>> Live from Los Angeles, it's theCube covering Open Source Summit North America 2017 brought to you by the Linux Foundation and Red Hat. >> Hey welcome back everyone, live here at Los Angeles, California it's theCUBE's exclusive coverage of the Open Source Summit in North America. I'm John Furrier, your host with my co-host Stu Miniman with Wikibon, and our next two guests, Alan Dickenson who is the program director of the blockchain platform at IBM and Shaun Frankson, who's the co-founder and TED speaker at a company called The Plastic Bank doing some truly amazing things with technology for the betterment of society and communities. We'll get this out in a second. Guys, welcome to theCUBE. >> Thanks for having us. >> So two important things honestly. IBM, well-known in the history books that's being written. Real proponent of Linux, they were one of the early guys in during that movement, with a billion dollars in cash. That's a big number. You guys went all in on Linux, good bet, Linux was successful, it's now the standard so congratulations. Now you have the same thing going on with Blockchain. IBM's got the big bet, the company's best brains at work working on blockchain, kind of reminds me of the Linux move back in the day. Pretty impressive. >> Yeah I mean, there's a lot going on with Blockchain and one of the reasons we're here is that this is a developer event. We really want to help accelerate technology adoption and with our platform we launched two weeks ago, we have a whole suite of capabilities that developers can use that's complimentary, that's free and they can use that to go and try blockchain with a Hyperledger Composer and they can experiment and work on blockchain projects. >> You know I love the IBM marketing department, they always have the best commercials. To me I also love the Smarter Planet and I think Shaun, I would like to give you a chance to talk about your amazing project you have going on. Take a minute to explain, you're up on stage here at the event, pretty compelling, great social good, real value. What's some tech behind it. Take a minute to talk about your work. >> At The Plastic Bank we make plastic waste a currency so in developing countries it can be too valuable to enter the ocean. So the mission to use technology to stop ocean plastic. So we create a recycling ecosystems all around the world where people can go out, recycle the plastic that's abundant in the environment, they can earn enough value to provide for their families, send their kids to school and we have this entire ecosystem where we gather the plastic, we have these incentive programs to sort it, recycle, then we actually sell it back to some of the world's largest corporations who can use that recycled social plastic in their products instead of using new plastic. Which means that every single product tells a story of stopping ocean plastic, reducing global poverty and this really allows just a responsible consumer to make a choice that's helping to stop ocean plastic in the end. >> Well great story I just want to drill down because this highlights couple of big trends we've seen in the Internet business as it got into Big Data. And certainly you guys know a lot about that at IBM. The collective intelligence idea of having these self-forming communities, you think of any problem. Recycling plastic, which is not that hard to do, you go to the placement. How do you get it institutionalized? Is the collective intelligence problem. So you got a clever idea to do this but you also have to support it. There's a lot of cost involved so how did you pull this together? What were some of the nuance to keep the incentives, to keep the motivation, to create the payouts. We all recycle our cans for five cents at some points in our lives, I remember when I was in college it helped me a lot. But it's a whole other scale here. Take a minute to talk about the technology. >> For sure. So we're starting in developing countries that essentially have almost no existing waste management systems so we're really starting from the ground and looking at the way of how do we remove the dangers of the cash-based systems, instead have an asset-backed token that we can safely distribute and create new abilities. So really we're dealing with the unbankable who can now for the first time, save and earn through recycling. So it's not really not looking of how do we go back to you know, what's been done in the past, it's how do we take an area and start with the best technology that exists to safely bring in these new systems. >> When you say unbankable, what does that mean? >> I mean sadly, but most of the world does not qualify for a bank account. They don't have the identity, they don't have the credit history, so it's simple concept of how do you save 200 dollars to send your kid to school. You essentially hide it under a mattress and hope that nothing happens in between. But when you can safely have a digital wallet, it's just instant savings. >> Mobile phone penetration is pretty high in these areas, so they might have mobility but no actual institutional credit bank account, am I getting that right? >> Oh exactly. It's amazing when we think there's countries with no power but who have phones. So that means the education of the mobile payments is still there, it's not a foreign concept, but now you can earn the tokens which can then even be converted into mobile payment. Again where recycling is the equal opportunity. >> So are you using the blockchain component, IBM blockchain, or are you guys using a derivatives, what's the tech? >> So we use IBM blockchain, Hyperledger Fabric and LinuxOne and you know it's a system designed to scale around the world without any interruptions and just it's a go big go at home and do it right. >> You mentioned LinuxOne and I believe there's some announcements week around how to secure containers even more and we've been trying LinuxOne, Linux on the mainframe for quite a few years. Give us the update on what's new. >> One of the new things that we're announcing at this year's show is Emperor II. It's a new Linux platform and it's the technology that's underpinning The Plastic Bank's blockchain. The other thing that we're announcing is the beta for Secure Services Containers. Around the globe we have a lot of cases where data is stolen and blockchain's another type of data, we don't want it to get stolen even though there's a lot of encryption in blockchain. We still don't want the data stolen and people trying to get at it. So we have this idea of Secure Service Containers that kind of wraps around the application and protects it from malware, protects it from insiders, can't see it, insider credentials get compromised, goes into the main ways, data gets stolen. You have to do it that way. Even if IBM gets a court order for us to reveal your blockchain data, we can't do it. It's protected and encrypted in this area, and only you have the encryption keys. So the beta for that is something we also announced today. And then two weeks ago we announced the blockchain platform, it's kind of a technology that we put in place to accelerate and help people. >> Security is a huge issue, I mean the ICO marker for instance, remind me of the old stagecoach robberies, right. You literally do like a multimillion dollar ICO, completely a secured, when you're getting your wallet getting snatched, you're getting hijacked, is that something that is related to that? Or is that just a point of the security is still an open book? I mean you can have secure transactions on the blockchain but you still got your wallets out there, so you got to have a wallet strategy. >> Most of the Secure Container technology can be used for any Linux application that you run when it's out of beta. Right now it's in beta. So we're looking for users that want to have a very secure application environment, running on Linux and sign then up for our beta. >> Shaun can you tell us, what led you to this solution? I'm sure security has got to be high on your list, the kind of financial transactions that are involved in it, but I have to say a young small company, mainframe is not the initial thing that we think of. >> Again, the only way to solve the global problems is really go on such a scale that we can have hundreds of millions of pounds provided to the world's largest companies. Which just means it's got to be large scale, no interruptions and for us, trust is the biggest thing. Investor trust, client trust, and just even everyone's trust that not only the financial side, but you know we're delivering a promise of social good, environmental justice, that if we get an irrefutable trust that it's just the right system, and to me, blockchain's a trust stamp, IBM's a trust stamp, LinuxOne is a trust stamp that just it's the right way to do it on a global scale. And for us it was global was the only way to go. >> And now of course, the supply chain is a channel that you're dealing with that blockchain is a good fit for. A lot of these early use cases, their supply chain like, well you got to keep track of a lot of moving parts and who's contributing to what. >> You can have a digital token that represents the physical asset and you can kind of track it through that way and blockchain can keep the information safe and documented so that you don't lose track of the value. >> Well we're super excited. As you know, we're looking at blockchain for our audience and our world, so it's interesting, a lot of the blockchain, certainly people see the hype and the scams out there and the ICO stuff, which is natural, they're early market, the underbelly kind of shows itself, we've seen that movie before. But, here's the thing that I've never seen in my career ever. Very often, when you have alpha geeks getting super excited, we're talking CTOs, really strong technical people, and A plus entrepreneurs, they're salivating at the blockchain opportunity because they're the canaries in the coal mines in my opinion on disruption opportunities. You seeing use cases where I can solve that problem, people with passion are going after these new opportunities that were ungettable before because you'd have to roll out this complex software product, all these costs to get started. Same pattern. >> We're seeing a lot of technology people get excited about it. But they understand the technology relatively quickly and they can get it. What seems to be slowing down a lot of blockchain adoption is more the linkages with other organizations because when you're exchanging value, you're passing it between one organization and another, and another and a value chain. And getting that value chain where you can articulate who it is, and codifying the ways that you work with the people in the value chain and create a smart contract around that, that's what we see slowing down the progress of blockchain. >> We had Brian Behlendorf on yesterday, he runs the SmartLedger project for the group and we talked about decentralizations versus distributive, we all know what distributive computing is, we've seen that. But now with decentralizations, he had a good quote, he said, minimum viable decentralization and 'cause if people think that you have to have a completely decentralized environment which I thought was a really good observation. >> I agree, I heard him say that and it reminded me of one of the steps we see in blockchain progression is we have to get a minimum viable ecosystem together. We see people sometimes biting off too big of a problem and one thing I like about The Plastic Bank's approach is that they try to get it working right somewhere first and then scale from there. And then the same thing with blockchain. You have to get your ecosystem defined, you have to get that working and then expand from there. And that's one of the things that we've designed into our blockchain platform, is the ability to govern a group of folks that are trying to exchange value and then also how to operate a blockchain once it's exchanging value with a group of folks. Things like, lets say you have a new version of Hyperledger Fabric, you want to take down your blockchain that's operating while you install the new version, but we've made sure that you can do that in a smooth way that keeps on running. >> You know Alan, that is a super smart observation. I hundred percent agree with you. I've always said this, and Stu and I and Dave, we talked about this. Blockchain is a community win. The community could win this together as the community participants increase in that kind of philosophy, the value increases. If it's a winner take all, it doesn't work, clearly. So what do you guys with the ecosystem? That's a good question. Are you guys investing in the ecosystem? Can you give some examples. Obviously you're supporting great projects. >> We've built a lot of technology but one of the things that is unique about IBM's approach to blockchain is the governance tools that we've created to help manage the ecosystem. We're the only blockchain partner out there right now that has these kind of ecosystem partner tools that can kind of speed the creation of bringing multi parties together and helping them think through how they should govern the creation and then also the operation of the blockchain. What if you want to add a few more members after your blockchain is running? That's a technology problem, but it's also a business problem. And will your blockchain keep running? >> Well we'll keep in touch, we definitely want to do a lot more coverage on what you guys are doing. I think it's instrumental, we're doing a lot of coverage as well on the ICO side, tracking that business side of it, but down on the enterprise it's a lot of activity coming and I think Accenture is going to do very well. Shaun, get back to you for a second. Want to ask you a quick question. On a personal note, what has been a learning from your process? You're doing, what seems to be probably an exciting and intoxicating job where you're making social good happen, using some tech. I mean, it's a cool project. Assuming there's been some bumps along the road like any other entrepreneurial venture. What are some of the learnings you've taken away from where you are today, where you've come from and what you achieved? What are some personal learnings? >> I think really the two biggest things is one, especially coming from just a entrepreneurial nature, it's not what you know, it's what you can figure out. There's always a how. And for us, when it was when you come up with such a giant idea and you just know where it's going and where it can go past there. Mentally just becoming the person capable of achieving what you are trying to achieve as compared to getting caught up on all the things you don't know, I mean the more you know, the more you know how much you don't know and it's really just getting inspired by the fact that whatever the next answer, whatever the next hiccup, whatever the next how, we'll figure it out. I might now know the answer, but I'm committed to figuring it out and committed to becoming the person capable of figuring it out. And you know it's a journey and process and an inspiring journey to be on. >> You got to dream the future to create it. What you're saying is it's a growth mindset, I love that growth mindset, say hey we're going to go after it, we're going to see some things and have to figure it out, that's a great mindset. Versus nervousness and insecurity. Good job, well done. Well congratulations on your success and thanks for coming on theCUBE, we really appreciate it. Alan, we look forward to chatting with you in the future and talking blockchain. IBM here on theCUBE with the great projects they're doing on blockchain and also they had an announcement a couple weeks ago around some really cutting edge value around food distribution and value chain so again, Smarter Planet, I know you guys do a lot of investments early on but congratulations, and continued success Shaun. Live coverage here from the Open Source Summit in Los Angeles, California. It's theCube, I'm John Furrier, Stu Minniman, be right back with more after this short break.

>> Narrator: Live from Las Vegas, it's The Cube, covering IBM Think 2018. Brought to you by IBM. >> Hello everyone, welcome to the third day of live coverage here at IBM Think in Las Vegas. This is The Cube, our flagship program, we go out to the events, and extract a civil noise of the leader in live technology coverage. I'm John Furrier, with my co-host Dave Vellante. Our seventh, eighth year covering a bunch of IBM shows. With all now six of them rolled into one IBM Think, this is their big tent event, day three, keynotes just finished, it's blockchain day here at IBM, and as we said, on the opening, on Tuesday, this is like, the innovation sandwich. In the middle is the meat, is data, and then the bread is blockchain and AI. And really that is the architecture of IBM's future strategy, foundationally set up by cloud computing and a variety of other applications and whatnot, but really the future is about data, with blockchain and AI surrounding it. Today's blockchain day, your thoughts on the keynote? Keynote speeches? >> Mm-hm. >> IBM, blockchain, certainly we've seen a lot of advertising on TV. Your thoughts and reaction to the keynote. >> Yeah, and I like your innovation sandwich, I just want to add, that the substrate of all this is cloud. It's critical, if you're going to get network effects, you've got to have the cloud. Today, yeah, was blockchain day, we heard from Marie Wieck, who's the general manager of IBM blockchain. IBM has a tendency, as you know, John, to identify a hot trend, especially some in Open Source, they did this with Linux, they did this with Spark, and they kind of, elbow their way in, you know, maybe that's a pejorative, but they do that, and they say, "Here's some code, here's some resources." They spend money on it, and they give credibility to that Open Source effort. The Hyperledger project is the one they targeted here. It's the fastest growing project in the history of the Linux Foundation. IBM contributed lines of code, people, they've got 15 hundred blockchain experts on this, and they're going all in on blockchain. Which I think, John, is really positive for the blockchain, and even the crypto community, because it brings the credibility of a, you know, a Fortune 100 company to that world. They've announced the blockchain starter kit. All this stuff is available on the IBM cloud. They announced today PWC as an audit partner, which again, brings credibility to the table. Although, I think as you and I know, and we're going to have some guests on later today, there's some other tech emerging, that is going to maybe complement that. >> Yeah. >> And we heard from David Katz, who is the CEO of Plastic Bank, this is the company that's essentially creating currency out of plastic. Allowing disadvantaged people to turn collecting plastic into money. And, at the same time, help save the planet. >> I mean, this is a great example of blockchain as an enabling technology. New ways to do business. As you know, we've been hot on blockchain for the audience watching, you know, we've been covering big data, and AI, that's in our wheelhouse, do all those shows and events, cover that territory with our journalism, and TV and research. But blockchain is an adjacency to storage and infrastructure, and also decentralized applications. The fundamental thing that we're seeing, and we talked to Brian-- Brian Behlendorf, who's with the Hyperledger project, at the Open Source Summit, the Apache Foundation, which IBM is a big sponsor of, IBM needs to do well here. Because they're, again, innovations is essentially betting on blockchain. But it's not just the developers at Open Source, the business users are the ones that are going to create the value, and what I mean by that is, if you look at the blockchain world, and crypto currency and decentralized applications, that's essentially the three components to this market. The blockchain is the infrastructure, ledger, storage of data, et cetera, you know over simplified, but the cryptocurrency runs protocols and infrastructure that power that, and then the application's going to sit on top. We've reported and observed that the secret of success in this new world, is nailing the business logic, and the business model, efficiencies that take advantage of the underlying technology. And that the risk factors in making that success happen, is that business model, not the technology. Although the technology is super important, the technology can be switched out a reduced risk. So the real risk in blockchain and cryptocurrency, and decentralized applications is nailing the business model disruption. This is different than the old way of tech, which was the risk was technology selection. This is a big deal, IBM needs to up their game on that piece of it. I've heard a lot of tech, I've got some nice use cases, but on the outreach basis, they got to go to the business users, and say, "This is an opportunity to leverage the data, "leverage the software and AI with watts and other things." And then leverage the underlying technology, software defined storage, software systems that move to the blockchain, in a decentralized and distributed way. Distributed and decentralized is the future of infrastructure, this is the secret of success, this is where the winners are establishing the clear line of sight. >> Well, one of the things that you're hearing at this conference, Ginny set this up yesterday, was incumbent disrupters, and we were just, kind of, having fun at the open yesterday, but I think it's really smart for IBM. You know me, John, I'm a big fan of saying most of your business is going to come from your existing customers, and if you're chasing all this new business, and start ups, and developers, you're not going to be as productive as if you go to your core. And I think that you're seeing this. IBM back to the core, and they're bringing blockchain to that core as a way to disrupt existing business models, defend against disrupters. So you're absolutely right, companies need to look for inefficiencies where there's a third party taking a toll, and then attack it hard with blockchain. I actually think-- well no, so IBM is really talking business. How do we bring blockchain to the business? They're not really talking about what we talk about a lot, this crypto economy and this whole other mission driven initiative. >> Well, but I mean, if they want to talk business, they got to talk token economics. That's where the business model efficiencies will be rendered on the app side, and the money side. The killer wrap in blockchain and crypto is money. Okay, and marketplaces. IBM got to great marketplace, but it's not just about the developers, that's an organic one stakeholder. The stakeholders that matter is the business guys and the developers coming together. That is absolutely fundamental. If they don't understand that, that's going to be hard to be successful. You can't just throw money at developer programs and say, "Oh, when we win the developers, we win the day." Cloud was, kind of, that playbook, but this world is so fast, and accelerating in it's value creation, that the business users are fundamental in actually grokking what the capabilities are, and putting that into motion quickly, and the proof points is pilots converting to production. That's going to come from the business units. That's where the intellectual property is, is looking at the technology innovations that are possible on the business logic. Business logic is the new IP, this is where the action is, and I haven't heard IBM talk at all about token economics, they kind of talk about it, but that really is the business impact. >> Well, I mean, you sort of heard that today from Plastic Bank, although they didn't talk about a token, they didn't talk about coins, they did talk about monetizing plastic, but in using blockchain to do that, I assume there's tokens behind that, but maybe not. Maybe it's just Fiat currency. It's unclear to me, but I think you're right, the killer app is money. >> Look at it, this is simple. The equation in crypto, and not blockchain, is value creators create value, and they can capture the value. Capturing the value is where the money is, the creating the value is where the technology can happen. So you got to nail both of those as areas. And money is the killer app, so that's going to come from the business side, so the real benefit of decentralization is offering the value capture equation to look different and be different. That's token economics. That's where the action's going to be. So, it really is, it's not mutually exclusive, they're both things. >> Well I think that what you're hearing, so value comes from two places in the simplest form, increased revenue, cut costs. I'm hearing a lot from IBM of cut costs, now again, the Plastic Bank this morning was a really interesting example, I'm glad IBM uses it, but the vast majority of things you're hearing from IBM, like the IBM Maersk relationship, et cetera, are about cutting costs, taking out inefficiencies. >> Well, I mean, the bank thing is easy to look at in your mind, but it's any supply chain. The ICO market that's at a massive bubble right now, is because the supply chain of funding start ups and growth, used to come from private equity and venture capital, that is being disrupted because it certainly hyped up, but that's a supply chain. Any supply chain activities, set of activities, that make up a supply chain, can and will be disrupted by blockchain, crypto, and token economics. >> Yeah, so let's talk about that. Because again, you're not hearing a lot of that from IBM. But I think we have a perspective there. You know, the 1.0 was the wild west, a bunch of developers, blockchain developers, theory developers, doing stuff, building up protocols, making a lot of money. And disintermediating the VCs, right? The new form of raising capital. The VCs are now all in, right? We saw this in Bahamas, you saw this in Puerto Rico, at the two conferences, at four conferences that we covered. So explain that? >> Well, that's just one application, the VCs and these guys are inefficient in some way, but what's happening with crypto currency about access to capital. Now there's a lot of capital being thrown out there. That's mainly because of the hype and the bubble aspect of it, but the real disruption is access to capital, that value chain, value activities are being disrupted and being more efficient. That's a global phenomenon, and that's happening in financing of start ups. Anything with a supply chain, whether it's moving food from point A to point B, is what IBM also highlights as well, anything that's structural incumbent is at risk. And so, this is where, I mean IBM has a ton of supply chain business. They've been doing this for generations in the computer industry. They connect systems together, and create value with using technology. So this is not going to be-- this is a great opportunity for IBM. Again, if they can convert that business value into the blockchain with the value capture, the create capture model, they can run the table. >> But I want to come back to innovation equation. And part of that innovation equation is being able to raise capital. And last I checked, which was last month, about 6.5 billion had been raised in crypto investments. >> And 60% of the projects failed. >> For sure, okay. But failure-- Silicon Valley, fail fest, it's probably up to 10 billion now, much more is being raised through crypto in startups in blockchain than there is in VC. The VCs realized this, and they want a piece of the action, but we're seeing private equity, we're seeing hedge funds, we're seeing crypto billionaires. >> The path of least resistance for the entrepreneur is where the action is. They go right to the new money opportunity. Because they can raise more money. >> So, here's the question. You take Fiocoin, for example, smart guys, trying to go after S3 with peer to peer storage, they raised 250 million dollars in 30 minutes, okay? Is it too much too fast? >> Yes, I think so, but it's what the market's giving. I mean, Fiocoin doesn't even have a product. They're on a roadmap. That's essentially a series A financing. >> Dave: That's a series C. >> Well, no, in terms of the evolution of the startup, it's a seed financing as a series C or D or F financing. >> Yeah, 250 million. >> I mean, it's insane. >> David Scott told us that he needed 85 to start Three Par. I mean that's a storage company 10 years ago, 20 years ago. >> Yeah. >> What a change. At 250 million. >> Look, it's a bubble. But the reality is that it's a bubble that's not going to pop and destroy the sector, it's just a proof point that the efficiency of funding is going to be disrupted. It is being disrupted. >> No, we'll see if it's going to destroy this sector or not. This could, you know-- Warren Buffet says it's going to end badly, others are believers. >> I'm long on blockchain, obviously you know that. I'm pretty biased, but anywhere there's inefficiencies, there's an opportunity for entrepreneurs and business leaders to put new business logic in place to capture that value. That's where the action will be. That's the innovation. And if IBM's innovation sandwich could work, you got a blockchain AI, data in the middle, everyone's going to be full and hungry and eat up everyone's lunch. So, Dave, that's the blockchain day. I'm John Furrier, with Dave Vellante, day three wall to wall coverage here at IBM Think in Las Vegas. More live coverage after this short break. (futuristic music)

>> Announcer: Live, from Las Vegas, it's the Cube. Covering InterConnect 2017. Brought to you by, IBM. >> Okay welcome back everyone, we're here live in Las Vegas for IBM InterConnect 2017, this is the Cube coverage here, in Las Vegas for IBM's cloud and data shows. It turns out, I'm John Furrier, with my cohost Dave Vellante, next guess is Jamie Thomas, general manager of systems development and strategy at IBM, Cube Alum. Great to see you, welcome back. >> Thank you, great to see you guys as usual. >> So, huge crowds here. This is I think, the biggest show I've been to for IBM. It's got lines around the corner, just a ton of traffic online, great event. But it's the cloud show, but it's a little bit different. What's the twist here today at InterConnect? >> Well, if you saw the Keynote, I think we've definitely demonstrated that while we're focused on differentiating experience on the cloud through cloud native services, we're also interesting in bridging existing clients IT investments into that environment. So, supporting hybrid cloud scenarios, understanding how we can provide connective fabric solutions, if you will, to enable clients to run mobile applications on the cloud and take advantage of the investments they've made and their existing transactional infrastructure over a period of time. And so the Keynote really featured that combination of capabilities and what we're doing to bring those solution areas to clients and allow them to be productive. >> And the hybrid cloud is front and center, obviously. IOT on the data side, you've seen a lot of traction there. AI and machine learning, kind of powering and lifting this up, it's a systems world now, I mean this is the area that you're in. Cause you have the component pieces, the composibility of that. How are you guys facilitating the hybrid cloud journey for customers? Because now, it's not just all here it is, I might have a little bit of this and a little bit of that, so you have this component-isationer composobility that app developers are consistent with, yet the enterprises want that work load flexibility. What do you guys do to facilitate that? >> Well we absolutely believe that infrastructure innovation is critical on this hybrid cloud journey. And we're really focused on three main areas when we think about that innovation. So, integration, security, and supportive cognitive workloads. When we look at things like integration, we're focused on developers as key stake holders. We have to support the open communities and frameworks that they're leveraging, we have to support API's and allow them to tap into our infrastructure and those investments once again, and we also have to ensure that data and workload can be flexibly moved around in the future because these will allow better characteristics for developers in terms of how they're designing their applications as they move forward with this journey. >> And the insider threat, though, is a big thing too. >> Yes. >> I mean security is not only table stakes, it's a highly sensitive area. >> It's a given. And as you said, it's not just about protecting from the outside threats, it's about protecting from internal threats, even from those who may have privileged access to the systems, so that's why, with our systems infrastructure, we have protected from the chip, all the way through the levels of hardware into the software layer. You heard us talk about some of that today with the shipment of secure service containers that allow us to support the system both at install time and run time, and support the applications and the data appropriately. These systems that run Blockchain, our high security Blockchain services, LinuxONE, we have the highest certification in the industry, EAL five plus, and we're supporting FIPS 120-two, level four cryptology. So it's about protecting at all layers of the system, because our perspective is, there's not a traditional barrier, data is the new perimeter of security. So you've got to protect the data, at rest, in motion, and across the life cycle of the data. >> Let's go back to integration for a second. Give us an example of some of the integrations that you're doing that are high profile. >> Well one of the key integrations is that a lot of clients are creating new mobile applications. They're tapping back into the transactions that reside in the mainframe environment, so we've invested in ZOS Connect and this API set of capabilities to allow clients to do that. It's very prevalent in many different industries, whether it's retail banking, the retail sector, we have a lot of examples of that. It's allowing them to create new services as well. So it's not just about extending the system, but being able to create entirely new solutions. And the areas of credit card services is a good example. Some of the organizations are doing that. And it allows for developer productivity. >> And then, on the security side, where does encryption fit? You mentioned you're doing some stuff at the chip level, end to end encryption. >> Yeah it really, it's at all levels, right? From the chip level, through the firmware levels. Also, we've added encryption capability to ensure that data is encrypted at rest, as well as in motion, and we've done that in a way that encrypts these data sets that are heavily used in the main frame environment as an example, without impending on developer productivity. So that's another key aspect of how we look at this. How can we provide this data protection? But once again, not slow down the velocity of the developers. Cause if we slow down the velocity of the developers, they will be an inhibitor to achieving the end goal. >> How important is the ecosystem on that point? Because you have security, again, end to end, you guys have that fully, you're protecting the data as it moves around, so it's not just in storage, it's everywhere, moving around, in flight, as they say. But now you got ecosystem parties, cause you got API economy, you're dealing with no perimeter, but now also you have relationships as technology partners. >> Yes, well the ecosystem is really important. So if we think about it from a developer perspective, obviously supporting these open frameworks is critical. So supporting Linux and Docker and Spark and all of those things. But also, to be able to innovate at the rate and pace we need, particularly for things like cognitive workloads, that's why we created the Open Power Foundation. So we have more than 300 partners that we're able to innovate with, that allow us to create the solutions that we think we'll need for these cognitive workloads. >> What is a cognitive workload? >> So a cognitive workload is what I would call an extremely data hungry workload, the example that we can all think of is we're expecting, when we experience the world around us, we're expecting services to be brought to us, right, the digital economy understands our desires and wants and reacts immediately. So all of that is driving, that expectation is driving this growth and artificial intelligence, machine learning, deep learning type algorithms. Depending on what industry you're in, they take on a different persona, but there's so many different problems that can be solved by this, whether it's I need to have more insight into the retail offers I provide to an in consumer, to I need to be able to do fraud analytics because I'm in the financial services industry, there's so many examples of these cognitive applications. The key factors are just, tremendous amount of data, and a constrained amount of time to get business insight back to someone. >> When you do these integrations and you talk about the security investments that you're making, how do you balance the resource allocation between say, IBM platforms, mainframe, power, and the OS's, the power in those, and Linux, for example, which is such a mainstay of what you guys are doing. Are you doing those integrations on the open side as well in Linux and going deep into the core, or is it mostly focused on, sort of, IBM owned technology? >> So it really depends on what problem we're trying to solve. So, for instance, if we're trying to solve a problem where we're marrying data insight with a transaction, we're going to implement a lot of that capability on ZOS, cause we want to make sure that we're reducing data latency and how we execute the processing, if you will. If we're looking at things like new work loads and evolution of new work loads, and new things are being created, that's more naturally fit for purpose from a Linux perspective. So we have to use judgment, a lot of the new programming, the new applications, are naturally going to be done on a Linux platform, cause once again that's a platform of choice for the developer community. So, we have to think about whether we're trying to leverage existing transactions with speed, or whether we're allowing developers to create new assets, and that's a key factor in what we look at. >> Jamie, your role, is somewhat unique inside of IBM, the title of GM system's development and strategy. So what's your scope, specifically? >> So, I'm responsible for the systems development involved in our processor's mainframes, power systems, and storage. And of course, as a strategy person for a unit like that, I have responsibility for thinking about these hybrid scenarios and what do we need to do to make our clients successful on this journey? How do we take advantage of their tremendous investments they made with us over years. We have strong responsibility for those investments and making sure the clients get value. And also understanding where they need to go in the future and evolving our architecture and our strategic decisions, along those lines. >> So you influence development? >> Jamie: Yes. >> In a big way, obviously. It's a lot of roadmap work. >> Jamie: Yes. >> A lot of working with clients to figure out requirements? >> Well I have client support too, so I have to make sure things run. >> What about quantum computing? This has been a big topic, what's the road map look like? What's the evolution of that look like? Talk about that initiative. >> Well if I gave you the full road map they'd take me out of here with a hook out of this chair. >> You're too good for that, damn, almost got it from you. >> But we did announce the industries first commercial universal quantum computing project. A few weeks ago. It's called IBM Q, so we had some clever branding help, because Q makes me think of the personality in the James Bond movie who was always involved in the latest R&D research activity. And it really is the culmination of decades of research between IBM researchers and researchers around the world, to create this system that hopefully can solve problems to date, that are unsolvable today with classical computers. So, problems in areas like material science and chemistry. Last year we had announced quantum experience, which is an online access to a quantum capabilities in our Yorktown research laboratory. And over the last year, we've had more than 40,000 users access this capability. And they've actually executed a tremendous number of experiments. So we've learned from that, and now we're on this next leg of the journey. And we see a world where IBM Q could work together with our classical computers to solve really really tough problems. >> And that computing is driving a lot of the IOT, whether that's health care, to industrial, and everything in between. >> Well we're in the early stages of quantum, to be fair, but there's a lot of unique problems that we believe that it will solve. We do not believe that everything, of course, will move from classical to quantum. It will be a combination, an evolution, of the capabilities working together. But it's a very different system and it will have unique properties that allow us to do things differently. >> So, what are the basics? Why quantum computing? I presume it's performance, scale, cost, but it's not traditional, binary, computing, is that right? >> Yes. It's very, very different. In fact, if. >> Oh we just got the two minute sign. >> It's a very different computing model. It's a very different physical, computing model, right? It's built on this unit called a Q bit, and the interesting thing about a Q bit is it could be both a zero and a one at the same time. So it kind of twists our minds a little bit. But because of that, and those properties, it can solve very unique problems. But we're at the early part of the journey. So this year, our goal is to work with some organizations, learn from the commercialization of some of the first systems, which will be run in a cloud hosted model. And then we'll go from there. But, it's very promising. >> In the timeframe for commercial systems, have you guys released that? >> Well, this year, we'll start the commercial journey, but within the next few years we do plan to have a quantum computer that would then, basically, out strip the power of the largest super computers that we have today in the industry. But that's, you know, over the next few years we'll be evolving to that level. Because eventually, that's the goal, right? Is to solve the problems that we can't solve with today's classical computers. >> Talk about real quickly, in the last couple minutes, Blockchain, and where that's going, because you have a lot of banks and financial institutions looking at this as part of the messaging and the announcements here. >> Well, Blockchain is one of those workloads of course that we're optimizing with a lot that security work that I talked about earlier so. The target of our high security Blockchain services is LinuxONE, is driving a lot of encryption strategy. This week, in fact, we've seen a number of examples of Blockchain. One was talked about this morning, which was around diamond provenance, from the Everledger organization. Very clever implementation of Blockchain. We've had a number of financial institutions that are using Blockchain. And I also showed an interesting example today. Plastic Bank, which is an organization that's using Blockchain to allow ecosystem improvement, or improving our planet, if you will, by allowing communities to exchange plastic, recyclable plastic for currency. So it's really about enabling plastic to be turned into currency through the use of Blockchain. So a very novel example of a foundational research organization improving the environment and allowing communities to take advantage of that. >> Jamie thanks for stopping by the Cube, really appreciate giving the update and insight into the quantum, the Q project, and all the greatness around, all the hard work going to into the hybrid cloud, the security-osity is super important, thanks for sharing. >> It's good to see you. >> Okay we're live here, in Mandalay Bay, for IBM InterConnect 2017, stay with us for more live coverage, after this short break.