 from theCUBE Studios in Palo Alto and Boston. It's theCUBE, covering IBM Think. Brought to you by IBM. Hi, buddy, we're back. This is Dave Vellante and you're watching theCUBE's coverage of the IBM Think 2020 Digital Event Experience, wall-to-wall coverage. Of course, in the remote CUBE studios in Palo Alto and Boston, Greg Lutko is here. He's with Broadcom. He's the Senior Vice President and General Manager of the Broadcom Mainframe Division. Greg, great to see you. Thanks for coming on. Hey, good seeing you too. Happy to be here. Hey, let's talk Z. I got to say, when Broadcom made a nearly $19 billion acquisition of CA, many people, myself included, said, huh, I don't really get it. But as you start to see what's happening, the massive CA install base and the cross-selling opportunities that have come to Broadcom, you start to connect the dots and say, ah, maybe this does make some sense. But how's it going? How's the acquisition been? It's been what now? Two years since that move? Yeah, we're coming up on two years. I think it kind of shocked the world, right? I mean, there's a lot of value there. And the customers that have been using the mainframe and running their core businesses for many, many years, they knew this, right? So Broadcom came in and said, hey, I don't think this is the cash cow that others maybe have been treating it as. We absolutely believed with some investment that you could actually drive greater value to customers. And what a novel concept, right? Expand, expense, invest, drive greater value. And that would be the way you'd expand revenue and profit. Yeah, I mean, I think generally the mainframe market is misunderstood. It obviously goes in cycles. I did a report a couple of months ago on really focusing on Z15, actually it was last summer. And how historically IBM performance overall as a company is really driven still by mainframe cycles because it still drags so much software and services. And so we're in the midst of a Z15 tailwind. And so of course, the COVID changes everything. But nonetheless, it's a good business. IBM is a dominant player in that business. Customers continue to buy mainframes because it just works. It's too risky to rip them out. People say, oh, why don't you get rid of the mainframe? No way customers are going to do that. It's running their business. So it's just a, it's a fabulous business. If you have a player there and clearly Yeah, and if you think about those cycles that's largely driven by the hardware, right? As each generation comes out. And if you look at traditional pricing metrics that really look at using that capacity or even using full capacity, that's what caused the cyclality with the software as well. But there's a lot of changes even in that space. I mean, with us, with mainframe consumption licensing from Broadcom with IBM doing tailor fit pricing. The idea that you can have that headroom on the hardware and then pay as you go, pay as you grow. I think that actually will smooth out and remove some of that cyclality from the software space. And as you said correctly, you look at the COVID stuff going on. I mean, there's an awful lot of transactions going on online. People are obviously checking their financials with the economics going on. The shipping companies are booming with what they have to do. So that's actually driving transactions up as well and use that capacity that's in the boxes. Yeah, and financial services is actually in really good. I know the stocks have been hit, but the liquidity in the banks is very, very strong because of the 2009 crisis. So the fiscal policy sort of dictated that or the public policy dictated that. So the banks are obviously huge consumers of mainframe. One of the things that IBM did years ago was it sort of embraced Linux. It was one of its first moves to open up the mainframe, but it's much more than just Linux. I wonder if you could talk about, so your point of view on open meets mainframe. Yeah, so open is way more than just Linux, right? I mean, Linux is good, running around the mainframe. I mean, that's absolutely an open paradigm from the operating system, but open is also about opening up the APIs, opening up the connectivity so that it's easier to interact with the platform. And sometimes people think open is just about dealing with open source. Certainly we've made a lot of investments there. We contributed to the command line interface and actually a little more than 50% of the original contribution to the Zoey project under the OMP, the open mainframe project. So that was about allowing open source technologies that interact with distributed and cloud technologies to now interact with that mainframe. So it's not just the open source technologies but opening up the APIs. So you can then connect the cross technologies that are on the platform or off platform. So what about the developer community? I mean, there's obviously a lot of talk in the industry about DevOps, how does DevOps fit into the mainframe world? What about innovations like Agile and sort of beyond DevOps, if you will, can you comment on that? Yeah, absolutely. I mean, you can bring all those paradigms, all those capabilities to the mainframe now with opening up those APIs. So I mean, we had a large European retail bank that has actually used the Git bridge that we worked with providing through Zoey to connect into endeavor so they could leverage all the investments they had made in that existing technology over the years but actually use the same kind of CI CD pipeline, the same interaction that they do across distributed platforms and mainframe together and open up that experience across their development community. What that really means is you're using the same concepts, the same tools that they maybe became comfortable with in university or on different platforms to then interact with the mainframe and it's not that you're doing anything that takes away from core capabilities of the mainframe, you're still leveraging the stability, the resiliency, the throughput, the serviceability but you're pressing down on it and interacting with it just like you do with other platforms. So it's really cool and that goes beyond Linux, right? Because you're interacting with capabilities and technologies that are on the mainframe in ZOS environment. Yeah, and the hardened security as well is another key aspect of the mainframe. Let's talk about cloud. Where does, a lot of people talk about cloud, cloud first, multi-cloud, where does the mainframe fit in the cloud world? So there's a lot of definitions of cloud out there, right? I mean, people will talk about private cloud, public cloud, hybrid cloud across multiple private clouds, they'll talk about, it's multi-cloud. We actually talk about it a little differently. We think about the customer's cloud environment. Our institution that we're dealing with, say it's a financial institution, to their end customers, their cloud is however you interact and you think about it, if you're checking an account balance, if you're depositing in a check, if you're doing any of these interactions, you're probably picking up a mobile device or a PC, you're dealing with an edge server, you're going back into distributed servers and you're eventually interacting with the mainframe and then that's got to come all the way back out to you. That is our customer's cloud. So we talk about their cloud environment and you have to think about this paradigm of allowing the mainframe to connect through and to all of that while you hit it, preserving the security. So we think of cloud as being much more expansive and the mainframe is an integral part of that, absolutely. Yeah, and I've seen some of your discussions where you've talked about and sort of laid out, look, the mainframe sits behind all this other infrastructure that ultimately the consumer on his or her mobile phone, goes through a gateway, goes through some kind of site to buy something, ends up ultimately doing a transaction and that transaction you want to be secure, you want it to be accurate and then how does that happen? The majority of the world's transactions are running on some kind of IBM mainframe somewhere in some way touches that transaction. So it's a, as the world gets more complex, that mainframe is, I called it sort of the hardened sort of back end and that has to evolve to be able to adapt to the changes at the front end. And that's really kind of what's happened, whether it's cloud, whether it's mobile, whether it's Linux and other open source technology. So it's, right, it's fabulous that the mainframe has, IO rates and throughput that no other platform can match, but if you can't connect that to the transactions that the customer is driving to it, then you're not leveraging the value, right? So you really have to think about it from a perspective of how do you open up everything you possibly can on the mainframe while preserving that security? I want to end with just talking about the Broadcom portfolio. When you hit the Broadcom mainframe site, it's actually quite mind boggling the dozens and dozens of services and software capabilities that you provide. How would you describe that portfolio and what do you see as the vision for that portfolio going forward? Yeah, so when people normally say portfolio, they're thinking software products and we have hundreds of software products, but we're looking at our portfolio as more than just the software. Sometimes people talk about, hey, let me just talk to you about my latest and greatest product. One of the things we were really afforded the opportunity to do with Broadcom acquiring us was to reinvest, to double down on core products that customers have had for many years and we know that they want to be able to count on for many years to come. But the other really important thing we believe about driving value to our customers was those offerings and capabilities that you put around that. Think about the idea of if you want to migrate off of a competitive product or if you want to adopt an additional product that have the ability to tie these together. Often in our customer shops, they don't have all the skills that they need or they just don't have the capacity to do it. So we've been investing in partnership. We kept our services business from at least the resources, the people from CA. We rolled them directly into the division and we're investing them in true partnership working side by side with our customers to help them deploy these capabilities, get up and rying and be successful. And we believe that's the value of a true partnership to invest side by side to have them be successful with the software and the capabilities and their operation. Well, like I said, I caught a lot of people myself included by surprise that acquisition. It was a big number, but you can see it, the Broadcom's performance post, the July 2018 acquisition done quite well. Obviously COVID has affected much of the market but seems to be paying off. Greg, thanks so much for coming to theCUBE and sharing your insights and best of luck going forward. Stay safe. Pleasure being here. Everybody, you yourself and everybody out there, be safe, be well, take care. And thank you for everybody for watching. This is theCUBE's coverage of the IBM Think 2020 digital event experience. 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