>>From the cube studios in Palo Alto in Boston. It's the cube covering IBM thing brought to you by IBM. >>Hi everybody. We're back. This is Dave Volante for the cube and you watching our continuous coverage of the IBM thing, 2020 digital event experience. And ed Walsh is here as the general manager. So the IBM storage division and software defined infrastructure. Ed, last time you were about to four feet to my left. I wish you were face to face but this'll, this'll have to do. Thanks for coming on the new normal. I like to call this maybe the new abnormal as some of us are still in lockdown but is the new normal. So we'll see more of this. So welcome it. I embrace it. No. So had you, you've obviously seen a number of, of downturns. You've run a lot, a lot of businesses, you've been on rocket ship businesses, you've been at IBM for a couple of stints. Obviously we've never seen anything like this. >>When did you first start getting visibility, uh, that this was going to be an issue? Obviously you guys have presence in China, okay. In AP. Uh, but when did you start to see it and what was your first move for the team? Yeah, sure. And so, uh, yeah, I've had the opportunity to lead a couple businesses and that was it. Okay. One, 2008. Ah, and this is, it is very different. But as far as our visibility on this, um, we have a worldwide and I'll say awesome. Right. Okay. So we saw this as far as a supply chain issue, um, and we came into it hot from Q4. We had a very good Q4 so I came into it hot or something. Why? So we are tracking it early and then we started to see the issues in China in late January. Then of course they shut down, came back to open after the Chinese new year in to be honest, they weren't quite back. >>So we were watching it almost as a support. Right. Main challenge. Yes. We do a lot of business in China, so we were also watching that, but it was light chain. But every single day managing that supply chain, I get out and give a compliment to my team. Uh, I don't think anyone has a better supply chain, but then of course quickly moved and everyone says, well, you should have seen it. This happened really fast. So it's a, it's different than other crises because it actually has to do with humans in life. Okay. All the other crisis were financial crisis. These, and we largely just manage the business through it and you're worried about your employees from the stress level, but you don't worry about the employees by the health level. So, uh, so we did see it early with supply chain that quickly gotten demand. And to be honest, when Italy went down, well, when Italy had the challenges that it happened so fast, when it shut down, uh, that was kind of a big wake up call for us. >>Mmm. You saw IBM respond very quickly. Um, everyone was at home almost immediately, even in countries weren't set up for it really took care of our people. But then we immediately, you saw the IBM was going to work really helping our clients. So we saw it kind of early, but it went from a hundred percent supply chain to a demand issue. And then we did have different real uh, interesting is a bad word, but interesting supply chain challenges as well. What it went on different countries stopping shipping's coming in, had to get a government approvals to get things. Mmm. So it was a good partnership with some of our um, get things where they need be in the right time. Ah. But it was probably a, I'll remember this quarter for a lot of different reasons. Um, and it worked out good for us. But uh, to be honest, it was, it is different from the other crisis's because it wasn't just a financial issue, which I think were just getting into actually, um, it was human and you saw different, two of our best regions were Italy and Spain that you think, Whoa, why? >>You know, you think the thing about other than going on in the quarter and but it was a relationship. It was, you know, we got our, the IB members got safe real quick, but then we quickly got them to engage with the clients, but we didn't Bush and was natural. Next thing you know that trust, I think there was a flight back to quality. You saw these different companies and that was the things they had to get done. Um, but it was, it was pretty amazing quarter to me. It was more seeing the team, you see your teams reacted. Crisis is in challenges in different ways and sometimes they paralyzed and we didn't see that at all in the team, which was pretty intelligent. Um, but we it coming from the beginning, call it before this we saw supply chain did, we came into Q1 hot on supply. So we kind of saw our early and we're already doing drills. So we saw it kind of right when it was hitting. Okay. >>But it was interesting you used the term interesting the challenging because it was sort of not only day to day for you, it was probably like minute by minute, hour by hour, country by country, region by region. How did you change the way in which you communicated to your teams or did you >>well so quickly? Um, so one I think culture, so I've been in a couple different companies, big and small. Mmm. I've seen different cultures react and the IBM culture is one that I've, I kind of look back and on this last quarter just because it's very customer intimacy. You don't have to, if the customer's in trouble, you can't stop them from running to help the clients. So we saw a natural, you know, we, IBM made sure they oil is refined to have one at home. Well we saw them quickly go after it. So most of it, any indication you do see it if these crisises um, you see some groups kind of freeze and, and you have to kind of walk them through it and make sure one, they're okay. This, this one was different yet to make sure your team was okay. Um, both mentally, physically, and their families. >>And it was a different stress level, was very personal and effected all of them. Where are the financial crises? In fact, it didn't affect everyone as much. It was more sterile. Uh, this one was wow, really different from a leadership. Um, but it's all the same. You have to get the team together and make sure they're healthy, happy, a healthy and mentally healthy too. And then you have to get people to kind of how do you go drive and help clients out. In this case it was helping you make sure your clients are okay, they're healthy, and then what can we do to help them? And I think that became more natural. And then of course it's Viber, Katelyn's drive, the business supply chain, which is I would say with any of the different um, challenges. But it's all communication. Well on this one, it was really had to check with the team often. >>We also had this new normal, I call this the new abnormal, which, you know, all of a sudden you can't meet with people so you couldn't get people physically together. So I call abnormal cause we're still, we'll get to the new normal, we'll use a lot more remote type of communication. But it was, I've never been so busy and I'm on video calls with all my teams every day. You see people using different tools to communicate like Slack, but also a lot more video. Uh, so it's communication, communication, which is the same thing. It's all the same thing with teams getting together, getting your direction. Well in this one it was mixture. They're safe first and then move on. Same thing with clients. Make sure let's say. Yeah. And that was what was fundamentally different about this. Um, Hey, what's up? Yeah. You know, and we were both grinders. >>I always joke, I work a half day every day. It doesn't matter which 12 hours the same way I have it twice. I'd take 12 hour days in a heartbeat these days. I mean, it's just really been crazy and I have to agree that the teams around the world at our, at our client space, of course the cube teams have barely really stepped up. But I want to ask you about the quarter. You're right. You came in hot in December, meaning you had a really good Q4. I, you know, I reached out to Tom Rosamilia last week, members said, Hey, nice announcement. And he said, did you cover it? I said, I did. And I sent them my breaking analysis. I, I really dug into the life cycles of the Z and how it affects, you know, IBM's overall business. And I predicted this is going to go on for several quarters where IBM has done a real chill tailwind, not only in, in systems hardware, but also, you know, the storage piece of the system's hardware business. >>We saw that last 40 accrued 19% and storage 60. Yeah. In, in, in Z hardware. Pretty amazing what's going on. Unpack. Okay. The quarter for us a little bit. Yeah. So if it wasn't for the crisis, I think all that would be plate. We had some announcements okay. Across the entire source portfolio. So what we do for storage for Z big announcements in Q3, uh, directly aligned with what we do with the new store. You know, the new Z, uh, you get a lot of value. One-on-one is three. So a lot of senators, I think it's different platform. So hit the demand and what clients are trying to do. Mmm. Bring a new, you know, uh, cloud development platforms, you know, native cloud development, but also using cloud. So there's a whole bunch of different things we brought to that platform. But we also launched new AI platforms, so stores for AI and big data. >>Uh, and then it the one we launched our new distributor. So we're kind of coming in from an offering set in fact water, uh, you know, 19% growth. Um, I think it's like speaks volumes no on the offering. Yes. But more how are we reacting to their clients more than anything else? I think it was a, Ashley's I talked about earlier, it was an interesting quarter. I think it's clients were responding to the flight equality, but also who's engaging with them the right way. So we do have a company absolutely refresh offerings across. In fact, this quarter, every single one of our offerings, every single new offerings group. Yeah. It's more of a, if you have the right offerings meet in the market, helping them with it, it correct after two, right. Your own journey. The cloud, moving, modernizing your environment. We need to free up our teams. >>We did a dramatic simplification on but what we do with storage or Z, but also distributed storage and what we do for storage AI and a big focus on cyber resiliency. Those are hitting what I'll say the market was in Q4 but they happen to also be hitting the market for what's going on now the noodles. So a lot of the simplification was that, how do you remote manage, how do you do things? One of the biggest things we do to our clients is, and we have all these tools, we give you a lot of things for free baseline, but we also have these increase the pro versions. We're just said, take them, I use them because it allows you to monitor and manage your environment better remotely. It was all web based. Uh, and that was one of the biggest things to do. But that is hidden the market. >>That's, that's the new normal. And we did that across those Z distributed storage. Mmm. But also what we did in a cyber resiliency in AI. I want to hit on a couple of those points. I mean, I'm going to start with the cyber resiliency because we were one of the first to report with our, with our partner ETR, our data partner that the work from home offset it was somewhat cushioning the downturn. I mean it's ugly, but chill worked from home pivot and that included, uh, uh, solutions around ransomware, data protection, cyber resiliency. So yep. Investment, actually 20% of the CIO is that we surveyed actually by not spending more in 2020, because of there wasn't zoom and WebEx, it was, there was other infrastructure around it, VDI, et cetera. So you're seeing that, uh, it sounds like, well, maybe talk a little bit about, so the cyber resiliency, and I'm especially interested in the context of going forward, feels like this is going to be one of those permanent things. >>You know, clients might sacrifice some near term profitability to have more flexibility and resiliency in their business and not rely so much on just narrow dr but more business continuance. No, I think you agree. In fact, um, we've always been, you know, a leader in business continuance. We still are. But cyber resiliency is yes. What a million different factories hovering from a ransomware or uh, um, you know, malware incident is different fundamentally different tool sets than what you're doing. You need to have a copy of your data of course, but very different than when if you were dr single server come up and running. Okay. You see us and mostly I think we're ahead of it because as IBM, we're the largest outsource firm in the world. So we actually live with these incidents as IBM. So in normal storage you hear about them and typically it's a storage issue. >>That issue that came back running. We are living with what we do or how to, our storage or outsourcing or strategic outsourcing group. And so we're putting into all of our products a lot of unique things from cyber resiliency. So what we did for storage for Z, it literally is a safe card. Copies an offering that little gifty 500 recover points. Yeah. Separated administratively and physically. So you're really able to literally, internal and external threats, protect yourself best in class. No one else has a solution set. We did the same thing and distributed. So, but in distributed, what we're trying to do is help people, not only, I used the term, left the boom and right up, boom, left the boom is before incident. How do you prepare? How do you have the right backup recovery? How do you have the right tool sets? Recover points? >>How do you protect yourself? How do you make sure you're um, you know, monitoring for ransomware? Every single night we'll get back power tools. Okay? The right of boom is once you do get hit, you go into this incident response situation where eyes drawn, your lights are on you. How do you give the humans, uh, the right cool. So they can react the right way and be quick. So also storage plays a huge role with ransomware and malware. Also. You get into, all right, the boom hits, you get the call, it's from the CEO. You got to fix it. You need new tools. Right? What recover point do you go back to? Um, it's iterative in nature. Uh, well yeah, it hit on, I got a call on Friday, but I don't know when the malware got and it was a Wednesday or Tuesday. It might be different per system. >>It's an internet process. You need the right tools, you use all your copies, primary storage, secondary storage for sure. He copies VR copies and find out what's your best recover point. And it's imperative you have to Lily bring up environments, you have to have fence network capabilities and all your tools to allow you to literally bring them up quickly in succession or altogether find them. That's recover point you get to as soon as you can. So those are the things I think we're leading. And we launched all this before this issue. Well we also saw an increase in malware in our client set. So to be honest, you know, even with all this crisis that we're seeing an increase and in malware, ransomware is where the storage infrastructure layer really matters in the incident response capability where if you have an incident, someone stole your data sets and typically storage guys that they call now IBM has great solution sets around their AI, direct driven. >>The ability is to allow you to protect yourself there. But this is on ransomware. It's something that storage plays a huge role. We do undistributed we do on mainframe with specialized solution sets. No one else in the industry is doing that. And of course back, uh, and recovery. Yeah. Quick recovery and orchestrated fashion. That's what we do around spectrum protect all day long. Right. Okay. Yeah. Last time we met. Oh, okay. You shared with us your, your consolidation strategy, your big, you know, announcement, uh, last fall, uh, and obviously, you know, great board or 90% growth. Well, a lot of that was drafting off the Z and the, you know, the hundred, but, but I'm wondering how that, how that consolidation work. We talked about the challenges of doing that know yep. The importance of that, how others are going to have to respond. And we're seeing that in the industry for a lot of the large portfolio players. >>But how did that, you know, how's that going? Can you give us, what, can you tell us about the progress there terms of its uptake and adoption? Sure, sure. So really what we did is we kind of looked at the industry and said everyone's adding too much complexity. You know, the whole industry is based on having a high end mid range and low end storage environment and the high end did everything custom and silk concrete performance, but you had to pay a price for it. And then the whole industry is based upon just get each of the next gen. So if you're a high end about problem is every client has high end, mid range and low in storage. So you have dual vendor strategy, but what you do is you have to, the whole industry is just getting to the next high end. Uh, you see EMC, Dell hashtag next generation, midbrain storage, the whole industry, including in the past, IBM was structure and getting you there. >>So we basically announced no more of that. Doesn't make sense. It used to, it no longer makes sense. We drive a lot of innovation what we're doing with Silicon, but software and we need to one platform, one platform that allow you at different price points down the stack from low end, mid range and high end, well without compromise. What's a dramatic simplification, right? Uh, that was a well-respected, you know, I would say we got an unbelievable response from that. And you saw a dramatic growth. So you kind of hit upon, we grew across all of our segments. Yes. We had a good growth on what we do for stores for Z. Well, we had an equally good growth at, as we did on distribute storage. So if you have physical environments, virtual environments, VMware, hyper V containers, public cloud, hybrid cloud, our distributed storage portfolio. >>So one of the biggest increases. Mmm. And we, again, we grew in every one of these segments. So one the simplification. Okay. Chapter two, how do you free up your team? How do you modernize your applications so you can innovate? Mmm. critical. You're free of your team. So that one thing that we also did a lot of, you know, Billy do remote management. I made it very simple to use Mmm. And simple to support, which also helps them the new normal, but it hit the right tone with it, our partners, but also our clients. And you saw a pretty massive uptick after the February announcement. So it was only half a quarter. We saw quite a large lift. I want to ask you about the storage for big data and AI as well. There seems to be a new emerging workload. You got all this data out there collected and Hadoop and analytics over the last 10 years. >>Now you're applying, we've talked about this, the new innovation cocktail. You got data AI and okay, well it gives you the scale whether it's on grammar in the public cloud, uh, but there seems to be a new workload where you get up what kind of a data store. You've got the analytic workloads that are in there. You've got some data science tooling, uh, and other, you know, AI that, that seems to be an emerging workload beyond, um, just kind of infrastructure as a service. But okay, really new way to get insights out of data, data, wonderful insights or not yet. So talk about that workload and how that is, is powering your business. And what are you seeing there? Well, I think this is where I see IBM, uh, really I'm helping clients with this journey to building smarter businesses cause AI is going to be in every workload. >>You're bringing up very specific workloads around machine learning, learning, bring customer on Silicon, like GPS into it, on these big data Lake. Uh, how do you take a data swamp and make a data Lake? Um, okay. Uh, what I'll say is IBM's doing this and we use the term ladder, the AI, and there's no AI without IAA information architecture. You have to have the right infrastructure to do it. We also see different groups having random acts of AI, a data scientist and the visionary does something is kind of interesting. Another group does something interesting and maybe a third. It's like the early days of data warehousing, but they're not able to take it together and bring it to, they can infuse AI across all the processes in a company and have one single view of the truth. Do we see people going through this natural progression, some start independently, a fight technology then bring it together. >>So everything we're doing from, I'll talk about what we're doing is storage infrastructure servers, but also across what we're doing, you know, are um, Mmm cloud pack for data offering and make it very simple for you to pull and get the use case out of it. But for storage is about when you want to bring it together, you need the right performance. But we bar none have the best source for AI. And data. It's based upon our, you know, Lily, um, award-winning. Yeah. Scale up a file system called GPFS or spectrum scale. It runs the largest AI supercomputers in the world. The same as X software, but you can buy it to your device that we launched it in December, which is feller. ESS, um, 3000 is a single all flash array. It's a cluster, but you can no compromise. You go from that device and the largest AI supercomputer in the world configuration, exact same technology, hardware and software that we do. >>Floyd. So now you can start small and grow and then we're helping along. How do you get the value out of it? So that's typically where storage ends. I gave you the best platform you can possibly have, cost effective, small, and you can scale to the biggest thing you want to do. The next thing we're doing, which people say, well that's not storage and why are you doing that? We're doing things called spectrum discover. It's managing your metadata and making your data scientists the most productive possible. They spent any 80% of the time literally just understanding the data, tagging the data, organizing it so they know what they're doing with, cause if you don't have the right AI data sets, you really can't get the outcome. Okay. But we have what's called spectrum discover works across a whole bunch of other products, but also all of our portfolio, both object storage file system block allows you to look at an environment, organize it, and save dramatic amount of time for data scientists. >>And of course that's easy feed into all the things we do around cloud pack for data, which is where IBM has really put a lot of these open source and our own tools together so you can move forward pretty quickly. The key thing is how does IBM help you not technology. We know what you want to accomplish, let's help you but not limit you by we're letting you use all the different open source. Yes. I just want allow you to move forward and help you in that journey. And it is a journey and we're meeting clients where they are because everyone's on it different. Yeah. I guess segment of the journey and how do we help you go through it and from a storage, uh, you're seeing that environment really double every quarter. Mmm. For the people that are looking for it, no one really touches us. >>Mmm. In fact, our number two and three customers, Mmm. Competitors in the space use the same software that we OEM so we're in a very good position when it comes to stores for AI, big data. So they say it's better to be lucky than good. I say it's, it's better to be good and lucky. And so, you know, we're not going back it's not happening. we've got this new abnormal, as you call it, and you've done a lot of the hard work in terms of rationalizing the port folio. You've done the R and D and you started this years ago and it took a long time. Mmm. But I wonder if you could just talk about why you feel like you're in a good position coming out of this thing and who knows how we're going to come out of it, but what are the critical components that you feel you have in your arsenal that will make you stronger and more competitive or you know, relative to, you know, the, uh, the landscape out there, your thoughts? >>Yeah. So now this is going to sound, uh, well good. So all these different issues we've been through all these Bryce disease we've been through in our careers. Um, there's an old adage, if you can last room and you get resourced, you can come out stronger. And it's very true. So you can grow, you can do the right things, but you have to have the right offerings. Sometimes that's low, lucky you entered, right? I think we perfectly with the right innovation that did take us years ago, but we're hitting the current market. But also what I'll say is the new normal market. Mmm. And I think that's an opportunity. And I've always said, listen, the world doesn't need another storage. Right. Well, they're looking for solutions around the source challenges and I think what we've done around product portfolio with, we use the term offerings was the offerings around it with a different software allows you to actually, we're really free, you know, if it's really chapter two now we're trying to do monetize your core infrastructure, you need to free up your team so they can innovate. >>We're going to do that dramatically in what we're doing. Storage, they help you with that journey to cloud either OnPrem or into the public cloud or really what we see is a hybrid multicloud fabric happening, but also we do cyber resiliency as we built it from the or. So I think we're good hitting it, right? Mmm. Now the new normal is all the things that it has to be simple, it has to be rope managed and those are all the things we made massive investments across every one of our portfolio items. They just got launched a launch in the last two quarters. So I think we're in good stead. But to be honest, in these times, as we talked earlier, you work harder. You've got to really embrace the client feedback. Mmm. I think IBM is a good position to do that. Also with the greater IBM, we see vigor, Mmm. Opportunity set to find out how to help clients. >>Okay. We're the number one AI company in the world. So we're seeing what clients really want to do with AI and how they. There's actually holding it back. Number one outsourcer. We're seeing how people are really dealing with cyber resiliency and especially now where ransomware, where storage really impacts you. We're seeing exactly how to do it and what tools push forward and that's where you're seeing very unique opportunities in these times. If you can have the right product, the right go to market and do very well and more importantly you'd do it by helping clients. If you can help clients through this, do you come out stronger? I think some other people's storage, it becomes more challenging. I don't think people just want you know, the next flash array. I think they're looking for solution sets a companies to help them get through and get to the really the new, I think we're going to get to the new normal. I think this is a new abnormal, I can't call it normal. When we're all locked away, the new normal is going to be much faster. You're gonna have to go faster. So I think IBM and the IBM storage is aligned with let's help you with the cloud journey. Let's help you build our businesses. We'll make sure cyber resiliency built in there. Well, we're going to, you're seeing it across every division of IBM, step up and help you in that. Mmm. In that direction. That's what I think is differentiated. Why I'm excited about >>what we're doing. IBM in general, but also, yeah, again, storage is perfectly aligned with that overall mission and it's, it's kind of exciting to see it kind of play out in front of class. Well, I think you're right. I think the last decade was a lot of, it was about the all flash data center and, and the future is about powering innovation infrastructure for machine intelligence. Uh, and, and really getting insights out of data scaling. Uh, ed ed Walsh. Always great to have you on the, uh, hopefully we can do this, you know, a little closer face to face, maybe six feet apart. Um, and then eventually we could shake hands or high five or whatever it works. Thanks so much for coming to the Cuba. It's great to see you looking good and stay safe. Hey, thank you. Stay safe. All right. And thank you for watching everybody. This is Dave Volante for the cube and our continuous coverage of the IBM, that 20, 20 digital events experience. I'll be right back. Sorry for the short break.