 Okay, we're back live. Day one of IBM's information on demand. This is Silicon Angles, theCUBE, our flagship program. We go out to the events, Extract a Signal from the Noise, I'm John Furrier, I'm George. My co-host, Dave Vellante, as usual. We are here to break down and extract the signal from the noise and share that with you. And we'd love to have Annalis on. We had Judith Horowitz on. She's trending on the Twitter board. And one other person who's also trending is Merv Adrien with Gardner, CUBE alum, very authoritative in the space. Welcome to have you. Great to have you back on theCUBE again. Seems like we just did this last week. Last week in Big Data NYC, our event that was going on around Stratoconference and Hadoop World. Kind of geeky Hadoop meets business mainstream here at IBM. What's your take? Obviously, you sat through the sessions, we were following your tweets. And just, what's your report card? Day one for IBM. As always, overwhelmingly large. 13,000, I think is the number here. It has to be seen to be believed if you've never been to one of these events and you have some idea of the scale of these venues in Vegas. But you come out of an event room, you come out of a ballroom, and you can't move in the hallway for three or four minutes. It's Tokyo subway, isn't it? It is extraordinary, the number of people who are here. So those of us who've done it a few times have learned a few of the back ways through the garage up over the roof. Down the, yeah. But it's an amazing crowd. It's an extraordinarily mixed crowd, to your point, John. There's a lot of suits here. A lot more suits than there were at Strada. A lot of people who were very interested in the business side, and even in a session that I just sat through that was talking about competitive displacements by IBM. Two of the people on the panel basically said, look, I didn't really want to hear too much about the technology. It was as much about my relationship with the vendors I was working with as it was about the technology. And that's always been one of IBM's strengths, is that they have a lifetime view of customer value and they cultivate their relationship very carefully over the years. So they do very well within their base. Their bigger challenge, and what we're seeing here, is how do they reach outside of that? How do they reach the folks that are not already blue stack loyalists and get them to come over? Yeah, because they talk about how they're reaching out beyond that base. But I'm correct in that 90% of the business, if not more, is with the blue stack. Is that a fair assertion? I think the numbers are that something like 80% of IBM's revenue comes from 20% of IBM's customers. So right there, even within their own base, you're seeing a very strong concentration. Clearly they have a strong base in companies that have the highest of mainstream requirements for security and reliability, the big banks, and so on. And that remains true. But their big focus in several of the speeches here was ease and simplicity. And that's a story that has to be told with pictures and they didn't do that effectively today. So people thought they did not do that effectively today. If you wanna tell me about how simple your GUI is and how easy it is to use your product for discovery, then don't use 5,000 words to do it. Put five pictures on the stage and show me that. Show me, right. They didn't do it. Service now, Tableau Splunk. Listen, there's a great tool here called Discoverer, which IBM has that is a marvelous way for an entry point into the unstructured and new data that people are trying to work with that gives you a way to go play with it, find something useful, and then persist something that will be of value, which is the inevitable next step of most people's early big data experiments. And right now that's an area where the big data community in general, all those folks we saw at Strata last week, this is where things begin to break down for them. It's great for those first few experiments. Then you're gonna make some architectural choices. Where am I gonna persist the stuff that I'm gonna use next week and the week after that? And IBM has a great portfolio of pieces that can be put together to tell that story. That's what they need to be doing. And today, I heard about the portfolio. I didn't hear about that story. I didn't hear a narrative. And the narrative is there to be told. So I think they'll get better at it. I think one thing that seems awkward, but I mean seems really relevant, but awkward the way we get to this tomorrow, maybe, is the social business is a great story. I mean that kind of to me is the face of the analytics, which is geeky, value chain, process improvement, but the social business kind of hits the rubber, meets the roads. It's the user shaking their smartphone and getting analytics rather than some chat application or the real change is on the society. Did they tease that out today or were they saving that for tomorrow? No, I think they did it very, very effectively in multiple places in financial services, in healthcare, in smart, metered solutions for the industrial internet. You know, the same things we're hearing elsewhere. What they're doing very effectively is pulling out the stories where people have had that kind of an impact. Again, the challenge is to show people you can do this too. And that was one of the best things said from the podium by our host today, the guy from the National Geographic. His name escapes me. Jason? Jake, yes. Jake, Jake. He was wonderful. He did a great opening and he put up some wonderful visualizations and he said, you know, this is about Big Dead. Look at how they've combined this data with geography. You know, wouldn't it be great if you can do it too? You can do it too. I would say it was perfectly staged. He just conveyed it very, very nicely. Well, us old school PowerPoint users are still clutched to text and seven bullets and a title and 14 fonts. Just make them 44 point, please. No more than five words. Well, honestly, it's a tough story to tell. I mean, to me, my takeaway, I want to get your opinion on this from both of you guys. This is a complex story to tell. I'm talking about big data analytics, you got Hadoop from everything else under the covers, blue acceleration, you got Cloud and Mobile, which are under the hood, a lot of technology issues there, nuances, data governance, information governance, and the social business is a paradigm, mind blowing paradigm shift. Just try to tell that together is hard. At the same time, they get customers deploying this stuff and getting successes on top of it. Lots of them. The sales outcomes, that consultative journey and the implementation on production scale. I mean, all those things, GMM to one makes for a hard story. I mean, how do you- It depends on how you tell it. If you tell it as a story, and if you abstract away from the complexities of an extraordinarily large product portfolio, then there's a message to be told there. Then there's another message to be told when you do get into the details of the product portfolio. IBM has to do both. And sometimes they seem caught between skill- Half pregnant, you know, my half pregnant, you know, stuck in the middle, what do you want to say? Yeah. Do you feel that day one kind of stuck in the middle? Or- I think they hit elements of both ends of the spectrum, but spend a lot of time kind of in between them, not quite doing enough on either end. That said, I think it all depends on what you bring to the conversation. I wandered in, really, not intentionally, to one of the enterprise content management sessions. That's not really my sweet spot. But it was a great discussion. And it was a discussion that, as they discussed unstructured data, sounded very much like what us DBA-style geeks are talking about over on the Hadoop side of the house, with a different set of business issues, but being realized and driving value, at least if not more effectively, and especially with the connection to the social side of things. So they've got the story. We were talking about the 80, 20 before, 90, 10, or whatever it is. Does IBM actually have to move beyond that base to succeed? I mean, most businesses, unless they're startups, get most of their business from their existing customers. Sure. It's a great question. What's your definition of success? And I talk to the guys in the various Wall Street firms all the time, and they're always worried about the change in the slope of the curve. It's the area under the curve that matters, right? There's a lot of money down there underneath that line. There's a lot of customer value. There's a lot of recurring revenue, and IBM's doing just fine there. Do they need to have a much larger user base of lots and lots of new users today? Well, I don't think so, but it wouldn't hurt, would it? And it's awfully nice to be able to position yourself as leading people into the future, as opposed to being the place where they'll go when they grow up. And I think a lot of people today, as their systems do mature and require these more significant enterprise class features, will inevitably migrate to my IBM technologies that can answer those questions. It's the area under the curve dilemma, right? You get Amazon and make the last quarter made $7 million in a $75 million, a billion dollar company. You made $7 million in profit, and the stock goes up. IBM throws off more cash, free cash flow. And IBM said from the stage today that their bare metal implementation performs twice as well as Amazon's. And now I haven't benchmarked that, but that's a nice assertion to be able to make. Performance, is that why people go to the cloud though, right? That's probably not why they go there at first. Kind of an interesting data point. I gotta ask about the fact. But performance is a second order variable. Meaning if everything's equal. First I explore, I discover, I find value. Once I do, and I put this into production, then I start thinking about how can I do this more cost effectively? How can I do it with better performance? How can I make it more stable, secure, reliable? That's when people come to IBM. And they're still well positioned for answering those questions when those questions come up. Competition out there for these guys. Obviously we were talking about a soft layer as a bolt-on, trying to figure out cloud, Dave's high on it, I'm not. What's your take on their moves in the cloud and just relative to their competition? Not my sweet spot, but I think that IBM has the assets and the spread and the portfolio to be a formidable competitor there if they choose to go there. The interesting challenge for anybody who wants to compete with Amazon is Amazon's stated mission, right? We will be the low margin supplier. Can you think of another IT vendor who says that? Yeah, and by the way, they're innovating. Yeah. And they're disrupting, innovating, and will go push the commoditized margins to close to zero. I think their margins are a lot higher than people may realize too, by the way. Well, they're shifting the margins. They seem to be able to drop their prices pretty frequently. It's called cross-sum. Although it doesn't everybody move, they just don't announce it, they don't market the fact, right? Everybody's price drop every quarter? No. No? In a word. But the costs do, right? No, the interest in new products have increased price. The cost of computing storage drops every quarter, yeah? You're saying they don't pass that on to customers? It's shocking, isn't it? Isn't it shocking? I thought you guys kept them honest on that. Yeah, we try, we try, we do our best, but then there's always new features that can add to the product in charge for it. Okay, Murph, we've got to wrap up. We have... We just got started, John. All right, next one. Great to have you on the cube. Okay. Let's see it tomorrow. It's the shortest cube segment we've ever done with Murph. That's okay. I know, we have the pressure because the analyst dinner from InHeatChu wants to come on and thank you for your time. I defer to the lady anytime. She's a rock star in the cube alumni. She's been on more times than you, but you're catching up to her. Doing my best. I'm trending. Thanks, guys. Murph, Adrienne, analyst at Gardner, been around the block, seen many, many cycles, excited about what IBM has, needs to kind of clean up their position, get more data and products. Don't get stuck in the middle and just good stuff. IBM got good review from Murph here on the cube. We'll be right back after this short break with our next guest.