Las Vegas expensing the signal from the noise it's the kue covering you interconnect 2016 brought to you by IBM now your host John hurry and Dave vellante okay welcome back everyone we are live here in Las Vegas this is silicon angles the cube our flagship program when we go out to the events and extract the signal annoys we are at IBM interconnect 2016 it's our fifth year now doing all the IV meds now interconnecting out the cloud show I'm John furrier with my coach Dave vellante our next guest is Eric Herzog vice president of storage and software-defined at IBM welcome back you belong great to see you great thank you very much always loved helping guys out of the cube thank you very much for including us pleasure we are very cognitive today we get cognition going on the cube we have all kinds of real-time we've got api's and notifications or and we're going to stract some insight and predictive and prescriptive analytics from you right first what's going on with storage and software obviously storage right now you're seeing huge change Dell buying EMC which you know a lot about emc IBM buys the weather company two contrasting strategies but Stewart still it's the center of the value proposition we also heard Robert de Blanc say on stage today cheap compute he didn't say cheap storage storage visited it did he didn't say so long about cheap storage okay I stand corrected but you talk about a commoditization of resource still valuable I always said what's wrong with cheap compute want more of it I want more and more compute so storage does he changing the software values their last time we spoke about that what's the update in context to cloud what's the storage equation was a storage angle well for us there's a huge value proposition when both the cognitive side and in the cloud infrastructure side obviously with the tumultuous change in storage both from just where the world is going we believe that you ride the wave a flash and software-defined and that is our mantra as you know one of the industry analyst firms who tracks the numbers we were number one in flash capacity shift and number one in flash units last year are all flash and we've been number one several years in row and software-defined storage so while the storage envelope is changing if you open up that envelope we're writing the change inside that omelet which is flash software to find converged infrastructure with our pure power product and also with our partnership with Cisco on the verses stack that's two years in a row for flash leadership right yes charge same thing with software to bunt well the good thing is well the other guy leads in revenue we believe in a fair price for an outstanding award-winning product line on the software value now the cell where that fits in we had multiple guests on today we had you know Jamie Thomas former GM and storage now thinking a more systems view its horizontally composable infrastructure now our dead loss infrastructure as code how does that change the equation certainly we want storage but now you've got software driving the change where's the wisdom value points there well when you look at the software-defined infrastructure the magic fairy dust is in the software so we can work with our own hardware we can work with our competitors hardware over 300 different raise from our competitors are completely compatible with our software to find solutions for storage and we can use with white box if one of our channel partners our end users would rather have a white box storage bear hard drives from seagate OWD and some some flash and just a wrapper of metal we are software provides the value add for integration into hybrid cloud configurations in the cognitive configurations into the oceans of data and big data and into analytic environments all powered by software-defined storage ok so you've been on less than a year now all right you came on last summer right yes mid year so what nine months roughly yes inland what are the big learnings that you've encountered and then we'll start from there and then we're going to get into result are you going to transfer yeah I think the big learning is the world is evolving and a lot of the customer base hasn't gotten there yet so we're going to take them on that journey with flash software-defined converged infrastructure so we're going to lead that charge we're going to ride the wave not fight the wave sometimes iBM has fought the wave we've changed that in the storage world so we're going to be a leader we're are a leader in flash we're leader and software-defined are converged infrastructure particularly with Cisco had an incredible year last year you know for our first year we had over 250 customers over 400 units sold and while there are others who are bigger in our first year that was one of the best first years in the converging instructor of any vendor and that's the power of our software to find portfolio our flash portfolio and the things we deliver from a storage perspective that helps customers they convert either the software-defined infrastructure or converged infrastructure so that case so that sort of answers the question as to how you're going to deal with immediate it's not unique you got old stuff that's declining you got new stuff that's growing like crazy but still not big enough to offset the decline of the old stuff you got currency headwinds but the there's light at the end of the tunnel in terms of that transformation to those newer architectures is that fair yes absolutely last year if you look whether it was in the channel with our award from computer reseller news as the best enterprise storage provider in the world and that was in the fall of 2015 so when you look at the channel and what they're looking for from their provider unlike the guys in hopkinton in Austin who are merging they didn't win that IBM one that so great solution for our Channel Partner base we've won awards for software-defined for all flash we did very well in the hybrid or a category last year with several product of the Year awards so again yes we have an older installed base one of our big goals this year is to refresh that installed base with software-defined with all flash with a comprehensive family of hybrid raise to make sure that people understand this is where the market is going this is where you need to go to drive cognitive value hybrid cloud value quite honestly it's all about applications workloads and use cases and even though I've done storage for 31 years let's face it most CEOs can't stand storage have to put it in the language that they understand which is software value-add and how it can enhance their ability to meet the business SLA s that the CIO is under pressure from the VP of Operations the VP of Marketing the finance side and of course ultimately the CEO so in this business I've been in the business maybe not 31 years but maybe 35 okay so the product portfolio is very very important one of the criticisms I've had of IBM over the years has been just not enough product innovation coming out great R&D but doesn't hit the pipeline so when you came to see us in Boston you showed us a little you know glimpse of the roadmap and it's very clear that's accelerating I wonder if you could talk about that what can you share with our audience sure we've done it we've done a couple things first of all we have the flash religion we acquired a flash company get started but so did several of our competitors in addition to spending money on that acquisition we've invested over a billion dollars in engineering resources on the flash site software-defined we're spending a billion dollars in that as you know we recently bought the award-winning and market-leading object storage technology with clever safe and we spent money on that so IBM is putting its money where its mouth is its focus is on storage and how storage enhances hybrid clouds cognitive big data analytics and you know deals with these oceans of data that our customers are facing and how do you manage that and how do you make the data more valuable and more productive to the business because that's what about it's not about storage it's about the management that data to optimize our customers business and how we can deliver that with effective cost so clever save was mentioned in the keynote in context to LeBlanc's reference to the digital transport transit of you know new stream the video stuff interesting how he plugged in clever see how it is that relate I mean honestly I know it's a recent acquisition is it's just the objects towards an unstructured data why is clever stay plugged into that kind of portfolio of those four companies you mentioned around you know is when you develop that type of technology you end up with incredible amounts of data and an object store is designed to handle exabytes of capacity and exabytes of information it doesn't necessarily have to be fast for example video surveillance data and all kinds of other data may be hot for a while and one of the values of clever say for example is on our spectrum scale product which is our scale out network attached storage actually will automatically cheer too clever safe we're in a public beta right now our spectrum protect product we've also talked about is going to support clever safe either as an source so you could back it up but more importantly as a target so you could take gobs of data and back it up into a clever safe repository when you've got oceans of data and people are generating exabytes and exabytes of data what you can get with clever safe on premises or in a cloud configuration allows you to handle this extensive data growth cost-effectively and in an easy to manage and configure way about the end where relationship with storage obviously there in an announcement today with IBM EMC recently had an announcement with VMware and VX rail rom and the big debate was I see his hybrid cloud was deposition using their software stack to be a glue and into the hybrid cloud journey but one of the comments that we made note of that we captured on the prowl chat was from Keith Townsend one of our members of our community he wrote it took Netflix seven years to move to the public cloud meaning everything all flash they had one of the first all flesh implementations that Amazon ever rolled out what does that mean for the average VMware customer in this case IBM customer from a product perspective so you got you know your relationship VMware you have this notion of hybrid cloud right it took Netflix seven years there in the cutting edge what does that mean for the average customer this whole notion of using software in storage plugging the hybrid cloud it took them seven years was it 70 years for an average company well you've got to remember that that started a while ago and the move to the hybrid cloud is just accelerated dramatically so our spectrum scale product our spectrum accelerate product our spectrum protect product all are designed for hybrid cloud configurations right this minute they're easy to employ they're easy to use they're all available in softlayer they're also filled with other cloud providers spectrum protect as close to a hundred different msps and csps who provide backup and archive services with award-winning spectrum protect so our specialist families and I've different than it was seven years ago today actually its accelerated easy-to-deploy it's easy to use you have a wide choice of msps and csps to use whether it's soft layer or other providers in the industry and our software-defined storage supports all of that vendor base regardless of whether it's IBM SoftLayer or other cloud providers as well well you could argue to Netflix did it at a time when it was early days right it was near the Pioneer they were they were final trees hack and you know right they're the ones with the arrows in motion tracking chaos monkeys everywhere so so Tommy you guys okay all right sorry John I want to talk about the state of the industry it's a lot of interesting stuff going on even in the business for four decades you understand some of the trends you've seen a lot of the ebb and the flow how would you describe where we're at right now seems like an uncertain time so storage is incredibly tumultuous right now one of the good things about storage it's constantly filled with innovation as you know from my past I've done seven startups thank God five have been acquired so I can wear a Hawaiian shirt they're expensive these days ISA why insurance so every five six years you have a wave of startups of the storage business that's not common in most other segments of the IT market space but in storage it is so you have a constant wave of startups that happens on a normal basis and we're in one of those phases right now at the same time you have massive change in the Tier one vendor base EMC and Dell emerging HP splits into two network appliance which had been an incredibly great company it's fast has now missed their numbers almost eight quarters in Rowan just last week announced they're laying off 1500 people so the world is changing dramatically also the applications workloads and use cases are changing dramatically so you've gone to a cognitive ear you don't have cereal management of data you now have parallel management of data you don't want databases that react or let's say a data warehouse it takes 30 hours to run a report you want the report to run in one so if you will real-time cognitive data availability and ability to analyze that data and that is dramatically changing what startups are out how successful they'll be how the tier 1 vendors are reacting you know for example one of the great things about IBM is we are focused on flash which is the fastest grain storage systems market and software to find which was one of the fastest growing storage software markets and we're leaders in both market spaces so when you open up the envelope of what's inside storage it's a slow growth market three to four percent per year is all it's growing but certain segments are growing rapidly and IBM focuses on those rapid growth segments now but the cloud piece right so you make you guys are talking about clever safe before I was thought that was a cloud acquisition which it was in part right but it's also something that falls into the storage portfolio right and that's because clever safe can be configured in a number of different ways on-premises only cloud only or hybrid configuration we can have an on-premises clever safe configuration talking to a cloud-based configuration so again part of IBM strategy to make sure that from a storage perspective all of our software to find infrastructure and what we acquired with clever safe are designed for hybrid cloud configurations or private cloud configurations or public again our spectrum family is used by hundreds of public cloud service writers to deliver a backup service for example a spectrum protect so the reason my question was this very clearly in effect on that you talked about three percent or whatever you know the the latest numbers are it's flat Marcus gases and flat is flat but the cloud market of course is growing like that from a smaller base but it's clearly having an impact on demand is that a fair statement yeah I think what's happening when you look at it from a storage perspective where you're really having the biggest impact on cloud is in the lower end in the entry space yes the capacity is growing exponentially but whether it's the department level of a giant at global fortune 500 whether it's Herzog's bar and grill or a midsize company when they need a small array a lot of times are going to a public cloud configuration so that low end of the market is shrinking at the same time when you do software-defined if you're one of the tier 1 vendors the storage could come from off-the-shelf hard drives so the values in the software but that also delivers a revenue hit to the vendor base and Ashley when you think about how would you get incredible performance five or six years ago you would have bought an array that was five to eight million dollars best case if not closer to 10 you'd be lucky if you could get 200,000 I ops maybe you could get five milliseconds latency today at an average sale place of 300,000 dollars we can deliver over a million I ops and sub hundred micro center and latency so you don't need to buy your big iron at five eight 10 million you can do it with something for three hundred thousand dollars huge the bottleneck John okay I mean this is back to our kena brian.krall from Apple was on stage another great company leaders in the delivering great value but he made a comment I want to get your reaction to because I know it's a phone analogy but I want to bring into storage if the values and the software and all flash is the bet you guys are making the numbers are impressive in terms of performance in terms of I ops throughput and and cost per puss per megabyte he said you got to get closer to the hardware to write your native apps and he's referring to the iphone software app using Swift and xcode to the hardware so in storage look different how does the software piece take advantage of the hardware and is that built-in is an obstacle the customer because we're seeing this notion of okay take care of it take advantage of the hardware so what was how do you reconcile the we've done some very strong things there so let's take for example our spectrum virtualized software spectrum virtualize allows enterprise class data services across heterogeneous storage environments hours our competitors and anything that's white box over 300 arrays we have taken the spectrum virtualized platform and integrate it into our v nine thousand flash systems all-flash array into our mid tier storwize v7000 and our mid tier storwize v5000 which we just launched last week three new configurations we also have the sand volume controller but what we've done is integrate that spectrum virtualized software which rides a virtual back end of all storage not just our own provides a single way to replicate a single way to snapshot transparent block migration on the fly and integrate that right into flash systems and storwize as a software comes as a hard annick Stauffer comes with it exactly it's built into the size of Jeff managed as a code or estructuras code like an apple programa billion native app to the iphone what does that develop or doing with you guys is it through that software layer or how they could be right i mean the key thing when you look from a DevOps perspective they want to quickly be able to provision storage okay and with things like all the spectrum family and with the gooeys we've implemented into our store wise our XIV and all of our storage products it's very easy to deploy storage you can do it in minutes so whether the DevOps guy does or where the deadlock flight calls the storage guy the bottom line is they can get the storage up and running in a virtual environment a containerized environment in a matter of minutes and from a DevOps perspective that's what they want so we're able to meet the needs of the DevOps guy but also the traditional storage vendor as well don't get one last question for me for the henna we've run out of time they might have one more but I want to get your take on this because it's really been an interesting industry chess game with VCE and VMware and EMC doing the hyper converged x4 star calling it this hyper conversion without Cisco right this is because no longer you mentioned you in partnership with Cisco so VCC and bx rails was talked about last week what's going on with VCE is it still going to be around you see you're taking multiple forms is the increased breadth of solution is going to be multi-vendor what's your in it what you're taking on so you were at IBM cell you have relationship with cisco has that how does that what a customer's deal and what does the customer do because they're like okay who do I so I think there's a couple things that customers to look at first of all there's going to be a transformation VCE as it was originally constructed a partnership with cisco EMC and VMware will not exist after the acquisition this is my theory what will happen this distinctive sorry Cisco is go in there's no luck involved so all happen is those Cisco servers will be transitioned now and dell servers will be tradition did it's exactly what's going to happen so cisco is aware of this and cisco has been engaging with other partners like i mentioned the vs. tak had the best first year of any converged infrastructure in the history within its first year why well in the middle of last year what happened Dell an EMC an announced a merger so a lot of the business partners a lot of the end users there's cause for concern and EMC is already taken Cisco out of a number of configurations and there's a number of things for an end-user to think about one look at the development budgets what was the EMC development budget what's the dell development budget and substantially lower EMC did an outstanding job of acquiring startups with the debt load that's been written about publicly not just in the storage fresh but really in the financial press will be able to afford to buy a bunch of cool startups like EMC used to do the old days hard to say an EMC well I thought of stata domain was a great acquisition for uniting isilon same thing will they be able to continue to do that and like IBM EMC has a pretty good reputation for support and service that's not really reputation of the guys in Austin their reputation is cost-effective rapid delivery not necessarily the best important service the enterprise side people looking for that enterprise-class important service so those the questions that a customer needs to ask at the end user level where a channel partner use a civ as this merger goes for how's it going to impact the roadmap for the future the development expense my support capability those are things that have different models in those two companies so being should see how it pans out unfortunately we're out of time because we could do a whole cube second just on that area thanks for coming by give you the last word what does the digital transformation for the customer of IBM the buyer when they talked to you in the elevator and they say hey what's the storage angle on this digital treasure where the stores fit into my digital transformation what's the what's the bumper sticker what's the value proposition well the key thing digital transformation is a different sort of data it's been data for years and years and years data has to sit on storage the better the storage is your better the digital environment is the faster it is things like flash systems or our spectrum scale for cognitive the better that date is going to be so the digital era is powered by storage underneath it's like the foundation of a home good foundation great home good foundation great digital data great foundation the cube day one here more foundational coverage tomorrow the cube conversation will continue tomorrow day two we had more interviews today but tomorrow a lot of big names the biggest names in tech most powerful people here IBM interconnect is the cube we right back with more coverage here on day ones wrap up after the short break