>> Announcer: Live from Las Vegas, it's The Cube covering IBM Think 2018. Brought to you by IBM. >> Hello and welcome to The Cube here in IBM Think 2018, I'm John Furrier. It's The Cube, our flagship program, we go out to the events and extract the signal in the noise. We're the number one live event coverage. We're here with The Cube with IBM Think 2018. Our next guess is Jesse Lund who's the vice president of IBM Blockchain. He's in the financial services side. Into blockchain, into crypto, into token economics, seeing the future, how money flows, Jesse great to have you on The Cube, thanks for joining me. >> Yeah, thanks for having me. It's great to be here. >> We were talking before on camera about blockchain, and we love blockchain, IBM certainly put it out there as part of the innovation sandwich. Blockchain, data, AI, kind of making that innovation, but it's really what it enables, and I want to talk to you about. You are involved in payments. We've been saying on The Cube that the killer app is money in this market. >> I agree, yeah. >> You agree, and you talk about it. This is a new market, so a stack is kind of developing. You got blockchain, then you got crypto which as protocols and you got infrastructure, then you got decentralized applications which you could call ICOs up top, certainly a little bit scammy and bubbly, but that's as arbitraging and optimizing the capital markets, you could argue that. But so this is a really big dynamic. Your thoughts on this trend. >> Sure, well so I joined IBM from 18 years at Wells Fargo. I spent really the majority of my career in financial services and when blockchain came along, I sort of immediately saw the impact, the potential for, I'll call it positive disruption, disruption in the positive sense. Transformational paradigm shift kind of stuff in terms of how money moves around the world and how we classify assets and how we transfer ownership of assets, I mean that's just, it's, the possibilities are limitless. And you're right, IBM is the place where I think blockchain has started as a mainstream focus for enterprises around building private networks, but that's really just the beginning. What we talked about earlier was it gets really interesting when data and money are connected together and they move at high velocities together. >> Let's get into that. I mean first let's just address the IBM thing. They got to put a stake in the ground, blockchain, it's a safe harbor to say supply chain stuff because that's their business, they've been building technologies for supply chains for companies, that's what enterprises do, that's IBM. But the game is where the money is and that's where the businesses are going to be transformed. We're talking about disrupting structural industries. This is where the money power comes in. Money's flowing, I mean if you want to move money from China, go to bitcoin. If you want to move it from anywhere, this is what's happening. >> Yeah, so think about bitcoin. It's kind of what started it all. It's a little bit of a bad word in banks and in regulated financial circles, but let's face it, the only real mainstream blockchain application today is still bitcoin, but you know we're only three years in to the blockchain industry, right? I mean think about when we were three years in to the internet industry, where we were still talking about which browser is going to win and then it went on to which application server's going to win, and it wasn't til a decade later we were really focused on what are the applications, the killer apps that are enabled by an interconnected world and that's exactly what's happening now. Other industries have already been completely disrupted. Look at retail, it's just, it's banking's turn. It's financial services turn. >> One of the founders, the co-founders of Ethereum, Anthony Diiorio, who I interviewed a couple weeks ago at the Bahamas, he said "While it is the new browser," to your points, browser wars, if you think about the payment, wallets are now becoming part of the mechanism for money transfer. If you don't have a wallet, if you want to send me some Ripple, you want to send me some Ethereum, I need a wallet. This is a no brainer, right? I mean if you want to leverage any money, that's one thing. The second thing I want to get your thoughts on besides the wallets, the fiat conversion, right? These are two threshold conversations that are going on. Your thoughts, wallet and conversion to fiat. >> Well I mean I think wallets are really important because this whole thing is based on key management, this whole concept is based on cryptography. It only works on a public, private key notion and you got to keep that private key private, but you got to keep it, right? You got to keep it safe and you got to keep it, it's like your wallet. You've got a wallet, you've got cash in your wallet, you lose your wallet, you lose your cash. It's the same kind of analogy, so wallets are really important and you're going to want to turn to providers who have made their business in encryption, who have made their business in security, I mean-- >> And cold storage, old school is kind of coming back, people are taking their keys and they're spreading them across multiple lock boxes, multiple states. People are getting broken into their house or their PCs are getting broken into. >> Right, yeah. >> I mean security, going old school. >> And why not? I mean, it works. >> Because if someone knows you got 100 million dollars in your house, they're going to get it if you don't lock it. Okay back to the reality of the money transfer. We were talking before you came on, I've been saying on The Cube, token economics really is where the action is, at least in my opinion. I want to get your thoughts because really the business model innovation is on the table because whoever can innovate the business model has more of a chance to disrupt an existing industry. This is where tokenization becomes part of the money piece of it, so how do you convert that value into capture? Is that token? Is that where you see it? What's your thoughts? >> Yeah so well first of all, I mean if you think of tokens as another form of currency, and by the way, I think we have to be careful about what we say, cryptocurrencies, the industry talks about thousands of cryptocurrencies out there where there's really not. There's maybe dozens and they're all derivatives of just a few models, bitcoin being one prominent model and there's a lot of offshoots off of that. But the rest of what we call cryptocurrencies are really tokens that represent primarily securities, which is why the SCC's getting involved. But the really interesting thing about this is these tokens move at high velocity because they're digital and so, but these digital things represent a claim on real world value, and that's where it becomes really interesting. IBM's built and launched as kind of its first foray into the solution space of financial services where IBM is an investor in this technology, a cross-border payment solution that inherently re-engineers this whole correspondent banking, this international wire process, and where FX, foreign exchange, becomes a real time capability in a series of operations that execute as an atomic unit. That's novel today. When you want to send money from here to somewhere else in the world, you go to your bank, your bank sends an instruction to another bank, and they respond and say "Yeah you know it's okay "because the person you're sending it to is not a terrorist, "is not on a some sort of sanctions list," great, now the bank has to actually go settle and it settles through another network, so the novelty is why can't the messages and the data and the value itself, the digital asset, why can't they exist and move together at the same time? That's what we've really built. But as we've built and deployed that and are getting banks and non-bank financial institutions to sign up for it because the cost of moving money goes way, way, way down and the user experience goes way, way, way up because instead of taking two or three days and you don't know how much it's going to cost until it gets there, it takes 10 or 15 seconds and you know before you even press send how much it's going to cost to get there. It all boils down to this notion of digital assets, that's what it all comes down to, is the way to settle value with finality in real time is for one party to exchange a digital asset with another party. Today, initially, the only form of negotiable digital assets are cryptocurrencies which has banks a little scared, but as we start talking through what we've learned in the enterprise blockchain space, we realized that we can tokenize all sorts of other asset classes, commodities, securities, and even fiat currencies where central banks or commercial banks can issue a token that represents a claim on deposits held at some financial institution and that's, that's a-- >> So you see tokenization as a big deal. >> It's a huge deal. I mean it's everything, I think it's-- >> It's the economic value of the ... >> I think it's the tipping point for blockchain. The irony is it goes back to bitcoin kind of started this all. You know we said "Well we like the idea of the technology "underneath bitcoin, but we want to focus on blockchain," I mean forget for a second blockchain is actually terminology that's invented by the bitcoin primer that was published nine years ago by Satoshi, so yeah it's their, whoever they are, it's their terminology, and it's kind of coming back full circle where you're seeing the convergence of all of these cool optimization capabilities, you know, immutability and workflow optimization, supply chain management-- >> And there's a lot of work to be done on performance and whatnot, but the concept of decentralized immutability data is fine, store the data. Now there's, it's got to get fixed, but I think that what that enables and I think you agree that tokenization's critical. So for a company that wants to token their business or raise money via tokens or get involved in this new economic value creation, innovation trend, how do they do it? And by the way are there tools available? You mentioned banking, and the banking business got to where it was because you had to build the picks and shovels to make it happen, you had to do a swift and you had to have this stuff go on. Now developers don't necessarily have the tools, so there's a picks and shovel market and there's also the real innovation. >> Yeah and that's I think the value contribution that IBM brings. I mean we bring 107 years of credibility in developing and operating mission critical, transactional, and financial systems, and I could do just an ad for a second, that's what the IBM blockchain platform is all about and as the industry evolves, as our platform offering evolves, what we want to be able to bring to small business, medium sized businesses, large businesses is the ability to develop solutions using our toolkit. >> So Jesse I want you to put your financial hat on and at the same time put your payments hat on and your token economics hat on, three hats. Hey I want to tokenize my business, I really want to get in. So we have an innovative team, we're seeing new business model formulas and logic that we want to disrupt, what do I do? I got an existing, growing business that I know has assets and I'm not a startup, but I'm not trying to pivot like Kodak, so I'm not dying, throwing the hail Mary, or I'm not a startup and got to build a whole product. I'm a real business, I'm growing, and I see tokenization as a way for me to be successful. What do I do? What's your advice? >> Well I think you look at it from all potential angles. If you look at any business, they're always looking to improve the bottom line by shrinking costs, right? They're also looking to improve the bottom line by increasing the top side, increasing revenue, and I think as a mid-sized business or a growing business, you have the opportunity to use tokenization, to use blockchain and digital currencies to do both of those things. You have the ability to accelerate the adoption of whatever your good or service or product is by if it's tokenizable, and most things are whether it's a utility, access to some service you provide, or whether it's an asset, some widget that you sell, you enable primary and secondary markets by creating a digital asset that can be bought by anybody anywhere around the world. I mean that's one way to do it and so I think getting people to realize the potential there-- >> You got programs, they call up IBM or get some developers, make it happen. Okay so killer apps money, that's going to be a 30 plus year trend and certainly this highlights that, but the other thing that's happened, it's coming out of either, in the open source community as well as cloud, the notion of marketplaces and communities so marketplaces and communities become a very important role in the token economics piece. What's your thoughts and opinion on that narrative? >> Well again for me, it goes back, I always go back to digital assets. We in the U.S. and around the world, when we start talking about financial instruments, we classify assets differently, but when it comes to an ecosystem and a community that becomes inherently peer to peer and inherently democratic, it's about an asset class agnostic distributed exchange where I can sell you my security token in exchange for your fiat token, or I can sell you my commodity token or utility token for the same. I think the ecosystem gets built automatically by way of new assets coming to a common network or interoperable set of networks, and that's what's missing today by the way, same in capital markets, right? The holy grail in the capital market space today is how do I shrink the time between trade and settlement? There's this whole t plus three and we're spending billions of dollars to go to t plus two, we gain a day, so the trade day and the settlement date are two days apart. I mean you just think about kind of the absurdity of that. If you just say well if the security that you're buying is a digital asset, and the money that you're buying it with is a digital asset, and they both exist on either the same network or an interoperable network, the transfer of ownership and the transfer of value happen together as two operations or a single operation in one atomic transaction, you've solved the problem. >> Speed of light can make it happen. >> Right, delivery versus payment, that's what the capital markets industry is trying to optimize for, right? Because it improves the balance sheet of all sorts of finance-- >> You had a phrase you mentioned before we came on camera, something about money, the future of money. What was that phrase? >> Programmable money? >> Programmable money. >> Yeah, right, right. >> I want you to take a minute to explain. Love this concept, Miko Matsumura, thought leader friend of ours, has a vision called open source money which is more of an open source, this hey money's flowing, it's open, it's out there, but you have a different perspective which I like too which is programmable money. What does that mean? Describe the concept and take a minute to unpack that. >> The concept of programmable money comes out of a paper that I jointly authored with Jed McCaleb who is the founder of Stellar and was the co-founder of Ripple and is a really smart guy so I feel like I have a small brain when I'm around him but we really wrote it in the context of central banking and the ultimate issuer of an asset because central banks are the issuers of currencies. Right now the primary dealers, if you will, for currencies are commercial banks and so that whole commercial, central, fractional reserve banking model has been replicated from the western world to everywhere else in the world and you can't get access to central bank money as they say. But if the central banks were to issue digital currencies which is essentially a token of fiat currency, so you own the token, you own a claim of fiat deposits held on the balance sheet of the central bank, now you have the ability to move that around. You can actually program the movement of money because it's a digital thing, it's a digital asset that's as good as cash and if you are working with a central bank who's issuing it, not only is it electronic money, it's actually legal tender because if the central bank issues it, it becomes legal tender which means everybody who accepts it has to accept that form of payment. That's pretty profound if we can get to that point and we're working with-- >> And software's a big driver in that because you need software to manage digital assets. >> Oh yeah, absolutely. >> The software's driving it. Bill Tai is an investor, I interviewed him, and he had an interesting topic and I made a highlight of it. He said after World War II, we talked about the oil situation when the dala was pegged to OPEC, that was essentially tokenizing oil. Then okay that's good, so that was their ICO. >> Right, right, yeah, essentially. >> That's what you're saying, you can actually put fiat to the digital token and take advantage of the efficiencies of digital. >> Right, yeah, okay-- >> Taking down all the structural inefficiencies that were built prior to digital. Is that ... >> It is. You fast forward a little bit and think where that takes us. It's no secret that the U.S. dollar is the trade currency of the world, and I want to be careful what I say because, you know, I'm an American patriot here but there are other large G20 nations who wouldn't mind dethroning the U.S. dollar as the trade currency of the world and so as you see central banks starting to get involved in the issuance of digital currency, you create a situation where all of a sudden well maybe oil could be traded heresy in other currencies besides the U.S. dollar which is all it's traded in today. Goes back to your ecosystem question. >> This is a great point. We could riff on this stuff, let's riff on this. The UK just signed a deal with Coinbase, this is a major signal. >> Sign, yeah. >> You got a legitimate country saying we're going to give a license to Coinbase, now they have Brexit to deal with so they're looking at it as an opportunity. Outside of the UK coming in and doing that deal with Coinbase, it's on the web, look up Coinbase in the UK, you'll see the deal. You have other companies trying to jockey for who's going to be the Wall Street for crypto? Meaning I want to convert crypto to fiat, where do I go? Do I go to Estonia? Do I go to Dubai? Bahrain? Armenia? China? There is no place yet. Your thoughts, what's going to happen? What shoe will drop first? Is there a domino effect? >> Yeah, well there's a couple things as it relates to the UK and kind of the extension to Coinbase of access to the national payment system which is really what enables them to then convert fiat to crypto and back. That's pretty interesting. Going back to the programmable money thing, though. If you have a central bank issued token, you've essentially extended the real time gross settlement system which has been only accessible by commercial banks to anybody that holds that token, right? It's a trend, I think the UK sees it coming, I think the Federal Reserve sees it coming. It's going to happen. >> Is it winner take all or winner take most? >> I think it creates a much more purely efficient market. It's a democratic system so I don't think there is going to be a new Wall Street, I think it's going to be-- >> John: Decentralized. >> Exactly, I mean that's the beauty of it. It's scary though for establishments like Wall Street to look at this and it-- >> I mean are the banks scared? You're dealing with the banks right now. >> Yes, they're scared. I mean I've actually read a recent article that Bank of America, the headline was "Bank of America's afraid of digital currency." You've seen Jamie Dimon who came out with a kind of a hard stance against bitcoin and has since kind of backed away from that. >> Of course you probably bought in when it dropped and now it's back up again. >> Well I think part of the bank was actually facilitating their clients and trading bitcoin so that might've been it. There's a natural reaction to it, especially if you're part of the mainstream establishment. >> There's no proof of that, I'm just saying we're posting on Reddit and whatnot. >> No we're just joking around. Jamie's a, he's a good guy, right? >> Can I get your thoughts on digital nations? We've been talking about this. Just a few years ago, smart cities, IoT was kind of the narrative, oh be a smart city, control the traffic lights, and instrument the physical goods and services. Now with crypto and blockchain front and center conversation is digital nations with sovereignty around their cash. This is kind of your point earlier. How are you seeing that? What's your view? Are you seeing that trend? Are there dots connecting for you? Because again, people are jockeying for a position on the global digital backbone to be a major part of the money flow, the fiat conversion, what is the goods and services? Who's going to clear the values? All digital, it's a perfect storm. >> Well I think there's always going to be the need for trusted entities to be the issuers of these assets because it all comes down to trust at the end of the day. The thing with bitcoin is that it's purely autonomous and people are a little bit skeptical of it because they're like, "Well who's controlling "the monetary policy?" and the answer is the market, you know, the users of the network are controlling it and that's why you see such volatility, right? Because the traders love it, they can go in and trade the up trends and the down trends. As long as there's volatility, traders are making money. I think there is still going to be a place for central authorities to add value, but that's going to be the pressure, is for them to prove that they're adding value not, you know, bureaucracy masquerading as process. >> I was reading an article that Telegram, which is doing a huge ICO, just got shut down by the Russian government, they went to turn over their keys, their private keys of their users. Say goodbye to the-- >> Jesse: I didn't read that, that's crazy. >> It's really crazy, so that's going to put a damper on their ICO but regulatory and then government issues around countries becomes a big deal. In your experience as Wells Fargo, at a bank, looking forward in the new digital world, is it one of those situations where path of least resistance, the countries that go more friendly get around that in a sovereignty where you domicile, where you start your company, where you do your banking. I mean I could start a company in Gibraltar and bank in Switzerland. >> Well transparency is part of the benefit or the downside of this, right? I think there may be advantages that pop up but I think they will equalize over time. I've been around the world now for IBM talking to 20 plus central banks, and I had a really interesting conversation with one of them recently in Asia. We're in the room with deputy director level people who are responsible for things like the NA money laundering policy and the economics and monetary policy and things like that and one person said, "You know, we're really torn "between two equally unacceptable decisions. "One is to ignore cryptocurrencies altogether, "and the other end of the spectrum is "to make them illegal, to ban them." I thought it was poignant that they see those as unacceptable, they have to do something in the middle. >> Do they weigh or ban? I mean look, the banning's happening. >> But okay so you saw that Trump used the executive order to prevent Americans from using or trading in the Venezuelan crypto that was issued on Ethereum, right? I saw that Venezuelan thing as a publicity stunt more than anything, an active of global defiance. So there's precedent now for, and the Russia thing with Telegram-- >> The United States of America has to step up its game because look at it, we have a lot of, I mean I remember back in the crypto days when I was just getting into the business, late 80s, early 90s, you couldn't even do it in the U.S., you go to Canada, that's why Canada's got a lot of innovation up there. We're risking our country, and I had one guy tell me in Puerto Rico, he's from South Africa, and he shouldn't be throwing any stones either but his point was, he says, "America's becoming Europe. "There's a shrinking middle class "while other emerging markets have a growing middle class," so the global impact of blockchain, cryptocurrency, and these applications are significant and have to be factored into policy decision making for governments. The U.S. can't just think about itself anymore in a vacuum. >> Right, not anymore. >> Because there's implications otherwise the U.S. will turn into Europe, regulated, all these rules, byzantine stuff. It's a real problem. Your thoughts on that. >> It is. It's cliche, but we live and work in a global economy. The flow of information globally in real time has been around now for a while and it's about time it came to money. The internet of money is a term I've heard. It's just, it's unavoidable. >> Jesse Lund here inside The Cube. Great guest, great conversation. >> Yeah, thanks. >> How do people get ahold of you on IBM's, you mentioned you got some great stuff going on, you've written a paper, you've got a lot of content, where does someone go to discover some of the stuff that you're working on they could get involved with you guys? >> Yeah well I mean the best place to go is IBM.com/blockchain, that'll tell you a lot about what we're doing and the different industry-- >> And the programmable money paper you wrote, is that there? >> It's out there as well, there's a link to that. >> On IBM.com? >> You can get me directly on LinkedIn, I try to be pretty responsive with that because I really enjoy the dialogue. This is a revolution of the peoples, man, it's all over the world, so it's great, it's great to be a part of it. >> And people tokenizing their business, there's real opportunities to change the game to bring consensus, data driven, new kind of supply chain whatever to the markets you're in, great opp-, and you need banking. >> Yeah of course. >> You need to have money. Money, marketplaces, and communities, that's my mantra. >> I subscribe to it. >> Thanks for coming on. >> Thank you, thanks for having me. >> Jesse Lund. I'm John Furrier here at IBM Think 2018. Cube coverage continues after this short break. (upbeat music)

>> Announcer: theCube presents HPE Discover 2022, brought to you by HPE. >> Hey, everyone. Welcome back to Las Vegas. This is Lisa Martin with Dave Vellante live at HPE Discover '22. Dave, it's great to be here. This is the first Discover in three years and we're here with about 7,000 of our closest friends. >> Yeah. You know, I tweeted out this, I think I've been to 14 Discovers between the U.S. and Europe, and I've never seen a Discover with so much energy. People are not only psyched to get back together, that's for sure, but I think HPE's got a little spring in its step and it's feeling more confident than maybe some of the past Discovers that I've been to. >> I think so, too. I think there's definitely a spring in the step and we're going to be unpacking some of that spring next with one of our alumni who joins us, Keith White's here, the executive vice president and general manager of GreenLake Cloud Services. Welcome back. >> Great. You all thanks for having me. It's fantastic that you're here and you're right, the energy is crazy at this show. It's been a lot of pent up demand, but I think what you heard from Antonio today is our strategy's changing dramatically and it's really embracing our customers and our partners. So it's great. >> Embracing the customers and the partners, the ecosystem expansion is so critical, especially the last couple of years with the acceleration of digital transformation. So much challenge in every industry, but lots of momentum on the GreenLake side, I was looking at the Q2 numbers, triple digit growth in orders, 65,000 customers over 70 services, eight new services announced just this morning. Talk to us about the momentum of GreenLake. >> The momentum's been fantastic. I mean, I'll tell you, the fact that customers are really now reaccelerating their digital transformation, you probably heard a lot, but there was a delay as we went through the pandemic. So now it's reaccelerating, but everyone's going to a hybrid, multi-cloud environment. Data is the new currency. And obviously, everyone's trying to push out to the Edge and GreenLake is that edge to cloud platform. So we're just seeing tons of momentum, not just from the customers, but partners, we've enabled the platform so partners can plug into it and offer their solutions to our customers as well. So it's exciting and it's been fun to see the momentum from an order standpoint, but one of the big numbers that you may not be aware of is we have over a 96% retention rate. So once a customer's on GreenLake, they stay on it because they're seeing the value, which has been fantastic. >> The value is absolutely critically important. We saw three great big name customers. The Home Depot was on stage this morning, Oak Ridge National Laboratory was as well, Evil Geniuses. So the momentum in the enterprise is clearly present. >> Yeah. It is. And we're hearing it from a lot of customers. And I think you guys talk a lot about, hey, there's the cloud, data and Edge, these big mega trends that are happening out there. And you look at a company like Barclays, they're actually reinventing their entire private cloud infrastructure, running over a hundred thousand workloads on HPE GreenLake. Or you look at a company like Zenseact, who's basically they do autonomous driving software. So they're doing massive parallel computing capabilities. They're pulling in hundreds of petabytes of data to then make driving safer and so you're seeing it on the data front. And then on the Edge, you look at anyone like a Patrick Terminal, for example. They run a whole terminal shipyard. They're getting data in from exporters, importers, regulators, the works and they have to real-time, analyze that data and say, where should this thing go? Especially with today's supply chain challenges, they have to be so efficient, that it's just fantastic. >> It was interesting to hear Fidelma, Keith, this morning on stage. It was the first time I'd really seen real clarity on the platform itself and that it's obviously her job is, okay, here's the platform, now, you guys got to go build on top of it. Both inside of HPE, but also externally, so your ecosystem partners. So, you mentioned the financial services companies like Barclays. We see those companies moving into the digital world by offering some of their services in building their own clouds. >> Keith: That's right. >> What's your vision for GreenLake in terms of being that platform, to assist them in doing that and the data component there? >> I think that was one of the most exciting things about not just showcasing the platform, but also the announcement of our private cloud enterprise, Cloud Service. Because in essence, what you're doing is you're creating that framework for what most companies are doing, which is they're becoming cloud service providers for their internal business units. And they're having to do showback type scenarios, chargeback type scenarios, deliver cloud services and solutions inside the organization so that open platform, you're spot on. For our ecosystem, it's fantastic, but for our customers, they get to leverage it as well for their own internal IT work that's happening. >> So you talk about hybrid cloud, you talk about private cloud, what's your vision? You know, we use this term Supercloud. This in a layer that goes across clouds. What's your thought about that? Because you have an advantage at the Edge with Aruba. Everybody talks about the Edge, but they talk about it more in the context of near Edge. >> That's right. >> We talked to Verizon and they're going far Edge, you guys are participating in that, as well as some of your partners in Red Hat and others. What's your vision for that? What I call Supercloud, is that part of the strategy? Is that more longer term or you think that's pipe dream by Dave? >> No, I think it's really thoughtful, Dave, 'cause it has to be part of the strategy. What I hear, so for example, Ford's a great example. They run Azure, AWS, and then they made a big deal with Google cloud for their internal cars and they run HPE GreenLake. So they're saying, hey, we got four clouds. How do we sort of disaggregate the usage of that? And Chris Lund, who is the VP of information technology at Liberty Mutual Insurance, he talked about it today, where he said, hey, I can deliver these services to my business unit. And they don't know, am I running on the public cloud? Am I running on our HPE GreenLake cloud? Like it doesn't matter to the end user, we've simplified that so much. So I think your Supercloud idea is super thoughtful, not to use the super term too much, that I'm super excited about because it's really clear of what our customers are trying to accomplish, which it's not about the cloud, it's about the solution and the business outcome that gets to work. >> Well, and I think it is different. I mean, it's not like the last 10 years where it was like, hey, I got my stuff to work on the different clouds and I'm replicating as much as I can, the cloud experience on-prem. I think you guys are there now and then to us, the next layer is that ecosystem enablement. So how do you see the ecosystem evolving and what role does Green Lake play there? >> Yeah. This has been really exciting. We had Tarkan Maner who runs Nutanix and Karl Strohmeyer from Equinix on stage with us as well. And what's happening with the ecosystem is, I used to say, one plus one has to equal three for our customers. So when you bring these together, it has to be that scenario, but we are joking that one plus one plus one equals five now because everything has a partner component to it. It's not about the platform, it's not about the specific cloud service, it's actually about the solution that gets delivered. And that's done with an ISV, it's done with a Colo, it's done even with the Hyperscalers. We have Azure Stack HCI as a fully integrated solution. It happens with managed service providers, delivering managed services out to their folks as well. So that platform being fully partner enabled and that ecosystem being able to take advantage of that, and so we have to jointly go to market to our customers for their business needs, their business outcomes. >> Some of the expansion of the ecosystem. we just had Red Hat on in the last hour talking about- >> We're so excited to partner with them. >> Right, what's going on there with OpenShift and Ansible and Rel, but talk about the customer influence in terms of the expansion of the ecosystem. We know we've got to meet customers where they are, they're driving it, but we know that HPE has a big presence in the enterprise and some pretty big customer names. How are they from a demand perspective? >> Well, this is where I think the uniqueness of GreenLake has really changed HPE's approach with our customers. Like in all fairness, we used to be a vendor that provided hardware components for, and we talked a lot about hardware costs and blah, blah, blah. Now, we're actually a partner with those customers. What's the business outcome you're requiring? What's the SLA that we offer you for what you're trying to accomplish? And to do that, we have to have it done with partners. And so even on the storage front, Qumulo or Cohesity. On the backup and recovery disaster recovery, yes, we have our own products, but we also partner with great companies like Veeam because it's customer choice, it's an open platform. And the Red Hat announcement is just fantastic. Because, hey, from a container platform standpoint, OpenShift provides 5,000 plus customers, 90% of the fortune 500 that they engage with, with that opportunity to take GreenLake with OpenShift and implement that container capabilities on-prem. So it's fantastic. >> We were talking after the keynote, Keith Townsend came on, myself and Lisa. And he was like, okay, what about startups? 'Cause that's kind of a hallmark of cloud. And we felt like, okay, startups are not the ideal customer profile necessarily for HPE. Although we saw Evil Geniuses up on stage, but I threw out and I'd love to get your thoughts on this that within companies, incumbents, you have entrepreneurs, they're trying to build their own clouds or Superclouds as I use the term, is that really the target for the developer audience? We've talked a lot about OpenShift with their other platforms, who says as a partner- >> We just announced another extension with Rancher and- >> Yeah. I saw that. And you have to have optionality for developers. Is that the way we should think about the target audience from a developer standpoint? >> I think it will be as we go forward. And so what Fidelma presented on stage was the new developer platform, because we have come to realize, we have to engage with the developers. They're the ones building the apps. They're the ones that are delivering the solutions for the most part. So yeah, I think at the enterprise space, we have a really strong capability. I think when you get into the sort of mid-market SMB standpoint, what we're doing is we're going directly to the managed service and cloud service providers and directly to our Disty and VARS to have them build solutions on top of GreenLake, powered by GreenLake, to then deliver to their customers because that's what the customer wants. I think on the developer side of the house, we have to speak their language, we have to provide their capabilities because they're going to start articulating apps that are going to use both the public cloud and our on-prem capabilities with GreenLake. And so that's got to work very well. And so you've heard us talk about API based and all of that sort of scenario. So it's an exciting time for us, again, moving HPE strategy into something very different than where we were before. >> Well, Keith, that speaks to ecosystem. So I don't know if you were at Microsoft, when the sweaty Steve Ballmer was working with the developers, developers. That's about ecosystem, ecosystem, ecosystem. I don't expect we're going to see Antonio replicating that. But that really is the sort of what you just described is the ecosystem developing on top of GreenLake. That's critical. >> Yeah. And this is one of the things I learned. So, being at Microsoft for as long as I was and leading the Azure business from a commercial standpoint, it was all about the partner and I mean, in all fairness, almost every solution that gets delivered has some sort of partner component to it. Might be an ISV app, might be a managed service, might be in a Colo, might be with our hybrid cloud, with our Hyperscalers, but everything has a partner component to it. And so one of the things I learned with Azure is, you have to sell through and with your ecosystem and go to that customer with a joint solution. And that's where it becomes so impactful and so powerful for what our customers are trying to accomplish. >> When we think about the data gravity and the value of data that put massive potential that it has, even Antonio talked about it this morning, being data rich but insights poor for a long time. >> Yeah. >> Every company in today's day and age has to be a data company to be competitive, there's no more option for that. How does GreenLake empower companies? GreenLake and its ecosystem empower companies to really live being data companies so that they can meet their customers where they are. >> I think it's a really great point because like we said, data's the new currency. Data's the new gold that's out there and people have to get their arms around their data estate. So then they can make these business decisions, these business insights and garner that. And Dave, you mentioned earlier, the Edge is bringing a ton of new data in, and my Zenseact example is a good one. But with GreenLake, you now have a platform that can do data and data management and really sort of establish and secure the data for you. There's no data latency, there's no data egress charges. And which is what we typically run into with the public cloud. But we also support a wide range of databases, open source, as well as the commercial ones, the sequels and those types of scenarios. But what really comes to life is when you have to do analytics on that and you're doing AI and machine learning. And this is one of the benefits I think that people don't realize with HPE is, the investments we've made with Cray, for example, we have and you saw on stage today, the largest supercomputer in the world. That depth that we have as a company, that then comes down into AI and analytics for what we can do with high performance compute, data simulations, data modeling, analytics, like that is something that we, as a company, have really deep, deep capabilities on. So it's exciting to see what we can bring to customers all for that spectrum of data. >> I was excited to see Frontier, they actually achieve, we hosted an event, co-produced event with HPE during the pandemic, Exascale day. >> Yeah. >> But we weren't quite at Exascale, we were like right on the cusp. So to see it actually break through was awesome. So HPC is clearly a differentiator for Hewlett Packard Enterprise. And you talk about the egress. What are some of the other differentiators? Why should people choose GreenLake? >> Well, I think the biggest thing is, that it's truly is a edge to cloud platform. And so you talk about Aruba and our capabilities with a network attached and network as a service capabilities, like that's fairly unique. You don't see that with the other companies. You mentioned earlier to me that compute capabilities that we've had as a company and the storage capabilities. But what's interesting now is that we're sort of taking all of that expertise and we're actually starting to deliver these cloud services that you saw on stage, private cloud, AI and machine learning, high performance computing, VDI, SAP. And now we're actually getting into these industry solutions. So we talked last year about electronic medical records, this year, we've talked about 5g. Now, we're talking about customer loyalty applications. So we're really trying to move from these sort of baseline capabilities and yes, containers and VMs and bare metal, all that stuff is important, but what's really important is the services that you run on top of that, 'cause that's the outcomes that our customers are looking at. >> Should we expect you to be accelerating? I mean, look at what you did with Azure. You look at what AWS does in terms of the feature acceleration. Should we expect HPE to replicate? Maybe not to that scale, but in a similar cadence, we're starting to see that. Should we expect that actually to go faster? >> I think you couched it really well because it's not as much about the quantity, but the quality and the uses. And so what we've been trying to do is say, hey, what is our swim lane? What is our sweet spot? Where do we have a superpower? And where are the areas that we have that superpower and how can we bring those solutions to our customers? 'Cause I think, sometimes, you get over your skis a bit, trying to do too much, or people get caught up in the big numbers, versus the, hey, what's the real meat behind it. What's the tangible outcome that we can deliver to customers? And we see just a massive TAM. I want to say my last analysis was around $42 billion in the next three years, TAM and the Azure service on-prem space. And so we think that there's nothing but upside with the core set of workloads, the core set of solutions and the cloud services that we bring. So yeah, we'll continue to innovate, absolutely, amen, but we're not in a, hey we got to get to 250 this and 300 that, we want to keep it as focused as we can. >> Well, the vast majority of the revenue in the public cloud is still compute. I mean, not withstanding, Microsoft obviously does a lot in SaaS, but I'm talking about the infrastructure and service. Still, well, I would say over 50%. And so there's a lot of the services that don't make any revenue and there's that long tail, if I hear your strategy, you're not necessarily going after that. You're focusing on the quality of those high value services and let the ecosystem sort of bring in the rest. >> This is where I think the, I mean, I love that you guys are asking me about the ecosystem because this is where their sweet spot is. They're the experts on hyper-converged or databases, a service or VDI, or even with SAP, like they're the experts on that piece of it. So we're enabling that together to our customers. And so I don't want to give you the impression that we're not going to innovate. Amen. We absolutely are, but we want to keep it within that, that again, our swim lane, where we can really add true value based on our expertise and our capabilities so that we can confidently go to customers and say, hey, this is a solution that's going to deliver this business value or this capability for you. >> The partners might be more comfortable with that than, we only have one eye sleep with one eye open in the public cloud, like, okay, what are they going to, which value of mine are they grab next? >> You're spot on. And again, this is where I think, the power of what an Edge to cloud platform like HPE GreenLake can do for our customers, because it is that sort of, I mentioned it, one plus one equals three kind of scenario for our customers so. >> So we can leave your customers, last question, Keith. I know we're only on day one of the main summit, the partner growth summit was yesterday. What's the feedback been from the customers and the ecosystem in terms of validating the direction that HPE is going? >> Well, I think the fantastic thing has been to hear from our customers. So I mentioned in my keynote recently, we had Liberty Mutual and we had Texas Children's Hospital, and they're implementing HPE GreenLake in a variety of different ways, from a private cloud standpoint to a data center consolidation. They're seeing sustainability goals happen on top of that. They're seeing us take on management for them so they can take their limited resources and go focus them on innovation and value added scenarios. So the flexibility and cost that we're providing, and it's just fantastic to hear this come to life in a real customer scenario because what Texas Children is trying to do is improve patient care for women and children like who can argue with that. >> Nobody. >> So, yeah. It's great. >> Awesome. Keith, thank you so much for joining Dave and me on the program, talking about all of the momentum with HPE Greenlake. >> Always. >> You can't walk in here without feeling the momentum. We appreciate your insights and your time. >> Always. Thank you you for the time. Yeah. Great to see you as well. >> Likewise. >> Thanks. >> For Keith White and Dave Vellante, I'm Lisa Martin. You're watching theCube live, day one coverage from the show floor at HPE Discover '22. We'll be right back with our next guest. (gentle music)

>> live from San Francisco, celebrating 10 years of high tech coverage. It's the Cube covering Veum World 2019 brought to you by IBM Wear and its ecosystem partners. >> Hey, welcome back. Everyone's the cubes. Live coverage here in San Francisco v. Emerald 2019. We're in the hall of Must Going north. Lot of stuff going on here. I'm John for David. Want a day for 10 years covering the emeralds? Been quite a ride, Seeing from 2010 to 20 A lot has changed, but still de our backup and recovery still is always a big thing. Our next two guests is already CTO co founder of a tree, Um, and Igor Zika, director of I t Sensible. Thanks for coming on your early customer since one Dato. You're on the journey with day tree. Um, congratulations. Been a wild ride. Good ride. Tell us. Thank >> you. It's been a journey. It's It's been a good relationship. We've been using day trim for three years. Started with 10 we're now in 5.3. I believe it's >> been really >> good. It's been, um, innovative. It's been challenging from us working in the space where we have to think about what next step is and working towards the data transformation internally in order to get to a cloud. But we're almost there. So we're pretty excited about the >> opportunities when they build a great product. They got some new news is all about the new news you got going on here. You get your core product now you got some new stuff. Share the news, >> we're gonna finish the journey, and we started off. The idea was to make a recovery be better for everybody else. As you know, we are is really mostly about disaster for everybody. So what we have done is that we are able to offer cloud disaster. Recovery of the service idea is that you can have backups in the club on Amazon, and then you push a button you can fail over and bring up your remember servers on demand so you can run your workloads right away, and when you push a button will bring it down and bring it. Bring data back to you on from we call it a cloud. Br the service to a movie. Every cloud on Amazon >> specific to Amazon, >> physically via MacLeod and Amazon, >> right Okay, um, one of the one of the early instance see ations of leveraging that platform. I think people they misunderstand atrium. I mean, you guys have been around now for a while, but in the early days, it wasn't clear that you guys were really kind of changing the way in which people approach storage. Maybe that's what interested you in the beginning, but But both primary and secondary storage, high performance yet gloss, That's right. All right. So it's kind of like magic sauce that you >> ultimately d r finishes the story because really look at any data center. The reason white B R doesn't work is because you end up with five different products, won his primary on his back up. One is the orchestration and some other things, like encryption by an optimization. You buy all these products for you, manage your data in one day to center, and then you replicate the same fight things on your second data center. No, that's not movies law. I don't know what it is. You push the button one day when there's a disaster. Every is watching the ideal person to actually do this. It's very fragile. It's very scary for a lot of people, which is why it doesn't really work. No customer as ever met. I've said it's amazing that the D R works for them. They're nobody's ever, >> well, most customers, almost all customers say they can't test D R because it's too dangerous. That contest test portions of it. They could test, fail over but not fail back. Can you explain sort of your approach in D. R. And how this potentially could change it? >> Yeah, and are, in my experience, the or is challenging for a variety of reasons. Major reasons. Yes, you can't actually fully test the d. R. You have to put a lot of efforts, a lot of thoughts and develop a really strong game plan in order to execute D. R. Flawlessly and a lot of times you have a chance of very short windows to perform these tests, and in order to deliver, you have to do a lot of homework, and you have to do a really good design of your infrastructure and extensive design in order to have a successful outcome. So in my experience, I mean, what are we hoping again? I mean, we are joining towards the day trim the Our solution is to actually have a solution that's going to be baked in that we can press a button on DDE, have our vision off d r and meet our objectives. Meet Rto is executed, >> So let's hit the escape key element So sensible San Fillipo What? >> What about? We are one of the largest California North based accounting firm. We deal with accounting and finance and compliance and assuring service is so. Our focus is to provide clients with no peace of mind knowing that their financial data is you know, that is correct. >> So paint a picture of your technology infrastructure. So you're obviously presuming inferring VM where customers that >> we are the M or customer. You are also a customer gets >> an idea of what what she looks like and >> we are basically operating out of a single location. We are multi multi office, you know, company, but we operate our single location. We are the m were based. We also VD I based so everybody works from a digital workspace are strong. Focus been to provide a robust and high performance digital workspace for employees so they can have a peace of mind and work anytime they want. >> I was at the first use case for atrium was video air >> atrium Woz our foundation to build that robust beady eye platform. >> Okay, so give us a before and after what prompted you to goto? Damn. What was it like before? What was the problem? You were trying to solve >> the challenge of the VD. I is. We have to provide a very robust platform. So people feel they work on their local machines. So highly responsive systems like highly responsive story systems of foundations red. Besides having a very, you know, high optimized bandwidth, we need to make sure that our bottlenecks are not focused on the storage. So our challenge is warped provisioning VD I machines within the within the time frame that we actually would really kp eyes that we designed. So our challenge was deploying all the master images, deploying provisional service's. And it's taking a very long period of time, which basically was putting us towards on ability for I t guys to do the job. So we were deploying virtual machine master images that too now and have to deploy every time we have a change every time we make a change in our environment, it to interment a smarter time in order to apply those changes. So day tree, um changed that. >> That was an infrastructure issue. I mean, the storage >> of that was a storage infrastructure. How? How >> did atrium change that? And maybe says all you could follow with the tech behind it >> The good >> Well, if you look at most people, end user scare about late and see my office is one thing but didn't see is what matters and deserves indeed. So having our architecture, having the local flash and the software running of the local host for you, that's what really provides the end user experience. Which is kind of what we here for a lot of a customer. The end users tell the A d folks that, hey, something has changed for me. That was our fundamental design architecture we chose from So those primary storage. And how do you make that high performance low latency? We're closed for everybody, and that's what we have done so that technology is basically local flash suffering host. That's what gives you the >> best of your experiences. You went from what you say an hour and 1/2 to >> 15 minutes. So that was pretty dramatic moment of truth when we deployed atrium and we started the imaging process and it was finished. And to be honest, I thought, that is broken, but it actually was that fast. So gave us a tremendous amount of ability to deploy and manage and do the war during the War day instead of working after hours >> and what we do for data protection before day tree, >> we use variety of different solutions. Backups, just a tape and variety of service. Is that actually backed up? They still do our know. We've given that a lot. The floor >> of all the legacy stuff you got rid of that. Did you have to change your processes or what was that like? Was painful. >> We have to We have to get rid of a lot of process that we're focused on backup focus on the time that it took to manage back up with a tree. Um, Day Trio didn't have the backup from the day one. This is something that they've designed, I think a second year, and that was very different to see the company that deals with storage. Creating such innovative vision for developing old I'm developing a road map that was actually coming true with every generation off the software deployment s o. The second tier that we provisioned was the snapshots on the snapshots that were incredibly fast. That didn't take a lot of space. That was give us ability to restore almost instantly gave us a huge amount of, you know, focus on not focusing on the storage anymore. >> But when you and Brian and you go got together and said, Okay, we're gonna do this you must have been thinking about backup, obviously, right? >> It's mostly not so much backup, but about data of the Mikado recovery faster for people That's not back up. I've been in business for a long time, backup, but you go back. I was very taxing. It's about recovery, and we made recovery fast. Freddy are finishes the story of recovery to be in the club >> and essentially eliminate the need for a separate sort of backup. My set, right? That's that was the vision >> you can recover from a backup device. Size it >> right. All right. So where do you go from here? >> That's a good question. Way hoping to go into fully orchestrated the our solution so we don't have to think about it. Don't mean my thing is like, I don't I don't want to worry about D. R. I want to make sure it's there. I want to be able to prove to business owners and our clients that we have a viable, orchestrated automated the our solution. >> So you you gave us some metrics in terms of hour and 1/2 to 15 minutes for deployment. But what about like, this is the staff, um, you know, not talking about getting rid of staff redeploying staff. Or maybe you got rid of staff, I don't know. But what are the people that were spending all that time? You know, the hour and 1/2 before, What are they doing now? Have you sort of re allocated them to some you know, other higher value initiatives, and you could add some color they're >> using the M or and integrated solutions allows us to have a pretty small profile on my T group. We actually operating with three people, believe it or not supporting over 250 users and systems so we can focus. I mean our main focus. Instead of troubleshooting technology systems and problems with the storage and problems with networking, we are focused on looking for the next best thing, providing high level of customer support, focusing on performance, looking for innovations and, you know, So it's definitely better use than troubleshooting, for sure. And >> innovative solution. What's it like working with the entrepreneurial? Not start up Very >> cool. Very fresh. Very good feeling off knowing that you can call in and you have a you have almost in house. I t relationship a defender is extremely valuable to us >> and bring it to innovate approach. It makes it go fast. I mean and making it easier. They talk about the industry and you go back. I mean, the interest has changed so much. We've been the cube for 10 years. I mean, so much has changed in I t. But in product sides, that's where the sprawl happens. I think >> the iPhone changed everything. Right, So, you know, iPhone, Icloud. That's what we wanted with our d R service as well. I think the world has changed. You expect those same experiences in your in your off duty and on I t. The people have wanted a similar experiences. This kind of what you want to do. >> This is cloud to point out. This is Enterprise Cloud the innovations, that clean sheet of paper you built from the ground up solves a lot of problems. I'm sweep the floor with the other guys >> as an observer of the of the storage business, right? Kind of Look at it. There's two companies now that there are over a billion dollars in revenue that are independent storage companies. And I was always surprised the year I met Brian. We had him on the Cube several years ago, and, you know, he was kind of, you know, coy about what? Actually, guys are doing a secret. And so and at the time we were thinking, Wow, it's stores. Amazing is the industry's consolidating, but money keeps flowing into storage because it's still hard Problem the salt. So what do you thoughts about that about the industry, its structure as a independent, you know, pure play storage company. What you want to do with this? This company want to grow it so >> we don't up your praise storage company in the sense that be focused on data management as well. So it's not just a pure prey storage only. So that's just a dumb stories. You're not gonna go anywhere. What you need to do is move a level up and provide customer level, higher level functionality so that they can make their lives easier. Dumb story doesn't sell anymore, just Lund's son anymore. >> So that says, essentially that. And I would agree with you. By the way. That's essentially. That old thinking about the storage model is dead. That's why the industry is consolidating data. You mentioned data management. Certainly. You're seeing a lot of the the the next generation Data protection companies use that term because that term means a lot of things to a lot of different people. What does it mean to you? >> Okay, I'll tell you what it means to us if I made any CEO their sake Lord for started. What they mean is that they want to be able to run their workloads anywhere they want to push a button, move, move from place to place. That's all they care about. So what are you doing? What you're building is a platform a multiple of data plane where we can run in any clothes you want to get. The same survey data service is you push a button will take you anyplace you want. That's what really aiming for. And it's just we believe the number is there everywhere, and Kubernetes is the other one. So if you put the America Bernadis on top and a trim on the bottom, you can move to any cloudy. Wantto, you cannot tell the difference, >> and you guys are software. It's a subscription model >> SAS model in the club. No, no deployment of software. It's all like new mortal of doing sass right, >> which is the new architecture cloud to point my point to point. Our >> people want that kind of stuff. People don't want to be installed if you're gonna go to the club and doing the same things you were doing before. That's not how people who want to operate anymore. We don't have time and patience. >> A lot of people are handcuffed to their old stuff they wanted Just get the shackles free beer, liberating people. You're a living. Yeah, he's their case Study. Well, you were nimble enough. You had a good team. You could do it harder >> for the bigger guys. It was It was hard doing it without them. You know, this is all I am. The team presented division. >> All right, The product. This is exactly the kind of stories we love to talk about. Thanks for coming on. Sharing the inside a cloud to point. No, this isn't a great example of innovation. Bm where? Kubernetes statement of the covers. All good. It's a cube. We're right back after this short break. Thank >> you.

>> Announcer: Live from Las Vegas, it's The Cube, covering IBM Think 2018, brought to you by IBM. (lively music) >> Hello everyone, welcome back to The Cube. We're here live in Las Vegas for IBM Think 2018. It's where all the action's happening. Third day of three days, wall to wall coverage, I'm John Furrier, co-host of The Cube, we have two great guests here, Paul Papas, Global Leader of Digital Strategy at IBM's iX, new digital agency, and his cohort Matt Candy, European leader of IBM iX, a new agency within IBM specifically developed for expanding the digital services to their customers, to create the best experiences, using technology, data, and other analog and digital capabilities. Wimbledon and among others. Guys, welcome to The Cube. >> Thank you, thank you, and thanks for that great introduction. >> So Paul, so take a minute, this is a novel concept. When I think of agency I think ad agency, buy some keywords, PR firms, you know, more of an adjunct to a core organization, kind of a service provider. >> Yeah. >> You guys have it a little bit different agency focus, more like management consultants meets World Economic Forum, meets, you know, UX UI design, because you are building this company. Take a minute to explain what iX is, and what's different about it in context what people might think it is. >> Sure, and thanks, a great set up in there it's like you melded a lot in there of what we do. So you can think of us as a combination of strategy consultancy, digital agency, consulting systems integrator. So we do three things with our clients, we help them design, well we help them define, their digital strategies, really their business strategy in a digital world. We help them design world-class customer experiences. Experiences that are going to be personalized, and have an impact. And then lastly we help them implement the technology. Implement the customer platforms that they use to engage with their customers in a personalized, meaningful, omni-channel way, all of those things that we do help drive a measurable business impact so nothing we do is hypothetical, everything we do is real and drives a real business impact for our clients. So, where if you might look at an agency a lot of people think of agency as marketing communications agencies, and the world has changed so fast around digital, >> Or ad agencies. >> Or advertising agencies, you know, in that vein, we're on the more transformational side. In fact we consider ourselves a business design partner. So what we're trying to do with our clients around the world is help them redefine, redesign their businesses, so that they're fit for purpose, so that they can survive and thrive in this modern world. >> Yeah, I want to get your thoughts on this, because you know looking back as a historian if you will of evolution, technology used to be slower, so agencies added value on something complex, ad agencies would create ad campaigns and some glam, glamour around something. And we even saw it in some of the lead gen side of the business, where this beautiful micro-site and the graphics are amazing, it looked great but actually didn't scale there's no tech behind it. Now fast forward, you have the requirement for cool, relevant, and glamorous, but actually having tech involved. Cloud computing has really enabled this, and the role of data has really enabled it, so this is now the new normal, the new normal for these higher-end functionalities is actually having a tech stack, technology stack, combined with business engineering logic, >> Paul: Yeah. >> And real business outcome, like profit, money outcome objectives that people might want. How do you guys explain that story because, you know, I would just call a consultant up in the past, are you guys combining it to make it easier? What's the purpose that customers call you guys in for? What are they asking for from you guys? >> So I'll start off and then Matt, you can add color commentaries, so, the way we describe what you just, what you just brought to life there, was, we have multi-disciplinary teams, so we have a combination of business strategists right, so when our clients are engaging us, they could be working with a business strategist who's really comfortable showing up for work and wearing a suit and tie, and he could be sitting next to, in our studio, sitting next to one of our creative designers who's tattooed from his wrist to his neck. >> The hoodie guy building everything. >> The hoodie guy, right, sitting there building there, next to one of our data scientists who's popping open his Lenovo laptop, it's got the latest chip in it, and he's so pumped 'cause he's going to run some crazy data analytics on it, applying AI on top of it. And all of these people work together using Design Thinking so we have an approach we call IBM Design Thinking, they've all been trained, we've trained over 16 thousand people on Design Thinking, and they all work together and come together to solve our clients' ploblems. They work in a studio environment, and we've opened up 38 studios around the world. Studios are places where we co-create with our clients, or we invite our clients in to ideate, innovate and co-create >> So it's agile on the format, on the projects, not like Waterfall, hey now you pass the ball to the other guy, it's all integrated team. >> Yes, and what you end up having is, you end up having the view of understanding the business and the client's business challenge, which is where we start when we define the strategy, when we do the design work, it's underpinned with an understanding of the technology that's going to bring this to life. So we like to say that we don't do creative for creative's sake or creative just for the beauty of the art, we do creative that can actually be made real. >> Yeah, you guys put a relevant package together. So I got to ask you now, the beauty of cloud computing was, is that you don't have to provision a data center if you don't need it. Now you see people needing a data center for privacy reasons they store their data, hence the hybrid cloud strategy, et cetera et cetera, but if I want to do something like what you guys are doing, it's going to cost me money to build it out. One, where are the people? Skills of the people, salaries of the people, tools for the people, all that is expensive to build out. So it's natural to go to someone who's already got it. So I want you guys to talk about that dynamic, of buy versus build, what stays in-house that's core competency, and what's the scale leverage that the clients get from working with you guys, 'cause you have that advantage. >> Yeah, and actually what I like to tee up is, this cost effective approach that we use to help our clients jumpstart the work that they're doing, we call it an innovation garage, and Matt and the team in the UK and in Europe have really been champions of this approach. Why don't you share some of the work we do around innovation garages. >> Yeah, so, I mean, one example is our client BP who we've been working with in this space, and helping them drive a lot of the digital reinvention of their business. And so, teams of data scientists, designers, developers, working hand in hand with product owners from the client side but ideating, finding new different digital products and services that help improve advocacy of customers drive loyalty, drive new revenue streams but very quickly taking those ideas and turning them into prototypes right, paper prototypes, actual MVPs, minimum viable products, launching them into market right, choosing some target markets, but putting very measurable KPIs around each of those things >> What's the timetable on that roughly, ballpark? >> Probably getting those MVPs out at eight to 10 weeks right >> So, fast. >> Oh yeah, fast. >> It's not months, not eight months. >> No, no, there's no Waterfall. And so a radically different approach to getting things out there, in the hands of real users. And then testing and learning, iterating, and then based on the data, actual fact and data backed against those KPIs and measurements then starting taking the decision around whether we're going to scale that into a global product. >> Yeah before we go to drill down on that, what's the alternative to doing that? How many months would it take if I want to do it from scratch in-house? >> Spinning up large transformation programs right, and >> John: A year. >> Yeah, at least, multi-years >> John: At minimum. >> Multi-years, and I think the other thing John, that's kind of key about this way of working, is that you're starting to infuse new ways of working and new ways of thinking into the client's organization right, and so Design Thinking: lean, agile, dev ops, right all of these approaches to get things done in a more rapid way and so, you're kind of driving change and transformation through making and creating and doing, not through some big change management program. And so we've been, if I took BP for example, training and certifying their people in IBM Design Thinking, certifying them as product owners and so, through the act of making and creating these services, it's changing their culture and changing how they get stuff done and it's a bit like a fire, kind of a little fire that burns and spreads within the organization as people see what's going on and want to become part of it. >> And one of the ways we do that we actually co-locate in these innovation garages. So you take a company like BP, if you go to our South Bank office, we have a dedicated floor where you have a hundred BP people with the IBM iX team, working in this innovation garage model, >> So they're learning too with you it's not like you're doing all the work and they're integrating in. No, no, we're learning together and they're building new skills and we're building new skills, and we're coming up with new ideas and innovations we're doing it in a cost-effective way, to your point before, in the past companies would spend a lot of money to try to go down a big path and try to in essence, boil an ocean sometimes. >> Yeah and your one guy quits, you got to replace, skill gaps, massive challenges. >> But also I find that from the client's perspective the thing that they're most proud of, some of the things they're most proud of, is the bin, what they call the bin. And so it's all of those ideas that we've killed as far to the left as possible right, and taking an idea that traditionally may have turned into some big program, multi-millions spent on doing it to find that it actually didn't deliver the outcome for the end consumer. >> So Matt, talk about the example with Wimbledon 'cause obviously everyone kind of can recognize that brand, you guys have been working at Wimbledon, you have a relationship with them so they've known IBM for years. What's the current state of the art with Wimbledon? What are some of the things you're doing for those guys and how is iX team, your integrated design team, working with those guys? >> So we've been partnering with Wimbledon now for about 28 years, so relationship goes back to 1990, I mean Wimbledon's been around back since the 1870s, you know, the home of kind of tennis, tennis in an English garden, so complete with rain and drizzle and gray clouds and everything else. And so, probably over the last seven years we've been working with them to drive their digital transformation, and so, how they engage with fans, and so how they use data and analytics to drive insights to put very personalized experiences in the hands of fans. So if you think about an event like Wimbledon, runs for 13 days, and about 500 thousand people get to physically experience Wimbledon in the grounds. And so their whole strategy from a digital perspective is taking the beauty of the grounds and the experience, and how they can manifest that digitally to millions of people around the world. >> And that's more than live streaming that's more than highlights, that's replicating the vibe the buzz, the experience of being there. >> Completely, so if you look at the web channel right when you go to that website, you don't actually see tennis players and stuff on there. What you might see is a beautiful flower just wafting in the breeze right, so a lot of the technology and the experience that we put together is trying to bring to life the beauty of the grounds right, through those digital mediums. And also being very thoughtful and purposeful about the different channels, so when you think about the mobile app right people use that to get snack access to data they're on the move, they want to understand the scores, alerts, iPad, people tend to use that sat on the sofa in front of the telly, you know, second screen experience so there's a different set of use cases and demands. We launched the first Apple TV app for grand slam tennis tournaments. So again, people tend to be using that for catch up and replays and so, being very thoughtful and purposeful about the... >> And you got to keep track of the digital culture 'cause it's like fashion, you got to know what's state of the art, what's going to sell VR, AR, whole new creatives coming out >> You do but you also have to do it in a way that's authentic to the product. >> Tech fashion. (laughter) The latest and greatest. >> Hashtag new hashtag tech fashion But you also have to do it, what I was going to say, you have to do it in a way that's authentic to the brand that you're representing. >> John: And relevant. >> Correct, so we're expressing the brand of Wimbledon online through digital channels and mobile channels, it has to be consistent with the brand, the brand values, the brand purpose, the brand mission. >> And that goes in to the design side of it 'cause they're going to tell you look if we go off the brand, we're not... >> The beauty, the elegance, the elegance of the sport, the elegance of the All England Tennis Club, you have to capture all of that and represent it in a way that's genuine. >> Alright so this is where the melting pot between agency, creative, ad agency, where it's much more about experience, less about the tech, and tech come together. So I wanted to ask you, I did a panel this year at Sundance called the New Creative, with Intel and it was all about the emerging new creative artists that have tech behind it, and here's what we talked about, I want to get your reaction to it. Agile, which killed Waterfall development, made things less risky, the old days was, you build something, a lot of craftsmanship goes into it, but you ship it, you don't know if it's going to work, and you hope it works and sells. Then Agile de-risked that, but you're shipping code every day. But what we lost with Agile that's now coming back, and I think this is where you guys are hitting the mark, the idea of craftsmanship in the product is coming back. So you got Agile, that's good, but it felt boring, it felt, the products didn't feel great. Yeah, certainly they were successful and they used data to be agile and always be iterating, fail fast, et cetera, but now the users want craftsmanship, they want art, they want more experience in the tech product What's your reaction to that, what's your vision? Do you agree and, if you do, what's your opinion? >> Well I agree on the recommitment to craft, and the approach that we take to that is really starting with Design Thinking, and we view this a couple different ways. One, we think Design Thinking is a way to actually solve business problems in the modern world. Now design, we view as a craft. So we have very specific craftspeople that are pure designers, that's what they do every day for a living. Everyone in our organization practices Design Thinking. So I believe that the use of Design Thinking coupled with our design community and the world-class talent that we have there, has enabled to really get an underlying need, right. So when you're doing a design, you have to have the understanding of the underlying need of the customers that you're trying to serve. And that's what we really get at, so the craftsmanship that comes in through applying Design Thinking, applying your design principles to creating something that can then be made real and have an impact. If you ask our designers, in our 38 studios around the world what they love about being part of IBM iX and being part of IBM, it's the impact that they can have. That they can see their design scale, they can see it brought to life in a way that is far beyond anything they could've done at any agency >> Can't fake design, it's like security, you can't fake it, it either works or it doesn't. >> And the way we think about design right is about almost design with a capital D. And so it's not just about how things look and feel, it's about how they work, and so how you can apply design to help solve problems in a very different way right. And how you apply design to strategy because designers are problem solvers. And so actually having people apply a designer's mindset to problem solving, you end up with very different outcomes right, you end up with a lot more innovation driving into what you're building, and I think you end up with products and services that actually help make somebody's life a little bit easier right, you're taking friction out of their life you're delivering something meaningful and of value to them. >> You're doing empathy mapping, you're doing customer journey mapping, you're doing a persona development. I want to build on what Matt said though that designers are problem solvers. When we look at Design Thinking, we have a method called IBM Design Thinking, and the logo that we use for Design Thinking is actually an infinity loop. So what we do is we combine Design Thinking with Agile and I think of IBM Design Thinking as a 3-D printing of a solution to a problem. We're designing it, we're getting at an underlying need, we're prototyping something fitting a proof of concept, we're learning, we're now doing another iteration of Design Thinking and learning more about the underlying need, testing something, and as we keep testing and learning, we add more texture to the solution of the problem and it starts coming into focus for us. >> Yeah, and the key word's problem. I interviewed a Stanford professor on the cutting edge of innovation, design she said, "Don't fall in love with your product. Fall in love with solving problems." And I think that's kind of what you guys believe. >> And I think John, to the point that you raised, about Agile, you know, we see many organizations driving kind of Agile transformation and shifting, and you know, I think our perspective is very much is you need this combination of design, of Agile and dev-ops together, because Agile allows you to pivot quickly, dev-ops allows you to kind of learn and get rapid feedback from production and putting things out there, and you've got to have this kind of design-led approach to doing stuff, because you've got to make sure that what you're building and putting out there serves a purpose and a real outcome for the end user. >> That's perfect, and most people think oh, we're Agile, check. No, whoa, hold on, stop, yeah it's not a silver bullet. >> You brought up a great point from a business leadership perspective that don't fall in love with your products, fall in love with the problems that you're solving, We are seeing that across every industry we work in, and I think this new digital age, with all these emerging technologies going mainstream so fast, AI, AR, VR, blockchain, it's allowing companies to, in some ways, reimagine their purpose, but in some ways, revisit their original purpose. So if you look at, Ford as an example, they've declared that they're going from pure car manufacturing, to mobility services. If you look at our clients in the life sciences industry, years ago they would've declared themselves as pharmaceutical manufacturers right? But now they would look at themselves as partners in health and partners in the health ecosystem. And every industry we're operating in, there's that re-imagining or revisit of the core mission. >> I think this is the only interview I haven't asked about blockchain, but I was just talking to Jesse Lund about blockchain and we talked about digital currencies, digital, and we observed, and we were talking about things are happening faster. So what's happening on digital it's a speed gain, across the board, with currency there's no clearing, it's digital, it moves instantly. So his banking side, that's his thesis, but here, your customers are challenged with looking down the barrel and being scared when, damn, this is going to be fast, what if I screw this up? I mean this is kind of how I see it happening, like it's accelerated in all aspects. >> And this is where I think, in terms of the business that we're in how we're different, and you've kind of raised the traditional agencies and stuff earlier, John. I think the difference for us is, you know when you think about the world of advertising, and companies driving their message out through shouting loudly and campaigns and building micro-sites, actually, our perspective very much is that these, most organizations need to look at how they digitally reinvent, right. And so therefore the scale of change needed as they look to reinvent their businesses, the business models, the skill pools within the organization, how they're going to use data and insights to drive different experiences you start to move to a very different level of change and transformation right, and one where these technology platforms, and becoming a platform business in these organizations, right, need a partner fundamentally who can help them scale and drive that change. >> And the data's critical, using data, using cloud, dev-ops, Agile, design, all rolled into a highly accelerated process, that's hard. >> It is hard but, >> You guys are doing it though. >> Well yeah, that's what we do for a living. It's what our clients are faced with right now. It's kind of a like a Dickensian-like challenge, right, it's A Tale of Two Cities. With all the emerging tech that we were talking about before there's never been a better time to create new innovations. To be innovative in some of the things that we're doing with BP was a great example of that. And some of the bigger things we're doing with some clients that are trying to reinvent their organization around a renewed purpose. But at the same time, there's never been a bigger threat to existing companies, in terms of there's never been more opportunity to be disrupted. So between these two poles of never been a better time to be in business, never been a tougher time to be disrupted, that's where our clients are operating. And this juxtaposition of core and new where our clients have mostly been in business for more than a few years. They have a core business that they need to grow and optimize, while they also need to expand into the new. And they can't do one or the other, they have to do both at the same time. >> And you know the customers I talk to in the industry, around this area, really look down, they look at three choices. Go for it, that's scary, need a partner to do that you guys are there for that. Don't do anything, put your head in the sand. Or three, create blockers and ban stuff. So you're seeing, you kind of walk in and you kind of figure out who's doing what. You see the blockers with all these excuses, no well we've got this other... And then the head, well we should be, they don't do anything, they're not moving. And then people who move. >> Yeah. >> I mean that's the reality right now. >> You know, what we see, we just published this research you know, a C-suite study, so we interviewed 12,000 C-suite executives, over 2,500 CEOs, and the title of this study's The Incumbents Strike Back, and that's what we're seeing now, so we're not seeing folks kind of sitting or putting their heads in the sand, they're looking at their legacy business, and the competitive advantage they have because of all the knowledge and incumbent advantage that they have, and now applying that. >> Well Paul and Matt, we don't have enough time to go into the impact of blockchain and cryptocurrencies, and initial coin offering's impact, to the token economics of how your business will change but we'll do that another time. >> Fantastic. >> Alright thanks for joining The Cube. I'm John Furrier here live in Las Vegas for IBM Think 2018. A lot of great conversations here in The Cube number one live tech coverage, extracting the signal from the noise. We'll be back with more after this short break. (techno music)

>> Announcer: Live from Las Vegas, it's the Cube, covering VMworld 2017, brought to you by VMware and its ecosystem partners. >> Welcome back everyone live, here in Las Vegas from VMworld 2017, I'm John Furrier of the Cube, live coverage of VMworld 2017 with my cohost Dave Vellante, next guest Dom Delfino, senior vice president of sales and systems engineering, Cube alum, great to see you, welcome back. >> Thanks guys, good to be here again. >> RAC are covering VMworld, the ecosystem has been a little tide goes out, tide comes in, real clarity this year, cloud, you want it on private cloud, public to private cloud or Amazon. >> Dom: Right. >> Any questions? >> Dom: Exactly. Clear. >> This is the vision coming to fruition. This is what you're seeing this year at VMworld. I think in particular when you talk to the customers, they're now in a state of cloud reality. There was sort of this big rush, I'm going to try to move as much to the public cloud as possible and then in terms of the scale they got there, they start to have then challenges on that side, they realize, I need to have a dual strategy. I need to have a private, a public, a hybrid strategy. I think you see all the announcements that we've made today, with DFC on AWS going live now, with more coming around the world in different zones as we progress throughout the rest of the year and into next year, as well as all the service offerings we just announced, Wave Run is a service, VRNI is a service, NSX is a service, app defense, which is our latest security strategy as well. Customers really see how it comes together now and they want to go down that journey with VMware. >> It's important too to clarify, I call the high level messaging, so it's got clarity, but also VMware and ecosystems has a lot under the hood and it can get very technical, so you got to balance the speeds and feeds to feed the red meat to all the practitioners and then the high level. I got to ask you the question because people that are sitting out there on this cloud reality that you mentioned, they don't have a lot of people sometimes. Someone's got to implement this stuff, automation's coming, okay I get that, but getting to the cloud is not easy. I still got to run my shop, what is that operational reality right now because cloud reality, okay I get it, but now I got to turn my on premise into a true private cloud with a new operating model, new practices, how are the VMware customers dealing with that? >> I think that's part of moving away from the legacy as fast as you can or at least where you have to keep it, you've got to sort of isolate it and put it in a corner because it's the legacy that's holding most of us back, right? Because I got to understand how to run the legacy, keep the lights on, that takes 20, 30, 40, 50% of my time, depending on the customer, depending on their infrastructure at the same time I've got to retool my skills, I've got to retool my tool kits that I use, my run books, my operational processes, but now they at least have a direction to build to. All the customer meetings we're having here today it's about software defined. How do I build this abstraction layer? Okay we've been doing this with VMware for years on the compute side, many of them have ventured down the journey with us on the NSX side, we see 10,000 customers roughly on the VSAN side as well and that's about putting together, putting the automation tool set around it and really building that same experience that they can get in the public cloud, which it's fast and it's easy on their on prem data centers as well. Sometimes there's many reasons to retain on the private side, data sovreignty, intellectual property, all of those things as well. I think that's where the customers are in the journey right now and it's now they feel comfortable with the direction and they're going to adopt quickly. >> I like this idea of cloud realities. We've been talking on the Cube today about configuring the cloud to the realities of your organization's data. You're talking about governance, security, data locality, etc. so it really comes back to a data challenge. You can't just take all your data and shove it up into the cloud. What are you seeing from customers in that regard? >> I think there's a regulatory component to that as well, particularly if you go overseas, to Europe and Asia, there's a lot more challenges around that as well. I think what you're seeing is that customers recognize the fact that not everything is going to go into the public cloud at this point, so they're really prioritizing, burstable work loads, temporary work loads, definitely a prime opportunity to put in the public cloud. New application development, definitely a primary opportunity to put in the cloud. If I'm in the health care business and I have to retain health care records for x number of years and I'm responsible for HIPPA compliance around them, maybe not something that I'm just going to shove up into the cloud today. It's use case specific depending on and application specific, depending on the vertical industry, the customer resides in and depending on where they are in their journey to the cloud as well. >> You've got a lot of momentum in your business right now. Basically you're on fire. We talked about the cloud realities, that's part of it. The AWS announcement last year, even though it was a year ahead of time, gave a lot of clarity to people. How much of the momentum is due to those factors? Again, the cloud reality, the fact that people are now more comfortable with your cloud strategy and saying okay, I'm willing to make maybe a multi-year commitment with VMware. Is that a factor? >> It is a factor, it is a factor and I think the two remaining components, accelerating and capturing momentum in the market of our SCDC strategy being VCN and NSX has also helped that reality come to fruition for customers as well. It is software defined, we've been talking about software defined data center for a long time, like everybody else in the industry, we talk about things sometimes a lot sooner than they come to fruition, but now that they put together VC ware with NSX with VSAN, and they say hey, I can actually build a private cloud that's fast and easy, which is the reason a lot of my IT people or my application developers were going around me, because the public cloud was faster and easier. Wasn't necessarily cheaper, but it was definitely faster and easier, now customers who've been on that journey with us for the last year realize they can offer the same thing on prem as well and take advantage of both. Does that make sense? >> Yeah. What's the biggest walk away for you right now, looking at VMware, if you had to talk to customers that are not here and looking at the online coverage, certainly Twitter you'll bump into a lot of Cube coverage and lot of pictures, lot of architectural slides. What's the big walk away so far, day one? >> I think tremendous innovation is the big walk away. In many different categories coming forward, you'll hear another big announcement tomorrow coming up in terms of what we'll be doing in conjunction with one of our sister companies in the application development world. But also about taking security to the next level with app defense, so microsegmentation has become fairly ubiquitously known within the industry now, how do I take that into the guest, into the operating system, into the application layer? How do I secure those things as well? You see a lot of customers getting hit with ransomware attacks this year, those are big reality checkers for you if you're the one sitting behind the keyboard that's got to defend your environment against that and rebuild it and I think they really see VMware continue to push the envelope to develop very innovative solutions to these approaches that are very cost effective and that are also very high performance. >> Personal question, as you're out in the field talking to customers, you've been in the industry for a while, you've seen the waves. What's the biggest thing that you notice, observe out there right now? What's happening? Share some color with the landscape in the marketplace. >> I think there's some good recognition from customers around the type of operational transformation that they're going to have to go through in this journey. It's not about the network independent from storage independent from security independent from computer anymore. Infrastructure is one entity, that's the way the application owners and the application developers view it and want to consume it, that's the way that infrastructure teams are going to have to deliver it. I think there's a lot of recognition of that. I think there's recognition that the security problem is bigger and badder and worse than ever and it's not going away any time soon and there's sort of no magic box. If there was, you'd pay a lot of money for it to make your problems go away, but it's really something that has to be ubiquitous. Infosect policy has to be aligned with infrastructure security implementation. I could have the greatest policy in the world, if I can't actually implement it, I'm not going to get the benefit to that security there. I think those are some of the things as well. I think sort of the container world is going through a little bit of the post high upcycle, what's the reality check of that environment as well right now, we saw this with open flow and SDN five and six years ago. >> John: Saw it on big data with Hadoub. It's so expensive to run, why even do it? At some point, it can be total cost ownership and ease of use, old school topics. >> We're well into production ready phase of software defined networking. We're well into the production ready phase of software defined storage and hyperconverge infrastructure we need to take containers into that next phase as well. >> Bottom line, what does cloud ready mean to an enterprise these days? >> Cloud ready means that application, that work load is portable and I can deliver the same level of availability, service and agility, whether it's in the public cloud or whether it's in my private data center. Or I move it back and forth between both. We're certainly excited about the momentum we see with our customers, I think you can see and hear the buzz around VMware going on this year and I think it's the best it's been in a few years. >> You run the SE team as well right? >> Dom: Yes I do. >> How does that work? SE's are like the Navy SEALS John always talks about on the beach, they, >> I like to call them the conscience of the sales force. >> There you go, right. Customer trusts them, but at the same time, they understand the customer requirements at a very deep level. How are they organized? How do they fit into the partner ecosystem, maybe you could explain that a little bit. >> Yeah I think traditionally we've organized our SE's, aligned them with product categories, so I've got networking and security SE's, I've got cloud management, automation, orchestration SE's and software defined storage SE's, but I think that sort of is the base line and then you start to build their skill sets toward solution, towards a solution. What types of solution? Is it containers on open stack? Is it VMware's STDC stack? Is it around particular vertical solutions? If you're an SE on my health care team, you're probably very focused on electronic health records and EPIC and Medtronic and different applications like that. How do you solve those customers' problems at the higher level and be able to drill down at the same time with the domain experts from those customers when they want to understand how OSPF works and NSX or they want to understand how lund creation works in VSAN. It's sort of an evolution in terms of building skills. You've got to start at the deepest levels and then you got to build to how those products and those technologies integrate together to provide the customer with a solution. >> So as you move toward this multi cloud word, throwing another buzz word, but is this cloud architect like SE role emerging? >> We'll call them a solution architect. That solution may be a cloud solution, it may be a vertical solution targeted at a specific customer base and make sure that we do what's appropriate to serve our customers. >> John: What's the coolest thing you've worked on this year? >> I've got to think that app defense is the coolest thing that we've got out this year. I think that we've solved a lot of problems with microsegmentation from a network security perspective. I think now going up into the guest and into the application layer and providing an analogous functionality there is going to be really a very very prevalent way of preventing breaches, malware, malware propagation, ransomware in the future as well. I'm a little bit of a security geek, it's attractive to me. I really see that as just an ongoing, it's not even a battle anymore, it's a war now for our customers. We want to help them win that war. >> John: Ransomware has been so brutal. >> Ransomware's been brutal and I mean, see customers almost going out of business. >> Well it's become a board-level topic overnight. It is a serious board-level topic, not just lip service. You're seeing that right? >> You will see in some circumstances boards actually pulling the chief information security officer out of IT and having them report directly to the board. >> Well it makes a lot of sense. >> John: The pressure is unbelievable. >> The pressure is unbelievable right? >> In a lot of regards you would think that the CSO certainly should not report to the CIO, it's kind of like the fox watching the hen house dynamic. Maybe that's not the best analogy, but there should be an inherent tension there number one, but number two is what's the right regime? Why is it IT's problem? It shouldn't be. >> Yeah I think it goes back to information security policy versus actual implementation and the gap that's existed between those two for years for many reasons, networking being a flagrant issue in that context, where I could say oh, this application, this user needs to talk to this application, this application needs to this set of data. How do we implement that? That's not the easiest thing with the tool set that customers who run legacy networks have had historically. I think now that we have some of those things, you'll see the scenario I just described where a few organizations are pulling the CSO out of IT and reporting to the board or some, we've seen board level mandates for segmentation initiatives within the technology area as well so I think this is going to be an ongoing battle that we face moving forward. >> This is the biggest problem I would say at the Cube all day long because part of the value proposition of cloud and dev ops and apps is having data in real time. To be liberal with the data, you run the risk of opening it up so you can't do it the old way. >> Part of the cloud adoption and the new wave of applications about moving these businesses forward, the security is one of those things that will move you backwards from where you are today. I think it's important that we be able to tackle all these battles on all different fronts at the same time. >> If I may, I know we got to go, but there's another dynamic as well which is the recognition that we are going to get penetrated and yet I think it was the third leg of Pat's slide today was response. Boards are saying it's not if, it's when. How do we respond? That's a critical part of the implementation. >> I think it's, we talk about IOT. Think about the number of new entry points you create into your infrastructure, every device you connect to the network itself. Keeping them out is a huge challenge. The question is what can you do as the owner/operator once they are inside? How do you limit, how do you restrict the level of risk that you have and exposure you have to your data, to your applications to your customer information, so on and so forth and I think that's what we've brought to the table in a substantial way with microsegmentation with NSX and I think you'll see that continue to really raise the game with app defense as well. >> Dom Delfino, great to have you, great color, great commentary, you're like a pro. He's just like a anchor with us, SportsCenter >> If Pat fires me am I in? No? >> John: You're in. >> All right. >> Pat fire him so we can hire him. >> John: Don't fire me, Pat, I like my job. >> Dom, thanks so much, good coverage, always great. >> Dave: Thank you, pleasure. >> Bringing a great attitude to the Cube, great energy. More come, day one as we continue down, wind down day one and three days of wall to wall coverage with the Cube VMworld two sets, double barrel shotgun of content here at the Cube, we'll be back with more after this short break. (electronic music)

>> Narrator: Live from Munich, Germany, it's theCube, covering IBM, Fast Track Your Data. Brought to you by IBM. >> Welcome to Fast Track Your Data, everybody, welcome to Munich, Germany, this is theCube, the leader in live tech coverage, I'm Dave Vellante with my co-host Jim Kobielus. Dinesh Nirmal is here, he's the vice president of IBM Analytics Development, of course, at IBM, and he's joined by Roland Voelskow, who is the Portfolio Executive at T-Systems, which is a division of Deutche Telekom. Gentlemen, welcome to theCube, Dinesh, good to see you again. >> Thank you. Roland, let me start with you. So your role inside T-Systems, talk about that a little bit. >> Yeah, so thank you for being here, at T-Systems we serve our customers with all kinds of informal hosting services, from infrastructure up to application services, and we have recently, I'd say, about five years ago started to standardize our offerings as a product portfolio and are now focusing on coming from the infrastructure and infrastructure as a service offerings. We are now putting a strong effort in the virtualization container, virtualization to be able to move complete application landscapes from different platforms from, to T-Systems or between T-Systems platforms. The goal is to make, to enable customers to talk with us about their application needs, their business process needs, and have everything which is related to the right place to run the application will be managed automatically by our intelligent platform, which will decide in a multi-platform environment if an application, particularly a business application runs on high available private cloud or a test dev environment, for example, could run on a public cloud, so the customer should not need to deal with this kind of technology questions anymore, so we want to cover the application needs and have the rest automated. >> Yeah, we're seeing a massive trend in our community for organizations like yours to try to eliminate wherever possible undifferentiated infrastructure management, and provisioning of hardware, and Lund management and those things that really don't add value to the business trying to support their digital transformations and raise it up a little bit, and that's clearly what you just described, right? >> Roland: Exactly. >> Okay, and one of those areas that companies want to invest, of course, is data, you guys here in Munich, you chose this for a reason, but Dinesh, give us the update in what's going on in your world and what you're doing here, in Fast Track Your Data. >> Right, so actually myself and Roland was talking about this yesterday. One of the challenges our clients, customers have is the hybrid data management. So how do you make sure your data, whether it's on-premise or on the cloud, you have a seamless way to interact with that data, manage the data, govern the data, and that's the biggest challenge. I mean, lot of customers want to move to the cloud, but the critical, transactional data sits still on-prem. So that's one area that we are focusing in Munich here, is, especially with GDPR coming in 2018, how do we help our customers manage the data and govern the data all through that life cycle of the data? >> Okay, well, how do you do that? I mean, it's a multi-cloud world, most customers have, they might have some Bluemix, they might have some Amazon, they have a lot of on-prem, they got mainframe, they got all kinds of new things happening, like containers, and microservices, some are in the cloud, some are on-prem, but generally speaking, what I just described is a series of stovepipes, they each have their different lifecycle and data lifecycle and management frameworks. Is it your vision to bring all of those together in a single management framework and maybe share with us where you are on that journey and where you're going. >> Exactly, that's exactly our effort right now to bring every application service which we provide to our customers into containerized version which we can move across our platforms or which we can also transform from the external platforms from competition platforms, and onboard them into T-Systems when we acquire new customers. Is also a reality that customers work with different platforms, so we want to be the integrator, and so we would like to expand our product portfolio as an application portfolio and bring new applications, new, attractive applications into our application catalog, which is the containerized application catalog, and so here comes the part, the cooperation with IBM, so we are already a partner with IBM DB2, and we are now happy to talk about expanding the partnership into hosting the analytics portfolio of IBM, so we bring the strength of both companies together the marked excess credibility, security, in terms of European data law for T-Systems, from T-Systems, and the very attractive analytics portfolio of IBM so we can bring the best pieces together and have a very attractive offering to the market. >> So Dinesh, how does IBM fulfill that vision? Is it a product, is it a set of services, is it a framework, series of products, maybe you could describe in some more depth. >> Yeah, it all has to start with the platform. So you have the underlying platform, and then you build what you talked about, that container services on top of it, to meet the need of our enterprise customers, and then the biggest challenge is that how do you govern the data through the lifecycle of that data, right? Because that data could be sitting on-prem, data could be sitting on cloud, on a private cloud, how do you make sure that you can take that data, who touched the data, where that tech data went, and not just the data, but the analytical asset, right, so if your model's built, when was it deployed, where was it deployed? Was it deployed in QA, was it deployed in development? All those things have to be governed, so you have one governance policy, one governance console that you can go as a CDO to make sure that you can see where the data is moving and where the data is managed. So that's the biggest challenge, and that's what we are trying to make sure that, to our enterprise customers, we solve that problem. >> So IBM has announced at this show a unified governance catalog. Is that an enabler for this-- >> Dinesh: Oh, yeah. >> capability you're describing here? >> Oh yeah, I mean, that is the key piece of all of this would be the unified governance, >> Jim: Right. >> which is, you have one place to go govern that data as the CDO. >> And you've mentioned, as has Roland, the containerization of applications, now, I know that DB2 Developer Community Edition, the latest version, announced at this show, has the ability to orchestrate containerized applications, through Kubernetes, can you describe how that particular tool might be useful in this context? And how you might play DB2 Developer Community Edition in an environment where you're using the catalog to manage all the layers of data or metadata or so forth associated with these applications. >> Right, so it goes back to Dave's question, How do you manage the new products that's coming, so our goal is to make every product a container. A containerized way to deliver, so that way you have a doc or registry where you can go see what the updates are, you can update it when you're ready, all those things, but once you containerize the product and put it out there, then you can obviously have the governing infrastructures that sits on top of it to make sure all those containerized products are being managed. So that's one step towards that, but to go back to your DB2 Community Edition, our goal here is how do we simplify our product for our customers? So if you're a developer, how can we make it easy enough for you to assemble your application in matter of minutes, so that's our goal, simplify, be seamless, and be able to scale, so those are the three things we focused on the DB2 Community Edition. >> So in terms of the simplicity aspect of the tool, can you describe a few features or capabilities of the developer edition, the community edition, that are simpler than in the previous version, because I believe you've had a community edition for DB2 for developers for at least a year or two. Describe the simplifications that are introduced in this latest version. >> So one, I will give you is the JSON support. >> Okay. >> So today you want to combine the unstructured data with structured data? >> Yeah. >> I mean, it's simple, what we have a demo coming up in our main tent, where asset dialup, where you can easily go, get a JSON document put it in there, combined with your structured data, unstructured data, and you are ready to go, so that's a great example, where we are making it really easy, simple. The other example is download and go, where you can easily download in less than five clicks, less than 10 minutes, the product is up and running. So those are a couple of the things that we are doing to make sure that it is much more simpler, seamless and scalable for our customers. >> And what is Project Event Store, share with us whatever you can about that. >> Dinesh: Right. >> You're giving a demo here, I think, >> Dinesh: Yeah, yeah. >> So what is it, and why is it important? >> Yeah, so we are going to do a demo at the main tent on Project Event Store. It's about combining the strength of IBM Innovation with the power of open source. So it's about how do we do fast ingest, inserts into a object store, for example, and be able to do analytics on it. So now you have the strength of not only bringing data at very high speed or volume, but now you can do analytics on it. So for example, just to give you a very high level number we can do more than one million inserts per second. More than one million. And our closest competition is at 30,000 inserts per second. So that's huge for us. >> So use cases at the edge, obviously, could take advantage of something like this. Is that sort of where it's targeted? >> Well, yeah, so let's say, I'll give you a couple of examples. Let's say you're a hospital chain, you want the patient data coming in real time, streaming the data coming in, you want to do analytics on it, that's one example, or let's say you are a department store, you want to see all the traffic that goes into your stores and you want to do analytics on how well your campaign did on the traffic that came in. Or let's say you're an airline, right? You have IOT data that's streaming or coming in, millions of inserts per second, how do you do analytics, so this is, I would say this is a great innovation that will help all kinds of industries. >> Dinesh, I've had streaming price for quite awhile and fairly mature ones like IBM Streams, but also the structured streaming capability of Spark, and you've got a strong Spark portfolio. Is there any connection between Product Event Store and these other established IBM offerings? >> No, so what we have done is, like I said, took the power of open source, so Spark becomes obviously the execution engine, we're going to use something called the Parquet format where the data can be stored, and then we obviously have our own proprietary ingest Mechanism that brings in. So some similarity, but this is a brand new work that we have done between IBM research and it has been in the works for the last 12 to 18 months, now we are ready to bring it into the market. >> So we're about out of time, but Roland, I want to end with you and give us the perspective on Europe and European customers, particular, Rob Thomas was saying to us that part of the reason why IBM came here is because they noticed that 10 of the top companies that were out-performing the S&P 500 were US companies. And they were data-driven. And IBM kind of wanted to shake up Europe a little bit and say, "Hey guys, time to get on board." What do you see here in Europe? Obviously there are companies like Spotify which are European-based that are very data-driven, but from your perspective, what are you seeing in Europe, in terms of adoption of these data-driven technologies and to use that buzzword. >> Yes, so I think we are in an early stage of adoption of these data-driven applications and analytics, and the European companies are certainly very careful, cautious about, and sensitive about their data security. So whenever there's news about another data leakage, everyone is becoming more cautious and so here comes the unique, one of the unique positions of T-Systems, which has history and credibility in the market for data protection and uninterrupted service for our customers, so that's, we have achieved a number of cooperations, especially also with the American companies, where we do a giant approach to the European markets. So as I said, we bring the strength of T-Systems to the table, as the very competitive application portfolio, analytics portfolio, in this case, from our partner IBM, and the best worlds together for our customers. >> All right, we have to leave it there. Thank you, Roland, very much for coming on. Dinesh, great to see you again. >> Dinesh: Thank you. >> All right, you're welcome. Keep it right there, buddy. Jim and I will be back with our next guests on theCube. We're live from Munich, Germany, at Fast Track Your Data. Be right back.