 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. New York City for theCUBE. This is our flagship program. We go out to the events and extract the citizen noise. I'm John Furrier. Show my co is Dave Vellante. We're here at Mike Pereira, VP of Z system software. Mike, welcome to theCUBE. All right, thanks for having me. So Z system's mainframe is modern platform. You guys, pretty impressive performance. David Floyd, a Wikibon analyst, is very impressed by it. We were on a production meeting this morning and last night. Really amazing performance. It's the Ferrari of cloud, whatever you want to call it, sports car. Skip the Model T for horses, right to Ferrari, as I said on my Twitter last night. But software needs to be a big part of it. So you have stuff that takes advantage of the in-processor stuff. So you got IBM software. But then there's also industry software. So could you talk about what is the software vision? What's out there? IBM software, external software. Just help us make sense of that. Sure, so everything that we do, we design for the stack, right? So in the stack obviously starts at the chips, the firmware, the operating system, and then the middleware as we go as well. So with the Z13, there's no exception there. And Java is one area that we've really focused on and really excelled at. So that Z now is my humble opinion, backed up by some data, the single most performant Java platform in the world. So you look at the performance that we've had more than six times improvement since we started on Java. You look at the increased throughput. You look at going from a 50% increase for SMT up to 200% increase if you're looking at security enabled applications. And then a lot of what we do and what's in the portfolio leverages Java. So we embed it in CICS. We embed it in IMS. Our operational decision management runs on top of it. The IBM mobile first platform runs on top of Java. So you get all the trickle down effect if you would by that single investment that we've been making in the core of Java throughout the rest of the stack. And again, that performance benefit is huge. Ironically it was a side report out on IBM earlier today, number one developer fan. Number one with developers with the Duke. Obviously an area where ETLs are looking to get important performance. But bigger than that though, this performance. So there's some controversy on Twitter just seeing right now. In the release it says Z13 is the first system able to process 2.5 billion transactions per day. Is that the number? Is it 30 billion? Is that a big number? I mean some people saying x86 has been doing as can do 2.9 billion transactions. Well I think the question is, is it real time or is it batch? And if you look at the integrity of the transactions start to finish that you guarantee what's gonna happen from the moment you hit enter all the way through to the two phase commit, et cetera, et cetera. There's nobody else in the world that can do that at the scale that we can do it. 2.5 billion is an interesting number. We've got countless number of clients who do more than a billion today. That 2.5 is on a single system. That's real time. That's not a benchmark number. That's a real number. Yeah, so you look at some of our products we can actually scale to a million transactions per second. Again, real time, which there's no x86 in the world that can do that at scale, at availability, at security, all the other illities. The press release really kind of gets loyered up and looks, but it's really. I can neither confirm nor deny. But you're talking real time but the difference is real time versus batch, right? And we do a combination of both, right? So the world continues to move more and more towards real time from batch, but we still have a lot of clients who run huge portions of their workload in batch because they don't need it real time. So Java is a big part of that. What are the software you guys powering on this thing? You see as big languages that people will be developing on that's going to be taking advantage of. Well, so an extension of Java, I mentioned the mobile first platform, right? So that's really our mobile platform where you take that in parallel to where the data resides, whether it runs on CICS or IMS or a website application server or wherever. And you look at the throughput ends up being 60% better. The response time ends up being 36% better if and when it runs on Z versus elsewhere. So mobile is a huge play for us as well as a scalability on the backend of whatever is driving mobile on the front end whether that front end lives on Z or lives somewhere else. The other big piece that I'm really excited about is the extension of Z, right? So the question is not does it run on Z but the question is how do you run it better with Z? And if you look at the paradigms, the as a service paradigm, right? Cloud paradigm, infrastructure, platform, our own offering around Bluemix, our clients have got hundreds of thousands if not millions of services that could have been built a day ago. It could have been built 40 years ago that have a huge amount of value. They're proven, they scale and they provide the function that an application developer needs to go develop whatever the latest and greatest application is. That to me is hugely powerful in getting folks to think about that paradigm of reuse and in some ways it's deja vu all over again with SOA 10 plus years ago now but now in a broader context and with other development paradigms. So Mike, a big theme of this announcement is bringing analytics and transaction systems together. What does that mean for your core transaction software and all the tools around it? How do you accommodate that? What sort of changes do you have to make? What should clients be thinking about? Well, so prior to this announcement we've done an awful lot again of optimization across the stack, right? So DB2 works extremely well with CICS, with IMS, with Webster application server, whatever's on the front end of that. With this announcement, you take the transaction, you take the analytics and then what can you do with those two things together? So being able to take a transaction that's in-flight in sub millisecond response time, do the analysis and take action on whatever it is that it could be fraud, it could be upsell, cross-sell, it could be just net new opportunity and then you take this world of mobile and these systems of engagement that now gives you context which you never had before as a standalone system of record and kind of this hybrid world. You can do a lot of really cool things, a lot of hugely valuable things to the business that you couldn't really do before. Like what? Give us some examples. Well, so imagine you're walking down the street here in New York City and you have your mobile device. That mobile device is connected to Zee on the back end. It's pick your favorite retailer and you're taking out the location awareness, you're taking into account how much money have I spent over the last however many minutes or hours and has any of those been on a food? Let's say, some kind of food service. I happen to be walking by a restaurant. I end up getting a transaction or a notification that says, hey, here's a 50 cents or 50% off whatever, a cup of coffee or some kind of food. That's one example in the real time piece is now I'm going to go pay for that and in the middle of me paying for it I'm doing a check to see is it really Mike Pereira who's buying this cup of coffee based on the context, based on the history, based on other charges that have been made within the last minute and then being able to make a decision on do I let it go or do I reject it? So the industry generally has been sort of talking about that example and others, fraud detection, et cetera, for a while now and generally the experience has been not quite real time. Are you saying we're now at a tipping point where you can deliver that experience in real, real time? Yes, absolutely. Opens up a lot of opportunities, right? Are you unique in that aspect, do you think? People talk about doing it on other platforms. So we are when it comes to the performance and the response time, right? And again, by nature of having 80% of the world's enterprise data residing on the platform you can do a lot of things now with that data and to that data versus if the data is dispersed all over the place and you've got multiple copies and then there nested copies within the multiple copies and then you've got latency issues, you've got data consistency issues, all of that, those types of things. So you're saying within the system you've got this so-called single version of the truth and you don't have to move it around? Right. So I want to talk about the sentiment in the marketplace. So I got to ask you about the generational chasm that you're crossing with Mainframe. So obviously Mainframe's been around, legacy for IBM, built their business on it, it's fantastic, I mean, as one point dominated the entire computer industry but now the young guns are out there, software developers, you know, they're used to the cloud, they take from their local host, push it to the cloud, run a lamb stack, whatever they do, no JS, they don't might not have the experience in scale. So how do you talk to that generation? The young CIO who might be 35, you know, to them, Java consider an outdated language maybe to them or they want to be more cutting edge with data science. So how do you guys connect to that audience? So to me, the big thing is we're not different, right? And I think we've kind of had the stigma around Z for a long time that well, Z is different. And that's, you know, this other thing over here and you know, even if you take Linux, which Linux is Linux, there's a perception that well, Linux on Z is different. It's not different, right? So as we're going and looking at, you know, and talking to the next generation, quote unquote, the first message is it's not different. The second message is it's the only platform in the world that can do what it does at the scale with a performance that oh, by the way, runs the world's economies, right? So when you say not different, you mean from a tooling standpoint, from a... Sure, so you're going to go develop an application, let's call it a node.js application, right? You develop that application to deploy it on Z just as you would to deploy it anywhere else in the world. So develop wherever I want? Absolutely. Run it on Z. Right, and now you take this integration aspect that I started mentioning earlier today and somebody who wants to go create an application in Bluemix, leveraging services that run on Z, again, it's no different, right? They don't need to know, nor should they care where that service lives and where it actually gets executed. It's just that that service provides what they need it to provide. So would you say to the young, cool kids that this is essentially a Ferrari or a souped up sports car, Tesla, whatever? I mean, is that kind of positioning? Absolutely, and we do it today. So if you take my CICS development team, for instance, more than a third of that team has got less than five years of business experience, right? These are the exact same folks that are building applications somewhere else that, and by the way, most of those or many of those people never heard of Z before they started working on CICS, yet if they want to work on something that matters to the world, Z is what matters. A lot of older programmers my age say, oh, they're young generation, they haven't made these days. And then they call the entitlement generation. So why not market to that? Hey, you're driving a horse and buggy, go right to the sports car. I mean, that's almost kind of what you guys are positioning this as. Almost like, hey guys, if we can give you the God box, if you will, and now people don't like that term, but that's essentially, this is the killer box for what you want to do. In terms of overall performance, security, yeah, you can run some stuff on scale out, but just go right here. So is that correct? Absolutely. That would be a positioning statement? Yep, absolutely. Dave, what do you think about that? Well, I think that the point that you're making about that you shouldn't care where it's running. So if I'm developing an application, what I want is the system to say, okay, now you're ready to deploy it. Do you want the simple mental model is do you want the gold standard? Do you want the silver or the bronze? And the gold's going to be more expensive. And if your application and your business requirement justifies it, put it there. You might pay a little bit more, but it's valuable, it's driving business value. Is that the sort of model that we should be thinking? Well, it is, although I'd argue with you about it being more expensive, because certainly at scale, we've proven time and time again that it's not more expensive. So you get all those benefits, with actually the price point being less than or equal to running it somewhere else. I think that this point about... Well, you're not saying, wait a minute, hold on, I gotta ask you a question. Bring it on. You're not saying that the mainframe is the least lowest cost for any application, any workload. No, no, so I'm not saying that. What I am saying is... For mission critical workloads, so let's define that box. Okay, well, so the boxes go to depend on the application itself, right? But generally speaking, if you're running at a scale of 200 VMs or above, we've proven time and time again that the mainframe is more performant than running it anywhere else because of all the benefits you get from the virtualization and the parallel processing and the shared everything. So that's an example. But there's a cost to that performance as well, right? So if your application justifies that, but there's also the complexity aspect that presumably should favor you. Yep, absolutely. And the other thing that we're seeing, I talked about this heterogeneous or hypermodel with Bluemix and Z, there's another model that we see evolving out there which is based on the open standards, whether it's Java, whether it's OpenStack, et cetera, is choosing your deployment and where you deploy it at the time of deployment based on what's your capacity, what's the SLAs, et cetera. So what we've announced today around patterns and bringing to market 12 patterns which allow and enable clients to bring up the speed very, very quickly, our top dozen or so products, including the mobile first platform, for instance. And then we've got clients who decide, you know what, based on today and based on what's going on and based on the SLAs, I may deploy it on Z or I may deploy it somewhere else. It's where do I have capacity and how can I best use my entire infrastructure so it's not a religious debate that says, I'm going to put it here, I'm going to put it there and that's the end. So my final question is, what do you say to the folks out there in terms of honestly, you've got to have a serious business model to run the mainframe, you're not going to just be loading an app into the cloud as a developer but the development shop is there. What do you say to the folks around digital transformation because part of the messaging here is digital business, social business, which I'm a big believer and I see it happening. I mean, everything's instrumented, big data's a big part of it, so like, I mean, everything's collectible now end to end for an entire business. Which if you think about it, it's the first time in the history of business that's possible, you could literally measure everything. So what does that mean? What does that digital business challenge mean and how do you guys, what do you talk to, you guys obviously do your research on this, but like, what's the big hot buttons there for the digital business points? Well, so I think one is the uncertainty that you don't know what's going to happen these days until it happens, in some cases you're prepared, in some cases you're not. Number two, it's the volatility that comes with the uncertainty. Number three, it's the scale, because you're now getting hit more than ever by all these different places that some you have control over and some you have no control over. And then on top of that, the simplicity point that you mentioned earlier today about your infrastructure overall and how much time are you spending managing however many thousands of servers that you've got versus managing a platform where it's self-contained, you get all those performance benefits and you can still choose to extend it if and when you need. So what's your opinion, if the thesis is all businesses are looking at their value chains and their business configurations and rewiring their business for digital. What rooms of the house are they working on first? Is it supply chain, is it infrastructure, is it sales? What do you see the low hanging fruit where your top clients are working on? All over the map, it's the answer. It depends on the vertical. It also depends on where does that client believe their differentiation is. And some clients major in supply chain. Some clients major in customer experience and differentiation and the unique one-on-one type of interactions. Other clients may major on other things. It kind of depends on what their core value is. Exactly. It's their customer service organization. Right, and the beauty is that we can serve all of those and bring all these capabilities to all of them regardless of what their priority is. Mike, thanks for coming on theCUBE. Really appreciate you. Congratulations, great announcement. We like this whole in-processor memory. I mean the in-memory versus the in-processor really interesting analytics thing. So looking forward to seeing the software. Thanks for coming on theCUBE. This is theCUBE. I'm John Furrier with Dave Vellante. We'll be right back with our next guest right after this short break live in New York City. We'll be right back. Thank you.