 Las Vegas, extracting the signal from the noise. It's theCUBE, covering Interconnect 2016. Brought to you by IBM. Now your host, John Furrier and Dave Vellante. Hey, welcome back everyone. We are here live in Las Vegas for exclusive coverage of IBM Interconnect 2016. This is theCUBE's Silicon Angles flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier. My co is Dave Vellante, our next guest, Kevin Egan, general manager of IBM Digital. We're all digital right here all the time, real time. In a cognitive mode, Kevin, welcome to theCUBE. Hey, I really appreciate that, John Dave. I love theCUBE, so it's an honor to be here. And I look forward to going and watching myself on digital TV. We'll hopefully get some CUBE gems out of this because they'll be on Twitter immediately. Digital's obviously the big topic, transformation. We were talking yesterday about the slogan really should be digitize everything because we are moving to a complete digitized world where data is the asset. And that's kind of sounds easy to think about, but what does it mean to put it into practice because digital assets are shifting to be more interactive, less static, more dynamic. What's your thoughts on that? Well, first off, you're exactly right. The explosion of data has created the opportunity to create assets. Assets that are only a piece of it until you unlock insight out of those assets towards the outcome of establishing trust with the client solutions, helping to make decisions. You really haven't created a platform. So as we've seen the explosion of big data, one of the challenges that our clients have and the customers, in fact, even inside of IBM we have is, how do you make sense of that so that you can construct thoughtful, friction-free customer journeys that as people are inspired by what they see, what they hear about at events, they can have a personalized journey that removes the roadblocks, brings in social content, brings in the best of industry expertise and unlocks the power and potential of doing digital in a transformative way no matter what your industry is. And so at IBM we formed a digital unit across the company over the last year to help tie together this explosion of content that's happened. And to gotta tell you, it's been a big year. A year ago at Interconnect, had you left the event and done a Google search to try to find what was announced a year ago, you would have seen the beginning of the narrative, but certainly not a journey that was leading towards a destination of transformation and great outcomes. This Interconnect, this is our first major event where work with companies like yours, working with our partners, you'll have a great experience, whether you're here or you're at home or you're at work next week, bringing together the content, the insights, the social, in a digital experience that frankly, behind it is a marketplace of content, ideas and solutions built on the IBM cloud that's going to accelerate our client's ability to make sense of all this and get to the journey they want. Kevin, you've seen the journey of digital from the web 1.0 days or web 0.5, however you want to look at it. You know you're involved inside, you walk one of the digital cities, community kind of things, evolving now. It's been a real interesting journey, but I want to get your thoughts on a concept called the user's preferred experience. That's the future experience that they weren't hoping for, not what they get today. You mentioned Google, great example. You go to Google News, it's the same story of the VMware this desk announcement is very news driven. There's no real discovery aspect of it. What is the mind of the consumer right now from an experience standpoint? What are they looking for? Obviously real time is a big part of it. What's your thoughts? You guys talk about this, you must have an opinion on this I'm sure. Well you know, we're finding when we say users, we see clients. Let's first talk about how in our industry and IT and in the big B2B spaces, the big change that's happened is we no longer think of the client as an organization. We've now made the full shift that our organizations that we serve are made up of individuals who are complex in their information needs, different stages of mastery. They all have time compression and they're so used to that digital experience that they're familiar with now from the consumer side of the world is they've seen transportation being disrupted with Ubers, they've seen travel being disrupted by digital agencies. Every part of the consumer experience now informs those professionals at work to expect a seamless user directed instant and always available experience. So applying that consumerization of IT and the explosion of marketplaces that take the incumbents that are taking a vendor-centric approach and just absolutely disrupt them and almost make them obsolete, we see the opportunity to apply those best-in-class consumer experiences to give our customers, professionals in every industry, control of their journey to inform that journey by their own profile, their preferences, their industry context and combine that with the world of social expertise and industry expertise that IBM's uniquely able to bring to the market and use great platforms like IBM's own cloud, cognitive solutions and cognitive APIs from Watson and you'll start to see this as an IBM client and be able to apply it in your own companies that you can simplify your own clients' journeys, your employees' journeys and activate a new wave of productivity that I don't think we've seen for decades. We're really at the era of tremendous progress brought about by cloud platforms, cognitive solutions and marketplaces that bring industry expertise all together. Wow, that narrative brings up so many thoughts, but I wanted to pick up on, so IBM calls them clients, you use the term users, but sometimes it's viewed as a pejorative, right? I like the term digital doers, right? So we're seeing this new era of individuals who are trying to get digital content out to their customers, trying to build digital platforms. Who are these digital doers? Obviously you've got the digital natives, those have been untethered for life, but we've got a big spectrum. How is IBM approaching the personas of digital doers? And so you're exactly right. We're in an era where professionals that have come out of technology and software engineering have become the modern builders of business process, the modern builders of customer experience. And so the word that I would use is we have to serve builders in industry, builders as individuals and builders as organizations to help them have the data, the tools, the platforms, the expertise so that they can build businesses, transform their business models and frankly grow awareness of what the value is that they bring to the table. So this class of builders has a few things in common. First off, it's grown out of old school software engineering. And so increasingly in roles from marketing to IT, understanding the basics of software engineering is critical. And so at the heart of that, IBM has a platform for builders, whether you're a low level systems programmer or you're a high level front end developer that brings the full spectrum of developer potential to life through Bluemix. Augment that with the communities that we've established through developer works, together with the ecosystem of partners who are bringing their components, their offerings, like the announcement of GitHub Enterprise and you begin to get a critical mass of the solution so that builders of modern business can come to IBM, experience and have a custom journey of content, learning and mastery connected to a marketplace where the tools, the APIs, the data sets are there for them to fast forward from concept to outcome in a timeframe that in the past was measured by months or years. It's now hours, days and weeks for really fundamental outcomes. Talk about the community aspect because that's a really awesome vision and the things that we talk about, when we have free condoms, we have some paid subscription with Luki Bond, but most of what we want to share as much content as possible, spray it around the web, shoot it everywhere. But if you look at the developer, software developer, they have GitHub, they can store code, they have communities like Stack Exchange and these other sites for advocacy. Is that the model for content development? Because that open source ethos, if you make the assumption that everyone's connected, they're using open source tooling, this community contribution piece, how does that fit in? Is this open marketplace? What's your vision on this? Is because the open piece might be a critical piece of that, how open, how IBM centric is it and vice versa? Well, I don't think that there's any sense in trying to put the genie back in the bottle of the open transformation that we're seeing. While some vendors would love to have virtual or digital walls that separate out the ability for content assets and learning to be unique to them, it's very clear that the technology has created an over the top transformation, that any attempt to lock up content that's a value to users is met with an over the top marketplace that aggregates indexes, synthesizes. If a content creator in the old industry of television tried to lock up their content inside of their network website, we see the emergence of marketplaces that come over the top, Netflix, Amazon video. And so applying that concept of marketplace aggregation of the content that has value, rich data personalization around what people are looking for, you begin today to be able to construct a marketplace that aggregates content from multiple sources. Now, even though there's content being sprayed, as you said, everywhere, it's frankly overwhelming when we listen to what our customers, what these builders tell us, that the ability to find information about blockchain, to find information on what might be relevant in their industry is so overwhelming that we go to the ultimate open source tool, the internet. And we just go to search and we type in Google. But frankly that experience has its limitations and we think there's a better way than simply going to Google to find industry expertise and insight. And so our strategy for IBM's marketplace centric strategy for digital and for cognitive is to aggregate together the catalogs of content, user profiles, industry expertise and connect it to a marketplace of products, solutions, APIs and data sets so that as I'm consuming content in that discovery and engagement stage, I'm always one click away from a trusted marketplace that can do key provisioning for APIs, give me access to tools, even connect me to human powered services in terms of being able to get a physical buyer and a physical expert together. That kind of full wrapping of value around what businesses really need to drive digital and cognitive transformation, that's at the heart of what we're doing with IBM Digital. So I love the business impact discussion. We'd like to have that discourse. You talked about productivity. Johns and Silicon Valley, we're by Coast to Lama in the East Coast. Silicon Valley's a little nervous right now but we feel like we're on the cusp of a productivity boom, a renaissance in productivity. Really two things going on there. One is productivity of individuals and the other is of assets. I mean physical assets, whether it's parking meters or automobiles that are becoming digitized. So talk a little bit about the business impacts of this digital transformation. First off, if you're not feeling the disruption of digital transformation in your business then you should be worried. Because this is a case where the paranoid and the self-aware will survive. Every industry, every sector, from the biggest companies to the smallest companies is having to fundamentally change the definition of who their customers are, how they reach them and how they create new business models and offerings to reach them. Now for IT business, the way of building solutions is fundamentally changing because small teams now with small starting budgets can rapidly prototype, compose, get proof of concepts, use digital marketing tools to refine and pivot the value proposition through A.B. testing. And so the world of engineering, the world of marketing are being collided together in an era of productivity that's powered by cloud-based digital platforms, connected to marketplaces and rich data that helped create custom experiences for that professional. Now productivity means that I no longer feel that if I'm inside of a large company that I'm beholden to a limited sandbox of what I can use, what I can experiment with, how I can explore. The top-down model, which was command and control, is now being served by a model built on hybrid cloud with security that meets the needs of the strictest corporations but unlocks personal productivity for this next generation of builders. So having an IBM account inside of an organization means that your employees have access to Bluemix, can connect to communities on developer works, have access to the content, including without sending all of your employees necessarily to this event, next week they can log on to IBM Go, experience the keynotes, see the workshops, connect that back to social networks on IBM and enter into a marketplace-centric journey that leads to experimentation, higher productivity, and faster pivoting as companies are trying to build next-generation products and new business models. Kevin, it's obvious you're right on the edge there and you see the path, the vision, and the future. Now get your thoughts on the old way versus the new way because this is an interesting topic, opt-in. If you have personalization, you have data, and you have over-the-top aggregation now as a platform called the Internet, and you certainly have gated content. The notion of gated stuff, Google's organic search results, pay stuff, click, go to a form, get access to content, that's an opt-in for the user. What is the new gated formula? What does opt-in mean now? Because if you have access now to all the data, the end game is to get that user to what you just said, which is I just want to roll my own, get content, learn, connect with others. But with personalization, there is no opt-in. You either know or you don't, so the goal should be no opt-in. I mean, I'm just trying to get your thoughts on this because it's one of those gray areas where a lot of people are working on stuff, and if you get it wrong, you lost. You're so right about that because just a few years ago it was considered digital acceptable practice that if you activated great content marketing you were building rich assets, case studies, that you would tease those out on social media, you'd tease those in email, but before delivering any real value to the client, you use that bait to put right in their face that gate. Basically, a DNA test of phone, address, data birth, frankly, in a world of immediate access. It's in Canada. Yeah, I gotta tell you, it created this expectation that the only purpose of digital marketing was to capture information to then hand off into the old school way of engagement, which is offline, human-based follow-up, not on the buyer's terms, not on the client's terms, but when an agency decided, or when a sales team decided that you were qualified. Now, IBM fell into that camp a few years ago, but today, and looking forward from 2016 on, IBM's philosophy around building value for clients is that content exists to help inform our client's journey, and the last thing we want to do is to gate content right at the moment when a customer is at that point of a ha, where the case study, where the CEO keynote, where the sample code is what they need to be inspired to take the commitment step, and so the concept of opt-in versus opt-out is being replaced with progressive profiling as a method that at the point of value delivery, you have an identity system, you have anonymous and known data systems that come together, so that what required login and authorization two years ago, today, we can do a better job than that with anonymous validation of behaviors and patterns. When you do get the customer identified, there's a new range of tools that requires to deliver even more value to the customer. So building value into your IBM digital relationship means that by offering your identity, in addition to the highly optimized anonymous content we can serve you, we can now help you build a history across your devices, across time. In fact, just this last month on ibm.com, we've introduced My IBM, a service that for the client who wants to log in and create an IBM account, ties together their experiences across over 150 IBM products, so that you can manage entitlements, perform upgrades, look at time remaining in trials, and it begins to unlock the value of the silos of IBM solutions, the silos of our partners' ecosystems and their products, and brings it together into a unified experience. This is so refreshing because you're right, the whole opt-in and fill out this form basically says, hey, I don't know anything about you, so just tell me, because I can't figure it out without that. And in reality, what's happening is consumers have all this information, there used to be an asymmetry of information, we knew, brands knew so much about the buyer, and now the buyer has the pricing power, so what are brands trying to do? They're trying to regain some of that knowledge, and so they're asking the customer, okay, fill out a form, it's just so 90s, 80s. And that's an offline world too, where when you fill out a form, there's this expectation that you've just seated control to someone else to decide, are you qualified? Now, while it's true that we do use advanced marketing automation systems, scoring platforms, lead management systems that flow into CRM, increasingly the customer-centric digital journey, instead of a form, it's a human being that's one click away to chat, to call, to even do video, so that the customer stays in control of the conversation. And as the value goes up, you get that. It's a human relationship with the customer, it's not like trap the user to day's point, tell me so I can do something offline, and maybe get a lead. It's like, okay, it's a historical relationship that has a series of value transfers. That's a social equation, I mean that is. It's social, it's on the buyer's terms, and it's on demand. And so in the past where registration forms played a key part of the customer qualification process for offline physical sales follow-up, the modern sales forces, the modern digital journey, brings value without gating the content. At the moment when a customer is needing assistance, increasingly chat, click to call, scheduled events that keep the customer in control are a much more powerful way to build trust and relationship and to deliver value. When you guys did IBM Go last year for the first time, one of the things that we really hardcore on was ungate everything, let it all fly around, but use that all-access gate as a context which for value, if people want to go there, the value should be stacked up. That's IBM's opportunity, that's not the crowd. So gates are okay if the users goes there. In other words, if it's part of their journey, I mean that's kind of the philosophy, right? I mean you want to. What's happening in just this year that this philosophy has accelerated is by taking these principles of customer-centered experiences, content that comes from multiple sources and buyer journeys that lead to a unified marketplace, we've seen metrics that are the leading indicators of growth of value both for IBM and for our partners and clients. We saw the largest increase in unique visitor traffic from both the percentage and absolute number term we've ever seen beginning in Q4 of last year. And IBM's got a good brand value. People want to have a relationship with IBM. They do, but IBM also has the challenge of its business model being limited to the largest, the most substantial clients. As IBM brings a digital platform to its go-to-market and works together with partners, IBM becomes accessible to a whole new range of business. Rather than being the largest enterprise, IBM becomes the platform company with cloud platform and cognitive solutions for businesses of every size. And while it may not always be the IBM digital seller at the end of every conversation, it creates opportunities for our channel partners, for our ecosystem. And I think this is the productivity engine that we're all looking forward to. So how are you going to do it? What does that do for the TAM? I mean, that just explodes the total market, right? You no longer need to have hundreds of thousands of face-to-face sales people in order to serve the largest clients because digital takes you into every organization. And you're no longer limited to only large clients if you're a company like IBM because digital allows you to achieve reach and scale to clients of all sizes. Digital transformation, Kevin, thanks so much for spending the time to come on theCUBE. It's a pleasure. Really appreciate it. Give me the final word. What's the vibe of the show that you're obviously digital transformation? I mean, is it a new IBM, new spring in their step? What's the vibe of the show? I think the biggest exciting thing this year, and it started with customers actually telling the story of IBM is we have a story now that might have been parts of the narrative a year ago. Now it's crystal clear that IBM solutions that span from hybrid cloud to cognitive solutions are tangible. They're ready for the mainstream. And this is the first time that I've, I'm relatively new to IBM machine only a year, that IBM now has a relevance and immediacy that works for clients of all sizes. So that energy is, I'm not just coming here to learn, I'm coming here to go back and do. And the cloud is certainly going to be a big accelerator of that. Awesome, Kevin Egan, digital manager of IBM digital, digital transformation from data to user experience, all cutting in between, great opportunities. Thanks for sharing your thoughts and commentary here in theCUBE. We'll be right back with more after this short break. And remember, March 15th is cube madness. That's when all of our guests stack up on the brackets and gets voted on. We'll see who comes to the end. Of course it turns into a hackathon because that's what people do, they stuff the ballot. So we'll see who's got the best hacks. Cube madness, go to siliconangle.tv. We'll be right back after this short break.