk Alibaba if we're talking globally. In a multi cloud world IBM has a strong play. As you said, they've got a lot of application assets, they have public cloud, they partner with a lot of the different cloud players out there and with Red Hat they get a key asset to be able to play across all of these multi cloud environments whether we're talking public cloud, private cloud, across all these environments. IBM's been pushing hard into the Kubernetes space, doing a lot with Istio. You know, where they play there, in Red Hat is a key piece of this puzzle. Red Hat running at about three billion dollars of revenue and paying 34 billion dollars but, you know, this is a linchpin as to say how does IBM stay relevant in this cloud world going forward? It's really a you know, a key moment for IBM as to what this means. A lot of discussion as to you know, it's not just the revenue piece but what will Red Hat do to the culture of IBM? IBM has a strong history in open source but you know, you got to, you have a large bench of Red Hat's strong executive team. We're going to see some of them here at the show. We're even going to have one Red Hat executive on our program here and so what will happen once this deal finally closes, which is expected later this year, probably October if you read, you know everything right. But what will it look like as to how will, you know, relatively small Red Hat impact the larger IBM going forward? >> Well, I think it's a big lever, right? I mean we were, Lisa, we were at Cisco Live in Barcelona last week kind of laying out the horses on the track for this multi cloud. Cisco doesn't own it's own public cloud. VMware and Dell don't own it's own public cloud. They both tried to get into the public cloud in the early days and IBM does own it's own public cloud as does Oracle but they're also going hard after this notion of multi cloud as is Cisco, as is VMware. So it sort of sets up the sort of Cisco, IBM Red Hat, VMware, Dell, sort of competing to get after that multi cloud revenue and then HPE fits in there somewhere. We can talk about that. >> So I saw a stat the other day that said in 2018, 80% of companies moved data or apps from public cloud. Reasons being security, control, cost, performance. So to some of the things I've read, Dave, that you've covered recently, if IBM isn't able to really go head to head against the Azures and the AWS, what is their differentiator in this new, hybrid multi cloud world? Is it being able to bring AI, Watson, Cognitive Solutions, better than their competitors in that space that you just mentioned? >> Yeah, IBM does complicate it. You know and cloud and hybrid cloud is complicated and so that's IBM's wheelhouse. And so it tends not to do commodity. So if it's complicated and sophisticated and requires a lot of services and a lot of business processing happening and things like that, IBM tends to excel. So, you know, if you do the SWOT analysis it's big opportunity is to be that multi-cloud provider for it's largest customers. And the larger customers are running, you know, transaction systems on mainframe. They're running cognitive systems on things like power. They've got a giant portfolio, at IBM that is, and they can cobble things together with their services and solve problems and that's kind of how IBM approaches the marketplace. Much different than say, Stu, Cisco or VMware. >> Yeah, Dave, you're absolutely right. You know one of the things I look at is you know, in this multi-cloud space we've see the SI's that are very important there. Companies like Accenture and KPMG and the like. IBM partners with them but IBM also has a large services business. So, you know who's going to be able to help customers get in there and figure out this rather complicated environment. So we are definitely one of the things I want to dig into this week is understand where IBM is at the Cisco Show, Dave. We've talked about their messaging was the bridge to you know what's possible. You know meet the customers where they are, show them how to reach into the future and from Cisco's standpoint, it's strong partnerships with AWS and Google at the forefront. So IBM has just one of the broadest portfolios in the industry. They absolutely play in every single piece but you know customers need good consulting as to Okay, what's going to be the fit for my business. How do I modernize, how do I go forward? And IBM's been down this trip for a number of years. >> Well the in the legacy of Ginni Rometty, in my opinion is going to be determined by the pace at which it can integrate Red Hat and use Red Hat as a lever. Ginni Rometty, when she was doing the roadshow with Jim Whitehurst kept saying it's not a backend loaded deal, and the reason it's not a backend loaded deal is because IBM is a 20 plus billion dollar outsourcing business and they're going to plug Red Hat right into that business to modernize applications. So there's a captive revenue source for IBM. In my view they have to really move fast, faster than typically IBM moves. We've been hearing about strategic initiatives and cloud, and Watson and it's been moving too slow in my opinion. The Red Hat acquisition has to move very very quickly. It's got to move at the speed of cloud and that's going to determine in my opinion-- >> So, actually, so a couple of weeks after the acquisition Red Hat had brought in an analyst to hear what was going on, and while the discussion is Red Hat will stay a distinct brand, there's going to be no lay offs were >> Yeah absolutely. >> Going to keep them separate, what they will get is IBM can really help them scale so >> Yep. Red Hat is getting into some new environments, you know that whole services organization, Red Hat doesn't have that. So IBM absolutely can plug in there and we think really accelerate, the old goal for Red Hat was okay how do we get from that three billion dollars to five billion dollars in the next couple of years. IBM thinks that they can accelerate that even faster. >> And Lisa I think the good news is IBM has always had an affinity toward open source. IBM was really the first, really to make a big investment you know they poured a billion dollars into Linux as a means of competing with Microsoft back in the day, and so they've got open source chops. So for those large IBM customers that might not want to go it alone on open source and you know Red Hat's kind of the cool kid on the block. But at the same time, you know there's some risks there. Now IBM can take that big blue blanket wrap it around it's largest customers and say okay, we've got you covered in open source, we've got the Red Hat asset, and we've got the services organization to help you modernize your application portfolio. >> One of the things too that Stu, you brought up a couple minutes ago is culture. And so looking at what, Red Hat estimates that it's got about eight million developers world wide using their technologies and this is an area that IBM had historically not been really focused on. What are some of the things that you're expecting to hear this week or see this week with respect to the developer community embracing IMB? >> Yeah and Lisa it's not like IBM hasn't been trying to get into the developer community. I remember back at some of the previous shows Edge and Pulse and the like, they would have you know Dev at and try to do a nice little piece of it but it really didn't gain as much traction as you might like. Compare and contrast that with cisco, we've been watching over the last five years the DevNet community. They've got over half a million developers on that platform. So you know, developer engagement usually requires that ground level activity where I've seen good work from IBM has been getting into that cloud native space. So absolutely seen them at the Kubernetes shows working in the container space very heavily and of course that's an area that Red Hat exceeds. So the Linux developers are absolutely there. Now you mentioned how many developers Red Hat has and in that multi cloud, cloud native space, you know Red Hat one of the leaders if not kind of the leader in that space and therefore it should help super charge what IBM is doing, give them some credibility. I'd love to see how many developers we see at this show, you know, you've been to this show Dave and you've been to this show before, it looked more enterprisey to me from the outside-- >> Well, I'm glad you brought up developers because that is the lynch pin of the Red Hat acquisition. If you look at the companies that actually have in the cloud that have a strong developer affinity obviously Microsoft does and always had AWS clearly does Google has you know it's developer community. Stu you mentioned Sisco. Sisco came at it from a networking standpoint and opened up it's network for infrastructure's code. One of the few legacy hardware companies that's done a good job there. VMware, you know not so much. Right? Not really a big developer world and IBM has tried as you pointed out. When they announced Bluemix but that really didn't take off in the developer world. Now with Red Hat IBM, it's your point eight million developers. That is a huge asset for IBM and one that as I said before it absolutely has to leverage and leverage fast. >> And what are you expectations in terms of any sort of industry deeper penetration? There's been some big cloud deals, cloud wins that IBM has made is recent history. One of them being really big in the energy sector. Are you guys kind of expecting to see any sort of industry deeper penetration as a result of what the Red Hat Acquisition will bring? >> Well thats IBM's strength. Stu you pointed out before, it's Accenture, you know Ernie Young, to a lesser extend maybe KPNG but those big SI's and IBM. When IBM bought PWC Gerstner transformed the company and it became a global leader with deep deep industry expertise. That is IBM's you know, savior frankly over these past many many years. So it can compete with virtually anybody on that front and so yes absolutely every industry is being transformed because of digital transformation. IBM understands this as well as anybody. It's a boon for services, it's a good margin business and so that's their competitive advantage. >> Yeah I mean it ties back into their services. I think back when I lived on the vendor side I learned a lot of the industry off of watching IBM. I see how many companies are talking about smarter cities. IBM had you know a long history of working In those environment's. Energy, industrial, IBM is very good at digging into the needed requirements of specific industries and driving that forward. >> So we're going to be here for four days as we mentioned, today is day one. We're going to be talking a lot about this hybrid multi-cloud world. But some of the double clicks we're going to do is talking about data protection, modern data protection, you know a lot of the statistics say that there's eighty percent of the worlds data isn't searchable yet. We all hear every event we do guys, data is the new oil. If companies can actually harness that, extract insights faster than their competition. Create new business models, new services, new products. What are your expectations about how, I hear a lot get your data AI ready. As a marketer I go, what does that mean? What are your thoughts Stu on, and we're sitting in a lot of signage here. How is IBM going to help companies get AI, Data rather AI ready and what does that actually mean? >> So IBM really educated a lot of the world and the broader world as to what some of this AI is. I mean I know we all watched many years ago when Watson was on Jeopardy and we kind of hit through the past the peak and have been trying to sort out okay well how can IBM monetize this? They're taking Watson and getting it into healthcare, they're getting it into all these other environments. So IBM is well known in the AI space. Really well known in the data space but there's a lot of competition and we're still relatively early in the sorting how this new machine learning and AI are going to fit in there. You know we spent a lot of time looking at things like RPA was kind of the gateway drug of AI if you will robotic process automation. And I'm not sure where IBM fit's into that environment. So once again IBM has always had a broad portfolio they do a lot of acquisitions in the space. So you know how can they take all those pieces, pull them together, get after the multicloud world, enable developers to be able to really leverage data even more that's possible and as you said you know more than eighty percent of data today isn't used, you know from an infrastructure stand point I'm looking at how do things like edge computing all get pulled into this environment and lot of questions still. >> IBM is going after hard problems like I said before. You don't expect IBM to be doing things like ad serving with Alexa. You know that's not IBM's game, they're not going to appropriate to sell ad's they're going to take really hard complex problems and charge a lot of money for big services engagements to transform companies. That's their game and that's a data game for sure. >> It's a data game and one of the pieces too that I'm excited to learn about this week is what they're doing about security. We all know you can throw a ton of technology at security and infrastructure but there's the people piece. So we're going to be having a lot of conversations about that as well. Alright guys looking forward to a full week with you and with John joining us at IBM Think I'm Lisa Martin for Dave Vellante and Stu Miniman. You're watching theCUBE live day one IBM Think 2019. Stick around we'll be right back with our next guest. (energetic electronic music)
SUMMARY :
Brought to you by IBM. Hey Lisa, good to see you. This is the second annual IBM Think, gentleman So that's the good news. A lot of discussion as to you know, kind of laying out the horses on the track So I saw a stat the other day that said And the larger customers are running, you know, the bridge to you know what's possible. and the reason it's not a backend loaded deal is because in the next couple of years. But at the same time, you know there's some risks there. One of the things too that Stu, you brought up a couple and the like, they would have you know Dev at and try but that really didn't take off in the developer world. And what are you expectations in terms of any sort of That is IBM's you know, savior frankly over these past IBM had you know a long history of a lot of the statistics say that there's and as you said you know more than eighty percent of data You don't expect IBM to be doing things like ad serving Alright guys looking forward to a full week with you and
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Mike Ferris, Red Hat | AWS re:Invent 2018
>> Live, from Las Vegas, it's the Cube, covering AWS re:Invent 2018, brought to you by Amazon Web Services, Intel, and their ecosystem partners. >> Hey welcome back everyone, live here in Las Vegas for AWS re:Invent 2018, all the action is happening for Amazon Web Services. I'm John Furrier, Dave Vellante, Dave six years covering Amazon, great opportunity, a lot of news, Red Hat is a big part of it, Mike Ferris is here. Vice President, Technical Business Development for Red Hat, welcome back, good to see you. >> Likewise. >> A lot's going with you guys since our Red Hat Summit days in San Francisco just a few months ago. >> Yeah. >> Big news hit. >> Yeah. >> The bomb around the world, the rock that hit the ground really hard, shook everyone up, surprised everyone including me, I'm like "Wow, IBM and Red Hat". What an interesting relationship, obviously the history with IBM has been good. Talk about the announcement with IBM because this is huge. Of course, big numbers, but also impact wise pretty big. >> Yeah, it's exciting times right? And if you kind of look at, you know, from the perspective of Red Hat in this, this will allow us to really scale and accelerate what we've already been doing for the past, you know, since really the 1994 era when Red Hat was founded and, you know, it kind of validates a lot of what we've put into open source and enterprise customers since then. You know, we really see a couple of key outtakes from this, one of which is, certainly it's going to give us the resources to be able to really grow with the scale that we need to. It's also going to allow us to invest more in open source in emerging areas, bring the value of scale and certainly choice and flexibility to more customers, and then ultimately kind of the global advantage of hybrid and multi cloud, we'll be able to reach more partners and customers everywhere, and it puts us several years ahead of where we have been and where we would have been frankly, and ultimately our intent is that with IBM we'll become the leading hybrid and multi cloud provider overall. >> Yeah, Jimmy and Jim Whitehurst kind of ruined our Sunday, we were sitting down to watch football and he's like got the announcement. And then Jimmy kept saying "It's not backend loaded, it's not backend loaded" and then you start to realize, wow, IBM has an enormous business of managing applications that need to be modernized and OpenShift is obviously a great place to do that so, it's got to be super exciting for you guys to have that giant new opportunity to go after as well as global scale that you didn't have before. >> And, you know, this extends the stuff that we did, announced in May at Red Hat Summit with IBM where we really focused on how do we take WebSphere DB2MQ, running on IBM cloud private, running on OpenShift, and make that the hybrid choice. And so it's a natural extension of what we've already been doing and it gives us a lot more resources than we would have otherwise. >> This is good, coming into the next segment I want to chat about is RHEL, and what people might not understand from the announcment is the synergy you guys have with IBM because, being a student of Red Hat, being just in the industry when you guys were rebels, open source, second tier citizen, and the enterprise, the adoption then became tier one service. I mean you guys have, level of service, 17 years or something, huge numbers, but remember where it all started. And then you became a tier one supplier to almost all the enterprises, so you're actually a product company as well as a huge open source player. That's powerful and unique. >> Absolutely, even if you look at kind of what Amazon is doing this week and have been doing over the years, they're a huge value ad provider of open source technology as well, and one of the statements that we've always made is, the public cloud would not exist if not for Linux and open source, and so everything has been based upon that. There's one provider that doesn't use Linux as the base of their platform but certainly as we've taken the in roads into the enterprise, you know, I was there when it started with just turning Red Hat Enterprise Linux on and then bringing it from the edge of network into the data center and talking about major providers like Oracle, HP, Del, IBM as part of that. Now, we're looking at "Is it a de facto standard?", and everyone including Amazon and all of it's competitors are really invested heavily in the open source world. >> And so, let's talk about the impact to the products, okay so one of the things that has come up, at least on my Twitter feed and the conversations is, okay, it's going to take some time to close the deal, you're still Red Hat, you're still doing your things, what's the impact to the customers and to the ecosystem in your mind? How are you guys talking about that right now? Obviously, it's more of the same, keep the Red Hat same, unique, independent, what new thing is going to come out of it? >> So, to be clear, the deal has not closed, right, so there's not a lot we're going to say otherwise. >> A year away, you got a lot of work to do. >> Our focus is what it always has been. Let's build the best enterprise products using the open source development model and make those available across all public and hybrid cloud environments. >> At a certain level, that's enterprise, multi-year, old Red Hat, same Red Hat model, alright. >> But let me follow up on that, because you're a believer in multi cloud, we're a believer in, whatever you call it, multiple clouds, customers are going to use multiple clouds. We believe that, you believe that, it seems like Amazon has a slightly different perspective on that, >> Cause they're one cloud. >> in that this greater value, right cause they're one cloud, there's greater value, but it seems like the reality when you talk to customers is, we're not just one company, we've got different divisions, and eventually we've got to bring those together in some kind of extraction layer. That's what you guys want to be, right? So, your perspectives on multi cloud? >> Absolutely, so, each individual department, each project, each developer, in all of these major enterprises, you know, has a different vantage, and yes, there are corporate standards, golden masters of RHEL that get produced, everybody's supposed to be using, but you know, the practicalities of how you develop software, especially in the age of dev ops and containers and moving forward is actually, you have to have the choice necessary to meet your specific needs, and while we will absolutely do everything we can to make sure that things are consistent, I mean, we started this with RHEL consistency, on and off premise, when we did the original Amazon relationship. The point is, you need to be able to give people the flexibility and choice that they desire, regardless of what area of the company that they're in, and that's going to be the focus, regardless of whether it's Microsoft, Amazon, Google, IBM clouds, international clouds with Alibaba, it's all the same to us and we have to make sure it's there. >> What's always great about the cloud shows, especially this one, it's one of my favorites, because it really is dev ops deep in the mindset culture. As you see AI and machine learning start to get powered by all these great resources, computer, et cetera, the developer is going crazy, there's going to be another renaissance in software development, and then you got things like Kubernetes and containers now mainstream. Kubernetes almost, I say, de facto standard. >> Yeah. >> Absolutely happened, you guys had a big part of making that happen. People are now agreeing on things, so the formation's coming together pretty quickly, you're seeing the growth, we're hearing terms like "co-creation", "co-opetition", those are signals for a large rising tide, your thoughts? >> So, it's interesting, we were an early investor in Kubernetes, we actually launched OpenShift prior to Kubernetes, and then we adopted it and made a shift of our platform before it was too late. We did the same thing with hypervisors when we moved from Zen to KBM, but this overall approach is, once we see the energy happening both in the community and the early customers, then you see the partners start to come on board, it becomes the de facto standard, it's really crucial for us as an open source company to make sure we follow those trends, and then we help mature them across the business ecosystem, and that's something we've loved being able to engage with. I mean, Google certainly instigated the Kubernetes movement, but then it starts to propagate, just like on the open stack side, it came out of Rackspace and Nasa and then moved on to different areas and so, you know, our focus is, how do we continue that choice and that evolution overall? >> How would you talk about the impact of Kubernetes if someone says "Hey Mike, what's the real impact, what is it going to accomplish at the end of the day?" What's your view of that? >> It will have the same impact that the Linux current standardization has had, you know, but in this case for micro services and application packaging and being able to do dev ops much more efficiently across heterogeneous platforms. >> Does it make it easier or less painful or does it go away? Is it automated under the covers? I mean, this is a big, awesome opportunity. >> So the orchestration capabilities of Kubernetes combined with all the other tools that surround key container platforms like OpenShift, really give that developer the full life cycle environment to be able to take something from concept through deployment, and onto the maintenance phases, and you know, what we end up doing is we look at, okay the technologies are there, what value ads to we have around that to make sure that a customer and a developer cn actually maintain this thing long term and keep their enterprise applications up? >> So, security for example. >> Security is a great example, right? How do we make sure that every container that gets deployed on Kubernetes platforms or by Kubernetes platforms, that every container that's deployed which, keep in mind, is an operating system, it has an operating system in the container itself, how is that kept up to date? How do you make sure that when the next security errata is released, from us or a different vendor possibly, how do you make sure that that container is secure? And, you know, we've done a lot in our registry as well as our catalog to make sure that all of our partners and customers can see their containers, know what grade they have in a security context, and be able to grow that. That's one of the core things that we see adding into this Kubernetes value and authorization level. >> It's not a trivial technical problem either. >> No. >> Sometimes micro services aren't so micro. >> It's been part of what we've for RHEL from the start, it's been how do we bring that enterprise value into technology that is maturing out of the open source community and make that available to customers? >> Yeah, one of the key things you guys, first of all, OpenShift has been phenomenal, you guys did a great job with that, been watching that grow, but I think a real seminal moment was the CoreOS acquisition. >> Sure. >> That was a real turbo boost for you guys, great acquisition, fits in with the culture, and then Kubernetes just lifted from that, that was the point but, at the timing of all this, Kubernetes gets mainstream lift, people recognize that the standardization it is a good thing, and then, boom, developers are getting engaged. >> Yeah, and if you see what the CoreOS environment has brought us from over their updates for our platforms, to being able to talk about a registry in the environment. Being able to say that, is kind of additive to this overall messaging, it really rounds out the offering for us, and allows us to participate even more deeply in the communities as well. >> Well, we're looking forward to keeping you covered, we love Kubernetes, we've got a special report called "Kubernetes Special Report" on siliconangle.com, it's called "The Rise Of Kubernetes", it's a dedicated set of content, we're publishing a lot on Kubernetes. Final question I want to get to you because I think it's super important, what's the relationship you have with AWS? And take some time to explain the partnership, how many years, what you guys are doing together, I know you're actively involved, so take a minute. >> It is somewhat blurry, it's been a long time, so 2007 era is when we started in depth with them, and I can remember the early days, actually in the development of S3, prior to EC2, being able to say alright, what is this thing and how does Red Hat participate in this? And I think, yesterday Terry Wiese even mentioned that we were one of the first partners to actually engage in the consumption model and, you know, claiming partial credit for out 34 billion dollar valuation that we just got announced. But, you know, overall the relationship really spawned out of that, how do we help build a cloud and how do we help offer our products to our customers in a more flexible way? And so that snowballed over the years from just early adopters being able to play with it to now where you see it's many many millions of dollars that are being generated in customers and they think, in the hundreds of millions of hours of our products being consumed, at least within a month if not shorter timeframes, every time period we have. >> You know that's an unsung benefit that people might not know about with Red Hat is that, you guys are in early markets because, one, everyone uses Linux pretty much these days for anything core, meaningful. And you listen to community, and so you guys are always involved in big moving things, cloud, Amazon, 2007, it was command line back then. >> Yeah. >> It wasn't even, I think RightScale just came online that year, so you remember. You guys are always in all these markets so it's a good indicator, you guys are a bellwether, I think it's a good beacon to look at. >> And we do this, certainly on the container space, and the middleware space, and the storage space, you know, we replicate this model and, including in management, about how do we actually invest in the right places where we see the industry and communities going so we can actually help those? >> And you're very partner friendly, you bring a lot to the table, I love the open source ethos, I think that's the future. The future of that ethos of contributing to get value downstream is going to be a business practice, not just software, so you guys are a big part of the industry on that and I want to give you guys props for that. Okay, more Cube coverage here in Las Vegas, AWS Reinvent, after this short break, more live coverage, I'm John Furrier, Dave Vellante, we'll be right back. (electronic music)
SUMMARY :
AWS re:Invent 2018, brought to you by re:Invent 2018, all the action is A lot's going with you guys since our Red Hat Summit days Talk about the announcement with IBM because this is huge. and, you know, it kind of validates a lot of what we've place to do that so, it's got to be super exciting for you and make that the hybrid choice. the announcment is the synergy you guys have with IBM into the enterprise, you know, I was there when it started So, to be clear, the deal has not closed, right, so Let's build the best enterprise products using the open At a certain level, that's enterprise, multi-year, old in multi cloud, we're a believer in, whatever you call it, That's what you guys want to be, right? it's all the same to us and we have to make sure it's there. the developer is going crazy, there's going to be another Absolutely happened, you guys had a and then moved on to different areas and so, you know, our standardization has had, you know, but in this case I mean, this is a big, awesome opportunity. That's one of the core things that we see adding into Yeah, one of the key things you guys, first of all, people recognize that the standardization it is a good Yeah, and if you see what the CoreOS environment has years, what you guys are doing together, I know you're adopters being able to play with it to now where you see know about with Red Hat is that, you guys are in early came online that year, so you remember. that and I want to give you guys props for that.
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IBM $34B Red Hat Acquisition: Pivot To Growth But Questions Remain
>> From the SiliconANGLE Media office in Boston, Massachusetts, it's theCUBE. Now here are your hosts, Dave Vellante and Stu Miniman. >> Hi everybody, Dave Vellante here with Stu Miniman. We're here to unpack the recent acquisition that IBM announced of Red Hat. $34 billon acquisition financed with cash and debt. And Stu, let me get us started. Why would IBM spend $34 billion on Red Hat? Its largest acquisition to date of a software company had been Cognos at $5 billion. This is a massive move. IBM's Ginni Rometty called this a game changer. And essentially, my take is that they're pivoting. Their public cloud strategy was not living up to expectations. They're pivoting to hybrid cloud. Their hybrid cloud strategy was limited because they didn't really have strong developer mojo, their Bluemix PaaS layer had really failed. And so they really needed to make a big move here, and this is a big move. And so IBM's intent, and Ginni Rometty laid out the strategy, is to become number one in hybrid cloud, the undisputed leader. And so we'll talk about that. But Stu, from Red Hat's perspective, it's a company you're very close to and you've observed for a number of years, Red Hat was on a path touting a $5 billion revenue plan, what happened? Why would they capitulate? >> Yeah Dave, on the face of it, Red Hat says that IBM will help it further its mission. We just listened to Arvin Krishna from IBM talking with Paul Cormier at Red Hat, and they talked about how they were gonna keep the Red Hat brand alive. IBM has a long history with open source. As you mentioned, I've been working with Red Hat, gosh, almost 20 years now, and we all think back to two decades ago, when IBM put a billion dollars into Linux and really pushed on open source. So these are not strangers, they know each other really well. Part of me looks at these from a cynicism standpoint. Somebody on Twitter said that Red Hat is hitting it at the peak of Kubernetes hype. And therefore, they're gonna get maximum valuation for where the stock is. Red Hat has positioned itself rather well in the hybrid cloud world, really the multicloud world, when you go to AWS, when you go to the Microsoft Azure environment, you talk to Google. Open source fits into that environment and Red Hat products specifically tie into those environments. Remember last year, in Boston, there's a video of Andy Jassy talking about a partnership with Red Hat. This year, up on stage, Microsoft with Azure partnering deeply with Red Hat. So Red Hat has done a nice job of moving beyond Linux. But Linux is still at its core. There definitely is concern that the operating system is less important today than it was in the past. It was actually Red Hat's acquisition of CoreOS for about $250 million earlier this year that really put a fine point on it. CoreOS was launched to be just enough Linux to live in this kind of container and Kubernetes world. And Red Hat, of course, like we've seen often, the company that is saying, "We're going to kill you", well you go and you buy them. So Red Hat wasn't looking to kill IBM, but definitely we've seen this trend of softwares eating the world, and open sources eating software. So IBM, hopefully, is a embracing that open source ethos. I have to say, Dave, for myself, a little sad to see the news. Red Hat being the paragon of open source. The one that we always go to for winning in this space. So we hope that they will be able to keep their culture. We've had a chance, many times, to interview Jim Whitehurst, really respected CEO. One that we think should stay involved in IBM deeply for this. But if they can keep and grow the culture, then it's a win for Red Hat. But still sorting through everything, and it feels like a little bit of a capitulation that Red Hat decides to sell off rather than keep its mission of getting to five billion and beyond, and be the leading company in the space. >> Well I think it is a bit of a capitulation. Because look, Red Hat is roughly a $3 billion company, growing at 20% a year, had that vision of five billion Its stock, in June, had hit $175. So while IBM's paying a 60% premium off of its current price, it's really only about 8 or 9% higher than where Red Hat was just a few months ago. And so I think, there's an old saying on Wall Street, the first disappointment is never the last. And so I think that Red Hat was looking at a long slog. They reduced expectations, they guided lower, and they were looking at the 90-day shot clock. And this probably wasn't going to be a good 'nother couple of years for Red Hat. And they're selling at the peak of the market, or roughly the peak of the market. They probably figured, hey, the window is closing, potentially, to do this deal. Maybe not such a bad time to get out, as opposed to trying to slog it out. Your thoughts. >> Yeah, Dave, I think you're absolutely right. When you look at where Red Hat is winning, they've done great in OpenStack but there's not a lot of excitement around OpenStack. Kubernetes was talked about lots in the announcement, in the briefings, and everything like that. I was actually surprised you didn't hear as much about just the core business. You would think you would be hearing about all the companies using Red Hat Enterprise Linux around the world. That ratable model that Red Hat really has a nice base of their environment. It was talking more about the future and where Kubernetes, and cloud-native, and all of that development will go. IBM has done middling okay with developers. They have a strong history in middleware, which is where a lot of the Red Hat development activity has been heading. It was interesting to hear, on the call, it's like, oh well, what about the customers that are using IBM too say, "Oh well, if customers want that, we'll still do it." What about IBM with Cloud Foundry? Well absolutely, if customers wanna still be doing it, they'll do that. So you don't hear the typical, "Oh well, we're going to take Red Hat technology "and push it through all of IBM's channel." This is in the IBM cloud group, and that's really their focus, as it is. I feel like they're almost limiting the potential for growth for Red Hat. >> Well so IBM's gonna pay for this, as I said, it's an all cash deal. IBM's got about 14 and a half billion dollars on the balance sheet. And so they gotta take out some debt. S&P downgraded IBM's rating from an A+ to an A. And so the ratings agency is going to be watching IBM's growth. IBM said this will add 200 basis points of revenue growth over the five year CAGR. But that means we're really not gonna see that for six, seven years. And Ginni Rometty stressed this is not a backend loaded thing. We're gonna find revenue opportunities through cross-selling and go-to-market. But we have a lot of questions on this deal, Stu. And I wanna sorta get into that. So first of all, again, I think it's the right move for IBM. It's a big move for IBM. Rumors were that Cisco might have been interested. I'm not sure if Microsoft was in the mix. So IBM went for it and, as I said, didn't pay a huge premium over where their stock was back in June. Now of course, back in June, the market was kind of inflated. But nonetheless, the strategy now is to go multi-cloud. The number one in the multi-cloud world. What is that multi-cloud leadership? How are we gonna measure multi-cloud? Is IBM, now, the steward of open source for the industry? To your point earlier, you're sad, Stu, I know. >> You bring up a great point. So I think back to three years ago, with the Wikibon we put together, our true private cloud forecast. And when we built that, we said, "Okay, here's the hardware, and software, "and services in private cloud." And we said, "Well let's try to measure hybrid cloud." And we spent like, six months looking at this. And it's like, well what is hybrid cloud? I've got my public cloud pieces, and I've got my private cloud pieces. Well there's some management layers and things that go in between. Do I count things like PaaS? So do you save people like Pivotal and Red Hat's OpenShift? Are those hybrid cloud? Well but they live either here or there. They're not usually necessarily helping with the migration and moving around. I can live in multiple environments. So Linux and containers live in the public, they live in the private, they don't just fly around in the ether. So measuring hybrid cloud, I think is really tough. Does IBM plus Red Hat make them a top leader in this hybrid multi-cloud world? Absolutely, they should be mentioned a lot more. When I go to the cloud shows, the public cloud shows, IBM isn't one of the first peak companies you think about. Red Hat absolutely is in the conversation. It actually should raise the profile of Red Hat because, while Red Hat plays in a lot of the conversations, they're also not the first company that comes to mind when you talk about them. Microsoft, middle of hybrid cloud. Oracle, positioning their applications in this multi-cloud world. Of course you can't talk about cloud, any cloud, without talking about Amazon's position in the marketplace. And SAS is the real place that it plays. So IBM, one of their biggest strengths is that they have applications. Dave, you know the space really well. What does this mean vis-Ã -vis Oracle? >> Well let's see, so Oracle, I think, is looking at this, saying, alright. I would say IBM is Oracle's number one competitor in the enterprise. You got SAP, and Amazon obviously in cloud, et cetera, et cetera. But let me put it this way, I think Oracle is IBM's number one competitor. Whether Oracle sees it that way or not. But they're clearly similar companies, in terms of their vertical integration. I think Oracle's looking at this, saying, hey. There's no way Oracle was gonna spend $34 billion on Red Hat. And I don't think they were interested in really spending any money on the alternatives. But does this put Canonical and SUSE in play? I think Oracle's gonna look at this and sort of message to its customers, "We're already number one in our world in hybrid cloud." But I wanna come back to the deal. I'm actually optimistic on the deal, from the standpoint of, I think IBM had to make a big move like this. Because it was largely just bumping along. But I'm not buying the narrative from Jim Whitehurst that, "Well we had to do this to scale." Why couldn't they scale with partners? I just don't understand that. They're open. This is largely, to me, a services deal. This is a big boon for IBM Services business. In fact, Jim Whitehurst, and Ginni even said that today on the financial analyst call, Jim said, "Our big constraint was "services scale and the industry expertise there." So what was that constraint? Why couldn't they partner with Accenture, and Ernie Young, and PwC, and the likes of Deloitte, to scale and preserve greater independence? And I think that the reason is, IBM sees an opportunity and they're going hard after it. So how will, or will, IBM change its posture relative to some of those big services plays? >> Yeah, Dave, I think you're absolutely right there. Because Red Hat should've been able to scale there. I wonder if it's just that all of those big service system integrators, they're working really closely with the public cloud providers. And while Red Hat was a piece of it, it wasn't the big piece of it. And therefore, I'm worried on the application migration. I'm worried about the adoption of infrastructure as a service. And Red Hat might be a piece in the puzzle, but it wasn't the driver for that change, and the move, and the modernization activities that were going on. That being said, OpenShift was a great opportunity. It plays in a lot of these environments. It'll be really interesting to see. And a huge opportunity for IBM to take and accelerate that business. From a services standpoint, do you think it'll change their position with regard to the SIs? >> I don't. I think IBM's gonna try to present, preserve Red Hat as an independent company. I would love to see IBM do what EMC did years ago with VMware, and float some portion of the company, and truly have it at least be quasi-independent. With an independent operating structure, and reporting structure from the standpoint of a public company. That would really signal to the partners that IBM's serious about maintaining independence. >> Yeah now, look Dave, IBM has said they will keep the brand, they will keep the products. Of all the companies that would buy Red Hat, I'm not super worried about kinda polluting open source. It was kinda nice that Jim Whitehurst would say, if it's a Red Hat thing, it is 100% open source. And IBM plays in a lot of these environments. A friend of mine on Twitter was like, "Oh hey, IBM's coming back to OpenDaylight or things like that." Because they'd been part of Cloud Foundry, they'd been part of OpenDaylight. There's certain ones that they are part of it and then they step back. So IBM, credibly open source space, if they can let Red Hat people still do their thing. But the concern is that lots of other companies are gonna be calling up project leads, and contributors in the open source community that might've felt that Red Hat was ideal place to live, and now they might go get their paycheck somewhere else. >> There's rumors that Jim Whitehurst eventually will take over IBM. I don't see it, I just don't think Jim Whitehurst wants to run Z mainframes and Services. That doesn't make any sense to me. Ginni's getting to the age where IBM CEOs typically retire, within the next couple of years. And so I think that it's more likely they'll bring in somebody from internally. Whether it's Arvin or, more likely, Jim Kavanaugh 'cause he's got the relationship with Wall Street. Let's talk about winners and losers. It's just, again, a huge strategic move for IBM. Frankly, I see the big winners is IBM and Red Hat. Because as we described before, IBM was struggling with its execution, and Red Hat was just basically, finally hitting a wall after 60-plus quarters of growth. And so the question is, will its customers win? The big concern I have for the customers is, IBM has this nasty habit of raising prices when it does acquisitions. We've seen it a number of times. And so you keep an eye on it, if I were a Red Hat customer, I'd be locking in some attractive pricing, longterm. And I would also be calling Mark Shuttleworth, and get his take, and get that Amdahl coffee cup on my desk, as it were. Other winners and losers, your thoughts on some of the partners, and the ecosystem. >> Yeah, when I look at this and say, compare it to Microsoft buying GitHub. We're all wondering, is this a real game changer for IBM? And if they embrace the direction. It's not like Red Hat culture is going to just take over IBM. In the Q&A with IBM, they said, "Will there be influence? Absolutely. "Is this a marriage of equals? No. "We're buying Red Hat and we will be "communicating and working together on this" But you can see how this can help IBM, as to the direction. Open source and the multi-cloud world is a huge, important piece. Cisco, I think, could've made a move like this. I would've been a little bit more worried about maintaining open source purity, if it was somebody like Cisco. There's other acquisitions, you mentioned Canonical and SUSE are out there. If somebody wanted to do this, the role of the operating system is much less important than it is today. You wouldn't have seen Microsoft up on stage at Red Hat Summit this year if Windows was the driver for Microsoft going forward. The cloud companies out there, to be honest, it really cements their presence out there. I don't think AWS is sitting there saying, "Oh jeez, we need to worry." They're saying, "Well IBM's capitulated." Realizing that, "Sure they have their own cloud, "and their environment, but they're going to be "successful only when they live in, "and around, and amongst our platform of Amazon." And Azure's gonna feel the same way, and same about Google. So there's that dynamic there. >> What about VMware? >> So I think VMware absolutely is a loser here. When I went back to say one of the biggest strengths of IBM is that they have applications. When you talk about Red Hat, they're really working, not only at the infrastructure layer, but working with developers, and working in that environment. The biggest weakness of VMware, is they don't own the applications. I'm paying licenses to VMware. And in a multi-cloud world, why do I need VMware? As opposed to Red Hat and IBM, or Amazon, or Microsoft, have a much more natural affinity for the applications and the data in the future. >> And what about the arms dealers? HPE and Dell, in particular, and of course, Lenovo. Wouldn't they prefer Red Hat being independent? >> Absolutely, they would prefer that they're gonna stay independent. As long as it doesn't seem to customers that IBM is trying to twist everybody's arms, and get you on to Z, or Power, or something like that. And continues to allow partnerships with the HPEs, Dells, Lenovos of the world. I think they'll be okay. So I'd say middling to impact. But absolutely, Red Hat, as an independent, was really the Switzerland of the marketplace. >> Ginni Rometty had sited three growth areas. One was Red Hat scale and go-to-market. I think there's no question about that. IBM could help with Red Hat's go-to-market. The other growth vector was IBM's products and software on the Red Hat stack. I'm less optimistic there, because I think that it's the strength of IBM's products, in and of themselves, that are largely gonna determine that success. And then the third was Services. I think IBM Services is a huge winner here. Having the bat phone into Red Hat is a big win for IBM Services. They can now differentiate. And this is where I think it's gonna be really interesting to see the posture of Accenture and those other big guys. I think IBM can now somewhat differentiate from those guys, saying, "Well wait, "we have exclusive, or not exclusive, "but inside baseball access to Red Hat." So that's gonna be an interesting dynamic to watch. Your final thoughts here. >> Yeah, yeah, Dave, absolutely. On the product integration piece, the question would be, you're gonna have OpenAPIs. This is all gonna work with the entire ecosystem. Couldn't IBM have done more of this without having to pay $34 billion and put things together? Services, absolutely, will be the measurement as to whether this is successful or not. That's probably gonna be the line out of them in financials, that we're gonna have to look at. Because, Dave, going back to, what is hybrid, and how do we measure it? What is success for this whole acquisition down the line? Any final pieces to what we should watch and how we measure that? >> So I think that, first of all, IBM's really good with acquisitions, so keep an eye on that. I'm not so concerned about the debt. IBM's got strong free cash flow. Red Hat throws off a billion dollars a year in free cash flow. This should be an accretive acquisition. In terms of operating profits, it might take a couple of years. But certainly from a standpoint of free cash flow and revenue growth, I think it's gonna help near-term. If it doesn't, that's something that's really important to watch. And then the last thing is culture. You know a lot of people at these companies. I know a lot of people at these companies. Look, the Red Hat culture drinks the Kool-Aid of open. You know this. Do they see IBM as the steward of open, and are they gonna face a brain drain? That's why it's no coincidence that Whitehurst and Rometty were down in North Carolina today. And Arvin and Paul Cormier were in Boston today. This is where a lot of employees are for Red Hat. And they're messaging. And so that's very, very important. IBM's not foolish. So that, to me, Stu, is a huge thing, is the culture. Dave, IBM is no longer the navy suit with the red tie, and everybody buttoned down. People are concerned about like, oh, IBM's gonna give the Red Hat people a dress code. Sure, the typical IBMer is not in a graphic tee and a hoodie. But, Dave, you've seen such a transformation in IBM over the last couple of decades. >> Yeah, definitely. And I think this really does, in my view, cement, now, the legacy of Ginny Rometty, which was kinda hanging on Watson, and Cognitive, and this sort of bespoke set of capabilities, and the SoftLayer acquisition. It, now, all comes together. This is a major pivot by IBM. I think, strategically, it's the right move for IBM. And I think, if in fact, IBM can maintain Red Hat's independence and that posture, and maintain its culture and employee base, I think it does change the game for IBM. So I would say, smart move, good move. Expensive but probably worth it. >> Yeah, where else would they have put their money, Dave? >> Yeah, right. Alright, Stu, thank you very much for unpacking this announcement. And thank you for watching. We'll see you next time. (mellow electronic music)
SUMMARY :
From the SiliconANGLE Media office And so they really needed to make the company that is saying, "We're going to kill you", And so I think that Red Hat was looking at a long slog. This is in the IBM cloud group, But nonetheless, the strategy now is to go multi-cloud. And SAS is the real place that it plays. and Ernie Young, and PwC, and the likes of Deloitte, And Red Hat might be a piece in the puzzle, structure from the standpoint of a public company. keep the brand, they will keep the products. And so the question is, will its customers win? And Azure's gonna feel the same way, and same about Google. not only at the infrastructure layer, And what about the arms dealers? And continues to allow partnerships and software on the Red Hat stack. the question would be, you're gonna have OpenAPIs. Dave, IBM is no longer the navy suit And I think this really does, in my view, And thank you for watching.
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Matt Hicks, Red Hat | Red Hat Summit 2018
>> Announcer: Live from San Francisco, it's theCUBE, covering Red Hat SUMMIT 2018, brought to you by Red Hat. >> Okay welcome back everyone. We are here live in San Francisco at Moscone West. This is theCube's exclusive coverage of Red Hat SUMMIT 2018. I'm John Furrier, co-host of theCube. This week John Troyer, guest analyst, he's the co-founder of TechReckoning, an advisory and consulting firm around community. Our next guest Matt Hicks, Senior Vice President of Engineering at Red Hat. He's going to give us all the features, and specs of the road map, and all the priorities. Thanks for coming on. >> Hey, thanks guys. >> John: He's like, "I'm not." >> So thanks for comin' on, obviously a successful show for you guys, congratulations. >> Matt: Thank you Paul Cormier was on earlier talking about some of the bets you guys made and it's all open source, so those bets are all part of the community, with the community. But certainly there's a big shift happening, we're seeing it now with containers, and Kubernetes really showing the way, giving customers clear line of sight of where things are startin' to fall in the stack. Obviously you got infrastructure and application development all under a DevOps kind of concept, so congratulations. >> Thank you, thank you, it's been fun, it's been, I think Paul shared this a couple weeks, we started OpenShift in 2011, so it's pretty cool to be here now, 2018, and just see how far that's come in terms of how many customers using it, how successful they've been with it. So that's, it's been great. >> Yeah we always like to talk on theCube, we love talkin' to product people and engineers because we always say the cloud is like an operating system. It's just all over the place, decentralized network, distributing computing, these are concepts that have been around. A lot of the Red Hat DNA comes from systems, you have SELinux operating system, that you offer for free but also have services around it. It's a systems problem as we look at the cloud, cloud economics. So when you go look at some of the product and engineering priorities, how do you guys keep that goin'? What are some of the guiding principles that you guys have with your team? Obviously open-source, being in up-stream projects, but as you guys have to build this out in realtime, what are some of the principles that you guys have? >> That's a great, that's a great question. I'll try to cover it on two areas. I think the first for us is workload compatibility, where you get down into the, building that new apps is great, it's fun, a lot of people can do it, and that's an exciting area. The customers also, they have to deal with apps they built over 10 plus years, and so in everything we design, we try to make sure we can address both of those use cases. I think that's one of the reasons, yeah we talk about OpenShift and how coupled it is to RHEL and Linux. It's for that you can take anything that runs on RHEL, run it in a container on OpenShift, stateful, not stateful. That's one really key design principle. The other one, and this we've actually experienced ourselves, of the roles and responsibilities separation. We run an OpenShift host environment publicly, I joke, like anyone that gives me an email address, I'll run their code and my operations team doesn't have to know what's inside of the containers. They have a really clear boundary which is make the infrastructure infinitely available for them, and know that you can run anything on that environment. So that separation, you know when customers talk about DevOps, and getting to agile, I think that's almost as critical as the technology itself, is letting them be able to do that. >> Yeah, that's been a real theme here at the show, I've certainly noticed. Sure there were technology demos up on stage, but also a lot of talk about culture, about process or anti-planning maybe, or you know helping people. The role of Red Hat with OpenShift and the full stack all the way down is bigger now than it was, just when it was just Linux. So I mean, is it you and your team, I mean your in engineering as you work with the open source communities, surely it seems like you're having to deal with a much broader scope of responsibilities. >> Yeah, that's true. I started in Red Hat when it was just Linux and part of it is, you know Linux is big, and it's complex, and that in and of itself is a pretty broad community. But these days it is, we get to work with customers that are transforming their business and that touches everything from how they're organizationally structured, how we make teams work together, how I make the developers happy with their rate of innovation and the security team still comfortable with what they're changing. I love it, like it is, you know and we open source at our core, so I fell like, I'm an open source guy. I always have been. You're seeing open source drive a much wider scope of change then I ever have before. >> Let's talk about functionality product-wise, 'cause again we interviewed Jim Whitehurst yesterday and we had Denise Dumas on as well, on the RHEL side, and we talked about security. These things going on, and with OpenShift, and with Kubernetes, and containers, it makes your job harder. You got to do more right? So talk about what does that mean for you guys and how does that translate to the customer impact because it's more complicated. There's abstraction layers that are abstracting away the complexity. The complexity is not going away, it's just being abstracted away. This is harder on engineering. How are you handling that and what's your approach? >> So I've looked at it as a great opportunity for us. I've been working with Linux for a long time and I was a big fan when we introduced SELinux, and for a long time moving from traditional Linux hosting to operations teams wanting to turn on SELinux, it's been a really tough climb. It's, it'll break things, and they're not comfortable with it. They know they need that layer of security, but turning it on has been a challenge. Then go to cgroups, or different namespaces, and they're not going to get there. With OpenShift, the vast majority of OpenShift deployments, under the covers we run with SELinux on by default, customize policies, everything's in control groups, containers uses Linux namespaces. So you get a level of workload isolation that it was unimaginable you know five, 10 years ago, and I love that aspect, 'cause you start with one aspect of security, you get much, much stronger. So it's our ability to, you know we know all the levers and knobs in Linux itself, and we get to turn 'em all and pull 'em all so, >> I want to put you on the spot, I want to, and it's not an insult to you guys at all. But we've heard some hallway conversations. You know just in a joking way 'cause everyone loves Linux, open source, we all love that. But they say, nothings perfect either. No software actually runs all the time great. So one customer said, I won't say the name, "When OpenShift fails, it fails big." Meaning there's, it's very reliable but it's taking on a lot of heaving lifting. There's a lot of things going on in there, 'cause that's, 'cause it's Linux, when it breaks, it breaks a lot, and I know you're tryin' to avoid that. But my point is, is that just as these are important components. How do you make that completely bullet proof? How do you guys stay on top of it so that thinks don't break? I'm not saying they do all the time. I'm just saying it's common. It was more an order of magnitude kind of thing. >> Yeah, yeah, no, well I think it's a coupla things. So we invested in OpenShift Online and OpenShift Dedicated and those were new for Red Hat, and for running hosting environments, so we could learn a lot of the nuances of how do you, OpenShift Online is roughly a single environment, how do we make that never break as a whole. A user might do something in their app and make their app break. How do we not make the whole break? The second challenge I think we've hit is just skills in the market of it's not necessarily an easy system there are lots of moving pieces there. The deal with Azure and the partnership there, having managed service offerings I think is really going to help users get into, I have a highly available environment, I don't have to worry about SED replication or those components but I can still get the benefits. And then I think over time as people learn the technology, they know how to utilize it well, we'll see, we'll see less and less of the it catastrophically failed because I didn't know that I could make it highly available. Those are always painful to me, where it's you know, >> John: That's education. >> Yeah >> So Matt, there's a clear conversation here. Very clarity of roles and responsibilities even in the stack. I think even as recently as a year or two ago, people were having conversations about the role of OpenStack, versus Kubernetes, and you were getting kind of weird, like what's on top of what? And even in terms of, you know other parts of the stack, I mean here it's clear, very clear, you know OpenStack is about infrastructure, OpenShift you know on top of it, and even in terms of virtualization, containers versus VMs. The conversation this year seems more clear. As an engineer, you know and an engineering leader, were the, did the engineering teams rolling their eyes going well we knew how this was going to work out all along, or did you all also kind of come along on that journey the last couple years? >> I think seeing the customer use cases refined a little bit while education builds those has been great. We always, like we're engineers, we like clear separation and what each products good at, so for us it's fantastic. You know OpenStack is great at managing metal. One of my favorite demonstrations was using OpenStack Director to on a, you know boot machines, put OSs on 'em, and leave OpenShift running, and be able to share network and storage clients with OpenStack. Those things are, you know they're great for me as an engineering lead because we're doing that once as well as we can, but it's nice in engineering if you get to optimize each side of the stack. So I think I have seen the customers understanding, as they've done more with OpenStack, and they've done more with OpenShift, they know which product they want to use, what for. That has helped us accelerate the engineering work towards it. >> You mention skills, skills gaps, and skills in general. How is the hiring going? Is there a new kind of DevOps rockstar out there? Is there a new kind of profile? Is there pieces of the stack that you want certain skills for? Is there generalism? Are the roles in engineering changing? If you could just add some color to that conversation around, you know cause we're talkin' about engineering now. It used to be called software engineering when I graduated, and then you became a developer. I don't know which ones better, but you know to me this is real engineering going on, which is using software development techniques. So what's the skills situation? >> For us I think, it is nice that you're seeing a lot of gravitation to Linux at the host level, and Kubernetes has helped, just at the distributed system level, so obviously skills there play pretty well in general. I would say what we have seen is there has been a stronger increase in having operational skills as well as development skills, and it's a spectrum. You're still going to have operational experts and algorithmic experts, but the blended role where you do know what it takes to run an application in production to some extent, or you do know something about infrastructure and development. I certainly look for that on our teams because that's, where customers I've seen struggle for years and years is in the handoff in the shift between, everyone can write functional apps, they usually struggle getting them into production. And it's really neither teams fault, it's in that translation and these platforms help bridge that. People that have some skills on either side have become incredibly valuable in that. >> John: So that's were the DevOps action is right, the overlay. >> It really is yeah. >> So thinking about network as the networking growth with DevOps. DevOps has always been infrastructure as code. And it all comes to, there's to many, many, I don't want to talk about it. It's always the network that gets beat on the most, I need better latency. And so networking software to find networking is not a new concept, self-defined data centers are out there. What's new in networking that you could point to that's part of this new wave? >> Two geeky things that might not have been noticed. One is the work we've done on Ansible networking has been stunningly popular to me, and that was just this simplicity of Ansible just needs us to sage in a minimal set of dependencies. Most switches out there can actually, they have SSH running, and having automation of switches in the actual gear itself was surprisingly not unified. And Ansible was able to fit that niche where you could remotely configure switches and that has grown and exploded. Because if you think of the, I'm going to do a DevOps workflow but now I need to actually change routing or bleed something, you're often talking to switches, and being able to couple that in has been, it has been fun to watch, so I've loved that aspect. The other portion when we combine OpenShift on OpenStack the courier work which we've talked about some, is, you know OpenShift often described as it consumes infrastructure that OpenStack provides, and the one exception was usually the networking tier. It was like we have to run an overlay network on it. When we run OpenShift on OpenStack it can actually utilize OpenStack's networking to be able to try that instead of doing it's own overlay. That is critical at the larger scale. >> John: So the policy comes in handy there is that, or configurations, where's the benefit? >> Both on network topology, which do you have two teams that are building different structures that may collide in the night. So it gets it from two teams down to one, and then the second is just the knock controls in isolation, it's done once. It's been nice for me on the engineering side where we'd put a ton of effort in the OpenStack community, we put a ton of effort in Kubernetes and the OpenShift communities, and we're able to pretty nicely combine those. We know 'em both really well. >> So take us through some inside baseball at Red Hat. What's going on internally within' your group. I want to probe on developer and software engineers productivity. If the quote DevOps works, the test is the freeing up their time from doing mundane tasks, and you got cool things like you said about the network things, pretty positive. This is going to free up some intellectual capital from engineering. So okay if that's true, I'm assuming it's true, if it's not then say it's not true, but it sounds like it's probably going to be true for you. What are your guys working on, what's next? So can you share some of what, 'cause you guys are doing your own thing, you're using your own software. Is that intellectual capital being freed up on the developers side? Are they doing some more programming? Are you seeing some more creativity? What are they doing with that free time, free time, extra intellectual cycles? >> All our excesses, I'll tell Paul that. He was up before me. Like, Ops team barely has to work anymore. >> There in there clipping coupons at the beach you know. It's all running, we're busy. >> So a good creative example, and this was I think the second demo we showed. Red Hat Insights has been in the market for a while and that was our, can we glean enough information from systems to get ahead of a support issue, and this year we showed the, it's not just known fixes, you know we match it to a knowledgebase article. But can we interpret fixes from peer analysis and you know machine learning type techniques? That's a classic example where we use the creativity and free time, and say you know what that stack internally runs on OpenShift, running on OpenStack, using Red Hat storage, and we're applying some of, you know TensorFlow and other capabilities to do that. That was probably my favorite example at SUMMIT where if we weren't getting more efficient at what we worked on, we wouldn't of been able to stand up that stack ourselves, much less execute to it, and show it live in SUMMIT, doing the analysis across a hybrid cloud. >> But this is the whole point of DevOps. This the whole purpose, being highly productive, to use those intellectual cycle times to build stuff, solve problems. >> Yeah absolutely. >> Not provision servers or networks. Awesome, well thanks for coming on theCUBE, really appreciate it. >> Matt: Thank you guys. >> What's the priorities for you guys this year? What's the focus? Share your plans for the year. >> You know I think it's similar to the last thing we showed today. We really want to make customers feel like they can deploy hybrid cloud. Whether it's compute, applications, they have the services they need, down to storage, it works. They're on premise. They know we're going to have the best combination we can. This year is a stay ahead of people on that path, make sure their successful with it. >> We'll see you guys at OpenStack SUMMIT, Vancouver. Thanks for comin' on, Matt Hicks, Senior Vice-President of Engineering at Red Hat. I'm John Furrier, John Troyer, Stay with us, we're day three of three days of live coverage here in San Francisco, Red Hat SUMMIT 2018. Stay with us, we'll be right back after this short break. (digital music)
SUMMARY :
brought to you by Red Hat. and specs of the road map, and all the priorities. obviously a successful show for you guys, congratulations. some of the bets you guys made and just see how far that's come that you guys have with your team? and know that you can run anything on that environment. and the full stack all the way down is bigger now and part of it is, you know Linux is big, and it's complex, So talk about what does that mean for you guys that it was unimaginable you know five, 10 years ago, and it's not an insult to you guys at all. Those are always painful to me, where it's you know, and you were getting kind of weird, Those things are, you know they're great for me and then you became a developer. and algorithmic experts, but the blended role is right, the overlay. What's new in networking that you could point to and the one exception was usually the networking tier. Both on network topology, which do you have two teams So can you share some of what, Like, Ops team barely has to work anymore. at the beach you know. and say you know what that stack internally runs This the whole purpose, being highly productive, really appreciate it. What's the priorities for you guys this year? to the last thing we showed today. We'll see you guys at OpenStack SUMMIT, Vancouver.
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Red Hat Summit 2018 | Day 2 | AM Keynote
[Music] [Music] [Music] [Music] [Music] [Music] that will be successful in the 21st century [Music] being open is really important because it comes with a lot of trust the open-source community now has matured so much and that contribution from the community is really driving innovation [Music] but what's really exciting is the change that we've seen in our teams not only the way they collaborate but the way they operate in the way they work [Music] I think idea is everything ideas can change the way you see things open-source is more than a license it's actually a way of operating [Music] ladies and gentlemen please welcome Red Hat president and chief executive officer Jim Whitehurst [Music] all right well welcome to day two at the Red Hat summit I'm amazed to see this many people here at 8:30 in the morning given the number of people I saw pretty late last night out and about so thank you for being here and have to give a shout out speaking of power participation that DJ is was Mike Walker who is our global director of open innovation labs so really enjoyed that this morning was great to have him doing that so hey so day one yesterday we had some phenomenal announcements both around Red Hat products and things that we're doing as well as some great partner announcements which we found exciting I hope they were interesting to you and I hope you had a chance to learn a little more about that and enjoy the breakout sessions that we had yesterday so yesterday was a lot about the what with these announcements and partnerships today I wanted to spin this morning talking a little bit more about the how right how do we actually survive and thrive in this digitally transformed world and to some extent the easy parts identifying the problem we all know that we have to be able to move more quickly we all know that we have to be able to react to change faster and we all know that we need to innovate more effectively all right so the problem is easy but how do you actually go about solving that right the problem is that's not a product that you can buy off the shelf right it is a capability that you have to build and certainly it's technology enabled but it's also depends on process culture a whole bunch of things to figure out how we actually do that and the answer is likely to be different in different organizations with different objective functions and different starting points right so this is a challenge that we all need to feel our way to an answer on and so I want to spend some time today talking about what we've seen in the market and how people are working to address that and it's one of the reasons that the summit this year the theme is ideas worth it lorring to take us back on a little history lesson so two years ago here at Moscone the theme of the summit was the power of participation and then I talked a lot about the power of groups of people working together and participating are able to solve problems much more quickly and much more effectively than individuals or even individual organizations working by themselves and some of the largest problems that we face in technology but more broadly in the world will ultimately only be solved if we effectively participate and work together then last year the theme of the summit was the impact of the individual and we took this concept of participation a bit further and we talked about how participation has to be active right it's a this isn't something where you can be passive that you can sit back you have to be involved because the problem in a more participative type community is that there is no road map right you can't sit back and wait for an edict on high or some central planning or some central authority to tell you what to do you have to take initiative you have to get involved right this is a active participation sport now one of the things that I talked about as part of that was that planning was dead and it was kind of a key my I think my keynote was actually titled planning is dead and the concept was that in a world that's less knowable when we're solving problems in a more organic bottom-up way our ability to effectively plan into the future it's much less than it was in the past and this idea that you're gonna be able to plan for success and then build to it it really is being replaced by a more bottom-up participative approach now aside from my whole strategic planning team kind of being up in arms saying what are you saying planning is dead I have multiple times had people say to me well I get that point but I still need to prepare for the future how do I prepare my organization for the future isn't that planning and so I wanted to spend a couple minutes talk a little more detail about what I meant by that but importantly taking our own advice we spent a lot of time this past year looking around at what our customers are doing because what a better place to learn then from large companies and small companies around the world information technology organizations having to work to solve these problems for their organizations and so our ability to learn from each other take the power of participation an individual initiative that people and organizations have taken there are just so many great learnings this year that I want to get a chance to share I also thought rather than listening to me do that that we could actually highlight some of the people who are doing this and so I do want to spend about five minutes kind of contextualizing what we're going to go through over the next hour or so and some of the lessons learned but then we want to share some real-world stories of how organizations are attacking some of these problems under this how do we be successful in a world of constant change in uncertainty so just going back a little bit more to last year talking about planning was dead when I said planning it's kind of a planning writ large and so that's if you think about the way traditional organizations work to solve problems and ultimately execute you start off planning so what's a position you want to get to in X years and whether that's a competitive strategy in a position of competitive advantage or a certain position you want an organizational function to reach you kind of lay out a plan to get there you then typically a senior leaders or a planning team prescribes the sets of activities and the organization structure and the other components required to get there and then ultimately execution is about driving compliance against that plan and you look at you say well that's all logical right we plan for something we then figure out how we're gonna get there we go execute to get there and you know in a traditional world that was easy and still some of this makes sense I don't say throw out all of this but you have to recognize in a more uncertain volatile world where you can be blindsided by orthogonal competitors coming in and you the term uber eyes you have to recognize that you can't always plan or know what the future is and so if you don't well then what replaces the traditional model or certainly how do you augment the traditional model to be successful in a world that you knows ambiguous well what we've heard from customers and what you'll see examples of this through the course of this morning planning is can be replaced by configuring so you can configure for a constant rate of change without necessarily having to know what that change is this idea of prescription of here's the activities people need to perform and let's lay these out very very crisply job descriptions what organizations are going to do can be replaced by a greater degree of enablement right so this idea of how do you enable people with the knowledge and things that they need to be able to make the right decisions and then ultimately this idea of execution as compliance can be replaced by a greater level of engagement of people across the organization to ultimately be able to react at a faster speed to the changes that happen so just double clicking in each of those for a couple minutes so what I mean by configure for constant change so again we don't know exactly what the change is going to be but we know it's going to happen and last year I talked a little bit about a process solution to that problem I called it that you have to try learn modify and what that model try learn modify was for anybody in the app dev space it was basically taking the principles of agile and DevOps and applying those more broadly to business processes in technology organizations and ultimately organizations broadly this idea of you don't have to know what your ultimate destination is but you can try and experiment you can learn from those things and you can move forward and so that I do think in technology organizations we've seen tremendous progress even over the last year as organizations are adopting agile endeavor and so that still continues to be I think a great way for people to to configure their processes for change but this year we've seen some great examples of organizations taking a different tack to that problem and that's literally building modularity into their structures themselves right actually building the idea that change is going to happen into how you're laying out your technology architectures right we've all seen the reverse of that when you build these optimized systems for you know kind of one environment you kind of flip over two years later what was the optimized system it's now called a legacy system that needs to be migrated that's an optimized system that now has to be moved to a new environment because the world has changed so again you'll see a great example of that in a few minutes here on stage next this concept of enabled double-clicking on that a little bit so much of what we've done in technology over the past few years has been around automation how do we actually replace things that people were doing with technology or augmenting what people are doing with technology and that's incredibly important and that's work that can continue to go forward it needs to happen it's not really what I'm talking about here though enablement in this case it's much more around how do you make sure individuals are getting the context they need how are you making sure that they're getting the information they need how are you making sure they're getting the tools they need to make decisions on the spot so it's less about automating what people are doing and more about how can you better enable people with tools and technology now from a leadership perspective that's around making sure people understand the strategy of the company the context in which they're working in making sure you've set the appropriate values etc etc from a technology perspective that's ensuring that you're building the right systems that allow the right information the right tools at the right time to the right people now to some extent even that might not be hard but when the world is constantly changing that gets to be even harder and I think that's one of the reasons we see a lot of traction and open source to solve these problems to use flexible systems to help enterprises be able to enable their people not just in it today but to be flexible going forward and again we'll see some great examples of that and finally engagement so again if execution can't be around driving compliance to a plan because you no longer have this kind of Cris plan well what do leaders do how do organizations operate and so you know I'll broadly use the term engagement several of our customers have used this term and this is really saying well how do you engage your people in real-time to make the right decisions how do you accelerate a pace of cadence how do you operate at a different speed so you can react to change and take advantage of opportunities as they arise and everywhere we look IT is a key enabler of this right in the past IT was often seen as an inhibitor to this because the IT systems move slower than the business might want to move but we are seeing with some of these new technologies that literally IT is becoming the enabler and driving the pace of change back on to the business and you'll again see some great examples of that as well so again rather than listen to me sit here and theoretically talk about these things or refer to what we've seen others doing I thought it'd be much more interesting to bring some of our partners and our customers up here to specifically talk about what they're doing so I'm really excited to have a great group of customers who have agreed to stand in front of 7,500 people or however many here this morning and talk a little bit more about what they're doing so really excited to have them here and really appreciate all them agreeing to be a part of this and so to start I want to start with tee systems we have the CEO of tee systems here and I think this is a great story because they're really two parts to it right because he has two perspectives one is as the CEO of a global company itself having to navigate its way through digital disruption and as a global cloud service provider obviously helping its customers through this same type of change so I'm really thrilled to have a del hasta li join me on stage to talk a little bit about T systems and what they're doing and what we're doing jointly together so Adelle [Music] Jim took to see you Adele thank you for being here you for having me please join me I love to DJ when that fantastic we may have to hire him no more events for events where's well employed he's well employed though here that team do not give him mics activation it's great to have you here really do appreciate it well you're the CEO of a large organization that's going through this disruption in the same way we are I'd love to hear a little bit how for your company you're thinking about you know navigating this change that we're going through great well you know key systems as an ICT service provider we've been around for decades I'm not different to many of our clients we had to change the whole disruption of the cloud and digitization and new skills and new capability and agility it's something we had to face as well so over the last five years and especially in the last three years we invested heavily invested over a billion euros in building new capabilities building new offerings new infrastructures to support our clients so to be very disruptive for us as well and so and then with your customers themselves they're going through this set of change and you're working to help them how are you working to help enable your your customers as they're going through this change well you know all of them you know in this journey of changing the way they run their business leveraging IT much more to drive business results digitization and they're all looking for new skills new ideas they're looking for platforms that take them away from traditional waterfall development that takes a year or a year and a half before they see any results to processes and ways of bringing applications in a week in a month etcetera so it's it's we are part of that journey with them helping them for that and speaking of that I know we're working together and to help our joint customers with that can you talk a little bit more about what we're doing together sure well you know our relationship goes back years and years with with the Enterprise Linux but over the last few years we've invested heavily in OpenShift and OpenStack to build peope as layers to build you know flexible infrastructure for our clients and we've been working with you we tested many different technology in the marketplace and been more successful with Red Hat and the stack there and I'll give you an applique an example several large European car manufacturers who have connected cars now as a given have been accelerating the applications that needed to be in the car and in the past it took them years if not you know scores to get an application into the car and today we're using open shift as the past layer to develop to enable these DevOps for these companies and they bring applications in less than a month and it's a huge change in the dynamics of the competitiveness in the marketplace and we rely on your team and in helping us drive that capability to our clients yeah do you find it fascinating so many of the stories that you hear and that we've talked about with with our customers is this need for speed and this ability to accelerate and enable a greater degree of innovation by simply accelerating what what we're seeing with our customers absolutely with that plus you know the speed is important agility is really critical but doing it securely doing it doing it in a way that is not gonna destabilize the you know the broader ecosystem is really critical and things like GDP are which is a new security standard in Europe is something that a lot of our customers worry about they need help with and we're one of the partners that know what that really is all about and how to navigate within that and use not prevent them from using the new technologies yeah I will say it isn't just the speed of the external but the security and the regulation especially GDR we have spent an hour on that with our board this week there you go he said well thank you so much for being here really to appreciate the work that we're doing together and look forward to continued same here thank you thank you [Applause] we've had a great partnership with tea systems over the years and we've really taken it to the next level and what's really exciting about that is you know we've moved beyond just helping kind of host systems for our customers we really are jointly enabling their success and it's really exciting and we're really excited about what we're able to to jointly accomplish so next i'm really excited that we have our innovation award winners here and we'll have on stage with us our innovation award winners this year our BBVA dnm IAG lasat Lufthansa Technik and UPS and yet they're all working in one for specific technology initiatives that they're doing that really really stand out and are really really exciting you'll have a chance to learn a lot more about those through the course of the event over the next couple of days but in this context what I found fascinating is they were each addressing a different point of this configure enable engage and I thought it would be really great for you all to hear about how they're experimenting and working to solve these problems you know real-time large organizations you know happening now let's start with the video to see what they think about when they think about innovation I define innovation is something that's changing the model changing the way of thinking not just a step change improvement not just making something better but actually taking a look at what already exists and then putting them together in new and exciting lives innovation is about to build something nobody has done before historically we had a statement that business drives technology we flip that equation around an IT is now demonstrating to the business at power of technology innovation desde el punto de vista de la tecnologÃa supone salir de plataform as proprietary as ADA Madero cloud basado an open source it's a possibility the open source que no parameter no sir Kamala and I think way that for me open-source stands for flexibility speed security the community and that contribution from the community is really driving innovation innovation at a pace that I don't think our one individual organization could actually do ourselves right so first I'd like to talk with BBVA I love this story because as you know Financial Services is going through a massive set of transformations and BBVA really is at the leading edge of thinking about how to deploy a hybrid cloud strategy and kind of modular layered architecture to be successful regardless of what happens in the future so with that I'd like to welcome on stage Jose Maria Rosetta from BBVA [Music] thank you for being here and congratulations on your innovation award it's been a pleasure to be here with you it's great to have you hi everybody so Josemaria for those who might not be familiar with BBVA can you give us a little bit of background on your company yeah a brief description BBVA is is a bank as a financial institution with diversified business model and that provides well financial services to more than 73 million of customers in more than 20 countries great and I know we've worked with you for a long time so we appreciate that the partnership with you so I thought I'd start with a really easy question for you how will blockchain you know impact financial services in the next five years I've gotten no idea but if someone knows the answer I've got a job for him for him up a pretty good job indeed you know oh all right well let me go a little easier then so how will the global payments industry change in the next you know four or five years five years well I think you need a a Weezer well I tried to make my best prediction means that in five years just probably will be five years older good answer I like that I always abstract up I hope so I hope so yah-yah-yah hope so good point so you know immediately that's the obvious question you have a massive technology infrastructure is a global bank how do you prepare yourself to enable the organization to be successful when you really don't know what the future is gonna be well global banks and wealth BBBS a global gam Bank a certain component foundations you know today I would like to talk about risk and efficiency so World Bank's deal with risk with the market great the operational reputational risk and so on so risk control is part of all or DNA you know and when you've got millions of customers you know efficiency efficiency is a must so I think there's no problem with all these foundations they problem the problem analyze the problems appears when when banks translate these foundations is valued into technology so risk control or risk management avoid risk usually means by the most expensive proprietary technology in the market you know from one of the biggest software companies in the world you know so probably all of you there are so those people in the room were glad to hear you say that yeah probably my guess the name of those companies around San Francisco most of them and efficiency usually means a savory business unit as every department or country has his own specific needs by a specific solution for them so imagine yourself working in a data center full of silos with many different Hardware operating systems different languages and complex interfaces to communicate among them you know not always documented what really never documented so your life your life in is not easy you know in this scenario are well there's no room for innovation so what's been or or strategy be BES ready to move forward in this new digital world well we've chosen a different approach which is quite simple is to replace all local proprietary system by a global platform based on on open source with three main goals you know the first one is reduce the average transaction cost to one-third the second one is increase or developers productivity five times you know and the third is enable or delete the business be able to deliver solutions of three times faster so you're not quite easy Wow and everything with the same reliability as on security standards as we've got today Wow that is an extraordinary set of objectives and I will say their world on the path of making that successful which is just amazing yeah okay this is a long journey sometimes a tough journey you know to be honest so we decided to partnership with the with the best companies in there in the world and world record we think rate cut is one of these companies so we think or your values and your knowledge is critical for BBVA and well as I mentioned before our collaboration started some time ago you know and just an example in today in BBVA a Spain being one of the biggest banks in in the country you know and using red hat technology of course our firm and fronting architecture you know for mobile and internet channels runs the ninety five percent of our customers request this is approximately 3,000 requests per second and our back in architecture execute 70 millions of business transactions a day this is almost a 50% of total online transactions executed in the country so it's all running yes running I hope so you check for you came on stage it's I'll be flying you know okay good there's no wood up here to knock on it's been a really great partnership it's been a pleasure yeah thank you so much for being here thank you thank you [Applause] I do love that story because again so much of what we talk about when we when we talk about preparing for digital is a processed solution and again things like agile and DevOps and modular izing components of work but this idea of thinking about platforms broadly and how they can run anywhere and actually delivering it delivering at a scale it's just a phenomenal project and experience and in the progress they've made it's a great team so next up we have two organizations that have done an exceptional job of enabling their people with the right information and the tools they need to be successful you know in both of these cases these are organizations who are under constant change and so leveraging the power of open-source to help them build these tools to enable and you'll see it the size and the scale of these in two very very different contexts it's great to see and so I'd like to welcome on stage Oh smart alza' with dnm and David Abraham's with IAG [Music] Oh smart welcome thank you so much for being here Dave great to see you thank you appreciate you being here and congratulations to you both on winning the Innovation Awards thank you so Omar I really found your story fascinating and how you're able to enable your people with data which is just significantly accelerated the pace with which they can make decisions and accelerate your ability to to act could you tell us a little more about the project and then what you're doing Jim and Tina when the muchisimas gracias por ever say interesado pono true projecto [Music] encargado registry controller las entradas a leda's persona por la Frontera argentina yo sé de dos siento treinta siete puestos de contrôle tienen lo largo de la Frontera tanto area the restreamer it EEMA e if looool in dilute ammonia shame or cinta me Jonas the tránsito sacra he trod on in another Fronteras dingus idea idea de la Magneto la cual estamos hablando la Frontera cantina tienen extension the kin same in kilo metros esto es el gada mint a maje or allege Estancia kaeun a poor carretera a la co de mexico con el akka a direction emulation s 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calidad de vida de atras de mettre personas SI y meet our que el delito perform a trois Natura from Dana's Argentine sigue siendo en favor de esto SI temes uno de los paÃses mess Alberto's Allah immigration en Latin America yah hora con una plataforma mas segunda first of all I want to thank you for the interest is played for our project the National migration administration or diem records the entry and exit of people on the Argentine territory it grants residents permits to foreigners who wish to live in our country through 237 entry points land air border sea and river ways Jim dnm registered over 80 million transits throughout last year Argentine borders cover about 15,000 kilometers just our just to give you an idea of the magnitude of our borders this is greater than the distance on a highway between Mexico City and Alaska our department applies the mechanisms that prevent the entry and residents of people involved in crimes like terrorism trafficking of persons weapons drugs and others in 2016 we shifted to a more preventive and predictive paradigm that is how Sam's the system for migration analysis was created with red hats great assistance and support this allowed us to tackle the challenge of integrating multiple and varied issues legal issues police databases national and international security organizations like Interpol API advanced passenger information and PNR passenger name record this involved starting private cloud with OpenShift Rev data virtualization cloud forms and fuse that were the basis to develop Sam and implementing machine learning models and artificial intelligence our analysts consulted a number of systems and other manual files before 2016 4 days for each person entering or leaving the country so this has allowed us to optimize our decisions making them in real time each time Sam is consulted it processes patterns of over two billion data entries Sam's aim is to improve the quality of life of our citizens and visitors making sure that crime doesn't pierce our borders in an environment of analytic evolution and constant improvement in essence Sam contributes toward Argentina being one of the leaders in Latin America in terms of immigration with our new system great thank you and and so Dave tell us a little more about the insurance industry and the challenges in the EU face yeah sure so you know in the insurance industry it's a it's been a bit sort of insulated from a lot of major change in disruption just purely from the fact that it's highly regulated and the cost of so that the barrier to entry is quite high in fact if you think about insurance you know you have to have capital reserves to protect against those major events like floods bush fires and so on but the whole thing is a lot of change there's come in a really rapid pace I'm also in the areas of customer expectations you know customers and now looking and expecting for the same levels of flexibility and convenience that they would experience with more modern and new startups they're expecting out of the older institutions like banks and insurance companies like us so definitely expecting the industry to to be a lot more adaptable and to better meet their needs I think the other aspect of it really is in the data the data area where I think that the donor is now creating a much more significant connection between organizations in a car summers especially when you think about the level of devices that are now enabled and the sheer growth of data that's that that's growing at exponential rates so so that the impact then is that the systems that we used to rely on are the technology we used to rely on to be able to handle that kind of growth no longer keeps up and is able to to you know build for the future so we need to sort of change that so what I G's really doing is transform transforming the organization to become a lot more efficient focus more on customers and and really set ourselves up to be agile and adaptive and so ya know as part of your Innovation Award that the specific set of projects you tied a huge amount of different disparate systems together and with M&A and other you have a lot to do there to you tell us a little more about kind of how you're able to better respond to customer needs by being able to do that yeah no you're right so we've we've we're nearly a hundred year old company that's grown from lots of merger and acquisition and just as a result of that that means that data's been sort of spread out and fragmented across multiple brands and multiple products and so the number one sort of issue and problem that we were hearing was that it was too hard to get access to data and it's highly complicated which is not great from a company from our perspective really because because we are a data company right that's what we do we we collect data about people what they what's important to them what they value and the environment in which they live so that we can understand that risk and better manage and protect those people so what we're doing is we're trying to make and what we have been doing is making data more open and accessible and and by that I mean making data more of easily available for people to use it to make decisions in their day-to-day activity and to do that what we've done is built a single data platform across the group that unifies the data into a single source of truth that we can then build on top of that single views of customers for example that puts the right information into the into the hands of the people that need it the most and so now why does open source play such a big part in doing that I know there are a lot of different solutions that could get you there sure well firstly I think I've been sauce has been k2 these and really it's been key because we've basically started started from scratch to build this this new next-generation data platform based on entirely open-source you know using great components like Kafka and Postgres and airflow and and and and and then fundamentally building on top of red Red Hat OpenStack right to power all that and they give us the flexibility that we need to be able to make things happen much faster for example we were just talking to the pivotal guys earlier this week here and some of the stuff that we're doing they're they're things quite interesting innovative writes even sort of maybe first in the world where we've taken the older sort of appliance and dedicated sort of massive parallel processing unit and ported that over onto red Red Hat OpenStack right which is now giving us a lot more flexibility for scale in a much more efficient way but you're right though that we've come from in the past a more traditional approach to to using vendor based technology right which was good back then when you know technology solutions could last for around 10 years or so on and and that was fine but now that we need to move much faster we've had to rethink that and and so our focus has been on using you know more commoditized open source technology built by communities to give us that adaptability and sort of remove the locking in there any entrenchment of technology so that's really helped us but but I think that the last point that's been really critical to us is is answering that that concern and question about ongoing support and maintenance right so you know in a regular environment the regulator is really concerned about anything that could fundamentally impact business operation and and so the question is always about what happens when something goes wrong who's going to be there to support you which is where the value of the the partnership we have with Red Hat has really come into its own right and what what it's done is is it's actually giving us the best of both worlds a means that we can we can leverage and use and and and you know take some of the technology that's being developed by great communities in the open source way but also partner with a trusted partner in red had to say you know they're going to stand behind that community and provide that support when we needed the most so that's been the kind of the real value out of that partnership okay well I appreciate I love the story it's how do you move quickly leverage the power community but do it in a safe secure way and I love the idea of your literally empowering people with machine learning and AI at the moment when they need it it's just an incredible story so thank you so much for being here appreciate it thank you [Applause] you know again you see in these the the importance of enabling people with data and in an old-world was so much data was created with a system in mind versus data is a separate asset that needs to be available real time to anyone is a theme we hear over and over and over again and so you know really looking at open source solutions that allow that flexibility and keep data from getting locked into proprietary silos you know is a theme that we've I've heard over and over over the past year with many of our customers so I love logistics I'm a geek that way I come from that background in the past and I know that running large complex operations requires flawless execution and that requires great data and we have two great examples today around how to engage own organizations in new and more effective ways in the case of lufthansa technik literally IT became the business so it wasn't enabling the business it became the business offering and importantly went from idea to delivery to customers in a hundred days and so this theme of speed and the importance of speed it's a it's a great story you'll hear more about and then also at UPS UPS again I talked a little earlier about IT used to be kind of the long pole in the tent the thing that was slow moving because of the technology but UPS is showing that IT can actually drive the business and the cadence of business even faster by demonstrating the power and potential of technology to engage in this case hundreds of thousands of people to make decisions real-time in the face of obviously constant change around weather mechanicals and all the different things that can happen in a large logistics operation like that so I'd like to welcome on stage to be us more from Lufthansa Technik and Nick Castillo from ups to be us welcome thank you for being here Nick thank you thank you Jim and congratulations on your Innovation Awards oh thank you it's a great honor so to be us let's start with you can you tell us a little bit more about what a viet are is yeah avatars are a digital platform offering features like aircraft condition analytics reliability management and predictive maintenance and it helps airlines worldwide to digitize and improve their operations so all of the features work and can be used separately or generate even more where you burn combined and finally we decided to set up a viet as an open platform that means that we avoid the whole aviation industry to join the community and develop ideas on our platform and to be as one of things i found really fascinating about this is that you had a mandate to do this at a hundred days and you ultimately delivered on it you tell us a little bit about that i mean nothing in aviation moves that fast yeah that's been a big challenge so in the beginning of our story the Lufthansa bot asked us to develop somehow digital to win of an aircraft within just hundred days and to deliver something of value within 100 days means you cannot spend much time and producing specifications in terms of paper etc so for us it was pretty clear that we should go for an angel approach and immediately start and developing ideas so we put the best experts we know just in one room and let them start to work and on day 2 I think we already had the first scribbles for the UI on day 5 we wrote the first lines of code and we were able to do that because it has been a major advantage for us to already have four technologies taken place it's based on open source and especially rated solutions because we did not have to waste any time setting up the infrastructure and since we wanted to get feedback very fast we were certainly visited an airline from the Lufthansa group already on day 30 and showed them the first results and got a lot of feedback and because from the very beginning customer centricity has been an important aspect for us and changing the direction based on customer feedback has become quite normal for us over time yeah it's an interesting story not only engaging the people internally but be able to engage with a with that with a launch customer like that and get feedback along the way as it's great thing how is it going overall since launch yeah since the launch last year in April we generated much interest in the industry as well from Airlines as from competitors and in the following month we focused on a few Airlines which had been open minded and already advanced in digital activities and we've got a lot of feedback by working with them and we're able to improve our products by developing new features for example we learned that data integration can become quite complex in the industry and therefore we developed a new feature called quick boarding allowing Airlines to integrate into the via table platform within one day using a self-service so and currently we're heading for the next steps beyond predictive maintenance working on process automation and prescriptive prescriptive maintenance because we believe prediction without fulfillment still isn't enough it really is a great example of even once you're out there quickly continuing to innovate change react it's great to see so Nick I mean we all know ups I'm still always blown away by the size and scale of the company and the logistics operations that you run you tell us a little more about the project and what we're doing together yeah sure Jim and you know first of all I think I didn't get the sportcoat memo I think I'm the first one up here today with a sport coat but you know first on you know on behalf of the 430,000 ups was around the world and our just world-class talented team of 5,000 IT professionals I have to tell you we're humbled to be one of this year's red hat Innovation Award recipients so we really appreciate that you know as a global logistics provider we deliver about 20 million packages each day and we've got a portfolio of technologies both operational and customer tech and another customer facing side the power what we call the UPS smart logistics network and I gotta tell you innovations in our DNA technology is at the core of everything we do you know from the ever familiar first and industry mobile platform that a lot of you see when you get delivered a package which we call the diad which believe it or not we delivered in 1992 my choice a data-driven solution that drives over 40 million of our my choice customers I'm whatever you know what this is great he loves logistics he's a my choice customer you could be one too by the way there's a free app in the App Store but it provides unmatched visibility and really controls that last mile delivery experience so now today we're gonna talk about the solution that we're recognized for which is called site which is part of a much greater platform that we call edge which is transforming how our package delivery teams operate providing them real-time insights into our operations you know this allows them to make decisions based on data from 32 disparate data sources and these insights help us to optimize our operations but more importantly they help us improve the delivery experience for our customers just like you Jim you know on the on the back end is Big Data and it's on a large scale our systems are crunching billions of events to render those insights on an easy-to-use mobile platform in real time I got to tell you placing that information in our operators hands makes ups agile and being agile being able to react to changing conditions as you know is the name of the game in logistics now we built edge in our private cloud where Red Hat technologies play a very important role as part of our overage overarching cloud strategy and our migration to agile and DevOps so it's it's amazing it's amazing the size and scale so so you have this technology vision around engaging people in a more effect way those are my word not yours but but I'd be at that's how it certainly feels and so tell us a little more about how that enables the hundreds of thousands people to make better decisions every day yep so you know we're a people company and the edge platform is really the latest in a series of solutions to really empower our people and really power that smart logistics network you know we've been deploying technology believe it or not since we founded the company in 1907 we'll be a hundred and eleven years old this August it's just a phenomenal story now prior to edge and specifically the syphon ishutin firm ation from a number of disparate systems and reports they then need to manually look across these various data sources and and frankly it was inefficient and prone to inaccuracy and it wasn't really real-time at all now edge consumes data as I mentioned earlier from 32 disparate systems it allows our operators to make decisions on staffing equipment the flow of packages through the buildings in real time the ability to give our people on the ground the most up-to-date data allows them to make informed decisions now that's incredibly empowering because not only are they influencing their local operations but frankly they're influencing the entire global network it's truly extraordinary and so why open source and open shift in particular as part of that solution yeah you know so as I mentioned Red Hat and Red Hat technology you know specifically open shift there's really core to our cloud strategy and to our DevOps strategy the tools and environments that we've partnered with Red Hat to put in place truly are foundational and they've fundamentally changed the way we develop and deploy our systems you know I heard Jose talk earlier you know we had complex solutions that used to take 12 to 18 months to develop and deliver to market today we deliver those same solutions same level of complexity in months and even weeks now openshift enables us to container raise our workloads that run in our private cloud during normal operating periods but as we scale our business during our holiday peak season which is a very sure window about five weeks during the year last year as a matter of fact we delivered seven hundred and sixty-two million packages in that small window and our transactions our systems they just spiked dramatically during that period we think that having open shift will allow us in those peak periods to seamlessly move workloads to the public cloud so we can take advantage of burst capacity economically when needed and I have to tell you having this flexibility I think is key because you know ultimately it's going to allow us to react quickly to customer demands when needed dial back capacity when we don't need that capacity and I have to say it's a really great story of UPS and red hat working you together it really is a great story is just amazing again the size and scope but both stories here a lot speed speed speed getting to market quickly being able to try things it's great lessons learned for all of us the importance of being able to operate at a fundamentally different clock speed so thank you all for being here very much appreciated congratulate thank you [Applause] [Music] alright so while it's great to hear from our Innovation Award winners and it should be no surprise that they're leading and experimenting in some really interesting areas its scale so I hope that you got a chance to learn something from these interviews you'll have an opportunity to learn more about them you'll also have an opportunity to vote on the innovator of the year you can do that on the Red Hat summit mobile app or on the Red Hat Innovation Awards homepage you can learn even more about their stories and you'll have a chance to vote and I'll be back tomorrow to announce the the summit winner so next I like to spend a few minutes on talking about how Red Hat is working to catalyze our customers efforts Marko bill Peter our senior vice president of customer experience and engagement and John Alessio our vice president of global services will both describe areas in how we are working to configure our own organization to effectively engage with our customers to use open source to help drive their success so with that I'd like to welcome marquel on stage [Music] good morning good morning thank you Jim so I want to spend a few minutes to talk about how we are configured how we are configured towards your success how we enable internally as well to work towards your success and actually engage as well you know Paul yesterday talked about the open source culture and our open source development net model you know there's a lot of attributes that we have like transparency meritocracy collaboration those are the key of our culture they made RedHat what it is today and what it will be in the future but we also added our passion for customer success to that let me tell you this is kind of the configuration from a cultural perspective let me tell you a little bit on what that means so if you heard the name my organization is customer experience and engagement right in the past we talked a lot about support it's an important part of the Red Hat right and how we are configured we are configured probably very uniquely in the industry we put support together we have product security in there we add a documentation we add a quality engineering into an organization you think there's like wow why are they doing it we're also running actually the IT team for actually the product teams why are we doing that now you can imagine right we want to go through what you see as well right and I'll give you a few examples on how what's coming out of this configuration we invest more and more in testing integration and use cases which you are applying so you can see it between the support team experiencing a lot what you do and actually changing our test structure that makes a lot of sense we are investing more and more testing outside the boundaries so not exactly how things must fall by product management or engineering but also how does it really run in an environment that you operate we run complex setups internally right taking openshift putting in OpenStack using software-defined storage underneath managing it with cloud forms managing it if inside we do that we want to see how that works right we are reshaping documentation console to kind of help you better instead of just documenting features and knobs as in how can how do you want to achieve things now part of this is the configuration that are the big part of the configuration is the voice of the customer to listen to what you say I've been here at Red Hat a few years and one of my passion has always been really hearing from customers how they do it I travel constantly in the world and meet with customers because I want to know what is really going on we use channels like support we use channels like getting from salespeople the interaction from customers we do surveys we do you know we interact with our people to really hear what you do what we also do what maybe not many know and it's also very unique in the industry we have a webpage called you asked reacted we show very transparently you told us this is an area for improvement and it's not just in support it's across the company right build us a better web store build us this we're very transparent about Hades improvements we want to do with you now if you want to be part of the process today go to the feedback zone on the next floor down and talk to my team I might be there as well hit me up we want to hear the feedback this is how we talk about configuration of the organization how we are configured let me go to let me go to another part which is innovation innovation every day and that in my opinion the enable section right we gotta constantly innovate ourselves how do we work with you how do we actually provide better value how do we provide faster responses in support this is what we would I say is is our you know commitment to innovation which is the enabling that Jim talked about and I give you a few examples which I'm really happy and it kind of shows the open source culture at Red Hat our commitment is for innovation I'll give you good example right if you have a few thousand engineers and you empower them you kind of set the business framework as hey this is an area we got to do something you get a lot of good IDs you get a lot of IDs and you got a shape an inter an area that hey this is really something that brings now a few years ago we kind of said or I say is like based on a lot of feedback is we got to get more and more proactive if you customers and so I shaped my team and and I shaped it around how can we be more proactive it started very simple as in like from kbase articles or knowledgebase articles in getting started guys then we started a a tool that we put out called labs you've probably seen them if you're on the technical side really taking small applications out for you to kind of validate is this configured correctly stat configure there was the start then out of that the ideas came and they took different turns and one of the turns that we came out was right at insights that we launched a few years ago and did you see the demo yesterday that in Paul's keynote that they showed how something was broken with one the data centers how it was applied to fix and how has changed this is how innovation really came from the ground up from the support side and turned into something really a being a cornerstone of our strategy and we're keeping it married from the day to day work right you don't want to separate this you want to actually keep that the data that's coming from the support goes in that because that's the power that we saw yesterday in the demo now innovation doesn't stop when you set the challenge so we did the labs we did the insights we just launched a solution engine called solution engine another thing that came out of that challenge is in how do we break complex issues down that it's easier for you to find a solution quicker it's one example but we're also experimenting with AI so insights uses AI as you probably heard yesterday we also use it internally to actually drive faster resolution we did in one case with a a our I bought basically that we get to 25% faster resolution on challenges that you have the beauty for you obviously it's well this is much faster 10% of all our support cases today are supported and assisted by an AI now I'll give you another example of just trying to tell you the innovation that comes out if you configure and enable the team correctly kbase articles are knowledgebase articles we q8 thousands and thousands every year and then I get feedback as and while they're good but they're in English as you can tell my English is perfect so it's not no issue for that but for many of you is maybe like even here even I read it in Japanese so we actually did machine translation because it's too many that we can do manually the using machine translation I can tell it's a funny example two weeks ago I tried it I tried something from English to German I looked at it the German looked really bad I went back but the English was bad so it really translates one to one actually what it does but it's really cool this is innovation that you can apply and the team actually worked on this and really proud on that now the real innovation there is not these tools the real innovation is that you can actually shape it in a way that the innovation comes that you empower the people that's the configure and enable and what I think is all it's important this don't reinvent the plumbing don't start from scratch use systems like containers on open shift to actually build the innovation in a smaller way without reinventing the plumbing you save a lot of issues on security a lot of issues on reinventing the wheel focus on that that's what we do as well if you want to hear more details again go in the second floor now let's talk about the engage that Jim mentioned before what I translate that engage is actually engaging you as a customer towards your success now what does commitment to success really mean and I want to reflect on that on a traditional IT company shows up with you talk the salesperson solution architect works with you consulting implements solution it comes over to support and trust me in a very traditional way the support guy has no clue what actually was sold early on it's what happens right and this is actually I think that red had better that we're not so silent we don't show our internal silos or internal organization that much today we engage in a way it doesn't matter from which team it comes we have a better flow than that you deserve how the sausage is made but we can never forget what was your business objective early on now how is Red Hat different in this and we are very strong in my opinion you might disagree but we are very strong in a virtual accounting right really putting you in the middle and actually having a solution architect work directly with support or consulting involved and driving that together you can also help us in actually really embracing that model if that's also other partners or system integrators integrate put yourself in the middle be around that's how we want to make sure that we don't lose sight of the original business problem trust me reducing the hierarchy or getting rid of hierarchy and bureaucracy goes a long way now this is how we configured this is how we engage and this is how we are committed to your success with that I'm going to introduce you to John Alessio that talks more about some of the innovation done with customers thank you [Music] good morning I'm John Alessio I'm the vice president of Global Services and I'm delighted to be with you here today I'd like to talk to you about a couple of things as it relates to what we've been doing since the last summit in the services organization at the core of everything we did it's very similar to what Marco talked to you about our number one priority is driving our customer success with red hat technology and as you see here on the screen we have a number of different offerings and capabilities all the way from training certification open innovation labs consulting really pairing those capabilities together with what you just heard from Marco in the support or cee organization really that's the journey you all go through from the beginning of discovering what your business challenge is all the way through designing those solutions and deploying them with red hat now the highlight like to highlight a few things of what we've been up to over the last year so if I start with the training and certification team they've been very busy over the last year really updating enhancing our curriculum if you haven't stopped by the booth there's a preview for new capability around our learning community which is a new way of learning and really driving that enable meant in the community because 70% of what you need to know you learned from your peers and so it's a very key part of our learning strategy and in fact we take customer satisfaction with our training and certification business very seriously we survey all of our students coming out of training 93% of our students tell us they're better prepared because of red hat training and certification after Weeds they've completed the course we've updated the courses and we've trained well over a hundred and fifty thousand people over the last two years so it's a very very key part of our strategy and that combined with innovation labs and the consulting operation really drive that overall journey now we've been equally busy in enhancing the system of enablement and support for our business partners another very very key initiative is building out the ecosystem we've enhanced our open platform which is online partner enablement network we've added new capability and in fact much of the training and enablement that we do for our internal consultants our deal is delivered through the open platform now what I'm really impressed with and thankful for our partners is how they are consuming and leveraging this material we train and enable for sales for pre-sales and for delivery and we're up over 70% year in year in our partners that are enabled on RedHat technology let's give our business partners a round of applause now one of our offerings Red Hat open innovation labs I'd like to talk a bit more about and take you through a case study open innovation labs was created two years ago it's really there to help you on your journey in adopting open source technology it's an immersive experience where your team will work side-by-side with Red Hatters to really propel your journey forward in adopting open source technology and in fact we've been very busy since the summit in Boston as you'll see coming up on the screen we've completed dozens of engagements leveraging our methods tools and processes for open innovation labs as you can see we've worked with large and small accounts in fact if you remember summit last year we had a European customer easier AG on stage which was a startup and we worked with them at the very beginning of their business to create capabilities in a very short four-week engagement but over the last year we've also worked with very large customers such as Optim and Delta Airlines here in North America as well as Motability operations in the European arena one of the accounts I want to spend a little bit more time on is Heritage Bank heritage Bank is a community owned bank in Toowoomba Australia their challenge was not just on creating new innovative technology but their challenge was also around cultural transformation how to get people to work together across the silos within their organization we worked with them at all levels of the organization to create a new capability the first engagement went so well that they asked us to come in into a second engagement so I'd like to do now is run a video with Peter lock the chief executive officer of Heritage Bank so he can take you through their experience Heritage Bank is one of the country's oldest financial institutions we have to be smarter we have to be more innovative we have to be more agile we had to change we had to find people to help us make that change the Red Hat lab is the only one that truly helps drive that change with a business problem the change within the team is very visible from the start to now we've gone from being separated to very single goal minded seeing people that I only ever seen before in their cubicles in the room made me smile programmers in their thinking I'm now understanding how the whole process fits together the productivity of IT will change and that is good for our business that's really the value that were looking for the Red Hat innovation labs for us were a really great experience I'm not interested in running an organization I'm interested in making a great organization to say I was pleasantly surprised by it is an understatement I was delighted I love the quote I was delighted makes my heart warm every time I see that video you know since we were at summit for those of you who are with us in Boston some of you went on our hardhat tours we've opened three physical facilities here at Red Hat where we can conduct red head open Innovation Lab engagements Singapore London and Boston were all opened within the last physical year and in fact our site in Boston is paired with our world-class executive briefing center as well so if you haven't been there please do check it out I'd like to now talk to you a bit about a very special engagement that we just recently completed we just recently completed an engagement with UNICEF the United Nations Children's Fund and the the purpose behind this engagement was really to help UNICEF create an open-source platform that marries big data with social good the idea is UNICEF needs to be better prepared to respond to emergency situations and as you can imagine emergency situations are by nature unpredictable you can't really plan for them they can happen anytime anywhere and so we worked with them on a project that we called school mapping and the idea was to provide more insights so that when emergency situations arise UNICEF could do a much better job in helping the children in the region and so we leveraged our Red Hat open innovation lab methods tools processes that you've heard about just like we did at Heritage Bank and the other accounts I mentioned but then we also leveraged Red Hat software technologies so we leveraged OpenShift container platform we leveraged ansible automation we helped the client with a more agile development approach so they could have releases much more frequently and continue to update this over time we created a continuous integration continuous deployment pipeline we worked on containers and container in the application etc with that we've been able to provide a platform that is going to allow for their growth to better respond to these emergency situations let's watch a short video on UNICEF mission of UNICEF innovation is to apply technology to the world's most pressing problems facing children data is changing the landscape of what we do at UNICEF this means that we can figure out what's happening now on the ground who it's happening to and actually respond to it in much more of a real-time manner than we used to be able to do we love working with open source communities because of their commitment that we should be doing good for the world we're actually with red hat building a sandbox where universities or other researchers or data scientists can connect and help us with our work if you want to use data for social good there's so many groups out there that really need your help and there's so many ways to get involved [Music] so let's give a very very warm red hat summit welcome to Erica kochi co-founder of unicef innovation well Erica first of all welcome to Red Hat summit thanks for having me here it's our pleasure and thank you for joining us so Erica I've just talked a bit about kind of what we've been up to and Red Hat services over the last year we talked a bit about our open innovation labs and we did this project the school mapping project together our two teams and I thought the audience might find it interesting from your point of view on why the approach we use in innovation labs was such a good fit for the school mapping project yeah it was a great fit for for two reasons the first is values everything that we do at UNICEF innovation we use open source technology and that's for a couple of reasons because we can take it from one place and very easily move it to other countries around the world we work in 190 countries so that's really important for us not to be able to scale things also because it makes sense we can get we can get more communities involved in this and look not just try to do everything by ourselves but look much open much more openly towards the open source communities out there to help us with our work we can't do it alone yeah and then the second thing is methodology you know the labs are really looking at taking this agile approach to prototyping things trying things failing trying again and that's really necessary when you're developing something new and trying to do something new like mapping every school in the world yeah very challenging work think about it 190 countries Wow and so the open source platform really works well and then the the rapid prototyping was really a good fit so I think the audience might find it interesting on how this application and this platform will help children in Latin America so in a lot of countries in Latin America and many countries throughout the world that UNICEF works in are coming out of either decades of conflict or are are subject to natural disasters and not great infrastructure so it's really important to a for us to know where schools are where communities are well where help is needed what's connected what's not and using a overlay of various sources of data from poverty mapping to satellite imagery to other sources we can really figure out what's happening where resources are where they aren't and so we can plan better to respond to emergencies and to and to really invest in areas that are needed that need that investment excellent excellent it's quite powerful what we were able to do in a relatively short eight or nine week engagement that our two teams did together now many of your colleagues in the audience are using open source today looking to expand their use of open source and I thought you might have some recommendations for them on how they kind of go through that journey and expanding their use of open source since your experience at that yeah for us it was it was very much based on what's this gonna cost we have limited resources and what's how is this gonna spread as quickly as possible mm-hmm and so we really asked ourselves those two questions you know about 10 years ago and what we realized is if we are going to be recommending technologies that governments are going to be using it really needs to be open source they need to have control over it yeah and they need to be working with communities not developing it themselves yeah excellent excellent so I got really inspired with what we were doing here in this project it's one of those you know every customer project is really interesting to me this one kind of pulls a little bit at your heartstrings on what the real impact could be here and so I know some of our colleagues here in the audience may want to get involved how can they get involved well there's many ways to get involved with the other UNICEF or other groups out there you can search for our work on github and there are tasks that you can do right now if and if you're looking for to do she's got work for you and if you want sort of a more a longer engagement or a bigger engagement you can check out our website UNICEF stories org and you can look at the areas you might be interested in and contact us we're always open to collaboration excellent well Erica thank you for being with us here today thank you for the great project we worked on together and have a great summer thank you for being give her a round of applause all right well I hope that's been helpful to you to give you a bit of an update on what we've been focused on in global services the message I'll leave with you is our top priority is customer success as you heard through the story from UNICEF from Heritage Bank and others we can help you innovate where you are today I hope you have a great summit and I'll call out Jim Whitehurst thank you John and thank you Erica that's really an inspiring story we have so many great examples of how individuals and organizations are stepping up to transform in the face of digital disruption I'd like to spend my last few minutes with one real-world example that brings a lot of this together and truly with life-saving impact how many times do you think you can solve a problem which is going to allow a clinician to now save the life I think the challenge all of his physicians are dealing with is data overload I probably look at over 100,000 images in a day and that's just gonna get worse what if it was possible for some computer program to look at these images with them and automatically flag images that might deserve better attention Chris on the surface seems pretty simple but underneath Chris has a lot going on in the past year I've seen Chris Foreman community and a space usually dominated by proprietary software I think Chris can change medicine as we know it today [Music] all right with that I'd like to invite on stage dr. Ellen grant from Boston Children's Hospital dr. grant welcome thank you for being here so dr. grant tell me who is Chris Chris does a lot of work for us and I think Chris is making me or has definitely the potential to make me a better doctor Chris helps us take data from our archives in the hospital and port it to wrap the fastback ends like the mass up and cloud to do rapid data processing and provide it back to me in any format on a desktop an iPad or an iPhone so it it basically brings high-end data analysis right to me at the bedside and that's been a barrier that I struggled with years ago to try to break down so that's where we started with Chris is to to break that barrier between research that occurred on a timeline of days to weeks to months to clinical practice which occurs in the timeline of seconds to minutes well one of things I found really fascinating about this story RedHat in case you can't tell we're really passionate about user driven innovation is this is an example of user driven innovation not directly at a technology company but in medicine excuse me can you tell us just a little bit about the genesis of Chris and how I got started yeah Chris got started when I was running a clinical division and I was very frustrated with not having the latest image analysis tools at my fingertips while I was on clinical practice and I would have to on the research so I could go over and you know do line code and do the data analysis but if I'm always over in clinical I kept forgetting how to do those things and I wanted to have all those innovations that my fingertips and not have to remember all the computer science because I'm a physician not like a better scientist so I wanted to build a platform that gave me easy access to that back-end without having to remember all the details and so that's what Chris does for us is brings allowed me to go into the PAC's grab a dataset send it to a computer and back in to do the analysis and bring it back to me without having to worry about where it was or how it got there that's all involved in the in the platform Chris and why not just go to a vendor and ask them to write a piece of software for you to do that yeah we thought about that and we do a lot of technical innovations and we always work with the experts so we wanted to work with if I'm going to be able to say an optical device I'm going to work with the optical engineers or an EM our system I'm going to work with em our engineers so we wanted to work with people who really knew or the plumbers so to speak of the software in industry so we ended up working with the massive point cloud for the platform and the distributed systems in Red Hat as the infrastructure that's starting to support Chris and that's been actually a really incredible journey for us because medical ready medical softwares not typically been a community process and that's something that working with dan from Red Hat we learned a lot about how to participate in an open community and I think our team has grown a lot as a result of that collaboration and I know you we've talked about in the past that getting this data locked into a proprietary system you may not be able to get out there's a real issue can you talk about the importance of open and how that's worked in the process yeah and I think for the medical community and I find this resonates with other physicians as well too is that it's medical data we want to continue to own and we feel very awkward about giving it to industry so we would rather have our data sitting in an open cloud like the mass open cloud where we can have a data consortium that oversees the data governance so that we're not giving our data way to somebody else but have a platform that we can still keep a control of our own data and I think it's going to be the future because we're running of a space in the hospital we generate so much data and it's just going to get worse as I was mentioning and all the systems run faster we get new devices so the amount of data that we have to filter through is just astronomically increasing so we need to have resources to store and compute on such large databases and so thinking about where this could go I mean this is a classic feels like an open-source project it started really really small with a originally modest set of goals and it's just kind of continue to grow and grow and grow it's a lot like if yes leanest torval Linux would be in 1995 you probably wouldn't think it would be where it is now so if you dream with me a little bit where do you think this could possibly go in the next five years ten years what I hope it'll do is allow us to break down the silos within the hospital because to do the best job at what we physicians do not only do we have to talk and collaborate together as individuals we have to take the data each each community develops and be able to bring it together so in other words I need to be able to bring in information from vital monitors from mr scans from optical devices from genetic tests electronic health record and be able to analyze on all that data combined so ideally this would be a platform that breaks down those information barriers in a hospital and also allows us to collaborate across multiple institutions because many disorders you only see a few in each hospital so we really have to work as teams in the medical community to combine our data together and also I'm hoping that and we even have discussions with people in the developing world because they have systems to generate or to got to create data or say for example an M R system they can't create data but they don't have the resources to analyze on it so this would be a portable for them to participate in this growing data analysis world without having to have the infrastructure there and be a portal into our back-end and we could provide the infrastructure to do the data analysis it really is truly amazing to see how it's just continued to grow and grow and expand it really is it's a phenomenal story thank you so much for being here appreciate it thank you [Applause] I really do love that story it's a great example of user driven innovation you know in a different industry than in technology and you know recognizing that a clinicians need for real-time information is very different than a researchers need you know in projects that can last weeks and months and so rather than trying to get an industry to pivot and change it's a great opportunity to use a user driven approach to directly meet those needs so we still have a long way to go we have two more days of the summit and as I said yesterday you know we're not here to give you all the answers we're here to convene the conversation so I hope you will have an opportunity today and tomorrow to meet some new people to share some ideas we're really really excited about what we can all do when we work together so I hope you found today valuable we still have a lot more happening on the main stage as well this afternoon please join us back for the general session it's a really amazing lineup you'll hear from the women and opensource Award winners you'll also hear more about our collab program which is really cool it's getting middle school girls interested in open sourcing coding and so you'll have an opportunity to see some people involved in that you'll also hear from the open source Story speakers and you'll including in that you will see a demo done by a technologist who happens to be 11 years old so really cool you don't want to miss that so I look forward to seeing you then this afternoon thank you [Applause]
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Erica Kochi & Mike Walker | Red Hat Summit 2018
live from San Francisco it's the cube covering Red Hat summit 2018 brought to you by Red Hat okay welcome back everyone would live here in San Francisco California the Moscone West for the cubes exclusive coverage of Red Hat summit 2018 I'm John for the co-host of the cube was my closest week analyst John Troy a co-founder of tech reckoning advisory and Community Development firm our next two guests is erica kochi co-founder of unicef innovation the United Nations Children's Fund and Mike Walker director of open innovation labs at Red Hat welcome to the cube thanks for coming joining us thanks love this story so Erica take a minute to talk about what you're working on at UNICEF you guys doing a lot of great stuff you got the relationship with Red Hat innovation labs but you doing some pretty amazing things take them into explain what you're doing at UNICEF some of the projects and what we're going to talk about here with the school and the magic fox all the greatness sure so UNICEF innovation essentially what we do is take technology and apply it to the problems facing children around the world and we do that in a variety of ways I think the things that we're probably most most known for is our work in mobile technology to connect frontline health workers and young people to to governments and have let them have a say in what's happening in in you know the halls of government and we have a program called you report which has five million young people from all over the world who are talking directly to their government representatives they need that now more than ever we certainly do yeah so open source obviously with red hat big shared vision talk about the shared mission like what's going on but there where's the connection I was the open source was great for society we've seen the benefits all around the world how is this translating for you guys yeah so I've been at Red Hat for a while and obviously we're the world's largest open source enterprise open source software company and I as a consultant been able to see Red Hat open source software used for many different purposes in every vertical you can think of but this one was really unique because we found a natural partnership I think between some of UNICEF innovations vision to use open source and open principles for maximum impact for good and so when I learned about innovation at UNICEF really by chance I just ran into a colleague at a meeting in New York and and she gave me a few words about it I said this is incredible because we can leverage all of what we learned at Red Hat our knowledge of open source to impact people and culture and not just for technical reasons and and partnered with UNICEF to make maximum social impact for children that need it most and you got red house key a technology company a lot of smart people there but with open source there's been a DNA in your bloodstream of the company around democratization and now we're out in the open with everyone online and everything's good this is a democratization piece talk about some of that the things that you guys are doing with red hat what specifically are you celebrating together here so we had a great collaboration with with Red Hat there at their labs program which really took a look at our challenge of using big data to read or understand what's happening on the ground especially in schools in countries that are either coming out of emergencies or have limited access to a lot of the parts of the country and so we layered satellite imagery information on poverty other sets of data you can really get a clear picture about where we should be allocating our resources and how we should be planning for emergencies and this collaboration just just finished up a couple days ago right and it's really been great what's some of the impact give an example of some of the use cases so actually saving time money will be things around yeah what what are some of the impact things that you see with this project what are some of the things a lot of countries right now are thinking about how they can connect all of their schools and make sure all of it their schools are online and give children this access to information that's really essential to to thrive in the world of today and tomorrow and if you don't know where your schools are and you don't know if they're connected or not and you can't see you know what else is happening it's in the socio-economic way in those areas it's really hard to figure out what to do and where to start so we're really just at the beginning of that process to try to connect every school in the world and we're at the moment we're trying to lay the groundwork to understand where we're at and where we need a level of insight you're providing once you connect the schools you can get people can know what to do and how to align with what's happening it's interesting I was just in Puerto Rico a couple weeks ago and the young kids there have self formed their own blockchain network between the schools and they're teaching themselves how to program because they recognize that to get out of their world and the mess that they're challenging through now post-hurricane they want to participate in the new economy so as someone not knowing that if I know I could help you're kind of providing a window into that kind of dynamic where is that kind of the use case is that how it's working so it's but participation and contribution is absolutely participation is key you know for young people and they need to it like really learn how to acquire the skills that they're gonna need to you know become successful productive adults in the future and school is you know one of the entry points to do that so that's really important and everyone loves that - yeah I'm kind of curious about the structure of the project today in the keynote you know Jim why does she start us off by saying well you know we can't plan everything we've got to be a little bit more agile here's a framework for how to how to really approach problems when we really don't know what the outcome or even what we're gonna hit so can you talk a little bit maybe about the structure of the of the process and did you know did you start with a blank piece of paper or do you know how did how did you figure out the pathway to the ultimate outcome here yeah I can take it first um that's a great question because at labs we experiment with ways to get fast feedback and really in a very short amount of time usually one to three months and a very limited amount of funds how can we make maximum impact using open technologies and open practices so the project was already in progress like most IT projects are right Gardi been some research we have data scientists to work with and one of the first things we did was really talk about really our concerns and fears about how we might work together using an exercise called how might we we kind of came together and said how might we solve this problem or that problem and just got it out on the table one of the aspects that I think work really is dedicating a small team in a residency style engagement where we worked off premise so Red Hatters left their office UNICEF folks left their office we came together in akola works based in New York City that was fairly convenient and you know we all focused on a tough problem and we decided really early on that in order to make sure that this problem actually would be usable and in the hands of end users in the field across the world we needed to get face to face so we made a trip to Latin America to work with a UNICEF field office to get fast feet up feedback on prototypes and that helped us adjust what we ended up shipping as the product at the end of the two months cycle Erika how was the outcome for you and your game it's great I think you know one of the things that really aligns RedHat and UNICEF is not just a commitment to open source and the values around that but also this agile methodology I think that you know to really move something a product forward or sort of a program forward you need to step away from the daily part of life you know and move away from the the email and the connection to the laptop and the phone and I think we were able to do that I also think that you need to ground truth things and so that you know that trip to the field and to really understand the context and the problems that that people are facing is is completely critical to success and that's like agile programming you kind of gotta get get out in the front lines not ask about the data I'm really intrigued so you got multiple data sources coming in love the satellite thing you're changing lives but you're saving lives too is your talk about you may name real-time efforts here what's the data science thing what's the tech behind I mean is it ingesting data as a third party data Z how does it work I mean can you share some some of the mechanics on the date of data science piece er yeah I think there's probably a lot we can talk about I could talk about data all day love data but some of the things that I think were fundamentally really exciting about this project and about what UNICEF innovation has done so let's take for example Facebook they have a whole lot of data but that's one company and it's sort of one lens to the world right it's it's quite broad and we get a lot of information but it's one company what UNICEF innovation has done is found ways to partner with private and public companies and private and public data sources in a way that maintains the security and integrity of that data so that it's not exposing proprietary information but they've been able to create those that community essentially that's willing to share information to solve a really tough challenge for social good and so we have actually a really wide variety of data at our disposal and our job was to create a sandbox that allow data scientists to really both proactively plan for things that might happen and reactively plan when events occur when we don't even know what that event might be so you know I like to think back to Jim Whitehurst's speech last year at summit where I said planning is dead we've got to try learn and modify I think that's exactly what we aim to build a platform that you know hasn't been planned for any one event or action but provides the flexibility for data scientists to try experiment pull different data together learn from it sharing Maps we integrated geospatial data and maps to be able to pass this along quickly and then modify based on the results so we can more quickly achieve something with the greatest impact that's awesome yeah so for example if you take you know you take like for example epidemics right so many factors are so many different types of data are needed to really understand what's happening in an epidemic for example take Zika you have temperature right mosquitos only breed at a certain at a certain temperature you have poverty or which really indicates standing water where mosquitoes can breed you have socioeconomic factors so it does the house more likely does it have mosquito screens or not and then you have the social right what are people talking about what are they concerned about and I think like a really interesting picture emerges when you can start to layer all of these kinds of data and that really helps us see where we should be focusing it's great discovery information using the data to drive kind of we're to look at and we're to focus efforts exactly and also a global footprint right and in previous decades maybe this would have run on a piece with some sort of a proprietary GIS thing or or yeah I'm not even sure right you chip around discs maybe but I mean not not to be too product oriented right built on OpenShift we've seen a whole lot this week right these global footprint you could take it live on any cloud I assume that's a piece of it right at global accessibility now for they out for the the resulting application absolutely and we want to take you know what we've done in one scenario and apply it to many others in many other locations and so being an open source is key for this because we wouldn't be able to do this in other locations are replicated just as easily handed to local folks have them an adapted and/or take it further or have other people work on it whether it's academics other companies us nice I love the structure like how its agile I got a Eric I ought to ask you about this because we're seeing a big trend with open source obviously that's well on its way to becoming it is the standard of doing software but mission driven technology activities aren't just nonprofits anymore you starting to see collaboration the JOBS Act that Obama put in place really set the table for new kind of funding so you've seen a lot more younger people coming in and saying hey you know what I can build it on the cloud and grants aware but the code gets live on right so you seeing a new flywheel around mission driven nonprofits and for-profits a new kind of entrepreneurship culture can you share insight into how this is developer you see a lot of it you have a lot of thoughts on this your them please so I think that you know as technology companies become so much more influential in our lives you know they're not just showing you the news anymore they were they're moving into every aspect of our lives whether it's in our into our homes or even inside our bodies that they're they're occupying as so much more influential role in an individual's life with that comes a tremendous amount of responsibility and I think that while it's not enough to say you should do good because it's the right thing to do I think that employees also really demand it I think that you know and that shift will occur because employees realize that they want to they want to be doing good in the world and if they're gonna be influencing so many people's lives that's really really it's a new citizenship model for the younger generations early Millennials want to work in a company that's not just the profit hungar motive but also there's some dynamics going on with the infrastructure world you look at Facebook as a classic example you know the word weaponizing content has been a bad thing but we've been talking about in the queue there's actually a reverse of that polar opposite which is you can weaponize content for good meaning that all the same principles that do bad things can be used for good things so this is where we started to see a lot more people saying hey let's do more of the fad and punish so the new kind of rules are developing in the society so I find it fascinating and I'm just curious is this known within the societal entrepreneurship culture or what's the what's your view on how to do more how to do better I'm doing a lot of work in what AI is gonna be meaning what's what it's gonna mean for children in the world and you know there are so many opportunities we've been talking about some of them but there are also a lot of risks right what does it mean when your child's best friend is a robot what does that change about our us us you know as human beings and so I think it's you know you have to look at both sides and you have to be very conscious about designing the technology that you want to see in the world that's gonna make the world a good place to live in and I think that there definitely is an awakening and that's going and there's a lot this is a first generation set of problems that social entrepreneurship brings a just society I mean who sets the policy which side of the road the cars drive on or you know there's these new issues that are evolving that I've never been seen before you know cyber bullying - all kinds of things happening so congratulations on all those success so what's the forecast for Red Hat innovation has more of this gonna continue double down on it what are the things do you guys have going on yeah so Labs is growing quite largely we are now live in North America amia and a pack with plans to expand extend to Latin in the future and we're growing quite quickly in terms of our ability to execute I guess you know the labs team is relatively small a small number of specialists but we are all of RedHat so the way we operate is based on what we're trying to achieve together we will look at all of red hat and sometimes even outside of red hat to figure out who we can bring to the table to help solve that problem and so it allows me to work with our engineering with our business units even with our marketing so we brought marketing in to the first meeting not simply because we're creating a marketing event but we realized we need to advertise internally and externally what we build in order to gain adoption it's part of building a community and what I have found is because Labs has an injective that goes beyond you know simply a technological objective we're aiming to change ways of working and to change culture it's really easy to build a lot of interest and adoption among all Red Hatters to bring them together to solve a tough problem a really an interesting facet a lot about labs I know you do these pop-up labs and I think this was what you know you don't make necessarily make people come to you you son can come to them but I think like you said it's important to get outside your your office and your day-to-day for these focused projects you talked a little bit about your approach to yeah so we've learned a lot you know Labs is almost exactly two years old I think we launched in April of 2016 at OpenStack summit and one thing we learned is you know the world is a big place and we can't necessarily have a physical lab location everywhere so we do have first-class facilities in Boston Singapore in London but I would say the large majority of the work efforts we've done to date have been in what we call pop-up labs and what that allows us to do is create that immersion and focus on a tough challenge by getting people out of the office but also provide the ability to go home at the end of the day and have dinner at your home which a lot of people enjoy and from the red head perspective we've got a lot of folks used to travel so we can make that happen meet in the middle and and it's been a good hybrid approach that we end up doing more and more great stuff here actually is my final question for then to take from Jim Whitehouse keynote today how is blockchain changing this open for good economics that's absolutely right and I mean Erika you might want to weigh in as well but I think I love blockchain first of all I love math and I love the science behind it but I love the fact that it was developed in the open it was debated in the open it's radically transparent you can see all of the transactions of anyone in the chain and it's being used in ways that no one ever dreamed of I mean it was meant for a universal currency but you know think about this we might be able to use it as a token system so that we can actually ensure that humanitarian efforts that are done are actually recognized by people that they may not otherwise have funds right someone with very little money can still use so perhaps takers making sure the money gets put to use absolutely and endpoints we have accountability you know we're using it to exchange electronic health records securely and privately with the people that need them and only the people that need them so I don't know where blockchain will be in five years but I am optimistic that I think the mathematics and the fundamental is a blockchain or sound and I think more than anything it's the community that will drive new applications of blockchain and really define and answer that question for you well I know we'll be in New York next week with blockchain for consensus of ennum there's a lot of ents going on we've seen wealthy entrepreneurs donating Bitcoin and aetherium there's a really great project so and a lot of young people love the blockchain and crypto so who knows got to be on that labs we're definitely look you know looking into it and we have a couple experiments around the world that range from trying to do some smart contracts you know in in country environments to taking donations in in blockchain armies Arion cryptocurrencies I think that there are a lot of exciting applications for it in this due to do good space I also think that there's a tremendous amount of hype and you know you really have to ask yourself the key question of like does this need a central trusted Authority or is there one that exists that already is great um and do we need to record every transaction if you can answer those two questions then the other baby going somewhere well great point the other thing I would answer that agree hundred percent and that is is that blockchain and crypto our token economic certainty not the ico scams but is an efficiency heat-seeking missile it it targets efficiencies where there's inefficiencies announced where I see a lot of the action going on and you know efforts and for good are highly inefficient yeah so hey you knows well we'd love blockchain as you can tell we talk about all day long smart contracts token economics thanks for coming on and congratulations on your project thank you you're good to stuff their cube coverage here day two of three days live coverage here in San Francisco the Red Hat summit 2018 moved back after this short break stay with us
**Summary and Sentiment Analysis are not been shown because of improper transcript**
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