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]

>> Narrator: Live from Miami, Florida, it's The Cube. Covering IBM's Data in AI Forum, brought to you by IBM. >> Welcome back to Miami, everybody. You're watching The Cube, the leader in live tech coverage. We're here covering the IBM Data and AI Forum. Scott Buckles is here to my right. He's the business unit executive at IBM and long time Cube alum, Daniel Hernandez is the Vice President of Data and AI group. Good to see you guys, thanks for coming on. >> Thanks for having us. >> Good to see you. >> You're very welcome. We're going to talk about data ops, kind of accelerating the journey to AI around data ops, but what is data ops and how does it fit into AI? Daniel, we'll start with you. >> There's no AI without data. You've got data science to help you build AI. You've got dev ops to help you build apps. You've got nothing to basically help you prepare data for AI. Data ops is the equivalent of dev ops, but for delivering AI ready data. >> So, how are you, Scott, dealing with this topic with customers, is it resonating? Are they leaning into it, or are they saying, "what?" >> No, it's absolutely resonating. We have a lot of customers that are doing a lot of good things on the data science side. But, trying to get the right data at the right people, and do it fast, is a huge problem. They're finding they're spending too much time prepping data, getting the data into the models, and they're not spending enough time failing fast with some of those models, or getting the models that they need to put in production into production fast enough. So, this absolutely resonates with them because I think it's been confusing for a long time. >> So, AI's scary to a lot of people, right? It's a complicated situation, right? And how do you make it less scary? >> Talk about problems that can be solved with it, basically. You want a better customer experience in your contact center, you want a similarly amazing experience when they're interacting with you on the web. How do you do that? AI is simply a way to get it done, and a way to get it done exceptionally well. So, that's how I like to talk about it. I don't start with here's AI, tell me what problems you can solve. Here are the problems you've got, and where appropriate, here's where AI can help. >> So what are some of your favorite problems that you guys are solving with customers. >> Customer and employee care, which, basically, is any business that does business has customers. Customer and employee care are huge a problem space. Catching bad people, financial crimes investigation is a huge one. Fraud, KYC AML as an example. >> National security, things like that, right? >> Yeah. >> You spend all your time with customers, what else? >> Well, customer experience is probably the one that we're seeing the most. The other is being more efficient. Helping businesses solve those problems quicker, faster. Try to find new avenues for revenue. How to cut costs out of their organization, out of their run time. Those are the ones that we see the most. >> So when you say customer experience, immediately chat bots jumps into my head. But I know we're talking more than, sort of a, transcends chat bots, but double click on customer experience, how are people applying machine intelligence to improve customer experience? >> Well, when I think of it, I think about if you call in to Delta, and you have one bad experience, or your airline, whatever that airline may be, that that customer experience could lead to losing that customer forever, and there used to be an old adage that you have one bad experience and you tell 10 people about it, you have a good one, and you tell one person, or two peoples. So, getting the right data to have that experience is where it becomes a challenge and we've seen instances where customers, or excuse me, organizations are literally trying to find the data on the screen while the customer is on hold. So, they're saying, "can I put you on hold?" and they're trying to go out and find it. So, being able to automate finding that data, getting it in the right hands, to the right people, at the right time, in moment's notice, is a great opportunity for AI and machine learning, and that's an example of how we do it. >> So, from a technical standpoint, Daniel, you guys have this IBM Cloud Pak for Data that's going to magic data virtualization thing. Let's take an example that Scott just gave us, think of an airline. I love my mobile app, I can do everything on my mobile app, except there are certain things I can't do, I have to go to the website. There are certain things I have to do with e-commerce that I have to go to the website that I can't do. Sometimes watching a movie, I can't order a movie from the app, I have to go to website, the URL, and order it there and put it on my watch list. So, I presume that there's some technical debt in each of those platforms, and there's no way to get the data from here, and the data from here talking to each other. Is that the kind of problem that you're solving? >> Yes, and in this particular case, you're actually touching on what we mean by customer and employee care everywhere. The interaction you have on your phone should be the same as the interaction and the kind of response on the web, which should be the same, if not better, when you're talking to a human being. How do you have the exceptional customer and employee care, all channels. Today, say the art is, I've got a specific experience for my phone, a specific experience for my website, a specific, different experience in my contact center. The whole work we're doing around Watson Assistant, and it as a virtual assistant, is to be that nervous system that underpins all channels, and with Cloud Pak for Data, we can deliver it anywhere. You want to run your contact center on an IBM Cloud? Great. You want to run it on Amazon, Azure, Google, your own private center, or everything in between, great. Cloud Pak for Data is how you get Watson Assistant, the rest of Watson and our data stack anywhere you want, so you can deliver that same consistent, amazing experience, all channels, anywhere. >> And I know the tone of my question was somewhat negative, but I'm actually optimistic, and there's a couple examples I'll give. I remember Bill Belichick one time said, "Agh, the weather, it can't ever get the weather right," this is probably five, six years ago. Actually, they do pretty well with the weather compared to 10 or 15 years ago. The other is fraud detection. In the last 10 years, fraud detection has become so much better in terms of just the time it takes to identify a fraud, and the number of false positives. Even in the last, I'd say, 12 to 18 months, false positives are way down. I think that's machine intelligence, right? >> I mean, if you're using business rules, they're not way down. They're still way up. If you're using more sophisticated techniques, that are depending upon the operational data to be trained, then they should be way down. But, there is still a lot of these systems that are based on old school business rules that can't keep up. They're producing alerts that, in many cases, are ignored, and because they're ignored, you're susceptible to bad issues. With, especially AI based techniques for fraud detection, you better have good data to train this stuff, which gets back to the whole data ops thing, and training those with good data, which data ops can help you get done. >> And a key part to data ops is the people and the process. It's not just about automating things and automating the data to get it in the right place. You have to modernize those business processes and have the right skills to be able to do that as well. Otherwise, you're not going to make the progress. You're not going to reap the benefits. >> Well, that was actually my next question. What about the people and the process? We were talking before, off camera, about our PA, and he's saying "pave the cow path." But sometimes you actually have to re-engineer the process and you might not have the skill set. So it's people and process, and then technology you lay in. And we've always talked about this, technology is always going to change. Smart technologists will figure it out. But, the people and the process, that's the hardest part. What are you seeing in the field? >> We see a lot of customers struggling with the people and process side, for a variety of reasons. The technology seems to be the focus, but when we talk to customers, we spend a lot of time saying, "well, what needs to change in your business process "when this happens? "How do those business rules need to change "so you don't get those false positives?" Because it doesn't matter at the end of the day. >> So, can we go back to the business rules thing? So, it sounds like the business rules are sort of an outdated, policy based, rigid sort of structure that's enforced no matter what. Versus machine intelligence, which can interpret situations on the fly, but can you add some color to that and explain the difference between what you call sort of business rules based versus AI based. >> So the AI based ones, in this particular case, probably classic statistical machine learning techniques, to do something like know who I am, right? My name is Danny Hernandez, if you were to Google Danny Hernandez, the number one search result is going to be a rapper. There is a rapper that actually just recently came out, he's not even that good, but he's a new one. A statistical machine learning technique would be able to say, "all right, given Daniel "and the context information I know about him, "when I look for Daniel Hernandez, "and I supplement the identity with that "contextual information, it means it's one of "the six that work at IBM." Right? >> Not the rapper. >> Not the rapper. >> Not the rapper. >> Exactly. I don't mind being matched with a rapper, but match me with a good rapper. >> All you've got to do is search Daniel Hernandez and The Cube and you'll find him. >> Ha, right. Bingo. Actually that's true. So, in any case, the AI based techniques basically allow you to isolate who I am, based on more features that you know about me, so that you get me right. Because if you can't even start there, with whom are you transacting, you're not going to have any hope of detecting fraud. Either that, or you're going to get false positives because you're going to associate me with someone that I'm not, and then it's just going to make me upset, because when you should be transacting with me, you're not because you're saying I'm someone I'm not. >> So, that ties back to what we were saying before, know you're customer and anti money laundering. Which, of course, was big, and still is, during the crypto craze. Maybe crypto is not as crazy, but that was a big deal when you had bitcoin at whatever it was. What are some practical applications for KYC AML that you're seeing in the field today? >> I think that what we see a lot of, what we're applying in my business is automating the discovery of data and learning about the lineage of that data. Where did it come from? This was a problem that was really hard to solve 18 months ago, because it took a lot of man power to do it. And as soon as you did it once, it was outdated. So, we've recently released some capabilities within Watson Knowledge Catalog that really help automate that, so that as the data continues to grow, and continues to change, as it always does, that rather than having two, three hundred business analysts or data stewards trying to go figure that out, machine learning can go do that for you. >> So, all the big banks are glomming on to this? >> Absolutely. >> So think about any customer onboarding, right? You better know who your customer is, and you better have provisions around anti money laundering. Otherwise, there's going to be some very serious downside risk. It's just one example of many, for sure. >> Let's talk about some of the data challenges because we talked a lot about digital, digital business, I've always said the difference between a business and a digital business is how they use data. So, what are some of the challenging issues that customers are facing, and particularly, incumbents, Ginni Rometty used the term a couple of events ago, and it might have even been World of Watson, incumbent disruptors, maybe that was the first think, which I thought was a very poignant term. So, what are some of the data challenges that these incumbents are facing, and how is IMB helping solve them? >> For us, one of them that we see is just understanding where their data is. There is a lot of dark data out there that they haven't discovered yet. And what impact is that having on their analytics, what opportunities aren't they taking advantage of, and what risks are they being exposed to by that being out there. Unstructured data is another big part of it as well. Structured data is sort of the easy answer to solving the data problem, >> [Daniel Hernandez] But still hard. >> But still hard. Unstructured data is something that almost feels like an afterthought a lot of times. But, the opportunities and risks there are equally, if not greater, to your business. >> So yeah, what you're saying it's an afterthought, because a lot of times people are saying, "that's too hard." >> Scott Buckles: Right. >> Forget it. >> Scott Buckles: Right. Right. Absolutely. >> Because there's gold in them there hills, right? >> Scott Buckles: Yeah, absolutely. >> So, how does IBM help solve that problem? Is it tooling, is it discovery tooling? >> Well, yeah, so we recently released a product called InstaScan, that helps you to go discover unstructured data within any cloud environment. So, that was released a couple months ago, that's a huge opportunity that we see where customers can actually go and discover that dark data, discover those risks. And then combine that with some of the capabilities that we do with structured data too, so you have a holistic view of where your data is, and start tying that together. >> If I could add, any company that has any operating history is going to have a pretty complex data environment. Any company that wants to employ AI has a fundamental choice. Either I bring my AI to the data, or I bring my data to the AI. Our competition demand that you bring your data to the AI, which is expensive, hard, often impossible. So, if you have any desire to employ this stuff, you had better take the I'm going to bring my AI to the data approach, or be prepared to deal with a multi-year deployment for this stuff. So, that principle difference in how we think about the problem, means that we can help our customers apply AI to problem sets that they otherwise couldn't because they would have to move. And in many cases, they're just abandoning projects all together because of that. >> So, now we're starting to get into sort of data strategy. So, let's talk about data strategy. So, it starts with, I guess, understanding the value of your data. >> [Daniel Hernandez] Start with understanding what you got. >> Yeah, what data do I have. What's the value of that data? How do I get to that data? You just mentioned you can't have a strategy that says, "okay, move all the data into some God box." >> Good luck. >> Yeah. That won't work. So, do customers have coherent data strategies? Are they formulating? Where are we on that maturity curve? >> Absolutely, I think the advent of the CDO role, as the Chief Data Officer role, has really helped bring the awareness that you have to have that enterprise data strategy. >> So, that's a sign. If there's a CDO in the house. >> There's someone working on enterprise, yeah, absolutely. >> So, it's really their role, the CDO's role, to construct the data strategy. >> Absolutely. And one of the challenges that we see, though, in that, is that because it is a new role, is like going back to Daniel's historical operational stuff, right? There's a lot of things you have to sort out within your data strategy of who owns the data, right? Regardless of where it sits within an enterprise, and how are you applying that strategy to those data assets across the business. And that's not an easy challenge. That goes back to the people process side of it. >> Well, right. I bet you if I asked Jim Cavanaugh what's IBM's data strategy, I bet you he'd have a really coherent answer. But I bet you if I asked Scott Hebner, the CMO of the data and AI group, I bet you I'd get a somewhat different answer. And so, there's multiple data strategies, but I guess it's (mumbles) job to make sure that they are coherent and tie in, right? >> Absolutely. >> Am I getting this? >> Absolutely. >> Quick study. >> So, what's IBM's data strategy? (laughs) >> Data is good. >> Data is good. Bring AI to the data. >> Look, I mean, data and AI, that's the name of the business, that's the name of the portfolio that represents our philosophy. No AI without data, increasingly, not a lot of value of data without AI. We have to help our customers understand this, that's a skill, education, point of view problem, and we have to deliver technology that actually works in the wild, in their environment, not as we want them to be, but as they are. Which is often messy. But I think that's our fun. It's the reason we've been here for a while. >> All right, I'll give you guys a last word, we got to run, but both Scott and Daniel, take aways from the event today, things that you're excited about, things that you learned. Just give us the bumper sticker. >> For me, you talk about whether people recognize the need for a data strategy in their role. For me, it's people being pumped about that, being excited about it, recognizing it, and wanting to solve those problems and leverage the capabilities that are out there. >> We've seen a lot of that today. >> Absolutely. And we're at a great time and place where the capabilities and the technologies with machine learning and AI are applicable and real, that they're solving those problems. So, I think that gets everybody excited, which is cool. >> Bring it home, Daniel. >> Excitement, a ton of experimentation with AI, some real issues that are getting in the way of full-scale deployments, a methodology data ops, to deal with those real hardcore data problems in the enterprise, resonating, a technology stack that allows you to implement that as a company is, through Cloud Pak for Data, no matter where they want to run is what they need, and I'm happy we're able to deliver it to them. >> Great. Great segment, guys. Thanks for coming. >> Awesome. Thank you. >> Data, applying AI to that data, scaling with the cloud, that's the innovation cocktail that we talk about all the time on The Cube. Scaling data your way, this is Dave Vellante and we're in Miami at the AI and Data Forum, brought to you by IBM. We'll be right back right after this short break. (upbeat music)

>> Live from Orlando, Florida, It's theCUBE, covering Cisco Live 2018, brought to you by Cisco, NetApp, and theCUBE's ecosystem partners. >> Welcome back, everyone. We are here in Orlando, Florida, theCUBE for Cisco Live 2018. I'm John Furrier with theCUBE. Stu Miniman is my co-host, for the next three days, our next segment is the Meraki team, we have Joe Hainline, who is with WWT's product manager, and Courtney Batiste, who is the Meraki solutions architect, welcome to theCUBE, great to see you, thanks for coming on. >> Thanks for having us.>> Great to be here. >> So, we got the engineering, we got the application,we got the use cases, Meraki's really reallypicking up a lot of steam, it's very cloud-scale, very cloud-native, bringing the enterprise perspective to it, which is a really big challenge right now, around how do I getenterprise into the cloud. If you're a startup on the cloud, it's really easy, you justprovision some servers, you're up and running. If you wanna really do the hybrid cloud, or multi-cloud, it's really complicated, Meraki's been doing really really well. What is the big takeaway, why should people careabout Meraki's success, and what does it mean to them? >> So, I think it'simportant to understand, why's Meraki been leading the way? We started out cloud-based, and that's what was important, and that's what's been leading for the past couple of years, and we look forward to pushing ourselves above and beyond that. So we also work with partners such as WWT that also embrace the samephilosophy and technology. And you can see that basedon the things that WWT has done up to this day. >> What's some things youguys have done, with Meraki? >> Yeah, I mean, what we love about Meraki for enterprise is beingable to leverage APIs, to be able to do thingsthat scale, and quickly, so we've done some of thelargest Meraki deployments, I would say, to date, in North America. You know, hundreds of Meraki networks, hundreds of site locations a night, with, leveraging some of theAPIs that Meraki's built, obviously, and someplatform innovations that we've done on top of that. >> Expand on that, giveus some color on that, so what does that mean, hundreds of sites, I mean, is it just offices,is it full networks, what's the density of it, could you just kind ofunpack that a little bit? >> Yeah, so we had a customerthat we were deploying, retail locations, so, 10 to15 Meraki devices per site, and being able to dothat at scale, you know, be able to deploy those really, I think our max wasabout 200 on one night, that we cut over,leveraging APIs, so yeah. >> What's the big walkaway from Meraki, obviously simplicity'sone, but you're seeing IOT becoming a big thing, where you don't want to have to hire someone to go out and actually turn stuff on, these networks need tobe self-provisioned, self managed, selfhealing, that seems to be the trend that everyone wants, right? >> Right. >> So that's obviously,getting stuff up and running, but then actually having it operating, connecting to the network, it seems to be, to me, the hard part. Is that where the magic is, Courtney? Where's the secret sauce? I mean, where is it, in all of this? >> So, the beauty aboutMeraki is that you can use that infrastructure to build a solution. And that's the goal. I mean, we've been doingnetworking for years, and there's no doubt aboutwhere the future holds, we want you to know that there's different solutions that you can build on top of your Meraki infrastructure. Whether you're focusing on provisioning, or you're looking at doingany kind of scanning APIs, those are things thatare leading the future. We're also trying tohelp you find innovative ways to bring otherbusiness units into the IT business, so for instance,marketing is huge, they have huge budgets, they want to invest intheir IT infrastructure, and if we're able to givevalue by showing them what they could extract from the network, that's where the APIs are key, to tie in. >> So integration is really critical. >> Absolutely. >> Is that, you said, APIswere used to the critical vantage for you guys, how are you guys doing your API, are you just slingingyour APIs with Meraki's, are you connecting them,are you writing code integration, where is the touchpoint? >> Yeah, that's a greatquestion, I would say that the power that Worldwidebrings to the table especially after acquiring Asynchrony Labs three years ago now, which is a software development arm, of Worldwide Now, is being ableto take those conversations, those integration conversations, and say what's the business outcome you're trying to achieve? So, if a customer, or amarketing, or a line of business person says these are the things we're trying to accomplish, a lot of those are gonna beenabled by infrastructure. And enabled at scale,you know, for enterprise customers really only via APIs. But there's more to that conversation too, I mean, it might be, what'sthe marketing campaign we wanna do, or whatdigital innovation are we gonna try to do that'sgonna make us competitive in this space, where we can take ourbusiness innovation practice, and our practice aroundmobile and web development and tie it in to the business outcome we're creating for a customer, leveraging the Meraki infrastructure, leveraging the capabilitiesthat Meraki brings to the table, leveraging APIs around, you know, who's in your store, youknow, traffic analytics, things like that, and pullingthose all into a solution, whether it's a consumer-facing solution, or a back-end solutionfor sales associates that helps give them insightabout what's happening, it's kind of knowing the business outcome you're trying to achieve, and putting the right pieces in place. >> Joe, wonder if youexpand could a little bit on you know, the transformation that WWT is going through, and your customers, you know, we're here in the debut zone, you know, I've known WWT for years, and moving up the stack andAPIs, and things like that, isn't the traditionalposition that I think of WWT, longtime Cisco partner,done lots of great solutions over the years, but it wasat the infrastructure level, which, not to say that's a bad thing, so, talk a little bit aboutmore that those transformations, for you and your customers, and partnering with Cisco even further. >> Yeah, I think, so, likeI said, we got acquired, I'm part of Asynchrony Labs actually, originally, and we gotacquired by Worldwide three years ago, and I think it was a really smart move,'cause Jim Cavanaugh saw the spaces moving towards software, defined everything,basically, and being able to have that capability built in, I think it's really changedthe way we go to market. We can have conversations now, conversations that doinclude infrastructure, infrastructure is stillcore to our business, but conversations that can start at the marketing or line of business side, or the digital transformation space, or really whatever business outcome that a customer's hoping to achieve. We now have the abilityto have that conversation at any level. Everything from you know,our skills and expertise, traditionally at Worldwide, and deploying infrastructure at worldwide scale, and supply chain management, and just top-notch integration skills, and solution delivery, and now with Asynchrony,being able to apply our best-in-class you know, business innovation,digital transformation, mobile development, webdevelopment skills into that mix. We can really provide fully customized solutions delivered to a customer. >> Take us through what that means for the customer, and useit as a way to compare five years ago, let'sjust go back in time. Pretend it was five, roll back five years. No Meraki, what's the road look like? And then what's the roadlook like with Meraki? If you had to do this five years ago, what would you have to do? Get a project team, have an assessment with the customer, I mean,much different world. >> Yes. >> Take us through what,in your mind's eye, kind of what that road would look like. >> So as someone from Asynchrony on the software side, I can tell you what it looked like five years ago, before we were acquired by Worldwide, when we had conversations with some of our big retail customers for example, we would only be able to go so far in the conversation, we could do the app development, we could take a mobile appand bring it up to par, make sure it integrated well, with back-end systems, but when it came to what does it take to actually deploy a new customer experience at scale across four thousand retail locations? We would have to have partners, and now with Worldwide, wecan have that conversation, we can integrate throughour ATC Labs base, our Advanced Technology Center Labs, we can integrate our retail location in our lab, six months before we deploy it in the real world, and have it be exactly the same hardware and software that we're gonna deploy in the real world, so we can now have conversations where we're working with infrastructure, ahead of the game to make sure that there's a seamless rollout, rather than there being sort of a line of business versus IT conversation where line of business says, hey we have this new digital innovation, but it's not working, because the network isn't solid. >> It's a two step process in the old way. >> Yeah. >> Which long creates more risk, a lot of moving parts. >> Yeah, and now wehave someone seamlessly connecting those piecesacross the spectrum. >> And you do it up front. And then you just deploy. >> And we know what'sa good network strategy to make this scale at enterprise scale, and then what's a good digital strategy to say how are we gonnaintegrate with that, what beacon technology are we gonna use, what network APIs we're gonna connect to, what analytics do we want to achieve, through this transformation, to measure it's success, and have that builtinto the infrastructure, from the beginning, so. >> Tell what the DI management style, the intelligent dashboarding is big, the machine learning, they have a lot of that in their products, it's only gonna get better in talking to the lead executives of the group, for you on the front lines of customers, you want to have thatawareness of what's happening, the instrumentation, how is that working for you, good? >> Yeah, it's-- >> Is that working out,what's your view on that? >> I'd say that it'sbeen really good working with Meraki because of the APIs, but we've also openedup some new offerings around Meraki lately, from a managed service perspective, so, we now have, I would say, a digital transformation engine, called Branch of the Future, which is designed around not just managing Meraki at scale, but it does have that component, but really the whole ecosystem of what does it take to doa digital innovation, leveraging Meraki at enterprise scale, and it includes, like I mentioned already, our Advanced Technology Center Labs, it includes a managed service, it includes branch service capabilities, to be able to roll out, you know, hundreds of sites a night, at scale, but it also includes platform innovations, like Thelios, which is what I'm the Product Manager for, which is really a platform for digital innovation, that leverages Meraki APIs, leverages other technologies that are gonna be in a space like a retail space, pulls those together, to provide an analytics capability, to provide provisioning, to provide other commonlyneeded capabilities, and really just gives customers a way that they can engage with Worldwide, and, in a continuous mannerthat's gonna give them an engine for innovation, where they can make a network upgrade, for example, rather than taking four years and rolling something out slowly, that they're trying todo a transformation, and not getting thebenefits of that technology for four years, leveragingBranch of the Future, we can do that same thing in four months, and that big investment they've made in infrastructure, theycan actually get an ROI on that immediately, but it doesn't stop there, because then we can say, alright,what's working, what's not, based on the analytics we're taking, what's the next step, and build in that continual evolving of the offering for the customer. >> Four years to four months. >> Courtney, what are youhearing from customers, how are their needs evolving, you know, what's driving them from the business, and from some of the new technologies? >> Well, so they'relooking at what's next, what's the trends, what are customers wanting, what exactly are their guests' experience that they're wanting to have? So it varies based on the vertical. They want more intelligence, they want more out oftheir infrastructure, and that's where I feellike we've definitely filled that void, andcreating this partnership with WWT has been amazing to see what customers are taking from it. They see the advantages of more than just a regular infrastructure running, they're getting to the point of truly embracing intelligent networking. >> On the future of you guys with Meraki, you know, you're doingdeployments overnight, massive numbers, we hear, and it goes from Todd Nightingale, customers are giving hugs to each other, things that have never happened before are happening, and this is the cloud scale, and the CEO of Cisco is in Kenya, talking about a scale,is really the new normal. How are you guys, whatare some of the projects you're working on that you could share, that give an indicator ofsome of the cool things, and relevant things that are going on, what are some of theprojects you're working on, right now? >> Yeah, I'm not allowedto talk about specific customer names, but we can, some of the things that we're building are enhanced customer-centric views of network health, forexample, so building systems that show network healthfrom the perspective of the business, in simple ways, that customers can understand, not just at the IT level,but at the CEO level, or the marketing level, so a lot of customization,leveraging APIs, and leveraging platform technology. >> So you have othercustomers that are out there, that might be a Cisco customer, or new to Meraki, what's your takeaway,what would you say to them if they say, you know, what is this Meraki thing, what does this mean to me? What would your advice be to your peers, or someone watching, whatwould you say to them, to kind of sum it upinto a bumper sticker? >> Yeah, I would say that you need to have those APIs for scale, you need to have acloud-managed platform that can really scale to the solution you're trying to offer, especially if you'rean enterprise customer, and you need to have apartner that understands how to manage to the business outcome you're trying to achieve, not just managed at the technology level. You really need a conversation, you need to be able tocreate a conversation between your business stakeholders, and your IT stakeholders, and your marketing and other stakeholders, infrastructure stakeholders, and say, what are we trying toachieve as a business, and I think Worldwideis uniquely positioned to be able to help havethose conversations with customers throughour business innovation practice, through ourchief digital advisors, and chief technical advisors practice, and just start a deep and rich experience with being able to do this at scale. >> Courtney, same questionto you, say someone bumps into you, you know, a friend sees you on the street, hey Courtney, what's this Meraki thing about, what would you say to them? >> I would tell them it'sthe way of the future. I had to shift even mymindset when I joined the team, and it was a great shift, I finally was able to havethat work-life balance that we all dream of as network engineers, so that's what I would say to someone. They're able to gather somuch intelligence from it. >> Yeah, it's really awesome. This is cloud-scale,do it right it's magic, more time on your hands to have more fun and do other things, it's theCUBE, live coverage here, in Orlando, Florida, for Cisco Live 2018,we'll be back with more, stay with us, day one iscontinuing of three days of wall-to-wall livecoverage, we'll be right back, stay with us, thanks for watching. (light music)

>> Live from Boston, Massachusetts, it's theCUBE, covering IBM Chief Data Officer Summit, brought to you by IBM. (techno music) >> We are wrapping up theCUBE's coverage of the IBM CDO Strategy Summit here in Boston, Massachusetts. I'm your host Rebecca Knight, along with Dave Vellante. It's been a great day here in Boston at the CDO Strategy Summit. >> Yeah, I like these events, they're packed with content, very intimate. You know, not a lot of vendor push -- well, one vendor I guess is pushing. >> (laughs) >> But I like the way, we were talking to Chris Penn about earned media and owned media and paid media - this is all media. It's really the quality of the content that differentiates those media, and IBM always has really solid content here. A lot of practitioners, a lot of, not so much how to but hands on stories, use cases. >> Right. >> Maturity models, things of that nature. And I think we are seeing the maturity of the CDO role from a back office function to one that's sort of morphed into or evolved into data quality and part of the whole data-warehouse-as-king push, and that meant a lot of reporting, a lot of compliance, a lot of governance, to one that is really supporting a monetization mission of the business. And when you think about monetization at the simplest level, there's two ways to get there. You cut costs and you grow revenue. Now you should be careful, not all of these companies are for-profit firms, but in a commercial sense those are really the two levers that you can push, in a lot of forms. Productivity, time to market, time to value, quality, things of that nature, but at the end of the day it comes down to spending less, making more. >> Right, exactly, and I think that you made a great point in that data was the back office, it was sort of something we had to worry about, manage a bit, but now it's really front and center in the organization, and then thinking about using it to make money and to save money. And I think that's what we're learning about too, and what I've appreciated is how candid IBM is being, frankly, about mistakes that it has made, and it's saying this is a blueprint because we've learned. We've learned where we went wrong, and here's what we have to offer other companies to learn from us. >> Well, it's interesting too, if you take my little simple model of how to get value out of data, from IBM's standpoint, it's really a lot of opportunities to cut costs. A huge organization, 300,000 employees so we heard, from Jim Cavanaugh and Indabal Bendari today, how they're applying a lot of their data driven expertise to not only capture that data but understand how they can become more efficient. We haven't seen the growth from IBM. >> That's true. >> Everybody talks about the string of quarterly declines in terms of revenue. The good news is the pace of that decline is slow, that's the best you could say about IBM's top line, but the bottom line seems to be working. And IBM's such a huge machine that you can actually squeeze a lot of cash flow by saving some money. And there are a lot of stories about IBM and the supply chain and making that more efficient, which as we heard was a main focus of a lot of the CFOs, or CXOs out there. So, I mean IBM, we always talk about the steamship, you know, turning, and this has been a five- to seven-year turn, it's going to be interesting to see if IBM really will be perceived as a data driven company. They're pushing cognitive, there's a lot of blow back about Watson and how it's very services-led. Having said that, IBM's trying to do things that Google and Facebook and Amazon aren't trying to do. IBM's trying to solve cancer, for example. >> Right, right. >> Those other companies are trying to push ads in your face. So, got to give props to IBM for that effort. >> The social innovation piece I think is really a part of this company's DNA. >> Yeah, I mean, you know, again, frankly the Silicon Valley crowd sort of poo poos Watson from a technological perspective, honestly I'm not really qualified to address that question, but IBM tends to take capital and pour it into long-term businesses and eventually gets there. So, it's not there yet, and so, but if IBM can use the data to become a more efficient company, be more responsive to its customers, understand the needs of its clients better, that's going to yield results. >> And I think the other part that we've heard a lot about today is the cultural transformation that's needed to make these dramatic changes in your business. As you said, IBM is a huge company, hundreds of thousands of employees dispersed across the globe, so teams working across time zones, across cultures, across languages. That is difficult to really say, no, this is where we're going, this is our blueprint for success. Everyone come on board. >> Well, and you've seen some real cultural shakeups inside of IBM. I mean I was mentioning just a very small example, when you go to the third floor at Armonk now, the big concrete building, it's now all open, this is a corporate executive office. It's an open area with open cubicles, they're nice cubes, believe me, the cubes are nicer than your office, I guarantee it. But they're open, you can see executives, you can talk to executives in an open way. That's not how IBM used to be, it was very closed off and compartmentalized. >> Or everyone was working from home. That frankly... >> Well, that's the other piece of it, right? >> Yeah. >> They said, hey, guys, time to create the beehive effect. And that's created a lot of dislocation, a lot of concerns and blow back, but personally I like that approach. If you're trying to foster collaboration, nothing beats face to face contact. That's why we still have events and that's why theCUBE... >> That's why we're here. >> ...comes to these events, right? >> No, you're absolutely right, a growing body of research has really pointed to the value and the benefit of an open office to spur collaboration, spur creativity, to get colleagues really working and understanding the rhythms of each other's interpersonal lives and work lives, and really that's where the good ideas come from. >> Yeah, so I mean those decisions are tough ones for organizations to make, but I'm presuming that IBM had some data... >> Yeah. >> ...related to this, I hope they did, and made that decision. You know, and it's way too early to tell if that was the right or the wrong move. Again, I tend to lean toward the beehive approach as a positive potential outcome. >> Right, exactly. So, the other piece that we've heard a little bit about today is this talent shortage, the skills shortage because you made this great point when we were talking to Chris Penn of Shift Communications. So much of all of this stuff is now math and science, and that's not what you typically think of as someone who's in marketing, for example. We have a real shortage of people who know data science and analytics, and that's a big problem that a lot of these companies are facing and trying to deal with, some more successfully than others. >> Yeah, I mean I think that the industry is going to address that problem because all this deep learning stuff and this machine learning and AI, it is largely math and it's math that's known. When you really peel the onion and get into the sort of the type of math, you hear things like, oh, support vector machines and probabilistic latent cement tech indexing. >> (laughs) >> Okay, but these are concepts in math and algorithms that have been proven over time, and so I guess my point is, I think organizations are going to bring people in with strong math and computer skills and people who like data and can hack data, and say, okay, you're a data scientist, now figure it out. And over time I think they will figure it out, they'll train people. The hard part about that is, not necessarily the math, if you're good at math you're good at math, it's applying that math to help your organization understand A. How to monetize data, B. How to have data that's trusted. We heard that a lot. >> Yeah. >> So the quality of the data. C. Who gets access to that data, how do you secure and protect that data, what are some of the policies around that data. And then in parallel, how do you form relationships with the line of business? You got geeks talking to wallets. >> Right, yeah. >> How do you deal with that? >> You need the intermediary who can speak both languages. >> And then ultimately the answer to that I think is in skill sets and evolving those skill sets. So those are sort of the five things that the chief data officer has to think about, three are in parallel, or, three are in sequential and two are in parallel. >> Yeah, you also mentioned the trust in the data, and you were talking about it from an internal standpoint of colleagues agreeing, alright, this is what the data is telling us, this is clearly the direction we go in, but then there's the trust on the other side too, which is the trust that the company has with customers and clients to feel okay about using our data, using my data to make decisions. >> Well, I think it's a great point. It was interesting to hear Chris Penn's response to that. He was basically saying, well, we could switch suits, but it's not going to have the same impact. I'm not buying it. I'm really going to keep pushing on this issue because, while I agree that IBM doesn't have the same proclivity to take data and push ads in front of your face, it's unclear to me how you train models and somehow those models don't seep out. Now, IBM has said, we heard some IBM executives say, no, they're the customers' models. But you know, ideas get in people's heads and things happen. And that's just one example. There are many, many other examples. So think about internet of things and the factory floor, and you've got some widget on the floor that's capturing data, and that widget manufacturer wants to use data for predictive analytics, for predictive failures, sending data back home, and then who knows what other insights they're going to gather from that data? Whose data is that? Is that data owned by the widget manufacturer, is that data owned by the factory? >> Right. >> It's their process, it's their work flow. Now of course if I'm the factory owner I'm going to say it's my data, if I'm the widget manufacturer I'm going to say that's my data, so... >> And you're both right. >> And you're both right. >> That's the problem here, is that there's no real arbiter to say, to make that determination. >> Yeah, and I don't think these things have been challenged in court and certainly not adequately, and so there's a lot of learnings that are going to occur over the next decade, and we'll watch that evolution. >> But Jim Cavanaugh is right, we are at a real seminal moment here for this explosion in data, which is really changing the role of the CDO and how it fits in with the rest of the organization. >> Yeah, and I think the other thing to watch is how (mumbles) talks about data driven organizations, digital businesses, cognitive businesses, what are those? Those are kind of buzzwords, but what do they mean? What they mean, in our view, is how well you leverage data to create a competitive advantage, and that's what a digital business does. It uses data differentially (chuckles) to retain customers, attract and retain customers. And so that's what a digital business is, that's what a cognitive business is. Most businesses really aren't digital businesses today, or cognitive businesses today, they're really few and far between. So a lot of work has to be done before we reach that vision. Yeah, everybody throws out the Ubers and the Airbnb's, those are sort of easy examples, but when you have giant logistic systems and supply chains and ERP systems and HR systems with all this stovepipe data, becoming a "digital business" ain't so easy. >> No, and we are really in early days, exactly. So that's something to discuss at the next CDO Strategy Summit. >> And I think there was a lot of discussion early on when the CDO role emerged that they're essentially going to replace the CIO, I don't see it that way. There's a lot of discussion about what's the growth path for the CIO, is it technology or is it business? But I think the CIO's okay. >> Yeah? >> I think the CDO, I think actually there's more overlap between the chief digital officer and the chief data officer, because if you buy the argument that digital equals data, then the chief data officer and the chief digital officer are kind of one in the same. >> Right, right. >> So that to me is a more interesting dynamic than the CIO versus the CDO. I don't see those two roles as highly overlapping and full of friction. I really see that the chief digital officer and the chief data officer are more, should be more aligned and maybe even be the same role. >> And it gets back to the organizational politics that are involved, with all of these massive changes taking place. >> Well, again, first, the starting point for a CDO in a for-profit company is, how can we use data to create value and monetize that value? Not necessarily sell the data, but how does data contribute to our value creation as a company? So, with that as the starting point, that leads to, okay, well, if you're going to be data driven, then you better have measurements, you better have a system. I mean do you use enterprise value, do you use simple ROI, do you use an IOR calculation, do you use a more sophisticated options-based calculation? I mean, how do you measure value and how do you determine capital allocation as a function of those value measurements? The vast majority of the companies out there certainly can't answer that across the board, the CFO's office might be able to answer some of that, but deep down the line of business in the field where decisions are being made, are they really data driven? They're just starting, I mean this is first, second inning. >> Right, right, right. So there's much more to come. Great. Well, you have watched theCUBE's coverage of the IBM CDO Summit. Thanks for tuning in. For Rebecca Knight and Dave Vellante, we'll see you next time. (techno music)

>> Live from Boston, Massachusetts, it's the Cube, covering IBM Chief Data Officer Summit. Brought to you by IBM. >> Welcome back to the Cube's live coverage of the IBM CDO Summit here in Boston Massachusetts. I'm your host, Rebecca Knight, along with my co-host Dave Vellante. We are joined by Caitlin Halferty. She is the Chief of Staff IBM Data Office, and also John Backhouse, the chief information officer and senior VP at CareEnroll. Thank you both so much for coming on the Cube. >> Great to be here. >> Thank you, good to see you. >> So before the cameras were rolling, John, we were talking about how you have this very unique vantage point and perspective on the role of the CIO and CDO. Can you tell our viewers a bit about your background? >> Sure. I started off in the military. I was in the army for 12 years as a military intelligence officer. I then moved to the NHS, which is a national health service in England and where I wrote the Clinical Care Pathways for myocardial infraction and diabetes pre-hospital. I then moved to the USA and became Chief Data Officer for Envision Healthcare, one of the largest hybrid providers of insurance and clinical care. And then I became a CIO for a multi-state Medicare program. >> So you've been around, so to speak (laughter) But the last two roles, CIO and CDO, so how would you describe them? I mean obviously two different places, but is it adversarial? Is it cooperative? What is the relationship like? >> I think its, the last couple of years, CDO role has matured, and it's become a direct competition between a CIO and a CDO. As my experiences I've been fighting for the same budget. I've been fighting for the same bind, I've been fighting for the same executives to sponsor my programs and projects. I think now as the maturity of the CDO has stepped out, especially in health, the CDO has a lot more power between the conduit between the business and IT. If the CDO sits in IT he's doomed for failure because it's a direct competition of a CIO role. But I also think the CIO role has changed in the way that the innovation has stepped up. The CIO role used to be "Your career is over, CIO." (laughter) Now it's the innovational aspect of infrastructure, cloud cognitive analysts, cognitive solutions and analytics so that the way the data is monetized and sold and reused, in the way that the business makes decisions. So I see a big difference. >> How much of that, sort-of authority, if I can use that term, of the chief data officer inside of a regulated company versus you're in the office of the chief data officer in an unregulated company, compare and contrast. >> Well, the chief data officer's got all the new regulatory compliancies coming down the GDC, the security, safe harbor, and as the technology moves in to cloud it becomes even harder. As you get PCI, HIPPA and etc. So, everything you do is scrutinized to a point where you have to justify, why, what, and when. And then you have to have the custodian of who is responsible. So then no longer can you say, "I got the data for this reason." You have to justify why you have that information about anything. And I think that regulatory component is getting stronger and stronger. >> And you know, we've often talked about the rise of the CDO role and how it's changed over the last few years. Primarily it started in response to regulatory and compliance concerns within financial services industries as we know banking and insurance, healthcare. And we're seeing more and more retail consumer products. Other industries saying look, "We don't really have enterprise-wide management of data across the organization" Investing in that leadership role to drive that transformation. So I'm seeing that spread beyond the regulated industries. >> Well Caitlin, in the keynote you really kicked off this conference by reminding us of why we're all here and that is to bring chief data officers together, to share those practices, to share what they've learned in their own organizations. Hearing John talk about the fight for resources, the fight to justify its existence. What do you think, how would you tease out the best practices around that? >> The way we've approached it, you know, I've mentioned this cognitive enterprise blueprint that we highlighted and released this morning. And this has been an 18-month project for us. And we've done it in close partnership with folks like John, giving a lot of great insight and feedback. And essentially the way we see it is there's these four pillars. So it's the technology piece and getting the technology right. It's the business process, both CDO-owned processes as well as enterprise-wide. And then the new piece we've added is around data, understanding the data part of it is so important. And so we've delivered the blueprint and then taking it to the next level to figure out what are the top used cases. How do we prioritize to your question, where prioritized-used cases. >> So, come back to the overlap between the CIO and CDO. I remember when I first met Ender Paul, we had him on the Cube and he's seared into my brain he's five points that the CDO has to do, the imperative. And three were sequential two were in parallel. One was figure out how to monetize, how you're data can contribute to the monetization of your company. Second was data trust and sources, third was access to that data and those were sequential >> Right. Processes and then he said "Line of business and skill sets were the other two that you kind of do in parallel, >> Absolutely. forge relationships with a lot of businesses and re-skill. Okay, so with that as the Ender Paul framework for what a CDO's job was... I loved it, I wrote a blog about it, (laughter) I clipped it. >> That's very good >> But the CIO hits a lot of those areas, certainly data access, of trust and security, the skill sets. Thinking about that framework, first of all do you buy it? I presume it's pretty valid, but where do you see the overlap and the collaboration? >> So I think that the framework works out and what IBM has produced is very tangible, it means you can take the pieces and you can action them. So, before you have to reflect on one: building the team, getting the right numbers in the team, getting the right skill sets in the team. That was always a challenge because you're building a team but you're not quite sure what the skill set is until you've started the plan and the math and you've started down that pathway, so with that blueprint it helps you to understand what you're trying to recruit for, is one aspect, and then two is the monetization or getting the data or making it fit for purpose, that's a real challenge and there's no magic wand for this, you know it depends on what the business problem is, the business process and understanding it. I'm very unique cause not only have I understand the data and the technology I actually give it the clinical care as well, so I've got the translations in the clinical speak into data, into business value. So, I can take information and translate it into value very quickly, and create a solution but it comes back to that you must have a designer and the designer must be an innovator, and an innovator must stay within the curve and the object is the business problems. That enables, that blueprint to be taken and run with, and hit the ground very quickly in an actionable manner. for me information in health is about insights, everybody's already doing the medical record, the electronic record, the debtor exchange. It's a little immature in health and a proper interoperability but it there and it's coming it's the actually use of and the visualization of population analysis. It used to be population health, as in we knew what we were doing after the fact, now we need to know what we are doing before the fact so we can target the outreach and to move the right people in the right place at the right time for the right care, is a bigger insight and that's what cognitive and the blueprint enables. >> So Caitlin, it feels like these two worlds are really coming together, you know, in the early days it was just really regulated businesses. >> Correct. >> Now with GDPR now everybody is a regulated business, >> Right. >> And given that EMR, and Meaningful Use and things like that are kind of rote now. >> Yeah. >> Regulated industries are really driving for that value holy grail. >> Yeah. >> So, I wonder if you could share your perspectives on those two worlds coming together. >> Yeah I do see them coming together, as well as the leadership. >> Right, yeah. >> Across the C-sweep, it's interesting we host these two in-person summits, one in the spring in San Francisco one here in Boston in the fall and we get about 120 or so CDOs that join us. We pull for, what are top topics and we always get ones around data monetization, talent, the one again that came up this year was changing nature of to the point on building those deep analytics partnerships within the organization, changing the relationships between CDOs and C-sweep peers. We do a virtual call with about 25 CDO's and we had John as our guest speaker, recently >> Yeah. And it was our best attended call, (laughter) it was solely focused on how CDOs and CIOs can partner together to drive business critical cross-enterprise initiatives, like GDPR in ways that they haven't in the past. >> Yeah. >> It was a reinforcement to me that building those relationships, that analytic partnership piece, is still top of mind to our CDO community. >> Yeah, and I think that the call itself was like sun because I invited the chief of their office and now he's the innovator and the chief information officer used to be the guy who kept the lights on, that's no longer the fact. The chief information officer is the innovator of the infrastructure, the design, the monetization, the value, the business and the chief in their office now has become the chief designer of information to make it fit for purpose, for presentation, for analytics, for the cognitive use of the business. Those roles now, when you bring them together, is extremely powerful and as the maturity comes of these chief there officer roles with the modern approach to chief information then you have a powerful, powerful dynamic. >> Well let's talk about the chief innovator, it reminds me of 1999. (laughter) >> If you want to be a CEO you've got to go the CEO's office and then Y2K on the whole thing blew up. (laughter) >> What's different now though, is the data >> Yeah. - [Caitlin] Absolutely. >> There certainly was a lot of data back then but not nearly like it is today and the technology underneath it, the whole cloud piece, but I wonder if you could talk about the innovation piece of that a little bit more >> Sure. and it's relationship to the data. >> So, I mean we've always been let's all go to the data warehouse, let's have a data lake, let's get the data scientist to fix the data lake. (laughter) >> Yeah. >> And then he's like " Whoa, well what did he do?" "Does it do anything? Show me." And you know now that physical massive environment of big service and big cages and big rooms with big overhead expenses is no longer necessary. I've just put 91 servers for an entire state's data and population in a cloud environment, multiple security levels with multiple methods of new innovational cloud management. And I've been able to standup 91 server in six and a half minutes. I couldn't even procure that... (laughter) - Right. >> Before >> I'd be months, and months >> Yeah, to put physical architecture together like that but now I can do it in six and a half minutes, I can create DR rapidly, I can do flip over active-active and I can really make the sure of it. Not only can I use the infrastructure I can enable people to get information at the point where it's needed now, far easier than I ever did before. >> So talking about how the technology has moved and evolved and changed so rapidly for the better but yet there is still a massive talent shortage of the people who, as you said - [John] Yeah >> Who can speak the language and take the data and immediately translate it into business value. What are you doing now about this talent shortage? What's your take on it and what are we doing to fix it? >> Yeah >> I would say, in one of the morning keynotes, Jim Cavanaugh our SVP for transportation operations got that question around how do you educate internally what it means to be a cognitive enterprise when there are so many questions about what does that really mean? And then how do you access skill against those new capabilities? He spoke about some of the internal hackathons that we did and ran sort of an internal shark tank-like to see how those top projects rise, align resources against it and build those skills and we've invested quite a lot internally as I know many of our clients have around what we call cognitive academy to ensure that we've one: figured out and defined what it means in this new...what type of new skills and then make sure that we're able to retrain and then keep and retain some of our new talents. So I think we're trying that multi-prong approach to retrain and retain as well. >> You guys use the term cognitive business we use the term digital business cause we can't use IBM's terms (laughter) But to us there the same thing >> Why not? >> Cause it's all about... (laughter) >> Cause were independent - [Caitlin] Dave's upset here >> But to us it's all about how you leverage data >> Yeah. >> And how you use data to >> Yeah. >> Maintain and to get and maintain costumers. So since we're playing CX bingo >> Yeah right. >> Chief digital officer, Bob Lord >> Right >> Bob Lord and Ender Paul Endario are two totally different people and there roles are quite different, but if it's all about the data and you buy that premise what is the chief digital officer do? they are largely driving revenue >> Absolutely >> That's understandable but it's part of your job too >> Right >> Or former job as a CDO and now as an innovation officer. Where do those roles fit? >> I think there's a clear demarcation line and especially when you get into EIM solutions as in Enterprise Information Management. And you start breaking those down and you've got to break them down into master data management and you start putting the domains together, the multi-master domains, and one of them is media, and media needs someone to own it, be the custodian, manage it, and present it to the business for consumption, the other's are pure data driven. >> Yeah. >> Master patient, master member, master costumer, master product, they all need data driven analytics to present information to the business. You can't just show them a sequel schemer and say "There you go." >> Yeah. (laughter) >> It doesn't work so there is different demarcations of specialist skills and the presentation and it got to be that hybrid between the business and IT. The business and the data, the business and the consumer and that is, I think the maturity of way this X-sweet is going these days >> Yeah. >> One thing we've seen internally to that point, I agree there's a clear demarcation there, is when we do partner with the digital office it can be to aid say digital sellers so we have a joint project going where we are responsible for the data piece of it >> Yeah. >> And then we are enabling our digital sellers, we're calling it cognitive sales advisor to pull dispersed pieces of costumer data that are currently housed in cylos across the organization, pull that into a digital, user friendly app, that can really enable those sellers, so I think there's some nice opportunities just as there are CDOs and CIOs to partner, for a data officer and a digital officer as well. >> One of our earlier guests was talking about some of the things that he's hearing in the break out sessions and he said "You know they could have been talking about the same stuff ten years ago, these intractable organizations that aren't quite there yet." What do you think we will be talking about next CDO summit? Do you think there will come a point where were not talking about is data important? Or does data have a role in the organization? When do you think that will happen? (laughter) >> Every time I say we're done with governance right? >> Yeah >> We're done and then governance >> Comes right back - Top topic (laughter) >> If you get the answer to that can I have the locker notes? (laughter) >> Sure >> Exactly, Exactly >> I think in the next ten years we're not going to ask anymore about what did we do, we're going to be told what we did. As in we're going to be looking forward, thing are going to be coming out and saying this is the projected for the next minute, second, hour, month, year and that's the big change. We are all looking back, what did we do? How did we do? What was the goals we tried to achieve? I don't think that's going to be what we ask next month, next year, next week. It's going to be you're going to tell me what I did and you're going to tell me what I'm doing. And that's going to change, and also the healthcare market, the way that health is prescriptive, they're not prescribed anymore. They way that we diagnose things against the prognosis, I think that the way we manage that information is going to change dramatically. I would say too, I've been working quite a bit with a client in Vegas, a casino, and their current issue or problem is they have all this data on what their guest do from the moment they check in, they get their hotel key, they know where spend, where they go to dinner, what type of trip they're on, is it business is is pleasure. Are the kids in town, different behaviors, spending patterns accordingly. >> Yeah. >> And the main concern they relate to us is I can't do anything about it until my guest has exited the property and then I'm sending them outreach emails trying to get them back, or trying to offer a coupon. >> Yeah. >> You know post - [John] Yeah, yeah. >> And they're gone. >> And what if I could do some real time analysis and deliver something of value to my guest while they are on site and we are starting to see some of that with Disney and some other companies. - [John] Yeah. >> But I think we will see the ability to take all this data that we already have and deliver it. >> In real time. -[John] Yeah. >> Influence behavior >> Right >> And spending patterns in real time that's what I'm excited about. >> Yeah and these machines will actually start making decisions, certain decisions for the brand. >> Yeah >> Right >> At the point where it can affect an outcome. >> Right, right, Which I think is hard >> It's starting >> Yeah >> No question, you certainly see it in fraud detection today, you mentioned Disney. >> The magic bands >> Right >> And the ability to track >> Yeah >> Where you are and that type of thing, yeah >> Great >> We're starting cyber security cause cyber security, an aspect of user log, server log, network, are looking for behavioral patterns and those behavioral patterns are telling us where the risks and the vulnerabilities are coming from. >> Thing that humans >> Yep >> Would not see that >> People don't see the patterns, yep. >> You're absolutely right, >> right >> They just wouldn't see the patterns of the risk. >> Excellent, well John, Caitlin, thanks so much for coming on the Cube it's always a pleasure to talk to you. >> Thank you - Great, thank you. >> I'm Rebecca Knight for Dave Vellante we'll have more just after this.