 Live from the Frederick P. Rose Hall, home of Jazz at Lincoln Center in New York, New York. It's theCUBE at IBM Z Next, redefining digital business. Brought to you by headline sponsor IBM. Okay, welcome back everyone. We are here live in New York. This is theCUBE special broadcast of the IBM Z Systems announcement. I'm John Furrier with my co-host Dave Vellante here extracting the signal from the noise. Our next guest is Samuel Durango, who's the general manager of Kenya Power. Welcome to theCUBE. Thank you so much. So tell us, what's it like being in New York City with the IBM announcement? And what do you think about the new system, the system Z? It's awesome, it's fascinating. It's very good to have it and we are proud that we are the first customer to buy it in Africa. What's the big performance gain? What do you like the most about this product? Okay, I like it because of the first performance. It's very fast, reliable. And the performance is, it's able to manipulate a lot of data at the very fastest rate because one of the things that users hate is whereby you are querying the system and you have to wait for the system to be processed. This is a system that you have what you call speed of dots. By the time you finish typing it, you already have the answer. That is the most exciting thing about it. So what's going on in Kenya with power? What's the state of the industry? Talk about the organization. Okay, I want to start by talking about Kenya. Kenya is a country in the eastern part of Africa and it's the fastest growing hub in Africa, north of South Africa. And it's a population of about 43 million and with a very high unemployment rate of about 40%. And- Sorry, what was the percentage? 40%. 40%. 40%. And the access to power is about that 5% and the internet access is about 53.3%. And we have about that 1.8 million subscribers for mobile telephony and about three million accounts for power. So the government has got a very serious challenge of trying to curb unemployment because when you have a very high percentage of youth, especially youth who are not employed, they engage into other negative vises. And therefore what the government has done is realize that the only way to curb that unemployment is to grow the economy. And you can never grow the economy in darkness. So there is a vision, the government has what do you call vision 2030, which is aimed at making Kenya a middle income economy by 2030. And so that we will be able now to create enough jobs for the unproduced youth. And the way government wants to do is that it's focusing on three pillars, economic, social and political. Those are the key pillars that are going to drive that process. And one of the main sectors that is going to enable that, especially economy, is power. Because I've talked to have that 5% access to power. So you cannot develop with such a low percentage. So there's a plan by the government to increase that rate from the current that 5% to about 7% by 2017, and maybe by 2030 about 95%. And therefore the government has come up with a plan of accelerating the rate of growth in the power sector. Right now our current generation is about two gigahertz. And the government wants to increase that to about seven gigahertz in 40 months. That by 2017, you come from two gigahertz to about seven gigahertz, which is a very big jump. And so now after doing that, the government expects Kenya power to grow the demand, to help them grow the demand to match that increased generation. Because one of the reasons why many investors feel that Kenya is not a very good hub for investment is because of the cost of power, the availability of power, and the availability of the power, the quality of power, because you don't have an industry whereby you're not sure you're going to have power 100%. Because it means that you have to invest in backup generation to be able to continue your production when the power is not there. So for somebody to come and invest, he has to be assured that the first of all, the cost is competitive. Right now our price of power is about 17 US cents on average. When you compare it with US, which is about 12 US cents, China is about 80 US cents, India is about 80 US cents, and therefore, so if somebody is producing goods in Kenya, he cannot compete in the world market because the cost is, power is almost about about that 5% input, one of the inputs in the production. So what does it take to get it below, to a more competitive rate, so let's say below 10 cents? The idea here is that out of, other than just increasing the generation, we want to make sure that the generation that we put in is from cheaper sources. Because right now, our generation is made from hydro, and then geodemo and fossil fuel. And what happens is that you see the hydro is whether dependent. So it means that when you have drought, we don't have enough generation, so we have to bring in expensive power to be able to meet the deficit. So what happens now is that the government wants to make sure that the sources that we are going to have are sources that are lower cost. So much of the digit that's going to come in is going to come from coal, LPG and geodemo, which are cheaper sources, so that you can bring the on average, the cost we're about to- So like coal, LPG, and geodemo. Oh, yeah, right, right, right. Yes, geodemo, yes. Okay, so geothermal is actually a growing part of the equation. Yes, so when that one is done, even now to assure that the power is competitive priced, and also available because those sources do not depend on the weather. So you can be able to manage and ensure that the power is available. So how, what kind of plant capacity you're building out, can you quantify that? I mean, how much capacity each year you build out? Okay, okay, like I may not be able to have the facts with me now. Yeah, but roughly. But I know that out of the, by the time we reach seven gigawatts, the coke should be about 21%, LPG about 21%, and then geodemo could be about another maybe 30%. And the hydro, we go down from current 50% to about less than 10%. What is it today, 50? 50%, yes. It's going to go below 10%. And first of all, it's going to be less than 5%. So you're putting in expensive infrastructure. Yes. Plants, generation plants. Yes. How is that funded? Okay, normally what we have is that we have what we call independent power producers. Yeah. You have private investors coming in to invest, and then you have what we call purchase power agreement. You guarantee them they are going to purchase the power, their power into the grid. So the investment is with the private, where you have long term contracts of 20 years, 20 years, whereby they are sure that when they put out their plans, they will be selling the power to the country. Okay. And what happens is that you also have what you call capacity charge. In the event that the infrastructure is not able to take up the power, you pay them for the capacity. Okay, so now let's talk about your IT infrastructure. Yes, yes, yes. So now what happens now is that as I talked about the importance of making sure that that dream is achieved, by making sure that the demand is grown. Now we need information, very accurate information. Because the government has this plan, you have to make sure that the plan, we are making sure that the plan of creating demand is very accurate. And then the government, because this is a projection of about seven gigawatts. We don't want to reach a point where by 2015, 2017, we find that we have the seven gigawatts, but we don't have the energy, the demand. So we have to be able to do a lot of predictive prediction to know that how is our solid working so that we know by the time we reach there, if we're able to have the demand meet the generation. So that if you find that you're not able to grow that demand, you can quickly go and change your strategy. Maybe instead of going to seven gigawatts, maybe you can go to about five gigawatts. All you can, maybe it's nine gigawatts, you don't know. So what is the ABM doing is that it's creating a platform where we have information which is, is it accessible? Accurate information which can be lied on so that, and then the stakeholders can access that information very easily from any device from anywhere. So people talk about the transaction system. Yes. Talk about analytic systems. It sounds like a lot of what you're doing is analytic. Yes, because we don't have applications that are doing the business. We have, we have the operations that are doing the building system. Others, we have an ERP system which is doing the logistics, HR, and also a bit of financials. We have other systems that are doing those applications that are to, for the performance of the system like the SCADA system, the design and construction system. All those things, but they're in silos. So why do we do it on a mainframe? Why not use x86 systems? No, no, because the, because the, what we want to do is that we want to have a system that has enough capacity to be able to run, to give that information easily. And also we have lots of plans in future to consolidate it. Some of these applications sort of run in those different boxes which are very expensive in terms of hardware and also licensing. We should be able to migrate them into this, into this mainframe so that we reduce the cost of hardware and also the footprint. So that's the idea we have. But now we are using it for analytics, but in future, we will be able to migrate the systems from these side of the boxes into one mainframe. So for ease of management. So you can consolidate all your infrastructure on a single mainframe. Yes, yes, yes. And how long have been used in the mainframes? We have not had, this is our first mainframe. Sorry, this is your first one. This is our first mainframe, yes. When did you put it in? About one year ago. A year ago? Yes, yes. So what was that like? What was there before the mainframe? The mainframe, we had a system like in the generic systems from other hardware. Just stove pipe systems? Yes, yes. X86 systems? Yes, we have, yeah. Most of Unix systems, Unix systems. Okay, so you've replaced many of those, all of those, you sort of consolidated them? Yes, what we're doing is that we are not replacing them as yet. But you see, as they come to the end of their life, instead of now replacing them with the same system. So you'll sunset those systems? Yes, then we'll migrate them, yes. Okay, where do you see this going? Where do you, how do you see your infrastructure growing and your application portfolio growing? Why is it is growing? Because like now we have a customer base of about three million. We expect that by 2017 we should be around seven million. And then maybe up to 10 million. So as the customer base grows, that is, this is big data. We have to have a vision that is able to do that big data. We also want to improve on the customer experience because the customer is getting more enlightened. They would like to monitor their consumption. They're able to connect the system for business systems. So we want to be able to have an infrastructure that is able to offer fast information and then also secure information. And then especially for any device from anywhere, this is the mobility. So that wherever they are, someone can connect the system from a mobile phone or from a tablet or from anything that they have and get it very fast. Because we want to help in fast decision making and improve on the customer experience. Yes. Talk about the customer experience where you're at now. And overall in your territory, a lot of mobile on board, a lot of people using mobile. What's some of the breakdown of usage for your customers with the technology? We can say that we have, there are areas which we have focused on the use of the mobility to our customers. First of all, is the bill payment. The customers can pay their bills from their phones. You know, Kenya is very successful in the mobile money transfer. So the customers can get their, first of all, they can create their bill from their mobile phones. They create the bill and then you also enable them to pay. They can also report outages. When the customers are out of supply, they can report. They can query the system and report that we are out of supply. But what I want to do now is to go build whereby we can now even enable customers to do predictions, to know their customer, their consumption patterns, to know are they increasing their usage or are they decreasing their usage. Those are things in which areas are they, are they, where are they using more of their power? And also we are preparing ourselves for the smart grid because you know, in future, we want customers to be responsible for their, for their, for their, for their consumption. To know when to consume power and when not, depending on the cost. Samuel, thank you for coming on The Cube. We really appreciate it. I want to say thank you. Great to see you here in New York City. And this is truly a global announcement, Dave. And IBM Z's having a great event. We're live in New York City. This is The Cube. We write back after the short break. This is John Furrier with Dave Vellante. Live in New York City for The Cube. We write back. Okay, welcome. Thank you so much.