 From Las Vegas, it's theCUBE. Covering VMworld 2018. Brought to you by VMware and its ecosystem partners. Welcome back to theCUBE. We are continuing our coverage of VMworld 2018. Day three, I'm Lisa Martin with two very stylish men next to me, I'm quite impressed. Dave Vellante, my esteemed co-host. Oh shucks. Rock and the Salmon, King Salmon Vellante. And this dog is back, Eric Herzog. Great to have you back. I was looking at you on Twitter and you have been on theCUBE 17 times. Is this 18 or 19? You know, I think Dave said I was on one of the very first Cubes way back in 2010, so I've been on a few. That's a whole other criteria of VIP level. Well thank you for coming back. You have been, not only is he old, you can't do a CUBE without Eric Herzog. You've been everywhere all over VMworld. I saw you're speaking at IBM booth on VMware and IBM. You're at Cisco, you're giving sessions. How do you fit it all in and still have time for us? Well I always make time for theCUBE. I always make time for you guys. Love talking theCUBE. You guys have been very helpful. We appreciate everything that you do. Love doing shows, love them. I may be six years old, but I'm really 18 down underneath, so if I only sleep three hours a night, not a problem. What do you love about them? I mean, is it? Number one is meeting customers. Customers and channel partners, right? Well, all of the employees of all the various companies here get a paycheck from whoever that may be, from the IBM, someone from other companies, people from VMware. That's not who pays your salary. It's the end users and the channel partners if they buy through the channel. They're the ones that really pay your salary. So being close to the customers and the partners is number one. Second thing of course is seeing all the cool technology. They'll see what's going on, what's hot, what can we leverage from our perspective, what can we tire ourselves to? So for example, the hot things that IBM's really been doing from a storage perspective in cloud and modern data protection. Those are the two big things we've been focused on for the last couple of years and how do we integrate our storage solutions and our modern data protection with cloud infrastructure and then also how do we, if you're not in the cloud, how do we help customers protect their data better in a modern way and reuse their secondary data instead of making 27,000 copies of the same data? So when theCUBE first started at the Mworld, modern data protection at the time was dealing with the lack of physical resources because you went from 10 servers down to one and you didn't have all that excess capacity to do a run a backup job anymore. Today, modern data protection's all around cloud and multi-cloud and software defined. So I wonder if you could help us sort of paint a picture of what modern data protection is for IBM. Sure, I think there's a couple aspects to it. So first of all, you have to support the cloud and that's two ways. So for us, several of our backup products are used by cloud service providers. In some cases, they use our name and say, featuring IBM Spectrum Protect or Spectrum Protect for us. Other cases, they have their own brand but it's our software underneath the hood so that if the end user is backing up to their cloud, they're actually using our software. So that's item number one. The second thing is you need to make sure that your traditional storage software can tier to the cloud, can migrate data to the cloud, can transparently move data to the cloud in an automated fashion using AI. So using artificial intelligence when the data's hot, if you canot a target and that target could be a cloud and when the data's hot, it tears the data to the cloud or sorry, when it's cold. When it's hot, it pulls it back in and that needs to be all automated through AI base. So we've done both. We have our backup software which is available from several cloud providers as a backup as a service. We also offer it through the cloud. So IBM cloud actually sells Spectrum Protect as a backup as a service solution. And then all of our primary storage software and even our spectrum scale software can automatically tier data to a cloud target device. You know, Eric, I got to ask you, so tiering used to be predominantly, and correct me if you disagree, but it used to be a one-way trip to the bit bucket and you just described going there and coming back. Has cloud changed that? Because of, you know, big data analytics where people want to pull back data increasingly? So I think of the couple of things. So first of all, there's no doubt that the world is data-driven. The most valuable asset isn't gold, it's not silver, it is absolutely not oil, it's not diamonds, it is data. And it doesn't matter whether you're one of the largest banks in the world, you're in manufacturing, you're in the government, or whether you're Herzog's bar and grill. The data is your most valuable asset. What you do with your customer data, how you manage your business, what you do with your supply chain, if your service is company, how are you servicing, what are you charging, what are you billing? All of that is the most critical thing that you have. So in a data-driven world, it's critical that you use the data. And that also means that because of the value data, when you back up the data or you snapshot or replicate the data, you've now created a secondary copy. Well, what if you could use it to do test? What if you could use it to do big data analytics? What if you could use it for DevOps? So instead of making one copy for test, one copy for disaster recovery, one copy for this, one copy and have basically a plethora of copies all over the place, with what we provide in modern data protection, you can use a backup, you can use a snap or a replica, and you can use that to do test or development or to do big data analytics, and using that one copy, not making multiple copies. So that's- You know, I just want to pick up something you said. He's been focusing on, he's like, yeah, yeah, we hear that data is more valuable than oil, it'd be more valuable than gold, et cetera, more valuable than platinum. There's evidence. If you look at the market value of the top five companies, Apple, Facebook, Microsoft, Google, and Amazon, they've surpassed the banks, they've surpassed the energy companies, and I would argue it's because of data, right? People are recognizing that they're data companies. But if you look at that name, the only one that actually builds anything of substance at a fair amount of their volume of revenue is Apple. It's Apple, right. Amazon doesn't, they ship stuff, right? Facebook clearly doesn't. Google. You know, Google has a few things, but not really build stuff, it's really about the data. So, absolutely, and if you're a more traditional company like a bank or someone building the table, whoever builds this table, if they have their act together and they're using that data right, they're building the table cheaper than anyone else, they're shipping it to the cube, cheaper than anyone else could ship it to you. They got more colors because they know what they're doing. And by the way, they ship you the right color table and they don't screw it up and send you a black table when you wanted this color table because black won't show up on the cube very well. So, guess what? The more you do that, the more money you make, even something as simple as a table manufacturer. And that's all about the data and how you use that data. So, Eric, you love talking with customers, which is great as a CMO for IBM storage. Got to talk to those customers. Let's talk about how you're seeing customers take the efficiencies of what IBM is doing with data protection, storage, et cetera, to be able to harness the power of AI, those superpowers that Pat Gelsinger talked about on Monday, and transform their businesses. Give us some of your favorite customer examples where it's really revolutionary. So, we had a great example today. We did a panel with a bunch of end users as part of the show agenda. And one of the customers is a provider of software as a service to universities and school districts. 45,000 customers between universities, junior colleges, school districts, et cetera, in North America, so Canada and the US. And they are doing software as a service. So, for them, performance is critical. They can't go down. So, all of the college bookstores, if you go in a college bookstore, all of the infrastructure behind that is them. So, they're called Follett. So, a couple things. One, because they're doing software as a service and managing all that, it's critical, it can't go down. It's got to be available, it's got to be performant, it's got to be resilient, it's got to be reliable. So, that's how the storage melds in. From modern data protection, the way it melds in is, guess what? How many books did Dave buy? What did Eric buy? Oh, is Dave buying a used book or an Eric buying new books? Okay, so we know that the propensity is certain members of the community at I went to UC Davis, University of California, Davis, are going to buy used books. Dave, whereas Herzog's going to buy new books. They can figure that out. How many used books they need? How many new books they need? That's all about efficiency and how they make more money. What are the store hours? Okay, certain universities, it's this. Other universities, it's that. What do they do in the wintertime? At UC Davis, you can go in the wintertime. I know you went to school in Boston for price snowing. No one's going to the bookstore in the wintertime. Right? Trend toward book rentals. How do we capitalize on that? That's all they do. So, one of the things they talked about was they have to always protect that data and back it up. The other thing they talked about was they have to assume a lot of capacity. So, what they did was they bought assuming they would have to refresh in 18 months. And because our storage arrays have a ton of different data reduction technology, whether it be block, de-dup, compression, et cetera, they actually, and they have petabytes of data. Petabytes, 12 petabytes. They've actually calculated out they won't need to buy new storage for 36 months instead of 18. So, they just saved on CapEx. Through the storage, through the intelligence of the storage. So, in that case, you got both modern data protection and you've got a storage message. One of our other customers, who's a public reference not here at the show, which is a hospital, they were backing up all their data, both cloud and on-premise with our backup software. And they went down and their entire system went down and they didn't lose one stitch of data. And it's a hospital. It's a teaching hospital. I think they're in Pennsylvania. And in the public reference in the video, he said, and we went down and off that backup, we were able to get all of the data back. We didn't lose any patient data. We didn't lose any research data. We didn't lose any billing data. If you break your arm, they do bill you, right? They didn't lose anything. That's not just money, that's lives. So, that's huge. I want to ask you about, you know, that table example you were giving, it made me think about, and we were talking about the big five companies in terms of market cap being data-oriented. There seems to be a gap between those sort of traditional companies and those data companies. And that gap tends to be, the data is often in silos. It's human expertise that, or expertise around a bottling plant or the manufacturing plant or whatever it is, versus a data model with humans who understand how to leverage that data. Do you see whether it's through new data protection techniques or other storage techniques that IBM is working on? Ways to help customers break down those data silos so they can become more digital and be able to take advantage of data. So, I think there's a couple of things. So, first of all, you know, at the very tactical level, we provide this automated IA-based data tiering. We can tier from anything to anything. So, we can take data from an IBM array and tier it to an EMC array. We can take data from an EMC array and tier it to a NetApp array, a NetApp array to a Tatu array, an HP array back to our arrays. We can do this transparent data movement based on hot and cold. So, not only does that allow you to control CAPEX and OPEX, but allows you to move the data from an array to array and once you move that data set, it might be working, that data, that other array, could be hooked up to a different set of servers through the sand that's running a different workload and then takes that data set and use it with that other piece of software out on the server side. So, that's item number one. Item number two is IBM, not just in the storage, but overall has a global program where IBM is promoting through universities, all over the world, data scientists. And part of that is training data scientists, not only how to do the science of data and analyzing data and mining data and doing it, but to break down those walls. The value is more there. And we also have, from a storage perspective, some products are spectrum scale product. One of our customers who's one of the largest banks in the world, they run 300,000 servers attached to a giant spectrum scale repository, the petabytes and petabytes, and they do real time data analytics to see if Dave Vellante or Lisa's credit card was stolen. Thank you. So that's real world analytics being run, but they need petabytes of data, right? And then with our IBM Cloud Object Storage technology, where we have several customers at the exabyte level in production with an exabyte of data, you put the data out when it's cold, but guess what? If you want to mine it, you might want to be able to pull it back and guess what? You can tear data from spectrum scale to IBM Cloud Object Storage, and then spectrum scale can pull it back in to do the big data analytic workloads. And that AI you're using, is it heavy open source? There's a little bit of Watson sprinkled there. It stuffed the storage division developed years ago and then has peppered in the AI based technology into that software to determine when the data set is hot or cold and then move it back or forth. Now, we also do the old style. So if you go back 10 years ago, the automation of storage was policy based. So we had it way back when, which was if the data is 30 days old, move it to this array. The old HSM kind of. Yeah, and it was automated, so once it hit 30 days. But now what we've done is we started with that, what I would call, you know, automation, and now we've moved that to AI. And by the way, if you still want to do it the old way and say move this data when it's 60 days old, you can still do that. But the modern way is let the storage figure out for you and move it back and forth, whether it be to the cloud or whether it be on premise. So it's intelligent hierarchical storage management. So if the characteristics change, the system knows what to do. So when it's hot, it'll pull the data back into flash, for example, when it's cold, it'll put it out to cloud, it'll put it out to tape, or it'll put it out to slow hard drives, either way. All right, Eris, so we're almost out of time here. I'm hearing, you know, you've been in IBM a long time. IBM's been around a long time. You have, you said you even have customers at exabyte scale. I'm hearing heterogeneity, customer choice. But if I'm a hospital, a small hospital in the middle of America, and I have choice with data protection vendors, storage vendors, some smaller than IBM that that might be able to move faster, what are the top three differentiators of why I would want to go with IBM's storage? Sure, so the first thing is our broad portfolio, whether it be file blocker object, whether it be modern data protection, whether it be archiving, if you still want to use tape, we're the number provider of tape in the world. And we sell gobs of it, by the way, to the web scale guys. Of course you do. They are the guys that buy it. It's cost effective. We've got one throat to choke, all of it talks to each other, and by the way, it happens to work with all the cloud vendors, not just IBM cloud. We work with Amazon, we work with Microsoft, we work with Google, and we work with IBM's own cloud. So we can work with anything, that's how I'm on. Second thing for smaller shops, we have a network of business partners all over the world. Some of them deal with a big global Fortune 500, and others deal with small accounts. And then I think really the third thing is that IBM makes sure that our stuff works with everyone else's stuff, whether it be cloud, our Spectrum Tech software, which has been around for years, and is the leading enterprise backup package, the bulk of what it backs up is not IBM storage. The vast bulk of it is from two of the competitors on the floor of the show, they also back up our stuff too. And we back up everyone's. There's probably 20 storage vendors, we back up every one of their data. So if someone buys storage from XYZ company, we can back it up. If someone buys it from one of the big competitors, we back it up. From us, we back it up. So the fact that our software works with everyone's gear is of an advantage for both a small shop and a big shop. We make sure that our software, whether it's embedded in our arrays, or whether we sell it is just a piece of storage software. And we are the number one storage software provider on the planet as well. We can meet the needs of any company big or small because we have this flexibility of working with our stuff and working with everybody else's stuff. And most of the other guys don't do that. If it's a small shop, their stuff usually only works with their stuff. And from a support perspective, so a lot of you play with everybody. It's a global network. I mean, we're known for our support, whether it be IBM Direct or what we do with our partners. They're all, all the partners are certified. It's a big certification process. And if they can't certify the product, guess what, they can't sell IBM stuff. That's just how we operate. Other people, if they can move a lot of boxes but they don't have anyone pick up the phone or can come out to Dave's house to install, well, they let them sell. We don't do that at IBM. We just, we don't use those box mover types. We go for guys that add value and know how to work with the cloud, know how to do hybrid cloud, understand, you know, one of our resellers in fact, designed a Watson-based AI system that's used in bottle factories. Packaging. So beer, soda, milk, and it can figure out if it's full or not full, if the bottle or can or carton is damaged and they used Watson, now they're regular reseller. They resell all the storage, they resell our power, they resell mainframe, but they've gone into the software development side using this Watson thing and they're selling a full solution with the software included to bottling plants all over the world. Wow, Eric, this has been a super-charged conversation. Thanks for stopping by and talking with Dave and me about not just your excitement about talking with customers, but really how IBM is really empowering customers of any size worldwide to succeed. So we know we'll see you again soon, but thanks for stopping by a couple times this week. Great, well, thank you. Thank you, really appreciate the time. And the outfit choices are just on point, guys. You blend well too. For Eric, Dave Vellante, I'm Lisa Martin. You're watching The Key of Life from VMworld, 2018, day three, stick around, we'll be back with our next guest after a short break.