 We're here with my co-host today, Stu Miniman. This is the Cube Silicon Angles Continuous Production. We're here two days live at IBM Edge at the Mandalay Bay. This is the second year of Edge. More than doubled from last year we were in Orlando and we've got about 5,000 people here this year. A lot of good buzz, a lot of good technical talk, a lot of good business talk. Good flavor between hardware and software, systems and storage and software and really showcasing sort of IBM's new vision, vision for the future, what they see as this new type of IT, the storage as a platform and Alex Yost is here. He's the Vice President of Business Line Executive within IBM's server business. Alex, welcome to the Cube. Thank you so much for having me here guys, good to see you. Yeah, so what are you doing here at Edge? What are you talking to customers about? What are you hearing? What's the buzz? So clients today are investing in their data centers, but more importantly what they're investing in is their business. So if you went to the main ten session, one of the things you heard about is when we talk to CEOs and CIOs, the importance of IT to customer businesses because what customers are looking for is how do they run their businesses more efficiently and more effectively? How do they use IT to do that? Well the fact of the matter is it's not by putting out server RFPs, it's by running those applications better and so what they're after from us is guys, how do you make our IT more effective for us and for our business and so we're spending a ton of time talking to people about exactly that topic. Yes, okay, so those are some of the factors that are driving IT decisions today. How is that affecting your strategy at IBM? Well the way it affects our strategy at IBM is you heard Tom Rosamillie talk about it. The money that we're spending on innovation is all around helping clients to get the most out of their IT spend. So clients are looking for how do they optimize big data? Well flash technology plays a big role in that. Optimized systems play a big role in that. Customers are coming to us and they're saying we know we have to adopt this or that application set, how do we do that with the staff that we have on board today? Number one, our staff is overworked. Number two, our staff isn't expert yet in doing that. So if we can provide them with recurrent architectures, if we can provide them with systems like an SAP HANA offering that give them the capability to get up and running more quickly then they can devote their IT staff to innovation for their company instead of keeping the lights on. I met with a client not too long ago and they said you know what 70% of our staff is eligible for retirement right now. Well the fact of the matter is when they look at that what they see is holy cats how are we going to innovate if our IT staff is ready to retire? So you said most customers aren't going to build a new data center but the server providers have such a growth pattern that it's almost like they're building a new data center you know every six months or year. So you know how was that discussion going between the enterprise and the service providers and even the cloud solutions and how do you kind of go between those two? Well the MSP market is very vibrant and what we're seeing is that clients are adopting MSP service providers application as a service across their business and it's interesting to see the adoption patterns. We recently had a customer advisory council and I asked the clients you know what is your adoption of cloud service provider content and capability and one guy said well we're not going to be going to a public cloud because our industry is highly regulated and we can't do that. The next guy to talk says because our industry is highly regulated we're adopting a cloud service provider because they're experts in providing applications for our industries and staying compliant in our industry and so what we're seeing is there's a lot of firms that are aware of it and evaluating it they're adopting at a different pace because it's what's relevant to them and to their business. Can you talk a little bit about kind of that transition from kind of the blade system to the pure system, pure flex architecture you know recent industry numbers show that blade server revenues are down in general you know so blade center's been a great workhorse for IBM for many years but it looks like this is really IBM's bet on the next generation architecture and how does that kind of fit to the kind of the cloud models that we were just talking about? Well clients today are looking for more value than just great hardware and so I'm here to tell you that you know the the flex system and pure flex hardware offering is based on over 15 years of innovation and development in the blade server marketplace it has the fastest backplane it's got the most power and cooling it's got the ability for the most memory processors in the industry it's unsurpassed in terms of technology but that's not enough clients are looking for how quickly can I get up and running how do I simplify the management deployment in a cloud environment in a virtualized environment or in a specific application environment and so with pure systems what we're offering to customers is a variety of offerings that give them the ability and whether it's an application as a service or whether it's a platform as a service giving them the capability to specify their operating environment and get up and going very quickly because if we can minimize the amount of time that skilled IT staff spend on the rudimentary tasks of up and running and deployment and management maintenance and get them into innovation customers get value and that's where we think they'll choose us yeah absolutely so Alex we're talking before about you know the labor component talk a little bit more about what customers want to spend their time on we talked a little bit about how they're spending their time today talk a little bit more about that because you said you know it burns one of your customers when they see a senior systems engineer changing it out of disk drive how are they spending their time patching whatever they're doing today and how do they want to spend their time well you're right a lot of the time today is spent on what many customers will say keeping the lights on where they want to spend their time is on innovation the big tasks that IT managers have been given by their executive management are enable mobility enable clients to access us and our business easier and and more quickly enable us to use big data enable us to use technology to differentiate us in the marketplace and so whether it's whether it's oil and gas and and doing exploration whether it's an automobile manufacturer looking to shorten the cycle time to produce or manufacture an automobile or whether it's a retailer looking for better information about their customers they're all looking to use technology to innovate use technology to give them a business advantage they can't do that if they're spending the time keeping the lights on and the data so I met with a customer in the financial industry the other day and that customer told me that when they bring a new application forward they actually monetize the each of those applications and they say this is a five million dollar application this is a four million dollar application and what they mean is our company is going to make five million dollars in profit once we get this thing out the door you know what that's a heck of a lot more job satisfaction than I kept the server farm running today well and then you can quantify the value you're bringing to the organization if you can get it in you know a month earlier you know it starts to get big exactly excellent alright Alex well listen thanks for stopping by the cube and sharing your insights about what customers are doing I really appreciate your time and good seeing you again great to see you guys thank you all right keep it right there everybody will be right back with our next guest we're live from edge this is the cube and we'll be right back after this word.