live from Las Vegas it's the queue covering del technology's world 2019 brought to you by Dell technologies and it's ecosystem partners okay welcome back everyone we live in Las Vegas with a cube tech cue coverage of Dell technology world I'm Jean for @d Volante we're here in Cuba Lumley MERIS house who's the president and chief commercial officer Dell technologies great to see you again always great to be here sir so the the movie just gets better and sequels and Dell 3 into the year 3 of the acquisition I love look I love the script and we're gonna keep going you guys are access to the Game of Thrones it's not going to end it's gonna one of the themes I want to get your thoughts on first of all welcome back to look you good to see you what's going on right now give us an update Mars you've you've seen the chessboard of MMA of big firms on the private equity side you worked at HP during those days you came to Dell with Michael early on partnering on the going private and then looking at the overall plan which is now in full execution mode at the integration part of integrating it all together it's working really good mill the fairway revenues at ninety plus billion where are we right now well I'll tell you I think you and I were just discussing it a second ago scale does matter but if you can align scale with ax in your portfolio that it's so well aligned to the trends in the industry and you're representing an opportunity for a customer to select a partner like Dell technologies to help them solve their key business channel and just not just for today we're into the future and then if you can do at scale right portfolio at the velocity we're doing it's a trifecta that we love it's a that you know I recently talked to Tom Tom sweet we grew the business eleven billion dollars on an already big number just last year alone so and we're gaining sharing all of our key lines of business so the Folies aligning really well customers have been extraordinary and obviously building those big trusted relationships not just now to the but into the future that's you guys ready and you guys got a great team the ability to attract the talent has been phenomenal give you guys props on that but I keep coming back to we had a few years ago which is okay the big waves coming everyone kind of got cloud they saw the scale of Amazon great gel sign that continues to do great for AWS now it's multi cloud now IT the original consolidation of IT that you guys were going after had good growth and value creation just out of the box and now the tail winds as you mentioned so I got to ask you about this end to end this is a land grab this end to end operational consistency thing because it's a very unique it's hard to copy it's in the middle if you can continue to pull that off that's going to be a great opportunity that's gonna feed up up the stack if you will talk about the challenges and why you guys are going this end to end and the benefits the customers there's there is no doubt that the customers are getting smarter every day in understanding what workloads what applications what data sets ought to reside in which ecosystems to better serve them and to better align to their overall economic needs and desires that they want and their flexibility and agility to be able to move those workloads in that data seamlessly to best address their particular needs the beauty of what we've been able to do is integrate the VMware architecture into the public cloud ecosystems and we've got many others that are ready knocking on the door to the beat want to be part of it so now what a customer can have is that true agility that true flexibility of moving applications and data seamlessly but all control through one mechanism because at the end of the day what's going to happen is they're gonna have their day to resign on multiple different sources but they want to be able to see it they want to be able to accident they want to be able to analyze it and once you're able to analyze it regardless of where it resides and then draw the conclusions from it that's what's enables them to then create a predictive model that almost a cost to zero so on day one of the keynotes Michael said he showed the be of a video he said if you're you know bank with two trillion and assets or your two-story farmhouse we care about you know that's kind of music to your ears you obviously you're a big part of that what's different about the commercial customers and and what's going on in that base in terms of their transformation their trends and how is that different from I mean in commercial customers Lisa my and my patch I've got the biggest of the public-sector account so I've got them of all different sizes and shapes and different stages of the journey and that's what we're finding everywhere even if you're a big account small account medium account everyone is on there's digital transformation journey and there's an intersection that we can play a very big part of in and then enabling them to create a playbook as to how do I go through this journey effectively but what we're finding is when we took the overall architecture kind of or indeed tenants if you will around making sure that we have a scale out architecture model it doesn't able to have our customers adopt things and then be able to scale it out as their economic or as their business grows as an example so you can jump into having leading-edge capabilities and technology to help you drive your your company today but know that we're there with you all the way to then scale at whatever rate you want to scale at Mars I got to ask you we had Tom sweet on as you just mentioned CFO he talked about the multiple levers to create multiple levers you guys are pulling to create shareholder value which is ultimately comes from free cash flow which is happy customers great to pay down the debt that's his job margin expansion get good product development increase go to market efficiencies okay and then so philosophy supply chain go to market efficiencies this is your wheelhouse as you guys go talk to the customers and go to the market now with the sets of partnerships one of the changes that we're seeing is in IT it shifted the conversation shifted from not just cost reduction but revenue generating so with these new tailwind is creating a business model opportunity for your customers this is not the old school best in breed got great storage low cost I I've you know low cost per storage gigabyte this is about I don't want to deal with infrastructure anymore you guys handle that this is what you're going after how are you guys going to market under the new reality that customers are critical do you agree with that and how are you going to market with this new shift in the customers mindset Mike the mindset is now that change or dying if I don't drive the digital transformation within my company someone else will do it and more than likely will be a competitor so you see it having on the the uber front air B&B front you can go down the list every single one of these industries are figuring out I better Drive this aggressively and make sure that I take advantage of what's happening in the technology landscape in order to progress and grow my business to be more relevant and more differentiated so instead of IT being a let me lower my cost structure model IT is now the enabler of changing the business model the enabler of a scaling at a much faster rate to take advantage of the options and how does that change the customer selection on vendor supplier because obviously this is obviously gonna probably good for saying you know one supplier gel but that's gonna change how they evaluate procure consume and they're partnering how is that going to change their selection they they want to move more and more towards having the conversation around what do we need to do to scale our business and again create a differentiated advantage right well last thing they want to be is a systems integrator of all the different IT suppliers so when you have a partner like Dell technologies that truly does have the broadest and and and what I'd say best capabilities on the planet to then become that partner of choice for them to move them in this direction faster that's a very simple decision for them to make and how is that dynamic translating into public sector where you know there's a lot of turnover in terms of administration's you might have edicts in terms of you know multi vendor what are you seeing there but I think this is consistent we have a built a a practice what we call smart digital cities that we seeing the need everywhere at the end of the day regardless what public sector entity you go to what country you go to whatever mean it's about you go to every single one of them are thinking about how can I create more jobs how can I create build and grow the economic engine of my city my state my country and guess what they're leaning on technology to do that so everywhere we go it's a conversation about how can we drive efficiencies and productivity improvements across all the things you do and provide a greater level of service to every one of your it's constituencies through technology anything from securing the environment driving protecting our citizens to providing better health care services to providing better traffic management to providing better education and reach waste management you just go down the list every single city every single Enterprise a public sector entity around the globe is thinking about it and what's again the beautiful thing is we can come in we can bring in our overall partner ecosystem because it is a broader ecosystem that is needed in order to be able to deliver those end-to-end capabilities but very much on demand everywhere I gotta ask you about first of all is on the IT side those four public sector entities have a huge job ahead of them and they're not IT huge that staffs they need nimbleness and they need horsepower basically out of the gate and the beauty of what we are able to do is we share the best practices of what we see around the world you can imagine that a city of Dubai very progressive right clearly have the budget clearly have less restrictions on data privacy clearly have less restrictions on legacy integrations into past solutions so they can move pretty quickly with a pretty broad base view as to where they want to go so you take those ideas take those best practices and then you you showcase that to the rest of the world it's - ok what can we use what can they use - to move their agenda forward quickly I want to switch gears talk about competition I saw the Tom sweets presentation the analyst briefing around competition I didn't see any cloud vendors on their office T going multi cloud with your own cloud I see that but just in the traditional IT space the numbers are great in your and you got bigger bigger is better so HPE when smaller they thought that focus would be better for them maybe it is but now you have existing competitors from the classic IT market it's a new new ground you're going after you got Alienware here it's a gaming world you're partnering with it's a beautiful set up so that's the future of TCS so you're in all these markets what's the competitive view how did you talk about your companies for competitive strategy - what we first talked about if you if you've got scale and you have a broad broad portfolio they can address the the core trends that are emerging for the next decade or two and you can do it at speed I'd say a very nice formula and that's what we're starting to really operate at that kind of cadence with the the the strategically aligned businesses like VM were like like pivotal like secure works that are all coming together very nicely to be able to drive these transformations collectively as one portfolio where's the partner coopertition kind of thing going on because you think Cisco for instance you know you guys partner with Cisco in some level but also at the same time NSX on the VMware family side looking like us competing directly with Cisco so this is this you're going to have direct competition and then other ones that are coopertition where you're working as a partner or maybe and it's evolving so how do you guys bet to have those balance conversations it's it's been like that for decades right and there's you you've got big players in the market at the end of the day as long as you service your customer and deliver to them what they want and how they want it at the end of the day we need to collaborate to make that happen - same exact reason why we announced our partnership with Microsoft and Azure earlier this week customer draw was there they said we want you to be that single that single broker that enables me to move my my data in my application seamlessly and securely containerized to any public cloud well guess what Azure needs to be part of that equation so when the customer drives it and it's clearly aligned to their particular needs the the IT ecosystem comes together the best serve that when you have when you meet with the top customers and the top senior people what's the pitch Mario's when you go in and say hey you know here's get we're just gel technology we've got all the puzzle pieces they'll be be successful what's your pitch when you go in what's the mean message that you guys say to those customers I like for the last couple of years we've been talking about that the transformations that are happening right at the highest level it's just a digital transformation journey that people are on the work force transformation they're doing the overall IT transformation that enables that then of course how do you the whole environment on top of that they're having the conversation about okay let's go build the blueprint as to what that looks like for me as a customer and then show me how I'm gonna you're gonna deliver to me the platforms that enables me to grow and make sure that I'm making the right batch long term right I don't want a solution that's just there for today I want to make sure that I've got a solution that good that that will take me into the future and that makes me ultra competitive so when you think about it if I wanted a an app development platform that clearly needs to be cloud native in mind I need to have agile development capabilities and I need to be able the time to value needs to continue to shrink well guess what we got that with pivotal right you want to be able to now do your data management ecosystem seamlessly and and across multiple platforms clearly we have assets like Bumi that enable that to happen very very well and and then you want to virtualize your overall infrastructure layer as much as possible so you truly can scale up or scale down any of your infrastructure capabilities in order to meet the needs of that particular workload seamlessly when you have the data platform when you have the app platform when you have the virtualization platform and you have all of the infrastructure platform so well aligned to the overall trends and transformations our customers are doing it's almost a no-brainer I mean it is an IQ test that all of our customers are clearly passing and okay and what you just laid out it's probably like a ten year he's gonna play out over the next ten years and there's still a lot of invention to be required if you guys aren't doing a lot of M&A right now you know paying down the debt tom was clear on that but as an M&A person I want if we can pick your brain and I'm more familiar with the tech M&A it's where myspace but most M&A much of it anyway fails and and from your perspective why is that and why are some successful why or some not I think it is the how do you how do you when you add a new entity into the broader entity what are the synergies that you're aligning to to make sure that that new entity has the opportunity scale and grow right and that's why you have meant you have sometimes smaller deals are interesting from an IP perspective but if you don't tie it back into how are you gonna go scale to go to market to make it available to your broader set of customer base you or it gets lost in the equation that's a problem and I think what we've done is a very good job making sure that we understand how each piece of the IP portfolio comes together and is aligned to our overall approach and how we how we how we help you have the conversation with the customer that we've been able to see what we call our cross synergies of all the acquisitions we've made significantly exceed any and all of our expectations and and that's important part to do ahead of time before you make the acquisition know not just how it fits into the IP stack but how it fits into your overall go to market stack and how it fits in your overall value proposition to the customer Marcus thanks for spending the time know you're really busy coming on the cube I got to ask you one final question of this showed here Dell technology world over three days what are the three top highlights that happened to you that give a tell sign of the next 10 years with Dell technology I mean we've always said that we do what we say so I think and I've had many of analyst tell us that my god you guys consistently have delivered what you said you would deliver so the early skepticism of hey this this is a big company there's multiple cultures not sure that operationally you will execute well guess what I think it's fair to say the teams are executing and then when you see the results of taking share in every line of business you see the results where the customer satisfaction is higher than it's ever been our partner satisfaction is higher than it's ever been our partner growth is higher is the fastest-growing route to market for us all of that is just a testament that we are operating on all cylinders but what's more exciting is the yet to come part and and the fortuity so big right the market is what three and a half trillion ninety billion is a fraction of that so this is what our our team members see it's what our customers see our partners see so that momentum it's just a tsunami that's just gonna keep on growing well the cube barometer certainly showing activity to sets when we get four you know you're doing well so we're gonna keep an eye on the pulse of the cube pan and we got here Mari it's great to see you always a pleasure great insight thanks for sharing John awesome grant appeared a virus awesome thank you so much Myers house president chief commercial officer Dell technologies Friends of the cube great executive tech athlete as we say live coverage day three here the cube coverage of Delta knows we will be right back with more after the short break [Music]

>> Announcer: Live from Las Vegas, it's the CUBE covering HPE Discover 2017. Brought to you by Hewlett Packard Enterprise. >> Hello, everyone, and welcome to the CUBE's special presentation of HPE Hewlett Packard Enterprise Discover 2017. I'm John Furrier and my cohost Dave Vellante. For three days of wall to wall coverage. This is our intro section of our three days of Hewlett Packard Enterprises transformation and coverage. This is our seventh year covering HPE Discover, formerly HP Discover after the split. Lot of commentary today. We have seen HP over the years transform. We've been watching this, sort of a front row seat to HP, now HPE, really getting hammered in stock market their last earnings again didn't meet expectations, but this is not a quick turn around. I mean, this is a market place that's shifting. HP's had their plan now for multiple years. We're going to cover it for three days. But interesting. The world is turning. You had tweeted this morning on a Twitter storm you put together @dvellante, twitter.com. So it's Dvellante. Everyone should check it out. But it really highlights it. True private cloud, or private cloud, cloud has impacted everything. HP's kind of shifted their cloud strategy. It's becoming clear what they're doing, but private cloud, true private cloud, is legit. It's a 250 plus billion dollar market opportunity, as you guys have put it out on wikibond. Hybrid cloud is very relevant, and on the horizon is multi-cloud, the ability for customers to use multiple clouds. And on top of that we have machine learning, AI, and a myriad of things. Marketplace is shifting significantly, HP has been transforming significantly over the past five plus years. Your thoughts this year at HPE Discover and marketplace conditions and are they poised for success? >> Well, John, we're in the fifth year now of the turnaround that Meg Whitman initiated, and I think it's the light at the end of the tunnel year. HPE-- We've said many times at theCUBE that HP has the strength to grow. Well, it's certainly shrunk. They're about a 50 billion dollar company with a 26 billion dollar market cap, and there's a way to eek out some growth. If you separate all-- Call it Remain Co. Like the remaining company. Take out the software, take out EDS, take out actually tier one, tier one customer who's-- who's not buying as many servers as possible, or as they had previously, and the company grew about one percent. So what you're seeing, John, is some quarters HP grows a little bit, some companies it shrinks a little bit, but essentially it's facing what most legacy hardware companies are facing. Legacy hardware's down, everybody's scrambling to what we call true private cloud, which is essentially hybrid IT, trying to mimic the public cloud. And then HP adds in a dose of IOT at the edge, and then, really importantly, services. Services have never been more important for this company, and that is what I called earlier Remain Co. The remaining HP. Once it jettisons the software business this fall, that's what will be left, basically a 50 billion dollar company with about 55,000 employees. >> I was looking at a-- some IOT stories just last night, and a Business Insider article came up. It was an image, and it had listed the companies that-- by average age. And you had, obviously, Facebook, average age like 28. HP was at the highest end, like 39. And I want to bring up this notion of changing market because HP has always been customer focused, so the question is, if they are truly customer focused, as is Amazon, for instance, we talked to Andy Chasey, he talks about that all the time. And the context of where you've been and where you're going, historical legacy, declining markets, say servers for instance. And where you're going. It brings up an interesting point. And notable is recently Amazon web services hired Gosling, the founder of Java, which had a big conversation on the internet around age. A lot of the winners are older systems guys. So what's interesting is I actually look at that Business Insider article and saying actually age is a wisdom point now, because right now HP's got to solve customer problems. In addition to transforming themselves, they're looking at a customer base that's changing their requirements, so having experience is actually a good thing, as pointed out by some of the big leaders right now in hyperscale are old m systems guys. This is an opportunity for HP, and I think that's where I want to get your thoughts on. Are they customer focused in your mind, and if they are going to be, continue to be, what should their customer focus be? >> Let's talk about what customers are doing. So, first and foremost, customers are deinvesting in non-differentiated, you know, hardware maintenance and provisioning, okay. So they're shifting IT labor from provisioning luns and servers into digital transformation initiatives, so that's sort of one piece. The other pieces there as they're shifting those resources in places up the value stack. So it's applications; it's, as you say, digital transformation services; it's new IOT activity. So they're only investing-- from the HP standpoint, HP's an infrastructure company. They're only investing in infrastructure that looks like public cloud and can focus on hybrid. So are they customer focused? Yes. And what are they doing there? So they're investing in MMA, they're doing some MMA tuck ins. They're focused on develop-- delivering platforms with an API that are essentially programmable infrastructure. And very importantly, they're in a low margin business now. It's sort of low 30 percent gross margin business. So they have to get volume. How do they get volume? How do they reach those customers? Partners. So you are seeing a new partner emphasis. You know, are they customer focused? Yes, but they're really right now partner focused to reach those customers and increase their scale and coverage. That is a critical difference between the new HP, not that they always didn't have partners, now partners are critical to their success. >> One of the things that's the theme here is simplifying hybrid IT and I think from a customer standpoint, simplifying that is going to be critical. At the same time, creating new services opportunities. So I want to get your thoughts on the top story, at least from my perspective, here at the show at HPE Discover, and that is, is it better to be big or small? And HP has a strategy of a collection of small, nimble, agile business units. Dell EMC, for instance, has a strategy of being big and using leverage and supply chain and what not. Two different strategies. We pointed that out on the web. Certainly we've heard a lot of different approaches. Your thoughts on HP's strategy vis a vis bigger and better, or smaller and nimbler is better. >> Well, HP's not small. Hewlett Packard Enterprises is still big. I mean, it's a, it's a company that's twice the size, or more, than EMC was at its peak. So it's still a very, very large company. The difference is, John, I think they're focused. So they really are focused on hardware and infrastructure, the support, you know, the digital transformation, whatever you want to call it. The big question I have, John, is now that HP is getting rid of its software business, its outsourcing and EDS business, what is HP going to do with regard to software and services. So, they reinvented the whole services organization. The big question mark for me is software. Will they get into this, what you call inter-clouding business? Software to manage multiple clouds. It's a wide open space, everybody's going after it, and I haven't heard much from HP there. So what is their software strategy? Now, the other thing I'll add, is the good thing about being smaller is that it's going to generate cash for them. So they're going to get, going to get cash out of the spin merge with CSC. They're going to get cash out of the spin merge with MicroFocus. And you've already seen HP become more aquisitive with the Simplivity acquisition, certainly with Nimble recently, previously the Aruba acquisition, and some other tuck ins. That's critical in order for HP to reposition and continue to grow. >> Yeah, and my take on HP right now is they got to be more assertive. Their voice in the marketplace, at an industry level, has to be very assertive and relevant. I think that's something you've got to put the stake in the ground and hammer that home. I think we got the piece parts, and I think the spin merge is not a "they're getting out of that business." They're just decoupling from the monolithic entity that was HPE and creating kind of cohesive entities. And I think there's a strategy, in my opinion, that looks really strong there in the sense that, hey, at the end of the day, it's going to be a services game. And if you look at the IOT Edge, to me that's the tell sign of the marketplace. As the value shifts from IT-- So, simplifying IT, having true private cloud, having some hybrid pathways for IT, maybe a declining market from a service perspective, but simplifying that and operationalizing that and shifting the value to the Edge with services is a huge opportunity for HP. This is something that not a lot of people on Wall Street are kind of rocking at this point. But the value shift from IT, centralized IT, to a distributed kind of network effect is a really interesting play. And I think this a bet I think HP's making from my standpoint, and that's where the intelligent Edge piece comes in. If they could nail that, and layer on the services, and bring real value paths for customers with outcomes that are, not pie in the sky-- Sure, they throw some AI in there, machine learning, it's all relevant. Getting into open source. Taking that labs machine and memster technology and bringing that out at an appropriate timing. With the services in place. I think that's a good strategy for HP. >> Well, you mentioned Wall Street. Look, Wall Street is very tactically focused on the quarter and the margin decline, and, you know, D-Ram prices doubled in January, okay? So a company like HPE is going to get hurt by that. So that's head winds for these guys, these currency head winds. The stock, the price will go up and down. But the point I want to make, John, is there's a new competitive reality. CIOs have woken up to open source and cloud. And as a result, we've emerged into a new competitive dynamic where HPE is competing with Dell. It's competing with China, and it's competing with AWS. And it's one different-- Two differentiable advantages or services, you know, clearly HP's doubling down on services. I'll actually add a third. The second is partnerships, and the third big one, which is green field, is an ecosystem around IOT and what they call the intelligent edge. >> Well, Dave, great commentary. My, again, my feeling is customer focus at an industry level, having the right product mix that's relevant in the, for the solutions customers want. And also their partners. Leveraging that partner network. Really going to be a two pivot points for me. I see that as great leverage for HP. At the end of the day, everyone talking about declining market of servers and storage. I actually don't see that. There's more computers available now, more storage available. The key is can that shift to true private cloud, which again is a 250 billion dollar market, partly declining. And hybrid cloud is certainly growing. So, declining and growing, I mean they're all different perspectives, and I think HP's messaging here-- Come the end of the show, we're going to look at that and understand and impact and unpack that, that analysis. So, I'm Jeff Furrier, Dave Vellante. Day one of coverage, of three days of wall to wall coverage at HPE Discover 2017. More live coverage after this short break. (upbeat music)

>> Narrator: Live, from Las Vegas, it's The Cube. Covering InterConnect 2017. Brought to you by IBM. >> Welcome back, everyone. Live here in Las Vegas, this is The Cube's coverage of IBM's Interconnect 2017. I'm John Furrier with my co-host Dave Vellante. Our next guest is Eric Herzog, Cube alumni, Vice President of Product Market at IBM storage. Welcome back to The Cube. Good to see you with the shirt on. You got the IBM tag there, look at that. >> I do. Well, you know, I've worn a Hawaiian shirt now, I think, ten Cubes in a row, so I got to keep the streak going. >> So, pretty sunny here in Vegas, great weather. Storage is looking up as well. Give us the update. Obviously, this is never going away, we talk about it all the time, but now cloud, more than ever, a lot of action happening with storage, and data is a big part of it. >> Yeah, the big thing with us has been around hybrid cloud. So our software portfolio, the spectrum family, Spectrum Virtualize, Spectrum Protect, our backup package, Spectrum Scale, our scale out NAS, IBM Cloud Object Storage, all will move data transparently from on-premises configurations out to multiple cloud vendors, including IBM Bluemix. But also other vendors, as well. That software's embedded on our array products, including our VersaStack. And just two weeks ago, at Cisco Live in Melbourne, Australia, we did a announcement with Cisco around our VersaStack for the hybrid cloud. >> So what's the hybrid cloud equation look like for you guys right now, because it is the hottest topic. It's almost like brute force, everywhere you see, it's hybrid cloud, that's what people want. How does it change the storage configurations? What's the solutions look like? What's different now than it was a year ago? >> I think the key thing you've got to be able to do is to make sure the data can move transparently from an on-premise location, or a private cloud, you could have started as a private cloud config and then decid it's OK to use a public cloud with the right security protocols. So, whether you've got a private cloud moving to a public cloud provider, like Bluemix, or an on-premises configuration moving to a public cloud provider, like Bluemix, the idea is they can move that data back and forth. Now, with our Cisco announcement, Cisco, with their cloud center, is also providing the capability and moving applications back and forth. We move the data layer back and forth with Spectrum Virtualize or IBM's copy data management product, Spectrum Copy Data Management, and with Cloud Center, or the ECS, Enterprise Cloud Sweep, from Cisco, you can move the application layer back and forth with that configuration on our VersaStacks. >> So this whole software-defined thing starts, it started when people realized, hey, we can run our data centers kind of the way the big hyper-scalers do. IBM pivoted hard toward software-defined. What's been the impact that you've seen with customers? Are they actually, I mean, there was a big branding announcement with Spectrum and everything a while back. What's been the business impact of that shift? >> Well, for us, it's been very strong. So if you look at the last couple quarters, according to the analysts that track the numbers, from a total storage perspective, we've moved into the number two position, and have been, now for the last two years. And for software-defined storage, we're the number one provider of software-defined storage in the world, and have been for the last three years in a row. So we've been continuing to grow that business on the software-defined side. We've got scale-up block configurations, scale-out block configurations, object storage with IBM Cloud Object Storage, and scale-out NAS and file with our IBM Spectrum Scale. So if you're file, block, or object, we've got you covered. And you can use either A, our competitor's storage, we work with all our competitor's gear, or you could go with your reseller, and have them, or your distributor provide the raw infrastructure, the servers, the storage, flash or hard drives, and then use our software on top to create essentially your own arrays. >> So when you say competitor's gear, you're talking about what used to be known as the SAN Volume Controller, and now is Spectrum Virtualize, right? Did I get that right? >> Yes, well, we still sell the SAN Volume Controller. When you buy the Spectrum Virtualize, it comes as just a piece of software. When you buy the SAN Volume Controller as well as our FlashSystem V9000, and our Storwize V7 and V5000, they come with Spectrum Virtualize pre-loaded on the array. So we have three ways where the array is pre-loaded: SAN Volume Controller, FlashSystems V9000, and then the Storwiz products, so it's pre-loaded. Or, you can buy the stand-alone software Spectrum Virtualize and put it on any hardware you want, either way. >> So, I know we're at an IBM conference, and IBM hates, they don't talk about the competition directly, but I have to ask the competitive questions. You've had a lot of changes in the business. Obviously, cloud's coming in in a big way. The Dell EMC merger has dislocated things, and you still see a zillion starups in storage, which is amazing to me, alright? Everybody says, oh, storage is dead, but then all this VC money still funneling in and all this innovation. What's happening in the storage landscape from your perspective? >> Well, I think there's a couple things. So, first of all, software-defined has got its legs, now. When you look at it from a market perspective, last quarter ended up at almost 400 million, which put it on a, let's say, a 1.6 to 2 billion dollar trajectory for calendar 2017, out of a total software market of around 16 billion. So it's gone from nothing to roughly 2 billion out of 16 billion for all storage software of all various types, so that's hot. All flash arrays are still hot. You're looking at, right now, last year, all flash arrays end up at roughly 25% of all arrays shipped. They're now in price parity, so an all-flash array is not more expensive. So you see a lot of innovation around that. You're still seeing innovation around backup, right? You've got guys trying to challenge us with our SpectrumProtect with some of these other vendors trying to challenge us, even though backup is the most mature of the storage software spaces, there's people trying to challenge that. So, I'd say storage is still a white-hot space. As you know, the overall market is flat, so it is totally a drag out, knock-down fight. You know, the MMA and the UFC guys got nothing on what goes on in the storage business. So, make sure you wear your flak jacket if you're a storage guy. >> Meaning, you got to gain share to grow, right? >> Yes, and it's all about fighting it out. This Hawaiian shirt looks Hawaiian, but just so you know, this is Kevlar. Just in case there's another storage company here at the show. >> So what are the top conversations now with storage buyers? Because we saw Candy's announcement about the object store, Flex, for the cold storage. It changes the price points. It's always going to be a price sensitive market, but they're still buying storage. What are those conversations that you're having? You mentioned moving data around, do they want to move the data around? Do they want to keep it at the edge? Is it moving the application around? What are some of those key conversations that you're involved in? >> So we've done a couple innovative things. One of the things we've done is worked with our sales team to create what we call, the conversations. You know, I've been doing this storage gig now for 31 years. Seven start-ups, IBM twice, EMC, Maxtor and Seagate- >> John: You're a hardened veteran. >> I'm a storage veteran, that's why this is a Kevlar Hawaiian shirt. But no CIO's a storage guy, I've never met one, in 31 years, ever, ever, ever met a storage guy. So what we have to do is elevate the conversation when you're talking to the customer, about why it's important for their cloud, why it's important for machine learning, for cognitive, for artificial intelligence. You know, this about it, I'm a Star Trek guy. I like Star Wars, too, but in Star Trek, Bones, of course, wands the body. So guess what that is? That's the edge device going through the cloud to a big, giant server farm. If that storage is not super resilient, the guy on the table might not make it. And if the storage isn't super fast, the guys on the table might not make it. And while Watson isn't there, yet, Watson Health, they're getting there. So, in ten years from now, I expect when I go to the doctor, he's just like in Star Trek, waving the wand, and boy, you better make sure the storage that that wand is talking to better be highly resilient and high performing. >> Define resilient, in your terms. >> So, resilient means you really can't have more than 30 seconds, 50 seconds a year of down time. Because whoever's on the table when that thing goes down has got a real problem. So you've got to be up all the time, and if you take it out of the healthcare space and look at other applications, whether you look at trading applications, data is the new gold. Data is the new diamonds. It's about data. Yes, I'd love to have a mound of gold, but you know what, if you have the right amount of data, it worth way more than a mound of gold is. >> You're right about the CIO and storage. They don't want to worry about storage. They don't want to spend a lot of time thinking about it. A CIO once said to me, "I care about storage like this, "I want it to be dirt cheap, lightning fast, and rock solid." Now, the industry has done a decent job with rock solid, I would say, but up until Flash, not really that great with lightning fast, and really not that great with dirt cheap. Price has come down for the hardware, but the management has been so expensive. So, is the industry attacking that problem? And what's IBM doing? >> Yeah, so the big thing is all about automation. So when I talk about moving to the hybrid cloud, I'm talking about transparent migration, transparent movement. That's an automation play. So you want to automate as much as you can, and we've got some things that we're not willing to disclose yet that'll make our storage even more automated whether it be from a predictive analytics perspective, self-healing storage that actually will heal itself, you know, go out and grab a code load and put the new code on because it knows there's a bug in the old code, and do that transparently so the user doesn't have to do anything. It's all about automating data movement and data activity. So we've already been doing that with the Spectrum family, and that Spectrum family ships on our storage systems and on our VersaStack, but automation is the critical key in storage. >> So I wonder, does that bring up new KPIs? Like, I presume you guys dog food your own storage internally, and your own IT. >> Eric: Yes >> Are you seeing, because it used to be, OK, the light's green on the disc drive, and you know, this is our uptime or downtime, planned downtime, you know, sort of standard metrics that we've known for 30-40 years. With automation, are we seeing a new set of metrics in KPIs emerge? You know, self-healing, percentage of problems that corrected themselves, or- >> Well, and you're also seeing things like time spent. So if you go back to the downturn of seven, eight, and nine, IT was devastated, right? And, as you know, you've seen a lot of surveys that IT spend is basically back up to '08, OK, the pre-08 crash. When you open up that envelope, they're not hiring storage guys anymore, and usually not infrastructure guys. They're hiring guys to do devops and testdev, and do cloud-based applications, which means there's not a lot of guys to run the storage. So one of the metrics we're seeing is, how much guys do I have managing my storage, or, my infrastructure? I used to have 50, now I'm a big bank, can I do it with 25? Can I do it with 20? Can I do it with 15? And then, how much time do they spend between the networking, the storage, the facilities themselves. These data center guys have to manage all of that. So there are new metrics about, what is the workload that my actual human beings are doing? How much of that is storage versus something else? And there's way less guys doing storage as a full-time job, anyway, because what happened in the downturn? And, so automation is critical to a guy running a datacenter, whether he's a cloud guy, whether he's a small shop. And clearly in the Fortune, global 2500, those guys, where they've got in-house IT, they've cut back on the infrastructure team and the storage team, so it's all about automation. So, part of the KPIs are not just about the storage itself, such as uptime, cost per Gig, cost per transaction, the bandwidth, you know, those sorts of KPIs. But it's also about how much time do I really spend managing the storage? So if I've only got five guys, now, and I used to have 15 guys, those five guys are managing, usually, three, to four, to five times more storage than they did in 2008 and 2009. So now you've got to do it with five guys instead of 15, so there's a KPI, right there. >> So, what about cloud? We heard David Kinney talk today about the object store with that funny name, and then he talked about this cloud-tiering thing, and I couldn't stay. I had to get ready for theCube. How do you work with those guys? How do you sell a hybrid story, together, because cloud is eating away at the traditional infrastructure business, but it's all sort of one big, happy family, I'm sure. But how do you work with a cloud group to really drive, to make the water level higher for IBM? >> So, all of our products from the Spectrum family, not all, but almost all our products from the Spectrum family, will automatically move data to the cloud, including IBM Bluemix/SoftLayer. So our on-premises can do it. If you buy our software only, and don't buy our storage arrays, or don't buy a Storwize, or don't buy a flash system, you still can automatically move that data to the cloud, including the IBM cloud object store. Our Spectrum Scale product, for example, ScaleOut NAS, and file system, which is very highly used in big data analytics and cognitive workloads, automatically, by policy, will tier-data to IBM cloud object storage. Spectrum Protect can be set up to automatically take data and back it up from on-premises to IBM cloud object storage. So we've automated those processes between our software and our array family, and IBM cloud object storage, and Bluemix and SoftLayer. And, by the way, in all honesty, we also work with other cloud vendors, just like they work with other storage vendors. All storage vendors can put data in Bluemix. Well, guess what, we can put data in clouds that are not Bluemix, as well. Of course, we prefer Bluemix. We all have IBM employee stock purchase, so of course we want Bluemix first, but if the customer, for whatever reason, doesn't see the light and doesn't go to Bluemix and goes with something else, then we want to make sure that customer's happy. We want to get at least some of the PO, and our Spectrum family, and our VersaStack family, and all of our array family can get that part of the PO. >> You need versatility to be on any cloud. >> Eric: We can be on any cloud. >> So my question for you is, the thing that came out of our big data, Silicon Valley event last week was, Hadoop was a great example, and that's kind of been, now, a small feature of the overall data ecosystem, is that batch and real time are coming together. So that conversation you're having, that you mentioned earlier, is about more real time than there is anything else more than ever. >> Well, and real time gets back to my examples of Bones on Star Trek wanding you over healthcare. That is real time, he's got a phaser burn, a broken leg, a this and that, and then we know how to fix the guy. But if you don't get that from the wand, then that's not real time analytics. >> Speaking of Star Trek, just how much data do you think the Enterprise was throwing off, just from an IOT standpoint? >> I'm sure that they had about a hundred petabytes. All stored on IBM Flash Systems arrays, by the way. >> Eric, thanks for coming on. Real quick, in the next 30 seconds, just give the folks a quick update on why IBM storage is compelling now more than ever. >> I think the key thing is, most people don't realize, IBM is the number two storage company in the world, and it has been for the last several years. But I think the big thing is our embracing of the hybrid cloud, our capability of automating all these processes. When they've got less guys doing storage and infrastructure in their shop, they need something that's automated, that works with the cloud. And that's what IBM storage does. >> All right, Eric Herzog, here, inside theCube, Vice President of Product Market for IBM Storage. I'm John Furrier, and Dave Velante. More live coverage from IBM InterConnect after this short break. Stay with us. (tech music)

live from the Fairmont Hotel in San Jose California it's the queue at big data sv 2015 hello everyone welcome back this is the cube our flagship program we go out to the events they strike this evil noise i'm john furrier we're here with IBM to talk about big data big data analytics and we're doing a first-ever crowd chat simulcast of live feed with IBM so guys we're going to try this out it's like go to crouch at dan / Hadoop next and join the conversation and our guests here Rob Thomas vice president product development big data analyst at IBM and beth smith general manager of IBM analytics platform guys welcome to welcome to the cube thank you welcome back and so IBM mostly we're super excited to next week as I was the interconnect you're bigger than you guys mashed up three shows for the mega shows and and Aerosmith's playing so it's going to say I'm from the Boston air so I'm really excited about you know Aerosmith and all the activities of social lounge and and whatnot but we've been following you guys the transformation of IBM is really impressive you guys certainly think a lot of heat in the press in terms of some of the performance size in the business but it's pumping right now you guys seem to have great positioning the stories are hanging together a huge customer base huge services so we're at the Big Data world which is tends to be startup driven from the past few years over the past phase one the big cuppies came in and started saying hey you know there's a big market our customers see demand and that so I got your take on on as we're coming in to interconnect next next week what is the perspective of big data asli Watson has garnered headlines from powering toys to jeopardy to solving huge world problems that's a big data problem you guys are not new to Big Data so when you look at this big data week here and Silicon Valley what's the take sure so I'll start often embedded Bethke night in so our big focus is how we start to bring data to the masses and we start to think in terms of personas data science and plays an increasingly important role around big data how people are accessing that the developer community and then obviously the line of business community which is the client set that I've been serving four years but the announcements that we've made this week around Hadoop are really focused on the first two personas in terms of data scientists how they start to get better value out of Hadoop leveraging different tools we'll talk about what some of those are and so we're really starting to change it about Hadoop results me about insight it's not about infrastructure infrastructure is interesting but it's really about what you're getting out of it so that's why we're approaching it that way it's how well it has naturally the IBM strategy around data cloud and engagement and data is really about using the insights which like Rob said it's about the value can get from the data and how that can be used in to transform professions and industries and I think when we bring it back to Big Data and the topic of a doob I think frankly it has gotten to a point that clients are really beginning to say it's time to scale they're seeing the value in the technology what it can bring how it gives them some diversity in their data and analytics platform and they're ready to announce scale on their workloads as a part of it so the theme is Hadoop next okay so that takes us right to the next point which is okay what's next is a phase one okay we got some base position validation okay this new environments customers don't want that so what so what is next i mean we're earring things like in memories hot aussie spark has proven that there's an action in member that that kind of says okay analytics at the speed of business is something that's important you guys are all over that and we've heard some things from you guys so so what's how do we get to the next part where we take Hadoop as an infrastructure opportunity and put it into practice for solutions at what what are the key things that you guys see happening that must happen for the large customers to be successful so I think that actually ties into the announcements we made this week around the open data platform because that's about getting that core platform to ensure that their standardization around it there's interoperability around it and then that's the base and that vendors and clients are coming together do that and to really enable and facilitate the community to be able to standardize around that then it's about the value on top of that around it etc it's about the workloads and what could be brought to bear to extend up that how do you apply it to real time streaming how do you add things like machine learning how do you deal with things like text analytics I mean we have a we have a client situation where the client took 4 billion tweets and were able to analyze that to identify over a hundred and ten million profiles of individuals and then by integrating and analyzing that data with the internal data sources of about seven or eight different data sources they were able to narrow into 1.7 million profiles that matched at at least ninety percent precision you know now they've got data that they can apply on buying patterns and stuff it's about that it's about going up the stack we're going to talk for hours my mind's exploding privacy creepy I mean a personas is relevant now you talk about personalization I mean collective intelligence has been an AI concepts we try not to be creepy okay cool but now so that brings us to the next level I mean you guys were talk about cognitives on that is a word you guys kick around also systems of engagement systems of records an old term that's been around in the old data warehousing dates fenced-off resources of disk and data but now with systems of engagement real-time in the moment immersive experience which is essentially the social and/or kind of mobile experience what does that mean how do you guys get there how do you make it so it's better for the users more secure or I mean these are hot button issues that kind of lead us right to that point so I'll take you to that a couple ways so so first of all your first question round head tube next so Hadoop was no longer just an IT discussion that's what I've seen changed dramatically in the last six months I was with the CEO of one of the world's largest banks just three days ago and the CEO is asking about Hadoop so there's a great interest in this topic and so so why so why would a CEO even care I think one is people are starting to understand the use cases of the place so that talks about entity extraction so how you start to look at customer records that you have internally in your systems are record to your point John and then you you know how do you match that against what's happening in the social world which is more or the engagement piece so there's a clear use case around that that changes how clients you know work with their with their customers so so that's one reason second is huge momentum in this idea of a logical data warehouse we no longer think of the data infrastructure as oh it's a warehouse or it's a database physically tied to something not tied to just what relational store so you can have a warehouse but you can scale in Hadoop you can provision data back and forth you can write queries from either side that's what we're doing is we're enabling clients to modernize their infrastructure with this type of a logit logical data warehouse approach when you take those kinds of use cases and then you put the data science tools on top of it suddenly our customers can develop a different relationship with their customers and they can really start to change the way that they're doing business Beth I want to get your comments we have the Crouch at crowd chat / a dupe next some commentary coming in ousley transforming industries billion tweets killer for customer experience so customer experience and then also the link about the data science into high gear so let's bring that now into the data science so the logical you know stores okay Nick sands with virtualization things are moving around you have some sort of cognitive engines out there that can overlay on top of that customer experience and data science how are they inter playing because this came out on some of the retail event at New York City that happened last week good point of purchase personalization customer experience hated science it's all rolling together and what does that mean unpack that for us and simplify it if you can oh wows complexing is a big topic you know it's a big topic so a couple of different points so first of all I think it is about enabling the data scientists to be able to do what they their specialty is and the technologies have advanced to allow them to do that and then it's about them having the the data and the different forms of data and the analytics at their fingertips to be able to apply that I the other point in it though is that the lines are blurring between the person that is the data scientist and the business user that needs to worry about how do they attract new customers or how do they you know create new business models and what do they use as a part of do you think we're also seeing that line blurring one of the things that we're trying to do is is help the industry around growing skills so we actually have big data University we have what two hundred and thirty thousand participants and this online free education and we're expanding that topic now to again go up the stack to go into the things that data scientists want to deal with like machine learning to go into things that the business user really wants to now be able to capture it's a part of it trying to ask you guys kind of more could be a product question and/or kind of a market question at IBM's Ted at IBM event in he talked about a big medical example in one of her favorite use cases but she made a comment in their active data active date is not a new term for the data geeks out there but we look at data science lag is really important Realty near real time is not going to make it for airplanes and people crossing the street with mobile devices so real real time means like that second latency is really important speed so active date is a big part of that so can you guys talk about passive active data and how that relates to computing and because it's all kind of coming to get it's not an obvious thing but she highlighted that in her presentation because I see with medical medical care is obviously urgent you know in the moment kind of thing so if you would what does that all mean I mean is that something custom Street paying attention to is it viable is it doable so certainly a viable I mean it's a huge opportunity and i'd say probably most famous story we have around that is the work that we did at the university of toronto at the Hospital for Sick Children where we were using real-time streaming algorithms and a real-time streaming engine to monitor instance in the neonatal care facility and this was a million data points coming off of a human body monitoring in real time and so why is that relevant I mean it's pretty pretty basic actually if you extract the data you eat yell it somewhere you load in a warehouse then you start to say well what's going on it's way too late you know we're talking about you know at the moment you need to know what's happening and so it started as a lot was in the medical field would you notice there's some examples that you mentioned but real time is now going well beyond the medical field you know places from retail at the point of sale and how things are happening to even things like farming so real time is here to stay we don't really view that as different from what I would describe as Hadoop next because streaming to me as part of what we're doing with a dupe and with spark which we'll talk about in a bit so it's certainly it is it is the new paradigm for many clients but it's going to be much more common actually if i can add there's a client North Carolina State University it's where I went to school so it's a if it's a client that I talk about a lot but they in addition to what they do with their students they also work with a lot of businesses own different opportunities that may that they may have and they have a big data and analytics sort of extended education business education project as a part of that they are now prepared to be able to analyze one petabyte in near real time so the examples that you and Rob talked about of the real world workloads that are going to exist where real time matters are there there's no doubt about it they're not going away and the technology is prepared to be able to handle the massive amount of data and analytics that needs to happen right there in real time you know that's a great exact point I mean these flagship examples are kind of like lighthouses for people to look at and kind of the ships that kind of come into the harbor if you will for other customers as you always have the early adopters can you guys talk about where the mainstream market is right now I'll see from a services standpoint you guys have great presence and a lot of accounts where are these ships coming into which Harper where the lighthouse is actually medical you mentioned some of those examples are bringing in the main customers is it the new apps that are driving it what innovations and what are the forces and what are the customers doing in the main stream right now where are they in the evolution of moving to these kind of higher-end examples so I mean so Hadoop I'd say this is the year Hadoop where clients have become serious about Hadoop like I said it's now become a board-level topic so it's it's at the forefront right now I see clients being very aggressive about trying out new use cases everybody really across every interest industry is looking for one thing which is growth and the way that you get growth if you're a bank is you're not really going to change your asset structure what you're going to change is how you engage with clients and how you personalized offers if your retailer you're not going to grow by simply adding more stores it might be a short term growth impact but you're going to change how you're engaging with clients and so these use cases are very real and they're happening now Hadoop is a bore group discussion or big day I just didn't see you formula we should have more Hadoop or is it you know I see I've seen it over and over again I'll tell you where you see a lot from his companies that are private equity-owned the private equity guys have figured out that there's savings and there's innovation here every company i worked with that has private equity ownership Hadoop is a boardroom discussion and the idea is how do we modernize the infrastructure because it's it's because of other forces though it's because of mobile it's because of cloud that comes to the forefront so absolutely so let's take Hadoop so I do bits great bad just great a lot of innovations going on there boardroom in these private equity because one they're cutting edge probably they're like an investment they want to see I realized pretty quickly now speed is critical right I would infer that was coming from the private equity side speed is critical right so speed to value what does that mean for ibn and your customers how do you guys deliver the speed to value is that's one of the things that comes out on all the premises of all the conversations is hey you can do things faster now so value on the business side what do you guys see that sure so a a lot of different ways to approach that so we believe that as I said when I said before it's not just about the infrastructure it's about the insight we've built a lot of analytic capabilities into what we're doing around a dupe and spark so that clients can get the answers faster so one thing that we're going to be we have a session here at strata this week talking about our new innovation big R which is our our algorithms which are the only our algorithms that you can run natively on Hadoop where your statistical programmers can suddenly start to you know analyze data and you know drive that to decision make it as an example so we believe that by providing the analytics on top of the infrastructure you can you can change how clients are getting value out of that so how do we do it quickly we've got IBM SoftLayer so we've got our Hadoop infrastructure up on the cloud so anybody can go provision something and get started and ours which is not something that was the case even a couple years ago and so speed is important but the tools and how you get the insight is equally important how about speed 22 value from a customer deployment standpoint is it the apps or is it innovating on existing what do you sing well I think it's both actually um and and so you talked earlier about system of engagement vs system of record you know and I think at the end of the day for clients is really about systems of insight which is some combination of that right we tend to thank the systems of engagement or the newer things and the newer applications and we tend to thank the systems of record are the older ones but I think it's a combination of it and we see it show up in different ways so I'll take an example of telco and we have a solution on the now factory and this is now about applying analytics in real time about the network and the dynamics so that for example the operator has a better view of what's happening for their customers they're in users and they can tell that an application has gone down and that customers have now switched all of a sudden using a competitive application on their mobile devices you know that's different and that is that new applications or old or is it the combination and I think at the end of the day it really comes to a combination I love these systems of insight i'm just going to write that down here inside the inside the crowd chat so i got to talk about the the holy grail for big data analytics and big data from your perspective ideas perspective and to where you guys are partnering I'll see here there's a show of rich targets of a queue hires acquisitions partnerships I mean it's really a frill ground certainly Silicon Valley and and in the growth of a big data cloud mobile and social kind of these infrared photography biz is a message we've heard so what is the holy grail and then what are you guys looking for in partnerships and within the community of startups and or other alliances sure you want to start with the Holy Grail me yeah so so you know I think at the end of the day it is about using technology for business value and business outcome I you know I really think that's what said the spirit of it and so if I tell you why we have for example increased our attention and investment around this topic it's because of that it's because of what Rob said earlier when he said the state that clients are now in um so that's what I think is really important there and I think it's only going to be successful if it's done based own standards and something that is in support of you know heterogeneous environments I mean that's the world of technology that we live in and that's a critical element of it which leads to why we are a part of the Open Data Platform initiative so on the on the the piece of analytics I was just cus our comment about our for example I was just mentioning the crowd chat I had Microsoft just revolution analytics which is not our which is different community is there a land-grab going on between the big guys of you know IBM's a big company what do you guys see in that kind of area terms acquisition targets yeah man I think the numbers would say there's not a land-grab I don't think the MMA numbers have changed at a macro level at all in the last couple years I mean we're very opportunistic in our strategy right we look for things that augment what we do I think you know it's related to partner on your comment your question on partnering but we do acquisitions is not only about what that company does but it's about how does it fit within what IBM already does because we're trying to you know we're going after a rising tide in terms of how we deliver what clients need I think some companies make that mistake they think that if they have a great product that's relevant to us maybe maybe not but it's about how it fits in what we're doing and that's how we look at all of our partnerships really and you know we partner with global systems integrators even though we have one with an IBM we partner with ISVs application developers the big push this week as I described before is around data scientists so we're rolling out data science education on Big Data university because we think that data scientists will quickly find that the best place to do that is on an IBM platform because it's the best tools and if they can provide better insight to their companies or to their clients they're going to be better off so I was so yes that was the commenting on and certainly the end of last week and earlier this week about that Twitter and it's a lot of common in Twitter's figured out and people are confused by Twitter versus facebook and I know IBM has a relation but we're so just that's why pops in my head and I was are saying HP Buddha's got a great value and so I was on the side of Twitter's a winner i love twitter i love the company misunderstood certainly i think in this market where there's waves coming in more and more there's a lot of misunderstanding and i think i want to get your perspective you can share with the folks out there what is that next way because it's confusing out there you guys are insiders IBM i would say like twitter is winning doing very well certainly we're close to you guys we are we're deeply reporting on IBM so we can see the momentum and the positioning it's all in line what we see is that is where the outcomes will end up being for customers but there's still a lot of naysayers out there certainly you guys had your share as as to where's as an example so what is the big misunderstanding that you think is out there around the market we're in and what's the next wave as always waves coming in if you're not out in front that next wave usually driftwood as the old expression goes so what is that big misunderstanding and this kind of converged from a hyper targeted with analytics this is all new stuff huge opportunities huge shifts and inflection point as Bob picciano said on the cube is its kind of both going on the same time shift and it point so what's misunderstood and what's that next big waves so let me start with the next big way is that I'll back into the misunderstanding so the next big wave to me is machine learning and how do you start to take the data assets that you have and through machine learning and the application of those type of algorithms you start to generate better insights or outcomes and the reason i think is the next big wave is it's it may be one of the last competitive motes out there if you think about it if you have a a corpus of data that's unique to you and you can practice machine learning on that and have that you know either data that you can sell or to feed into your core business that's something that nobody else can replicate so it becomes incredibly powerful so one example I'll share with you and I want to bring you my book but it's actually not getting published next week since so maybe next week but so Wiley's publishing a book I wrote and one of the examples I give is a company by the name of co-star which I think very few people have heard of co-star is in the commercial real estate business they weren't even around a decade ago they have skyrocketed you know from zero to five hundred million dollars in revenue and it's because they have data on four million commercial properties out there who else has that absolutely nobody has that kind of reach and so they've got a unique data asset they can apply things like machine learning and statistics to that and therefore anybody who wants to do anything commercial real estate has to start with them so I pointed you're starting to get the point where you have some businesses where data is the product it's not an enabler it's the actual product I think that's probably one of the big misunderstandings out there is that you know data is just something that serves our existing products or existing services we're moving to a world where data is the product and that's the moat I wrote a post in 2008 called data is the new development kit and what you're basically saying is that's the competitive advantage a business user can make any innovation observation about data and not be a scientist and change the game that's what you were saying earlier similar right that's right okay so next big wave misunderstanding what do you wait bet what's your take on what are people not getting what is Wall Street what is potential the VCG really on the front end of some of the innovation but what is the general public not getting I mean we are in shift and an inflection what's it what's the big shift and misunderstanding going on so so I I would tend to you know actually agree with with Rob that I think folks aren't yet really appreciating and I guess I would twist it a little bit and say the insight instead of just the data but but they're not realizing what that is and what it's going to give us the opportunity for you know I would retire early if I actually could predict everything that was going to happen but but you know yeah but if you think about it you know if you think about you know mid to late 90s and what we would have all fault that the internet was going to allow us to do compared to what it actually allowed us to do is probably like night and day and I think the the time we're in now when you take data and you take mobility and you take cloud and you take these systems of engagement and the fact the way people individuals actually want to do things is is similar but almost like on steroids to what we were dealing with in the mid-90s or so and so you know the possibilities are frankly endless and and I think that's part of what people aren't necessarily realizing is that they have to think about that insight that data that actually has some value to it in very different ways there's a lot of disruptive enablers out Dunham's there's a lot to look at but finding which ones will be the biggest right it's hard I mean you get paid a lot of money to do that is if you can figure it out and keep it a secret um but you didn't you machine learning is now out there you just shared with us out competitive advantage so everyone knows know everyone kind of new kind of in the inside but but not everybody's using it right i mean i think another example a company like into it has done a great job of they started off as a software company they've become a data company i think what you what i've observed in all these companies is you can build a business model that's effectively recession proof because data becomes the IP in the organization and so I don't I actually you know I think for us those are the live in the world we this is well understood I don't think it's that well understood yet yeah insiders mic right and you know when we first started doing big data research and working with thousands of clients around the world there were there were six basic use cases it started of course with the customer the the end customer and the customer 360 and that sort of thing and went through a number of different things around optimization etc but the additional one is about those new business models and you know that is clearly in the last 12 to 18 months has become a lot more of what the topic is when I'm talking to clients and I think we will see that expand even more as we go in the future we've a lot of activity on the crowd chatter crowd chatter net / Hadoop necks and I'll mentioned we can probably extend time on that if you guys want to keep it keep it going conversation is awesome and we did getting the hook here so we'll remove the conversation to crouch at totnes Esther Dube next great thought leadership and I can go on this stuff for an hour you guys are awesome great to have you on the cube and so much to talk about a lot of ground will certainly see it in to connect go final question for you guys is what do you guys see for this week real quick summarize what do you expect to see it unfold for a big data week here at Silicon Valley Big Data asked me so I think you know a lot of the what we talked about machine learning is going to be a big topic I think there'll be a lot of discussion around the open data platform that Beth mentioned before it's a big move that we made along with another group supporting the apache software foundation I think that that's a big thing for this week but it should be exciting alright guys thanks for coming out to be IBM here inside the cube we're live in Silicon Valley would be right back with our next guest after the strip break I'm Jennifer this is the cube we write back