 The Cube, at IBM Impact 2014, is brought to you by headline sponsor IBM. Here are your hosts, John Furrier and Paul Gillan. Welcome back everyone, this is Silicon Angles The Cube, it's our flagship program. We go out to the events, extract the suits from the noise. We're ending our day two of two days of wall-to-wall coverage with myself and Paul Gillan. Ten to six-thirty every day, just we'll take as much as we can to get the data, share that with you, extract the signal from the noise. I'm John Furrier, the founder of Silicon Angles, my co-host Paul Gillan and our special guest, Holger Mueller, from Constellation Research Analyst, covering the space. Ray Wang was here earlier, you've been here for the duration. We're going to break down the event. We do a wrap up here. We have huge impact events for 9,000 people. Paul, I want to go to you first and get your take on just the past two days. We've got a lot of cool-aid injection attempts for cool-aid injection, but IBM people were very very candid. I mean I didn't find it very forceful at all from IBM. They're pragmatic. What's your thoughts on the event? I think pragmatism is what I take away, John. I think that's a good word for it. What I saw was a not a blockbuster. There was not a lot of hype and overstatement about what the company is doing. I was impressed with Steve Mills for our interview with him yesterday. We asked about blockbuster acquisitions and he said basically why? I mean why should we take on a big acquisition that is going to create a headache for us in integrating into the organization? Let's focus on the spots where we have gaps and let's fill those. That's really what they've you know they really have put their money where their mouth is and doing these 150 or more acquisitions over the last three or four years. I think that the one question that I would have, I don't think there's any doubt about IBM's commitment to cloud as the future about their investment in big data analytics, certainly have put their money where their mouth is there over $25 billion invested in big data analytics. One question I have coming out of this conference is about power and about the decision to exit the x86 market and really create confusion in part of their business partners, their customers about how they're going to fill that gap and where they're going to go for their x86 needs and the power clearly power eight clearly is the the future it's the it'll fill that role in the IBM portfolio but it's going to act fast. Do you think there's a ripple effect then so that that moved us to cause a ripple effect in their ecosystem? Well I was talking to I've talked to two IBM partners today fairly large IBM partners and both of them has stressed that their customers are suffering some whiplash right now because all of a sudden the x86 option from IBM has gone away and so it's frozen their their purchasing process. Some of them are going to HP, some of them are looking at other providers. I don't think IBM really has has told a coherent story to the market yet about how and power's new so they got to prop that up so you so you're saying is okay HP's going to get some new sales out of this so frozen the market for IBM and yet the power story is probably not clear is that what you're hearing? I don't think the power story is clear I mean certainly it was news to me that IBM is taking on Intel at this event and I was surprised that that that that was a surprise. Holger I got to go to you because we've been sitting here at the Cube and we've been have all the execs come here and we've been getting briefed here in the Cube sharing that with the audience you've been out on the ground it's we've coming into you guys with all the other analysts and all the briefings you've been in the private sessions you've been in the rooms you've been you've been you've been out and out in the trenches there what have you what are you finding what have you been hearing and what are some of the soundbites that you could share with the audience it's not the classic IBM anymore what a difference to you know as a joke I asked the execs for some cloud panel and you give me your body language he had impact one year ago because they didn't have software at the time they were not in your reaction something about what a difference everything's running itself line but I agree what you said before is that the messaging isn't right and they don't tell customers here's where we are right now take you by the hand this will be gonna go there's something IBM has to improve. You mentioned software it's very interesting I mean consider IBM finalized the acquisition only last July it's only been nine months since it was acquired and everything is software now it leads me to think of who acquired who you know did IBM acquire software or did software actually acquire IBM because it seems the software is so strategic IBM's cloud strategy going forward very strategic but I think it's probably why you know I've had this a long time it's the most transformative single acquisition IBM has done but I wasn't connections in general and here where we say we could be better on our software the other one is we could be in software so remember seeing IBM that aligned a lot of single things around them that they had to do makes a lot of noise because that made things go moving very very fast what do you think about the social business is that hanging together that story hanging it's obviously relevant direction it's kind of a smarter planet positioning certainly businesses will be social are you seeing any meat on the bone there on the collaboration side I have to say John I was struck by the lack of discussion of social business in the opening keynote in particular mobile mobile big data I mean that came across very clear but I'm an accustomed to hearing that's the social business rugby it didn't come out of this conference yeah I mean my take on that was is that I think it's pretty light I don't think there's a lot of meat on the bone with the social I'll tell you why I think it's like it's like the destination everyone wants to go to but there's no really engine yet right I think there's a lot of bicycle riding when they need a car right so the infrastructure is just not as it's too embryonic if you will a lot of manual stuff going on even the analytics and you know you're seeing on the leaderboard here on the social media side and big data analytics certainly that there's some core engine parts around IBM but that that social engine I just don't see it happening yours requires a new kind of automation it's got some real times but I think that this is some some nice bright spots I love the streams I love this zones concept that we heard from Watson foundations I think that is something that they they need to pull out of the war chest there and bring that front and center I think the thinking about data for zones is really compelling and then I see mobile they got all the messaging on that and you might be a bit better for the doubt I mean they have a story now that they have a revenue-generating story with cloud and with big data and social was never a revenue-generating story that's a software story it's not big it's not big dollars and they've got something now that really could drive I'll say Kristen from from mobile first she was very impressive and I'll tell you social is being worked on so I but the people are getting it I mean IBM 100% gets social I think the it's not a gimmick to them it's not like oh we've got some social media stuff I think in the DNA of their soul they they come from that background of social so I give them eye marks on that I just don't see the engine yet I'm looking for analytics I'm looking for a couple eight cylinders we know the engine right the engine is blue mix if you want to build your next generation application perfect data and tons of mobile at the show you need something about it and you need social I'm skeptical I'm skeptical on blue mix I'll tell you why I'm not skeptical I shouldn't say that it's going to get some plain mail for that okay I'll say it's out there I'll say it I'm skeptical about blue mix because it could be a right brother situation okay the wrong guy is building the wrong airplane so the question is they might be on the wrong side of history if they don't watch the open source foundations because here's the problem I have a blue mix it's rushed to the market certainly IBM's got muscle to put solutions together no doubt betting on cloud foundry is really a risk and although people are pumping it up it's got some momentum they don't have a big community they have a lot of marketing behind it and I know James was over there is doing a great job and Josh McKinney over there with piston cloud behind it it has all the elements of open collaboration and architecture collaboration however it's not a done deal yet in my mind so that's a red that is a risk factor my my mind we've got a number of maybe maybe you can help to do to put these in order a number of new concepts out there we got blue mix the the software and we've got the marketplace and these are all three concepts that are critical but which is a subset of which what's the hierarchy of these different platforms well software is definitely the bottom line that's the engine which runs everything which I like gives the CIO the visibility right they also have the top of CIO and CSIO something UI security is not every step no CIO or no CIO and the marketplace basically enabling the applications to build rooms right with you with the service with the other blue mix you know what the father IBM would have to open source their platforms their platform as a service it's not even up a source and doing a deal without foundry so so they got I think they're going to the middle where's their angle on that but again I like again they develop a story is good the people are solid so I think it's it's not a fail of my in my mind at all the messaging is great but you know with the red hat summit you know they have a very active community multiple generations in the data center in the enterprise with Linux and and open you know their open open shift is it's got traction and it's got legit traction so that's one area the other area I liked with Steve Mills was he's very candid about the turf they're staking out clearly the cloud game is up is there is hardcore for them and in the IBM flavor enterprise cloud they want to win the enterprise cloud they clearly see Amazon they see Amazon and it's rhetoric against narrative rhetoric against Amazon is interesting saying that there's more links on soft layer than Amazon now if you count EC2 links then I think that number skewed so it's you know there's a little bit of gamification going to have to dig into that I didn't want to call out on that but you know it's also hosting business versus you know cloud parse the numbers but what's your take on that the Amazon soft layer kind of comparison it's it's fundamentally different right Amazon is a shared part of everything right it's a retailer which moves its backspace depending on what is selling what is not selling and how we use this soft layer gives you that visibility from the machine and this acquisition me and the CIO is the most part of the world and I'm more conservative knowing that I buy that machine I can see that machine I can even physically touch that machine if I really have to and I can only dip slowly into any cloud virtualization share everything easily Paul I got to say my favorite interview and I want to get your take on this it was Grady Bush who sat down with us and talked with us earlier today IBM fellow walks on water with an IBM obviously legend in the computer industry just riveting conversation I mean it was really we just getting started I mean it felt like we were like you know going a cruising altitude and then he just walked away so what's your take on that conversation well I mean certainly he the Grady Bush interview he gave us the best story of the two days which is they're being in the hospital for open heart surgery looking up seeing the equipment is going to be used to go into his chest and open his heart and knowing that he knows the people who programmed that equipment and they programmed it using a methodology that he invented that's a remarkable story but I think the fact that a Grady Bush can have a job at a company like IBM is a tribute to IBM the fact that they can employ people like that who don't have a hard revenue responsibility he's not a P and L he's just a genius and he's a legend and IBM to its credit finds a place for people like that all throughout its organization and that's why they never lost their soul in my opinion you look at what HP and IBM you know IBM had a lot of reorganizations a lot of pivots so to speak a lot of battleships that's turned this in way but you know the most part they kept their R and D culture but there's an interesting analogy to the remember the case methodology was where Brutes was part of them with the five message language email something because it was all about those religions and it used this methodology different vendors that were proprietary to the people who transport themselves and then IBM to their credit bring it together guys know bring Grady Bush into a unified methodology and did a great service to all of the software engineering and maybe it's the same thing IBM can play around divergent written style you've got to give IBM profit that's a great point earlier we Steve Mills made a similar reference around it wasn't animosity it was more of hey we help make Intel a big business and you know where what's in it for us right you know where's our you know help us out because it brought us a bone did he say he helped Microsoft too of course with a licensing fee with Gates but this is the point the unification story and with Grady's here IBM has some real good cultural you know industry goodwill do you agree Paul to know for IBM is the Intel Quest customer and they will do what's right you are the money and the budget of the Intel Quest customers and customers want compatibility they don't want to have staff of course they want to have investment protection I think IBM is doing a good job of defining that as their cloud strategy they clearly are not going head to head with Amazon it's a hybrid cloud strategy they see the enterprise customers that legacy as an asset and it's something they want to build on of course the risk of that is that Amazon right now is pure play it has all the momentum it has all the buzz and being tied to a legacy is not always the greatest thing in this industry but from a practical revenue generation standpoint it's pretty good let's go down and wrap up here and get your final thoughts on the event and let's just go by the numbers the key things that IBM was promoting and then our kind of scorecard where they kind of played out and new things that popped out of the woodwork that got your attention the power systems thing was big on their messaging the big data story continues to be part of it blue mix of the operations and the openness you heard a lot of open openness in their messaging and for the most part that's pretty much it Watson yeah continue kind of the Watson a lot of news still to come out of Watson I think in many ways that is their ace in the hole that is their diamond any other thoughts well what I missed is which I think that's the idea of the API coming everybody else at that pure name block stops the platform or says I'm going to build like the org I'm going to build you a monolithic application and it's a clear differentiator on the IBM so you just still have to build blue mixes in the labeling part they still have to figure out granularity there will be my web service how granular we are free how granular do we have these APIs have to be but that sets them apart and they have to live on I think I give them an A plus on messaging I think they're on all the right fault lines on the tectonic shifts that we're seeing everyone I asked every guest interview what's the game changing mode why is it so important and almost consistently the answers were we're living in a time of fast change data, efficiency experimental you're going to be left behind this is the confluence of all these trends these fault lines so I think IBM is sitting on these fault lines now the question is how fast can they cobble together the tooling from the machineries that they have built over the years going back to the main frame a lot of these parts out there a lot of acquisition but so far the story holds together well take the customer by the hand that's the main challenge this was a web sphere show often we do a web sphere on the unit day 1-0, day 2-2 jobs well they're tooling their conferences it's the customer event there's 9,000 people here somewhere I have to do something with web sphere where is my way from existing web sphere and so on right, but how do we get there what can we use, what are my assets what are the things I can leverage how do I comment guys really appreciate the commentary this is going to be a wrap for us we want to just do a shout out to Matt, Greg and Patrick here doing a great job with the production here in the CUBE team we have another CUBE team actually doing Simultaneous CUBE up in San Francisco Service Now you guys have done a great job here and also shout out to Bert Lattimore who's been doing a great job of live tweeting great the crowd chat which has been a huge success had a great crowd chat this time hopefully we'll get some more influencers and thought leaders in there for the next event and of course I want to thank Paul Gillan for being an amazing co-host on this trip, I thought the questions and the cadence was fantastic the guests were happy and Holger thank you for coming in on our wrap I really appreciate it, constellation research this is the CUBE, we are wrapping it up here at the IBM impact event here live in Las Vegas this is the CUBE John Furrier with Paul Gillan and we'll see you at our next event and stay tuned with SiliconANGLE.tv as we have continuous coverage of Service Now and tomorrow we will be broadcasting and commentating on the Facebook developer conference in San Francisco, we're running here Mark Zuckerberg and all Facebook's developers and all their developer programs rolling out so watch SiliconANGLE.tv for that as well again the CUBE is growing 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