 Welcome back to IBM's Information on Demand Conference. This is theCUBE, Silicon Angles, exclusive coverage of IOD. Hashtag is IBM IOD. This is theCUBE, our program, we've got the advanced instructor from the noise. I'm John Furrier with Dave Vellante, our co-hosts, and Darren Nelson, Vice President of Solutions Sales, a series of computer solutions. Welcome to theCUBE. Thanks for having me. The largest IBM reseller in the world. Is that right? We are. True statement. That's awesome. That's a big accomplishment. You must get treated well from IBM. Get some nice soft dollars. Shmoos and customers, big customers. You're in the trenches. So my first question is, okay, give us the reality. Big data analytics and social business. Which one has got traction? Or both, does it have traction? Or is it just now getting traction? Give us the straight scoop. Yeah, so I would say there is probably equal amount of activity in both, but there's more POs being cut for analytics and big data. Social in and of itself is, there's a lot of interest and hype and customers are really trying to understand how they can leverage these tools to augment the solutions that they're bringing to their customers, whomever they might be. But social in and of itself, people are not just investing in social without it being a part of some bigger solution. And the activity that you're seeing in big data and analytics is now beyond proof of concept, right? Oh, yeah. I wonder if you could talk about that a little bit, because a year or so, even a year ago, it was sort of kick in the tires, proof of concepts. What's happened? We're leaving that phase and how are people going into production? What are you seeing? You know, I think we're fortunate to work in an industry that is extremely dynamic. I mean, every three months, there's some crazy buzzword that people started talking about, you know, cloud, client server computing, second life, and big data and analytics fell into that. But what I think we're seeing is after people started proving out that they actually were running a more profitable and more efficient business, when they had facts based on how their businesses were performing, they were starting to invest. I mean, there's studies done that say customers that are investing in analytics and using a fact-based business approach, they're 20 times more profitable than those that do not. And so it's really become the price of entry at this point for those customers that are not investing in analytics and making decisions based on facts. They're behind the A-ball. They're at a competitive disadvantage. So I think it's reality now. So what's your observation space to use John Furrier or Jeff Jonas' line? Where do you sell into? Is it, so the U.S., is it your particular regions trying to understand that? Yeah, so I'll give you just a little bit of background. So Sirius actually was founded in 1980. It predominantly is an IBM hardware reseller. And so for three decades selling IBM infrastructure, essentially, about seven years or six years ago, Sirius acquired my company. I was IBM's largest software reseller and systems integrator in the northeastern part of the U.S. And they asked me to help transform the company to being more software and software services capable. In a three-year period, we tripled our IBM software business and became IBM's largest software reseller on the planet, even though we only sell in the U.S. So we only sell in the U.S. In 2011, we actually finished the year with IBM software being our number one brand. After three decades of predominantly being an IBM hardware reseller, IBM software now became our number one brand. So long answer to your question, we sell U.S. But what this enabled us to do was to have a high value conversation with our customers, not around just implementing infrastructure, but what are the business challenges that you're facing? Where do you want to go? And we can then employ the right hardware, software and services to enable our customer to meet those businesses. A total transformation, right? Because as you know, being in this business for a long time, it's always the application that's, you know, connects the infrastructure to the business. Exactly. Yeah, yeah, if you figure that out, yeah, yeah, we get some infrastructure too. That's not a problem. So what are you proposing to customers is that the whole, I mean, IBM's portfolio is complicated to a lot of people. Is it, are you selling the whole portfolio? Are you primarily selling, for instance, Cognos? I wonder if we could talk about that a little bit. Yeah, sure. So we are fortunate to be able to resell the entire IBM software stack in excess of 5,000 products. We're not experts in all those, but we can resell them. The hotspots that we're seeing, we're seeing a lot of activity in the enterprise market management space. So T-Leaf is just a tremendous product in that space, providing a kind of analytics around customer experience optimization. That is white hot for us right now. We're also seeing quite a bit of activity in the analytics space, really around the business intelligence, business analytics. We're actually seeing a lot of activity in the retailers around social analytics. Really trying to understand customer sentiment, hot words, trending, to be able to make very effective marketing decisions. I mean, think about what it used to take to understand how the market was perceiving your brand or your customer service. You'd employ a third party to do some sort of study and three months later you'd get an answer back and then have to put plans in place. Right now our customers are unable to very quickly in real time, take a look at how they're trending, what kind of, what is the market perceiving them to be in certain areas and be able to make decisions, whether it be marketing decisions or damage control decisions. So that's been really hot. From a social perspective, let me just finish on social. Social we're seeing now, people layering social on top of these business areas, these business solutions to really accelerate the value and increase the value of the solutions that they're providing. We have a customer for example, they're a $6 billion automotive retailer and they had all of their records around their automobiles in paper copy and they decided, you know what, we gotta be more efficient in this, we gotta be more effective of this, we're gonna put this in the IBM Records Management System. They realized it's providing them so much benefits and economies to their business, they're not putting everything in that environment and exposing that through social technologies. WebSphere portal for example enabling people to collaborate on that and now adding connections to that so they can build communities and enable people with special interests to be able to collaborate on those topics and also being able to use connections for expertise location. Maybe one seller in the West Coast is needing to sell a Hummer and he's run into this one objection. Well he can actually find who the Hummer expertise is across their entire company and be able to tap into it and in real time respond. Yeah, sorry but I see huge potential there for overlaying, if you will, that social experience and we were just talking earlier about how the whole user experience has gotta change to become more social. Now will you guys do integration at Sirius? Do you rely on IBM to do that? Is it a hybrid? Yeah, so it's very difficult to sell this technology if you don't have the skills to implement it so we absolutely, we've built in excess of 100 engineers that do nothing but implement the IBM software stack that I referred to. So we not only architect and sell it, we implement it for our customers. So how does that work with IBM services? They're a big services company, they do a lot of implementation and integration. You obviously have expertise. How's your relationship there and how does that all work out? We have a tremendous relationship with IBM. There's actually, there's a portion of the market that frankly we're probably better served to, you know, we have a pricing structure and possibly a bit more nimble than the big IBM GBS can do. So the very large, big, big stuff. Yeah, we lead to IBM and GBS but for anything below that, we play very heavily in that space. There's scenarios where IBM even subcontracts our resources to work with them, leverage our expertise. And vice versa, we subcontract them where we're, you know, our bench is completely deployed. Under your brand. Yeah, under our brand, absolutely. So you mentioned that the customer experience optimization, the tea leaf stuff is white hot. I wonder if you could talk a little bit more about what's driving that and what you guys are doing with customers. Sure. So I'll give you a quick, a quick analogy. So I'm a hockey goalie dad. Okay, very stressful position to be on. I hate when you're kissing that. Oh no. Crazy. Hello parents, you don't sieve. If I don't get a substance abuse problem from this, I won't get it for anything. It is absolutely, I'm that dad that videotapes my son in net so that we can, if he made a mistake, we can review it. He led in this goal, couldn't understand how this goal went and he was in perfect position, perfect technique, couldn't understand it. We went to the videotape and we could see that he was hanging his glove. He was hanging his glove and it went over his glove. Instead of him attacking, tea leaf is like the instant replay of a customer experience. It enables our customers to actually understand struggles that their customers may be having, whether it be through a mobile experience or a web experience and be able to actually relive that and replay that exact customer experience so you can see, oh they're abandoning our cart. Here's why. You know, I'll give you a recent scenario. We did a demonstration to a retailer actually in the Nebraska area. Got so excited about it, ran out of the room, grabbed a CEO, CEO came in, sat down, saw it, said gotta have it. Seven days later, got a PO for the product. Had it implemented in eight days, it paid for itself inside the first quarter. Here's how. They couldn't understand why people were abandoning their cart and what they were able to do is see the trends, see the analytics around it and then actually replay it and learn that there was a bunch of Canadian customers that were filling the shopping cart but because of export restrictions they couldn't sell this certain product so instead of them giving them alternatives, it came up some crappy message that said no, you can't do this and they left never to come back. You can't buy from us. Yeah, exactly. That's great customer pull. But TVF enabled that to get resolved very, very quickly, paid for itself inside of the first quarter so that's the kind of stuff that we're seeing happening. Yeah, head that off early, make another offer right away. Send them on a different branch. Okay, so that's obviously heavy retail. You see an uptake in other? Customer service. Anyone who's got customer service? Yeah, telco, insurance. Call centers, yeah. Big call centers, absolutely. Insurance, telco is absolutely. Awesome. How about the BI business? We were at the Tableau conference a few weeks ago and maybe it was a couple of months ago now and the CEO would, anytime we talked about the BI business he would slow it down his cadence and talk about the traditional BI business but the traditional BI business is getting a bad rap so what's the reality there? What's real? How is it evolving to really be more agile and solve some of the promises that it's made over the last 20 years? Obviously I think ISVs are, they're taking much, much more care in understanding that the user experience of those platforms is extremely important and we've seen a tremendous evolution in the ease of use of the products. We've seen a tremendous evolution in the integration of the products so now are you not just doing traditional reporting and dashboards but now being able to do predictive and do planning and social and have that all integrated under one user experience has made this much more consumable by a larger percent of IT professionals and not just the PhDs out there. So I think the simplification of the platforms, the integration of the platforms and the robustness of the functions that are being provided has really started to enable this to reach a larger, larger percent of the user base. Darin, I want to ask you a little bit more data on what you've seen in the field. Last week, big data analytics everywhere. It's so intoxicating because there is the tea leaf. You can look at the tea leaves, great example. Social business, it's a no brainer. Hey, we got to be more social, it's the future. We can't debate that but under the hood, cloud, mobile, these are real issues, right? So take us unpack under the hood. What are customers doing? Are they going hybrid cloud? Are they saying, hey, you know, I'm gonna stay on premise? They're just buying more servers. You know, they'll throw more iron at the problem. And then mobile. How does that tie in with BYOD, those things? So those are kind of things that I've been talking about, not at this conference, but it gives a peek of what's going on there. Are the proposals end to end? Are the POs being cut and kind of piecemeal? Yep. So let's talk about mobility first. So mobility is, there's some real interesting dynamics there. What we're seeing is a lot of the mobility projects are actually being driven out of the line of business. So what you have is you have these departments or lines of business that have a sub-enterprise budget, I'll call it. And they have skunk work type projects where they say, I've got to deploy this mobile application and they go ahead and do so. Only to find out that down the line they run into problems around security, around mobile device management, about deploying multiple applications. They stuck on the plane without going through TSA. Exactly, exactly. So then what happens is now they go to... You get kicked off the plane. Yeah. Well they got to go back to the enterprise and they got to say, I need help. And so now there's customers then having to kind of backpedal and figure out, hey, we've got to invest in some mobile enterprise application platform to simplify everything around the mobile application development, the mobile application deployment, the security, the MDM, remote wipes, all those kinds of things. So you see the line of business essentially dragging IT and the enterprise kicking and screaming and then having to force them getting after the fact. We're also seeing from the mobility perspective still a lot of custom app development because these departments they don't have a budget to invest in an enterprise application platform so they end up doing phone gap or custom device specific development. From an analytics on the mobile device, we actually just hosted 100 customers last night in an event where we demonstrated the use of Android, iOS, iPad devices, receiving alerts around certain KPIs, reaching thresholds and being able to have a CEO drill in from his iPad and actually review. You did that here. You did that here, yeah. Last night we hosted 100 customers demonstrating this and reviewing from his iPad actual reports, being able to mark up after doing some what if analysis and what not, mark it up, send it off to his analyst asking some questions, his analyst going in, doing some social analytics to drill in to really understand what's happening, do some planning, create some products and then emailing that back and him being able to receive the response on his Android device. So we're seeing mobile is really just an extension of existing applications but it's the price of entry. If you're not paying attention to mobility you're gonna have a disappointment customer. How about cloud? So cloud, we are seeing the commoditization and consumerization of certain IT applications and what I mean by that, there are certain applications that customers are comfortable putting a black box around and pushing it out in the cloud because there's just not real value in implementing variants of that and the cost of upgrading that in the future. For example, e-commerce, right? Everyone used to have to do e-commerce on their own premise. Now what we're seeing is a lot of customers really taking a close look at, do I really need a custom shopping cart? Do I really need a custom catalog? If it does 80% of what I need- It's public information. Yeah, do I really- It's basic security, Bob Wilder, no big deal. Exactly. It gets hacked and just put another instance. From an analytics in the cloud perspective, we're not seeing as much comfort level yet. Because people are putting private information in there. That's my stuff, man. That's my stuff and I'm really critical stuff. And so I think there's a little bit slower to let that go into the cloud. Let me ask you a question on that, because conventional wisdom would infer from that statement that cloud is perceived as less secure than my own premise. Talk to a lot of people and they say, well, you know what, cloud is actually more secure than my own premise. Well, a high percentage of breaches are done from inside your firewall, right? Right, exactly. We could talk about that for a long time and you could make a good case for the cloud in terms of security. The issue when you peel back the onion is oftentimes that the cloud service providers' policies, the security doc, the SLAs are just different. They're maybe not worse or better. They're different than what I have internally. Is that what's going on here or is it just the maturity of the cloud is not there? The SLAs actually are worse. What's your take on all that? I think the SLAs are fine. I think, frankly, a lot of it is emotional. There's just a gut comfort level of having my stuff close to me and under my control and putting critical information under someone else's control is an emotional challenge. That'll attenuate over time, don't you think? Yep, I agree. Darren, thanks for coming inside theCUBE. Darren Nelson, he's in the trenches, top IBM partner with Serious Solutions. A final word for you. I'll let you get this in. Are people buying heavily now, P.O.'s end of the year budget flush? Or are they looking at next year as a positive outlook? What's your, just give us a sentiment of is it people still, they think it's not going to implode? Is it going to be great? What's the outlook for 2014? Are people, we're hearing a little bit of budget flushing going on at the end of this year. What's your take on this? We're also hearing uncertainty, right? Because of the, you know, the government shutting down, Obamacare, all the stuff. I mean. If that's happening, we're not seeing it. I mentioned we tripled our business in a three-year period. We had a pretty high baseline to build from. Year-to-date through Q3, we're up another 30% year-over-year, and we're looking like we're going to crush it with our Q4 pipeline. So I hope that continues, and I hope the naysayers are wrong, because we're not seeing that. Excellent. Okay, we'll be right back here live in the QF for the short break.