 Live from Las Vegas, it's theCUBE. Covering Edge 2016, brought to you by IBM. Now, here are your hosts, Dave Vellante and Stu Miniman. Welcome back to Las Vegas, everybody. This is theCUBE, the worldwide leader in live tech coverage. Ed Walsh is here. He's back. He's the general manager of IBM Storage and Software Defined. Ed, always a pleasure. Great to see you again. Love to be here. So this is, you and I, we're at the first edge. You were with IBM at the time. Five years ago, back. Great keynotes this morning. How are you doing? Very good. Things are good. Live in the dream, as we say it, so all good. So this is sort of a new chapter in your life. I mean, you're a startup guy, right? You've done a ton of startups, but many people may not know. You went back to school, you know? I love it when, I mean, I'm a lot older than you are, but old guys going back to school always makes me feel young. So that's good. And MIT Sloan School, you know. What was that like? You mean, get an education, MBA? It was a Kool-Aid injection of strategy, finance. I mean, what did that do for you? Okay, so education is never bad. And we talk about reinventing all the time and building your skills. So I guess you have to live it. So not that I thought you were going to ask that question, but I couldn't always recommend that people get more education. I think MIT is very unique. So, you know, everything starts for the model, have to think analytically and drive it. I think it's a wonderful background. I did it late in life, which I actually think is good. I probably took more out of it than I would've when I was 25, 26. But with a family, it was an interesting way to run a couple of years. It's just the demands of that and work, but I would recommend it to anyone. So I pulled a lot. It's such that the frameworks, it's not that it's changed dramatically in the last 12 years, but there's a lot of new models that having a little deep dive into it is very helpful and then in the real world, you can apply it. So I love it. So back at IBM, what brought you back? I mean, like I said, you're known for being a startup person. Avomar, VirtualIron, you just, you recently came from CataLogic. You had your own company early on in your career. 1989, I think you sold your first company, right? So what brought you back to IBM? Okay, so good direct question, but what I'd say is for the opportunity. And let me just phrase that for you, but it's an opportunity to help clients through what is probably the biggest transition I've ever seen in my life, the industry going through and for storage, it is the transition and people are wrestling with how to get through it. So I thought about it in three different ways, right? First of all, I thought they vanished to IBM would be, they've actually gone through multiple compute eras and not only innovated and brought their clients forward, but also they haven't left clients behind in the process. You look at that compared to my competitors who haven't really been through those eras and it gives us a culture advantage. Second thing is actually the broad portfolio that we have, right? So, you know, you do need a broad portfolio to help people because people are challenged with how do I take this and manage my current traditional application environment and modernize it, take out costs, optimize it. It's not just cost, but it's also take out the manual test of free up resources for what I'll say is the new application environments which they need to invest in. And that's investment in dollars, but also in people. By the way, we used to call it next generation application, it's really now. We see everyone, every environment I go into has these environments up, Hadoop, Cassandra, HPC type environments. So I think our portfolio allows us to help clients to modernize and transform for both of those workloads, which is important. Sometimes I get, wow, it's just a broad portfolio as in a negative, I think it's a positive. I have run startups that have one product and it's great when it's one product and all you need is this one product and it solves all the issues. But that's not really reality. I think the broadness kind of attacks the challenge that people are doing and how to transition into it. And then third, the reason I like this is the whole IBM is wildly behind the vision and no one argues with the vision. Cognitive solution is deployed in hybrid clouds and hybrid clouds is just private clouds and public clouds and put the right workload in the right spot given the right time, right? No one argues with that, but I not only have the broad portfolio and investments in the key areas like software defined in Flash, but I actually have all the energy, the vision, the investment, the innovation, the execution of overall IBM driving cognitive solutions delivered in a hybrid cloud and I can bring that to my clients. In fact, this afternoon we're announcing new products and we're directly taking software that we got through an acquisition over in the cloud team into Spectrum Protect to give you better ways to do hybrid clouds. We're already seeing that. So you asked me why it came. It was purely for the opportunity, but it's the opportunity to help clients get to this next transition or the shift and it's a hard one, but I think we're well, and if you look at it from that perspective, I'm probably uniquely positioned to help clients go forward. Yeah, so Ed, we are at a really interesting point in the storage industry. Many of us said with EMC being acquired, it's the end of the storage industry as we know it. Can you talk about how storage, can you talk about that broad portfolio? What I loved in your keynote this morning is how storage fits in the cloud, how storage fits in the analytics, into cognitive, into Watson. Do we really need storage anymore or where does it fit into those other pieces and how do you understand where to put all the effort of all the people that you've got? So data is, in fact, one of the reasons I took the job is actually the commitment IBM has to storage and it's all about data and data strategic. All the things we've done, we virtualize compute, we virtualize applications and virtualize compute, but data is still, it has mass to it, it has value to it and how do you protect it, how do you serve it up for performance. So storage or data, the way I look at it, is ultimately strategic to not only IBM, but our clients. So that's one. And then how do you actually roll it? It is, there's not one side fits all. That's why I keep on referring to the broad portfolio as a, it's a strategic advantage I have compared to somehow trying to explain why it's too broad. I think you have to look at one of the workloads and then what you need to apply to it. You also see us really focusing on two big investment areas, software defined and flash. And the reason that's important is, as data moves into a cloud, like if you're assuming hybrid cloud is the way we're going to deploy things, then having the ability to deploy storage or data in a system or an array, which we do today, but also software or as a service becomes really important. So our entire portfolio of open system storage is available as software and put it on your own hardware, you know, commodity, you know, Intel or power-based systems to build it out or as a system, an array that I sell you, or as a service in the cloud. Now that allows you to get it your way as a client, but also clients are trying to transition, so you need that flexibility. So they might be 80% traditional application workload environments today. They might be dabbling our 20% in this new application environments, but you know over time that's going to switch. So part of our investments on software defined and flash is actually to help them do that switch, and we can do it today. All right, so Ed, you know, we're putting your MBA hat on. Yes, you know, and when I think about measuring the storage market, you know, for so long we've been measuring boxes. It's, you know, here's boxes and here's revenue and, you know, IBM is not, you know, number one or two, you know, typically in a lot of those environments. You know, why should IBM be considered, you know, one of the leaders in kind of data? Sure. So it brings a good thing. So we count hardware devices, right? I actually think it's more if you look at data and storage is how you house it, and that's going to be housed in software also in the cloud. And if you add that up, I think we're our leader. In fact, IDC as far as just counting up the revenue, just last week IDC kind of said number two in storage overall. So it's not that we're some laggard. In fact, to be honest, we're number two. And granted, you saw the biggest acquisition integration in the history of IT with EMC and Dell. But not that we're striving to be number two, but to be honest, we are a player in the space, the broadest portfolio. We're making significant investments to help our clients. And also, I kind of mentioned this earlier, the investments that IBM's doing in the vision, the execution of the overall IBM cloud, you know, cognitive solutions delivered in a hybrid cloud, that investment helps my customers directly. That make sense? It, yes it does. The divestiture of the x86 business, along with the BNT networking piece, opened up some new opportunities for IBM to partner. Particularly you've seen the relationship with Cisco, Blossom and VersaStack came out of that. We, Stu and I were talking earlier about just hyper-converged, you know, there's flash, there's software defined, there's hyper-converged, there's a few mega trends that are going on, some call them buzzwords, we'll just call them mega trends for now. But what's the play on hyper-converged? IBM obviously had a converged strategy with Pure that changed after the x86, you know, D-Levver. What's the strategy there? Is it to play through partnerships? Is it to leapfrog with what we call server sand, you know, bringing storage and compute closer together? Can you talk about that a little bit? So our converged architecture is our VersaStack, which is our partnership with Cisco. We're seeing great uptake on that. So if you look at people trying to have a more operational efficient things around VMware or a Hyper-V environment, I think it's second to none. You get all the benefits of the different architecture, but you do save a lot in operation. We talk a lot about helping people modernize and transform their current, you know, I'll say traditional application workloads and then transform into these new generation workloads. I'll tell you, the converged infrastructure with VersaStack provides all that with an additional operating value. By bringing it together, less provisioning times, you'll see stats all the time, people saving more time, especially on the provisioning and managing of that environment. So I think that's where a large majority of the converged, they're trying to do it to make it easier, make it easier to consume, free up, they're trying to modernize, optimize their current, what I'll say, traditional workloads so they can free up time and money. And it is time, it's as much your people to focus on new things. VersaStack or converged architecture is, you know, the right way to do it. Now you're saying, hyper-converged, hey, take it further to do it, and we're working in different ways. In fact, all of our storage is actually in software as it is now, right? So you have partners saying, well, I'll take your great, you know, storage array software that I can get a software and deploy in my environments and get the same mission critical, you know, it's the exact same code that we have in thousands of environments on these enterprise, I mean, well-tested forever. So you're going to see it be more and more focused on the software side of that conversion. Yeah, so that makes sense, right? VersaStack, we're having a great uptake on it. Because hyper-converged, you think it really is software. I mean, that's really what it's all about. And so, and Cisco's interesting, they're a giant whale, 60, 70% market share. You saw what happened with, you know, VCE and Cisco had a great market entry. They've sort of knocked down a lot of, you know, go-to-market strategies. They've got their own hyper-converged stack, you know, with the spring path, you know, piece. But it's interesting that you guys have cozyed up to them, of course, because you don't have a networking competition, competitive factor going on. So the partnership seems like it's going well, but long-term, you've got other plans that are in the pipeline. Is that right, or? No, I think in general, there's just different deployment options, right? It gets back to this broad portfolio that is, well, think about it. If you're trying to do a VMware environment or a Hyper-V environment, which is a large majority of people trying to do conversion or hyper-conversion, that's what they're trying to deploy. I'm trying to make that an easier value proposition to free up my critical resources and capital. That's what you're solving, right? So the how you solve it is, I would argue with you, the vast majority of what people are doing are exactly what we're doing with VersaStack. It's not going, the vast majority is not going hyper-converged, it's actually going converged, and they pick up all the advantages of operations, right? So that's all the, well, we can go through it. Now, as far as hyper-converge or partner with that, Cisco has it. I think we have a great relationship with Cisco, but also they have other solution sets and we have to be open to that. Right, okay. Let's come back to sort of your role as the general manager. You're a true outsider, because you were at IBM for a while, but they brought in somebody from the outside. I don't think that's happened in a while. If you look at the general managers of IBM from Abusia to Vanderslice, I don't know actually if Vanderslice might have been outside, but Linda Sanford and Andy Mancha and Ambush Goyal, these are internal folks. Brian was an internal person, and IBM said, all right, we're going to go out, and number one, number two is they weren't storage people generally. It's fair to say you're a storage guy. You know the storage business pretty much inside and out. You've worked at EMC, you've worked at startups. So many of the general managers have come in to this job saying, we're going to knock EMC out of the number one position. There's a long list of those who said that and failed. You're not saying that, and it's probably not appropriate to say that now because EMC's gone. It's now Dell Technologies. So coming back to your objectives, sort of you're in, I think you're into your first 100 days still. So what are you trying to accomplish in that first 100 days, and what are your mid and long-term objectives for the division? Well it brings up, so you brought a couple things in that question, so. Furrier's not here, so I had to take that role for him. So listen, I actually think we have a broad portfolio that fits a lot of the needs today. You'll see us doing more and more investments on the software side and the flash. And there's reason for, I kind of explain, you need the flexibility of software to find. We're going to play our own game. I think we've seen these transitions in compute before. I think IBM has done a good job innovating through it and bringing clients with it. I think other vendors have not been through these transitions and it's a real challenge. I'm glad we don't have a huge hardware platform. In fact, if anything, we're second in storage overall, which is strong, but also all our investments are in the software side and cloud and cognitive, and that's where it's growing, and that's where I have an unusual advantage, or because I'm leveraging IBM's overall vision and execution engines are behind, and that's what puts me in a good spot. So if I were you, let me run this by you, if I may, I'd say okay, just exactly that. Drive all the innovations through software. If I need an appliance, great, I'll build one or I'll partner, because it's convenient to have an appliance. I'll partner for anything that's x86 related, and I'm going to drive all my innovation through software. I'm going to focus on Flash. I'm going to focus on software defined. I'm going to integrate with software in a big way because I have a captive distribution channel, and I'm going to partner with the rest of IBM, global services, cloud, et cetera, and really win the day within the IBM client base, and then I'm going to try to get my R&D pipeline out faster than I have historically. That would be kind of my rough game plan. Is that fair? I mean, is it too critical? Is it on point? I think you're on point, a lot of point on a lot of those different issues, right? So I'm nine weeks in, and I think in general, you're looking at the same sets of facts I'm looking at, and executing for, I think we have an unusual advantage due to IBM. If you believe it's going to go cognitive in cloud, I have won the better portfolio today than anyone in the industry, and I have the investments, not only a mine, which I'm driving that direction, but also what you see from IBM. Overall, IBM is leaning in on cognitive solutions and delivering hybrid cloud. Those solutions, I pick up automatically from my clients. The engagement we have from clients is picked up automatically, and that's where if you don't look at storage as being the old paradigm, if you look at, it's like, okay, we just talked about we're going new era, a new shift, who's better positioned? I think we have an unusual opportunity, and that's why I opened the conversation, which is why I'm here. I see an opportunity to help clients through this big shift. It's a big shift, and I think we're well positioned to. So when you go to the cloud group, everybody says, oh, well, Amazon and Google, they don't buy from EMC and IBM and HPE. They build their own stuff. I presume that IBM SoftLayer is trying to do some of that as well, but they also, because of the huge IBM client base, are bringing in products that allow you to do on-prem and in the cloud, same technology, same infrastructure homogeneity. So is it correct that you're driving that hard into the LeBlancs organization? Hey, here are my products. Let's figure out where they fit, and I want to compete with whatever, homegrown, roll it your own, whomever else is trying to sell into that base. Is that fair? Yeah, if you look at my roles to help my clients transform to the next vision, and part of that is I can go now and do these solution sets in HyperCloud with SoftLayer that are very powerful industry leading, but also they have different CSPs they want to deal with. We'll also help them do that. The key thing is you have to have your technology and software. If you don't have, it's the same software you're running in the rays, so they interoperate together. If you do that, you can actually go to almost any cloud. What you can't do is take an array with you into your favorite public cloud. But yes, we have an advantage with SoftLayer, but also I think SoftLayer's going to work with a lot of storage. SoftLayer's also saying I am driving cognitive and cloud solutions for the overall enterprises, and that's their mission, and I'm tightly coupled with it, but also a lot of stuff coming analytics and software. Makes sense to me. Yeah, you're saying you got to earn the right to win that business, and you're in a good position to win that business. But for our clients, they're going to have to take advantage of cloud. It's the way you're going to drive the economics, it's the way you're going to drive the new era, and we're going to do that across the cloud. You're not running away from that. You're not trying to protect the past from the future. No, in fact, the way I'm set up, I'm advantaged to not protecting the past and rays, and go as hard as I can to help clients get to the next generation. So some of the interesting compares in the software space of storage are like Red Hat and Microsoft, rather than kind of the traditional soft storage players. What do you think about their position today? Red Hat, obviously, a partner, Microsoft, you know, if you look at, you know, Ceph and, you know, storage spaces and some of those pieces. Yeah, so when you look at what I'll say is traditional workloads, that's what you're going to see the traditional, what I'll say is our arrays or systems being bought in software as a service. When you start talking about what I'll say is a new workloads, and these would be the more server-rich type of server environments, you're going to see a whole bunch of things pop up, and what we're seeing is our ability to help enterprises look at it as one grid. So what we're doing with Spectrum Compute, all these things go on X86 servers that are commoditized, but they're all separate. They're different file systems, they're different connectors. So think of Hadoop, Spark, Cassandra, let's just do some basic commodity storage from Red Hat. But what we can do is help them manage it as a compute grid, Spectrum Compute, but also as one storage pool that has enterprise features that you sometimes don't find in these low environments. That's Spectrum Scale. Combine that gives us an interesting profile in these new workloads, which is what you bring up. Well, why don't I just do, Ceph, what, Ceph works for particular workloads? Why don't I do HTFS? I'll do Hadoop. Well, that works in some workloads. How about Spark? That works in a workload, but how do you actually have a strategy of which one's going to grow? It's like we've gone backwards. So we have a strategy of today available today to help you take all those workloads onto one share pool. We'll help you with spreading that compute over the different grid. Again, commodity, X86 or power hardware, but then also a storage pool that allows you to native all these different file systems, but you get the enterprise features because you have this mission critical stuff. So also in backups, snapshots, replication, these become critical and that's what we provide in a way that you can serve up all those different workloads today. But what if Hadoop's in favor today and then you want to go to Spark or Cassandra in our environment? That's easy for your flow because we handle them all and we handle them natively, but we give you what I'll say is the enterprise capabilities is what you expect from IBM. And it works on-prem, multi tiers to object storage or tape for cost effectiveness, but also allows you seamlessly through our tiering to the cloud, softly or others, allow you to get that without doing a lot of hard work. Again, freeing up your team. So I don't look at these guys as competitors. I see them all the time. But clients are challenged with how do I, this new world is kind of popping up. How do I get my arms around it and actually run it as an enterprise, local or remote? And I think we have today a better way to do the future and people are just kind of catching up to it. So we've been documenting IBM for the last five years anyway in theCUBE. We've seen IBM go after high value businesses. The years ago it got out of spinning disk drives. It got out of, and when I mean that, I mean competing with Seagate, that schlocky 18% gross margin business. And IBM's not a schlocky company, disk drives the schlocky business as L. Shugart once told me. And we saw IBM sell off its microelectronics business, its x86 business. I'm hearing that storage is strategic to IBM. A lot of people in storage will say, oh, Ed Walsh, expert at flipping companies. You weren't brought in to sell this company, right? This is strategic. Can you confirm that? No, I can definitely confirm that. I was not brought in to do that. To be honest, this is massively strategic to getting people to the next era, computing period, end of sentence. It just is. If you think about it, data's a last hurl and it has gravity to it. You've got to protect it. You have to secure it. You have to move it. You have to access it. We've virtualized everything else. This is the last thing you need to work on. But it's also where all the value is. All the cognitive is all about leveraging data, bringing new data together, and getting true cognition. You're actually working through the data sets. That's all data. So I think it's one strategic. And that was my conversation coming in. We're committed to the business. We're driving it. We're investing today. But also I keep on bringing up. We already have a broad portfolio, but we're also seamlessly picking up all the investment of the big IBM, the broad IBM in these different spaces. Which makes me larger than just what I'm developing, if that makes sense. But it is strategic, period. And the business is consolidating, which presumably is a good thing if you're part of the cartel, which IBM is, right? And you still get innovation. Still tons of startups out there. It was shocking. I wasn't at VMworld, but I was there last year, and it was amazed to see how many storage startups came out of the woodworks last year. So innovation is alive and well. And awesome, Edwold. Thanks very much for coming to the queue. Thanks for having me on. I appreciate it. I'll give you the last word. Things that you're seeing at Edge, hoping to get done at Edge, things that are exciting you. No, for me, it's mostly engaged with the clients. Most of the clients come here to engage with the other clients. That's why you're going to see most of the speakers actually clients. That's what I like the most about Edge is actually spending time with the clients themselves. And also we're doing a lot of product launches, so it's almost an embarrassment of riches with the segments to get up to date. But anyway, that's why I'm looking forward to it. Great to see you again, Ed. Thanks again. I appreciate it. Keep it right there, everybody. Steve and I will be back with our next guest. Check out ibmgo.com for all the action. We'll be right back.