 Live from Las Vegas expecting the signal from the noise. It's theCUBE covering InterConnect 2016, brought to you by IBM. Now your host, John Furrier and Dave Vellante. Okay, welcome back everyone. We are here live in Las Vegas for IBM InterConnect 2016 exclusive coverage from SiliconANGLE, media's theCUBE, our flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier, my co-host Dave Vellante Dave, day three kickoff, wall-to-wall coverage here in Las Vegas. A lot of action Dave going on here. So, you know, kind of winding down but all the stuff still continuing to roll out. Watson analytics, big data, digital transformation. We had Kevin Egan on yesterday who's new head of digital at IBM. Really, really impressive. IBM is going all across the board digital transformation including having their own digital practice internally the company changing the way people interact with content, changing the way people use the data, using cloud to accelerate all that and then bringing Watson analytics underneath all that. Again, the keynotes continue. A mix of futuristic concepts here at InterConnect blended with the realities. How do I get to the hybrid cloud? So, really interesting Dave. Don't get your thoughts on your take on this because, you know, there's a lot of things that are going on the building blocks that are part of the transformation. And then the reality that the North Star as Kevin Egan says is the end game, the outcomes. And the role that the customers play in all this. Well, IBM's building out digital as a service, right? You saw the acquisitions that it made and you continue to hear about how IBM's doing that. We have Brad Hunstable coming on from Ustream later on today. Of course, we use Ustream as our video platform on theCUBE and IBM's acquired a content distribution network, an FTP company, you know, for high-speed file transfer, an object storage company and Cleversafe to be able to do distributed objects around the globe, you know, at very broad distances and highly secure. And they're offering that as a service inside of Bluemix. I mean, it's all about the Bluemix services. We heard from Tanmay yesterday, the 12-year-old programmer, that he loves the Bluemix services. It's very, very rich. He'd like to see more APIs out of Watson. So, IBM's got some work to do there. But really driving digital throughout its portfolio. And the thing that struck me yesterday, I thought one of the most compelling interviews was Kevin Egan. I brought him up in my intro there in that the engagement model, obviously systems of engagement is a big part of the mess. The systems of record, that's a database issue. Systems of engagement, that's going to be more of the interactions. And then the cognitive everything, cognition. And we kind of joking about the minority report, those pre-cogs, I could predict things. You know, this is the new way. Using intelligence, using the data to create this cognitive environment. It's digitized everything. And use intelligence and analytics, the new asset. What do you mean by that pre-cog concept? What are you talking about when you say pre-cog? You mean preliminary to cognitive setting up for the cognitive? It's like cognitive ready? Like it's de-ready? Well, IBM's selling the dream, right? They're selling Watson now from jeopardy into more practical execution. You're seeing Watson analytics in each you saw yesterday that was on here. She's taking over the collaboration business unit. She's going to take that old division, which is executing in-market selling, Lotus Dom and a bunch of other things, and bring more collaborative in there. Deals with box.net and all the companies she's teasing out. And that's all going to be based on intelligence. The notion of cognitive is about using machines to create insights around things and interactions and relationships. That's the cognitive message. Now, in the data world, not data analytics, that's an older thing. But when you get into this cognitive role, you've got to think differently about the data. So when I say pre-cog, and I kind of joke about the movie Minority Report, the humans who are the pre-cogs that actually predict the crimes in advance, and they go out and their Rastaf Cruz is involved in that movie, are actually the predictive engines. But in data, you need to have those seeds. You have to have the understanding of the context of things before you actually run a cognitive algorithm or run machine learning or whatever the tools are. Cognitive is an accelerant to the insight. It is the last mile to insight or action in a whole new way. You've got to have that setup. So pre-text to the data, the pre-cognitive layer, is about using data in this setup area. That is something that hasn't been explored at the event. I kind of brought it up as a random term to describe, in my view, what that means. And that's going to be understanding the data better. And that's multi-source data. So it could be different databases merging data together, alchemy, chemistry, whatever you want to call it. I call it content chemistry. But content, people, engagement are all working together. This is all coming from different databases. Now, in the old way, database silos, schema databases, they're vertically integrated. Now you've got different databases mashing up the data, almost like the old API mashup days. That's what the data action is, in my opinion. That's wrangling, that's setup, that's prep. Pre-cognitive is a critical area. No one's really exploring it, in my opinion. That's going to be the area that we will be watching. Can I ask you some questions about that? I want to stay on this theme for a minute. So if you think about the Enterprise Data Warehouse, it's pretty structured, right? I mean, it's got a schema. You know what's in there. Hadoop comes along. And all of a sudden, you've got this data lake, data ocean, data swamp. No schema on write, or schema on read, as most people say. They're dumping data into this place, lake, ocean, whatever you want to call it. Now IoT comes in. So you've got all these edge devices. They're pumping in data somewhere, maybe to the data lake, maybe to the Enterprise Data Warehouse. Is that data swamp, I'll call it? Because it really is, in many cases, a swamp. People just throwing it in there. There's not a lot of nutrients. It turns into a swamp. So in order to leverage that data for cognitive, what has to happen? Well, this is an interesting thing. The selling of the dream of analytics is actually the great thing with Watson. But to have the precognitive area enabled, if you will, precognitive is just enabling cognitive. That's a sense of the way I think about it. But to move data fast, there's a lot of underlying things that have to change. Infrastructure, we see flash. You've got to have software. You see DevOps and infrastructure as code. Big theme about DevOps, horizontally scalable, using open source, into an application. There's a lot of stuff under the hood that goes on, that is transforming in real time. So the business value is a discussion that they're talking about, solutions and whatnot. But under the hood, a lot of stuff's changing. So, OK, moving stuff out of a data warehouse into a real time streaming environment, if you will, is a big deal. And that's not trivial. Presenting the data, visualization, are the CMSs handling push notifications. This is a huge area. Compose.io, an acquisition IBM did, is really, really an important part that no one's talking about, WISC, that they're talking about, another area. These are the tooling and the software that's going to enable that kind of software layer that can manage the data, because you want to move the right data into the right place at the right time, then you have a better sense of what you're looking at. So you can have all the visualization of the world of bad data. You're looking at a nice, cool picture, iCandy, as we say, but if the data's wrong, you look at the wrong picture. So the picture may look good, but it's not. Like, the influencer map here. I mean, you look at all these influencers, it's all logos, it's IBM. It's not people. It's like, OK, they're not influencers. It's a Twitter handle. It's not a real person. So a lot of cases, you're looking at the wrong picture. So what companies want to do is they want the right picture. That's getting the right data at the right time. OK, so some work has to be done before you can leverage all this data. So I mean, we're going to talk today about the collision between IoT and Cognitive. But from a practitioner standpoint or a digital builder, like that term, Kevin, you can use that yesterday. From that person's standpoint, there's a lot of some lifting that has to be done. So it's maybe some pretty heavy lifting. That's where Watson comes into place. To me, the Watson dream that they're selling is viable, because that's an outcome-driven conversation. Yeah, I want to get to the nirvana. But the reality is, you've got to have the data involved in that. You've got to have an insertion of data into Watson. That data will drive insights. So you're only as good as the data coming in. So that, to me, is the real value. And what Watson does is it accelerates time to insight, time to some sort of actionable transaction, whether it's an IoT instrument coming in on UDP, which, by the way, HTTP or UDP is really important. You've got to know the difference between UDP and HTTP. For instance, Cloud Foundry doesn't support UDP protocol. Bluemix does. Bluemix versions of Cloud. That's a little nuanced thing, but that's important. That's interesting, because Bluemix is built on Cloud Foundry. Well, they have their own little version there. This is like Pivotal. I mean, Pivotal is Pivotal. Pivotal wants to sell Pivotal Cloud Foundry, but IBM is Cloud Foundry. But they're adding in a lot of other services. Everything has a service, APIs, and having that ability with Watson to take the APIs, take that data, that precognitive mode, and turn it into insight. That, to me, is the value of Watson. Having Watson plugged into Bluemix is a home run positioning from a product standpoint. And if they can move that into value, that's going to be an absolute game changer. So that, to me, moves it out of the gimmicky, oh, Watson won jeopardy. That's kind of a living room conversation. It shows the value. Machines can do stuff. But adding value is ultimately going to be, what's the insight? Is it the right insight? Is it in context of what I'm doing and my business? That can I put into my mobile app? Is it a JSON feed? Is it real time? Does it handle push notifications? These are little, little big things. Well, but you're talking also about a whole new set of protocols that have to emerge around IoT, right? I mean, and so there are some headwinds to IoT adoption. The other one we've talked about a lot on theCUBE is everybody talks about instrumenting the devices, but if the devices don't have connectivity, there's no point in instrumenting the devices. This is the nuance. You're not going to do a truck roll every time. I mean, the technical conversation about protocols like UDP versus HTTP is important because UDP is a different transmission of the packets than the TCP protocol. You got to open up a socket. You have a connection. These are like weird things, but they're important because IoT will trickle data in from wherever device. You got to have the capturing and the compute. This is under the hood conversation. Then you got to have the visualization and you have the insight. So, you know, to me, IoT is important there, but the problem with IoT is simply this. If you're not connected to the network and you don't have the power, you're already hamstrung. So the challenge outside the network is UDP works great. You can trickle the packets in, can assemble them on the site, and then when you have power, that's a truck roll. What if the battery goes out on some sensor? You got to roll a truck roll. What if there's no connectivity? So at Mobile World Congress, you're seeing 5G. You're seeing the spectrum game going on. If you can overlay in radio frequency via wireless as a backhaul mechanism for the devices, now you're connected. This is going to be a huge enabler once they solve that problem. Well, in the use case, it'll be very specific. We saw Dion Newman stop by and he's now moved over from Z into IBM IoT. He was sharing with us a number of clients that IBM has in this space. They're showing off some building mojo here. A lot you can do, obviously, with buildings and energy savings and the like. I mean, those are sort of some initial no-brainer wins that companies like IBM and others are getting with IoT. But there's, for the grand vision of IoT, there's, as they say, a lot of headwinds and obviously a lot of learning. Well, the headwinds as a connectivity power is one. But the real headwinds in IoT is the partnership that IBM does with their customers. Think of building owner, for instance, a multi-tenant unit or real estate developer or whatever, homeowner. You got to have a relationship with that partner. Okay, or say it's an ISV or a developer. This is where IBM is spending a lot of their conversations here at Interconnect this year is that partnership. That partnership deal. IBM's partnerships are key. We had Bitlion, we had a bunch of other companies coming on, so to me, that's a big deal. All right, so big day today. We've got Chris O'Connor coming on. He's the GM of IoT in Watson. So we're going to find out what his vision is for a vision. And Brad Hustable's coming on. I think he's been on the queue before, right? Yeah, he's been on. And as I say, we use Ustream. So we really want to unpack what IBM is doing in that digital space with that sort of service capability that they're bringing, that media service. Yeah, and a lot of, we'll end the day here. A lot of cloud integration, a lot of wrap up, some celebrities, some VIP influencers. A lot of cool stuff happening here at IBM Interconnect. This is theCUBE, it's our flagship program. Go to Twitter and check out the hashtag CubeGems. So go to Twitter and search, the Twitter search box, and type in the hashtag CubeGems, G-E-M-S, and you'll see the highlights from theCUBE. So go to YouTube.com slash SiliconANGLE, you'll see all the full videos. But get theCUBEGems, they're snackable, they're little highlights. Find out what you like, click on them, enjoy them. Check out the crowdchat.net slash IBM Interconnect. A lot of great conversations. Here and live in Las Vegas, day three coverage of SiliconANGLE's theCUBE. We'll be right back with more coverage after the short break.