 Live from Las Vegas, Nevada, it's theCUBE at IBM Edge 2014. Brought to you by IBM. Now here are your hosts, John Furrier and Dave Vellante. Okay, welcome back everyone. Live in Las Vegas for IBM Edge, it's theCUBE, our flagship program. We go out to the events, extract the ceiling from the noise. I'm John Furrier, the founder of Silicon Angle. So my co is Dave Vellante, co founder of Wikibon.org. Our next guest is Norman Filisetti, president of data integrity award winner for the winning edge in the X server category. Welcome to theCUBE. Thank you for having me. So first of all, let's get this out of the way. You're the president of the company, you won the award. Tell us about the award winning edge. It's an award highly coveted prize. Tell us about the award, the category, the judging. Share with the folks out there. Okay, well, the winning edge award again, as you say, it's a special award given to us for our success, culminating an 18 month really strategy that we put in place to develop our learning, our technical skills. And that came together with some really great partners in business and the success of the award is just amazing and we're going to cover it. What was the big reason? What was the reason why you won? Just quality, was there variables involved? Was there the weighted judgment system? How did they decide? They sell a lot of stuff. We sold a lot of stuff, there's no question about that. There was a lot of stuff. That's heavily weighted, it better be. No question about it, it was certainly an important factor. We were about 700% in terms of growth, so that was huge for us. Plus what was important to us is the skills that we gained, those were part of the factors in scoring. So we had technical skills, we got executive knowledge base, we developed top gun type classes and fantastic. How are our skill sets changing? How are your requirements changing? How are customers demanding that you change? Is there more of an application centricity? Is there faster cycle times? Any other particular skills that you guys are bringing in that you've had to accommodate the market over the past three or four years? Certainly applications are a key point and we've developed them over the years. We've had a strong presence in the enterprise and certainly they're key applications that we deliver. Let's talk about the build out of the cloud. I'll see X servers really well positioned on the commodity side for private cloud implementation. Are you seeing a lot of that? Is it morally data centers deployments? What's the customer situation for you guys there? Well, primarily we're in the data center, so we deploy a lot into the private cloud structure. But we also have a key component of our business in retail and we have applications that are actually driven in mission critical out in the field and we're starting to virtualize those environments. On the growth, you mentioned 700%, would that growth come from mostly retail? Mostly retail, yeah. How much percentage of your customers are cloud based and how would you peg them in the order of kind of evolution? First grade, second grade, elementary, college? I would say they're right at first grade. I think there's a very small percentage of our business that is cloud that they're moving in that direction. They're excited about it. They're looking for the right workloads to run in that environment. You guys are specializing in x86, right? That's sort of, so what's happening in x86? I mean, Intel, obviously the dominant player, we had a number of guests on yesterday from Intel. I mean, it's quite amazing, actually, what that company has done. You made a good bet, obviously. The ecosystem, the robustness, the levels of service. So I wonder if we could talk about that ecosystem, what it means to you as a partner and then I want to follow up with sort of the Lenovo deal. Well, the ecosystem is a strong part of why we stayed in the x86 platform. It's allowed us to really draw out in storage and other areas and allow us to really develop a strong business in the enterprise. We are looking forward to the next couple of months, certainly with Lenovo being a player and how that will impact us with IBM. So I mean, IBM's moving 7,500 people over there. So obviously a lot of the guys you're working with now or maybe all the guys you're working with now are moving over. So those relationships stay intact. What do you see as the opportunities? What concerns do you have? And how is IBM communicating to you? Well, IBM is communicating to us, interestingly enough, much more information than is Lenovo. Lenovo being constrained by the people who are acquiring tell us very little about what's going on. Although we have some nervousness, we feel that it could be a very strong, positive initiative here. The thing that we're concerned about is how that relationship will play out over time. We were there when Lenovo acquired the desktop business. All positive, everything's been great. We think the template's there and the next move is gonna be a positive one and we'll all succeed. So you have an existing relationship with Lenovo. Okay, so what do you think you can learn from the sort of previous transition? That was a while ago and it was in a different business. But what kind of learnings can you pull from that? Well, what learnings you can pull from it is that we understand the infrastructure, we understand the way that Lenovo operates, we have a great relationship with Lenovo at this time. But there is a different play between the way that Lenovo goes to market and IBM does and that's where the nervousness comes in and whether those changes will be all positive. I wonder if we could talk a little bit more about data integrity. So regionally, where do you guys focus? We're primarily in Ontario and Canada. We do strongly focus on the GTA or the Toronto area. So you do a lot of government business presumably, is that right or? Interestingly enough, government crown corporations primarily, not the government directly. So you sell the companies that are selling to the government or not necessarily? No, these are companies or entities that are principally owned by the government but not specifically run as a ministry or an entity within the government. So quasi-government services. In Ontario, we have parts of this crown corporations that do retailing and they're one of our strong retail partners. And you don't sell in the United States, is that correct? No, we don't. Okay, so talk about the markets in Canada. What do they like? I mean, to the extent that you can comment on other discernible differences between what's going on in the U.S. I mean, you're close enough that you can see or is it sort of homogenous? Well, I think it's hard for me to make an opinion of, certainly, I would think it's homogenous although I strongly understand the Canadian market rather than the American market. We see great growth. We've had, in the Ontario and particularly the Toronto area, almost, certainly in the clients that I do business with, almost zero impact by any recession. So we've just continuously grown over a period of time, the 34 years we've been in business and it's just been positive. So, Norman, you were talking earlier about, we were talking about skill sets and you mentioned applications. Are you seeing a push toward specific environments? You know, you hear a lot about SFB HANA, Oracle environments, certainly VMware. It's sort of really not an app but it's a workload and of course Microsoft. I would imagine you do a lot in Microsoft accounts. Is that fair? Absolutely fair. And have you had to acquire specific expertise there? Is it advantageous for you to do so? Can you, for instance, make more money? A better margin if you do that. I wonder if you could talk about sort of the channel dynamic a little bit. Okay, well, in terms of the skill sets, Microsoft certainly is one of those areas that we have focused on over the number of years. It's a difficult, challenging market. The margins aren't that strong in that area. Certainly, there are better margins in some other areas we could focus on. We're looking at developing other practices that will kind of bring us into the SAP world as an example but we focus on Microsoft. We are doing well. We have the skill sets. We've organically developed them in-house and it's a strong part of our business. Am I correct that over the last, let's say five years, you're certainly seeing margins get squeezed. So you've got a transition from sort of the, it's a pejorative, I'm just going to say it, the box-selling mentality to the value-added mentality. Where is that value-ad going forward in your view? That's the $64,000 question. The value-ad is certainly in the spin that we can make on our delivery. We certainly have a unique position in our marketplace in that we have seasoned professionals that can deliver unique and certainly complex solutions when the client has those unique and complex problems. I mean, you have the relationships, right? I mean, that's why you do so well and are so successful. What are your customers telling you? How do they want to transform and how do you respond? How do we transform and respond? Well, they're asking us to deliver state-of-the-art solutions, whether it be a cloud solution that they're looking to move forward to, or simply just trying to deliver their line of business applications where they have mission critical. Are you seeing a lot of uptake in the public cloud? We aren't in our level, no. Yeah, so you were talking to John earlier about that. Why do you think that is? Is it just because of the particular industries that you focus on? I think it's a combination of that and the fact that Canadians are a little more conservative than Americans and our uptake is a little bit slower. Great, so on the channel side, Dave asked a question about the X86. Obviously, sales are good. Is there a transition plan that they communicated to you with Lenovo? Is it seamless processes of new contracts? How does that work? Yeah, it's absolutely seamless process. They're looking at this being completely fork-lifted into Lenovo and status quo. We certainly don't see any changes probably for at least the two-year period. Yeah, we were talking to some sales guys last night. It's the same guys at IBM, so it's really not that. It's not like a big deal, right, in your mind. No. Contracts are being smooth. Yeah, absolutely no contract changes, we've been told. The concern we have going forward is Lenovo is not a certification-based type company, so they may change the dynamics and who has access to products and that's where the nervousness comes in. That's just channel management issues for you guys. Absolutely. But even with the power system stuff, we had a big showing with power, the power systems at the IBM Impact. Is the word out there on that? I mean, obviously with the Lenovo taking the low end and going to blow that out, certainly sales will be accelerated, not a small, maybe a bump in the road, maybe, but now you're having the high end, the power system. Do you guys look at that at all? No, we're not in the power at all. Okay. How about the customers you have? What's their take on it? The take on power itself? Well, they're looking at power. They're certainly interested in power eight and seeing where this is going to play out, but the open structure now with power being an open product, it's certainly going to explode, I think, with Google and some of the other players, tie in that are getting involved. Talk about the changes in the industry. I want to get your take on it. As someone who's been in the industry and you built a business, you have a lot at stake with IBM, what's changed in the partner channel over the past few years that's different? Because cloud certainly is disruptive, all the mobile and social, all the stuff that they're talking about is changing the world. How do you see that affecting your business? Well, it's incredible. And coming from that old school type of mentality, and I'll be the first to admit, I'm not the social kind of guy, but I have a couple of young gentlemen who work for me, happen to be my sons. They're in their mid-20s. They understand it. They get it. They tweet? They tweet like crazy. They tweet. They know what's going on. And I certainly have deferred to them in that area. And that's really where the future is. Talk about the value proposition for your company. Talk a little bit about what you guys do and some of the key things that you bring to the table, helping customers. Yeah, our value proposition really concentrated on our seasoned professionals, our complex solutions that we've delivered, and certainly our reputation of being on time and delivered on budget. And some of the clients that you have, again, mostly retails or other sectors you're doing well in? We primarily deal in retail and finance. What are the biggest challenges you have this year going forward? With the industry going on? Honestly, the portfolio of refresh for IBM is transformative on their end. How does that impact your business? And what are the big challenges you guys have this year? Well, the portfolio changes really isn't a big impact for us. It's always an evolutionary thing for us. I think the big impact for us now is moving into some other areas that we're starting to develop knowledge in. And that would be in particularly flash. Norman, great to have you on theCUBE. I want to give you the last word. Share with the folks out there. Your young sons in the business, obviously the young guns going to take over new schools, social sales, all the stuff's going on. What's going on in the industry? Share in your own words. Just in a big picture, this moment in time, all the inflection points we've lived through, why is this more hyped up? Why are people so on top of this trend, this tectonic shift than ever before? Well, I think that it's just been this acceleration in the marketplace. We have witnessed no less than an order of magnitude of change, and social is the big shift. And we see it as the big play in the future. Cloud. Social change, go to crowdchat.net slash IBM Edge to jump on our social channel. We'll be watching you, Norman. Thanks for coming theCUBE. This is theCUBE here live in Las Vegas for IBM Edge. I'm John Furrier with Dave Vellante of Wikibon.org and SiliconANG. We'll be right back after this short break.